HomeMy WebLinkAboutItem 06.kMarch 4, 2019 Item No.________
MINNESOTA INVESTMENT FUND LOAN AGREEMENT WITH
QA1 PRECISION PRODUCTS INCORPORATED
Proposed Action
Staff recommends adoption of the following motion: Move to approve a Minnesota Investment Fund Loan
Agreement with QA1 Precision Products Incorporated.
Overview
The City Council authorized the submittal of a Minnesota Investment Fund (MIF) grant application to
the Minnesota Department of Employment and Economic Development (DEED) on December 17, 2018.
The application was to secure funding in the amount of $100,000 to assist QA1 Precision Products Inc.
(QA1) in the purchasing of new machinery and equipment. QA1 is proposing to construct a new 100,000
square foot manufacturing facility to be located in Interstate South Logistics Park, located at the southwest
quadrant of Co. Rd. 70 and Dodd Blvd. The proposed new manufacturing facility would replace two
smaller buildings owned and occupied by QA1 in Airlake Industrial Park. The City received an award
letter from DEED dated January 28, 2019 approving the City’s application.
The MIF Loan program is structured so that DEED provides funding for the MIF Loan through a grant to
the City of Lakeville. The City then enters into a Loan Agreement with QA1. The Loan Agreement requires
QA1 to construct a new 100,000 square foot manufacturing facility and to purchase a minimum of $200,000
in new machinery and equipment for its new manufacturing facility. In addition, QA1 agrees to create a
minimum of 20 jobs with hourly wage rates ranging from $15.00 - $21.00 per hour within the next three
years and retain the current 95 jobs it currently has in Lakeville. The Loan Agreement also requires approval
of Tax Increment Financing assistance from the City not to exceed $526,000 (approved at the February 19,
2019 City Council meeting) and private financing in the amount of $10,500,000. Compliance with these
requirements will result in the entire $100,000 amount being forgiven.
The Economic Development Commission and the City Council have previously reviewed this proposed
project on several occasions and have recommended approval. Staff recommends approval of the Contract
for Minnesota Investment Fund Loan Agreement with QA1 Precision Products Inc.
Primary Issues to Consider
• Is this MIF Loan Agreement consistent with the City’s policies? The project will result in the
retention of an existing business with 95 employees, the creation of a minimum of 20 new jobs
and will result in a minimum of $6,000,000 in new property tax base.
Supporting Information
• Minnesota Investment Fund Award Letter, Proposed Loan Agreement and Promissory Note
Financial Impact: $_$ 100,000 Budgeted:Y/N__N___Source:_Minnesota Investment Fund__
Envision Lakeville Community Value: Diversified Economic Development_________________
Report Completed by: David L. Olson, Community & Economic Development Director
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LOAN AGREEMENT
MINNESOTA INVESTMENT FUND
THIS AGREEMENT is made and entered into as the ___ day of ____________, 2019 by
and between the City of Lakeville (the "Lender") and QA1 Precision Products, Inc. the
"Borrower");
Recitals
1. The Lender has applied to the Minnesota Department of Employment and Economic
Development (DEED) for a Minnesota Investment Fund Grant (the "MIF Grant")
pursuant to an application (the "Grant Application") and received approval for the grant;
and
2. Grant Contract Number CDAP-19-0001-H-FY19 (the "Grant Contract") between the
Minnesota Department of Employment and Economic Development (the “State”) and
the Lender has been executed and requires that the Borrower provide sufficient funds
to complete financing and agree to loan terms with the Lender regarding the MIF Grant;
and
3. Borrower and Lender wish to set forth the terms and conditions upon which Lender will
make the Loan to Borrower and for the repayment thereof.
NOW THEREFORE, it is agreed by and between the parties hereto as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. In this Loan Agreement, unless a different meaning clearly appears from
the context:
“Bank” means BMO Harris Bank, or any such FDIC insured financial institution as may be
identified by Borrower prior to disbursement.
“Benefit Date” means the earlier of: (i) the date that equipment financed through a Minnesota
Investment Fund loan is fully operational; or (ii) June 30, 2020.
“Benefit” is defined as one or more of the following non-mandated compensation items paid by
the Borrower on behalf of employees: health, dental, life and disability insurance, retirement
program or profit-sharing.
“City” means the City of Lakeville.
“County” means Dakota County.
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“Compliance Date One” means the date that is two (2) years after the Benefit Date.
“Compliance Date Two” means the date that is three years after the Benefit Date.
“Development Property” means the real property described in Exhibit A attached (MIF funds
used to purchase real estate or property improvements, equipment).
“Effective Date” means _____________. (Not established until Grant Contract is fully executed)
“Expiration Date” means three months after Compliance Date Two.
"Equipment" means the equipment purchased by the Borrower with the Loan Proceeds and
described in Exhibit B attached.
“Full-Time Equivalent (FTE)” is one or more people working a sum of 2,080 hours in a calendar
year.
"Grant Contract" means Minnesota Department of Employment and Economic Development
Grant Contract # CDAP-19-0001-H-FY19 and attached as Exhibit C.
"Initial Disbursement Date" means the date of the first disbursement of any loan proceeds by
the Lender to the Borrower.
“Jurisdiction” means within the corporate boundaries of the Lender.
"Loan" means the funds loaned by the Lender to the Borrower pursuant to this Loan Agreement.
“Loan Documents” means this Loan Agreement, the Promissory Note, Security Agreement and
the Guaranty.
"Loan Proceeds" means the funds disbursed to the Borrower pursuant to this Loan Agreement
and any proceeds thereof.
"MIF" means the Minnesota Investment Fund, Minn. Stat. § 116J.8731 and Minn. Rules Chapter
4300.
"MIF Grant" means the award of funds by the State to the Lender pursuant to the Grant Contract.
“New Jobs” means the new permanent, Full-Time Equivalent, non-contract, non-seasonal jobs
to be created by the Borrower.
"Project" means the Borrower’s purchase of an approximately 8 acre site in Lakeville and
construction of a new, approximately 100,000 square foot facility, to include the purchase of
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machinery, equipment and IT.
“Promissory Note” means the Promissory Note of even date herewith from the Borrower to the
Lender in the principal amount not to exceed $100,000.
“Security” means the letter of credit to be provided by Borrower to the Lender as provided under
Section 3.5 of this Agreement.
"State" means the Minnesota Department of Employment and Economic Development.
"Termination Date" means: (i) if Borrower complies with its obligations under this Loan
Agreement, the Expiration Date; or (ii) in all other circumstances, the date of the final payment
made by the Borrower to the Lender under the terms of the Loan Agreement and the Promissory
Note.
ARTICLE 2
Loan, Use of Proceeds and Conditions of Repayment
Section 2.1. MIF Loan/Funds. The Lender agrees, on the terms and subject to the conditions
hereinafter set forth, to make a loan to the Borrower in an aggregate principal amount not to
exceed $100,000 for the purchase of machinery & equipment. The obligation of the Borrower to
repay the Loan shall be evidenced by the Promissory Note. The Borrower’s obligations under this
Loan Agreement are expressly contingent on the Lender’s receipt of the proceeds of the MIF
Grant from the State in an amount adequate to make the Loan.
Section 2.2 Grant Application and Grant Contract. The parties hereto agree to incorporate into
this Loan Agreement by reference the Grant Application and Grant Contract.
Section 2.3. Non-MIF (Other) Project Funds. The Borrower has secured a commitment for the
private financing necessary to complete the Project, in a form and under conditions satisfactory
to the Bank, Borrower and Lender.
(a) The Borrower shall commit not less than $10,500,000 of other private financing
for the completion of the Project.
(b) Other Project Funds described in the Grant Application must be used at the same
amount, for the same purposes and under the same terms, rates and conditions as specified
unless written consent is received from the State prior to expenditure.
Section 2.4. Loan Terms. FORGIVABLE LOAN: The Loan shall be forgiven by the Lender and the
State upon satisfaction by the Borrower of the terms of this Loan Agreement. In the event the
Loan is not forgiven, the Loan shall be repayable as set forth in Section 8.2 of this Loan
Agreement. The Loan terms may not be modified without prior written approval from the State.
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Section 2.5. Early Repayment. The Promissory Note may be prepaid in whole or in part at any
time without penalty. A prepayment shall first be applied against any accrued interest, and then
against any outstanding and past due payments which are due and owing hereunder or under
the Loan Agreement, and then the remaining portion of such prepayment shall be applied against
the remaining outstanding and unpaid principal balance.
Section 2.6. Maintenance and Operation of the Project. As long as any portion of the Loan is
still outstanding, Borrower shall maintain and operate the Project and use the Loan Proceeds in
compliance with the terms of the Minnesota Investment Fund Act (MIF), this Loan Agreement,
and all applicable federal, state and local laws, regulations and ordinances, including but not
limited to all environmental laws and regulations.
Article 3
Conditions of Lending
Section 3.1. Condition Precedent to Any Advance. The obligation of the Lender to close the Loan
and disburse the proceeds thereof to Borrower shall, subject to waiver by the State, be subject
to the condition precedent that the Lender shall have received on or before the date of such
closing the Promissory Note duly executed by the Borrower.
Section 3.2. Further Conditions Precedent to Disbursement. The obligation of the Lender to
disburse the Loan Proceeds shall also be subject to the following conditions precedent:
(a) The Loan which is being made to the Borrower shall be consistent with the
provisions of the MIF Program.
(b) No Event of Default hereunder or event which would constitute such an Event of
Default but for the requirement that notice be given or that a period of grace or time elapse,
shall have occurred and be continuing.
Section 3.3. Disbursement and Deposit of Loan Proceeds. Upon the execution of this Loan
Agreement and the satisfaction of all of the conditions specified in Article 6, the Lender shall
disburse the full Loan Proceeds to the Borrower.
Section 3.4. Termination. This Loan Agreement shall automatically terminate without any notice
to Borrower:
(a) If Lender does not receive funds from the State in an amount adequate to make
the Loan to the Borrower;
(b) If no loan proceeds have been disbursed to the Borrower prior to the Expiration
Date; or
(c) If the Borrower fails to pay its debts as they become due, makes an assignment
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for the benefit of its creditors, admits in writing its inability to pay its debts as they become due,
files a petition under any chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter existing, becomes "insolvent" as that term is generally defined under
the Federal Bankruptcy Code, files an answer admitting insolvency or inability to pay its debts as
they become due in any involuntary bankruptcy case commenced against it, or fails to obtain a
dismissal of such case within sixty (60) days after its commencement or convert the case from
one chapter of the Federal Bankruptcy Code to another chapter, or is the subject of an order for
relief in such bankruptcy case, or is adjudged a bankrupt or insolvent, or has a custodian, trustee,
or receiver appointed for it, or has any court take jurisdiction of its property, or any part thereof,
in any proceeding for the purpose of reorganization, arrangement, dissolution, or liquidation,
and such custodian, trustee, or receiver is not discharged, or such jurisdiction is not relinquished,
vacated, or stayed within sixty (60) days of the appointment.
Section 3.5. Security. To guarantee compliance with the terms of this Agreement and the
Promissory Note, including interest, Borrower shall furnish the Lender with a letter of credit in
the form attached hereto as Exhibit D from a bank (“Security”) for $125,000.00 prior to
disbursement of loan funds. The bank shall be subject to the pre-approval by the Lender’s City
Administrator.
ARTICLE 4
Acknowledgments, Representations, and Warranties
Section 4.1. Acknowledgments.
(a) The Borrower acknowledges that the Lender, in order to obtain funds for part of
the Borrower's activities in connection with the Project, has applied for the MIF Grant to the
State under the Minnesota Investment Fund Program, Economic Development Division, and
that the Lender has entered into the Grant Contract with the State, setting forth the terms,
conditions, and requirements of the MIF Grant. The Borrower further acknowledges that it has
made certain representations and statements in the Grant Application concerning its activities
relating to the Project, and that the Borrower is designated and identified under the Grant
Contract.
(b) A copy of the Grant Contract and this Loan Agreement shall be on file in the
offices of the Lender. In the event any provision of this Loan Agreement relating to the
Borrower's obligations hereunder is inconsistent with the provisions of the Grant Contract
relating to the Borrower's activities there under, the provisions of the Grant Contract shall
prevail.
(c) The Borrower acknowledges that nothing contained in the Grant Contract or this
Loan Agreement, nor any act of the State or the Lender, shall be deemed or construed to create
between the State and the Borrower (or, except as Borrower and Lender between the Lender
and the Borrower) any relationship, including but not limited to that of third party beneficiary,
principal and agent, limited or general partnership, or joint venture. As such, the Borrower
agrees to hold the State harmless from any claim, demand, suit, action, or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from this Loan
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Agreement, any events related to the Project or the Borrower’s participation in this Loan, or
Borrower’s activities on the Development Property.
Section 4.2. Representations and Warranties. The Borrower warrants and represents, in
connection with the Loan and for the benefit of the State and the Lender, that:
(a) It is a Minnesota corporation business entity organization, registered and in good
standing under the laws of the State of Minnesota, and is authorized to enter into this Loan
Agreement and perform any of the acts required herein.
(b) It has the legal authority and is duly authorized to operate the Project, to ensure
the indebtedness of the Promissory Note and the obligations of this Loan Agreement, to
execute and deliver the Loan Documents to which it is a party and it has taken all actions
necessary and incident to its execution and delivery of the Loan Documents.
(c) Its execution and delivery of the Loan Documents to which it is a party, and its
incurrence of the Loan Documents does not violate any provision of law or Borrower's
corporate documents.
(d) The Promissory Note was duly and validly authorized, executed and delivered,
and it constitutes the legal, valid and binding obligation of the Borrower enforceable in
accordance with its terms. The Loan Documents to which it is a party, have been duly and
validly authorized, executed and delivered, and are the legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their respective terms,
except to the extent the enforceability thereof may be limited by bankruptcy, insolvency or
other law affecting creditor's rights, or the application of equitable principles generally.
(e) It is not in violation of any provisions of its organizational documents or of the
laws of local governments, State of Minnesota or U.S. Government, and there are no actions,
suits or proceedings pending, or to its knowledge threatened, before or by any judicial body or
governmental authority, against or effecting it, and it is not in default with respect to any order,
writ, injunction, decree, or demand of any court or any governmental authority which would
impair its ability to enter into this Loan Agreement or to perform any of the acts required of it
in the Loan Documents to which it is a party.
(f) Neither the execution and delivery of the Loan Documents to which it is a party,
nor compliance with any of the terms, conditions, requirements or provisions contained herein
or in such referenced documents, is prevented by, is a breach of, or will result in a breach of
any term, condition or provision of any agreement or document to which it is now a party or by
which it is bound.
(g) It will maintain adequate capital for the proper operation and administration of
its duties under this Loan Agreement.
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(h) It will comply with Minn. Stat. § 116J.8731 and Minn. Rules Chapter 4300 and all
of the terms, conditions, provisions and requirements, contained in the Loan Documents to
which it is a party.
(i) Representations, statements, and other matters provided by the Borrower
relating to those activities of the Project to be completed by the Borrower, which were
contained in the Grant Application, were true and complete in all material respects as of the
date of submission to the Lender and such representations, statements, and other matters are
true as of the date of this Loan Agreement and there are no adverse material changes in the
financial condition of the Borrower's business.
(j) The Borrower acknowledges that the State, in selecting the Lender as recipient
of the Grant, relied in material part upon the assured completion of the Project to be carried
out by the Borrower, and the Borrower warrants that said Project will be carried out as
promised.
(k) The Borrower warrants that it will obtain all federal, state, and local
governmental approvals, reviews, and permits required by law to be obtained in connection
with the Project and has undertaken and completed all actions necessary for it to lawfully
execute this Loan Agreement as binding upon it.
(l) The Borrower warrants that it shall keep and maintain books, records, and other
documents relating directly to the Other Project Funds, and that any duly authorized
representative of the State shall, at all reasonable times, have access to and the right to inspect,
copy, audit, and examine all such books, records, and other documents of the Borrower for six
years after the expiration of the Loan Agreement or until such time that the Lender and the
State have both determined that all issues, requirements, and close-out procedures relating to
or arising out of the Loan have been settled and completed, whichever is later.
(m) The Borrower warrants that no transfer of any or all of the Loan Proceeds by the
Lender to the Borrower shall be or be deemed an assignment of loan proceeds, and the
Borrower shall neither succeed to any rights, benefits, or advantages of the Lender under the
Grant Contract, nor attain any right, privileges, authorities, or interest in or under the Grant
Contract.
Section 4.3. Affirmative Covenants. Borrower further warrants and agrees that:
(a) It has sufficient funds to complete the purposes of the Project and sufficient
capacity to administer the Project.
(b) The Project will be performed in full compliance with all applicable federal, state
and local laws, regulations, rules and ordinances, which include but are not limited to all
applicable environmental laws, regulations and rules.
(c) Borrower agrees to submit reports required in Article 7 and Article 8.
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ARTICLE 5
Events of Default and Rights and Remedies
Section 5.1. Events of Default. Any one or more of the following events shall be deemed and
shall constitute an “Event of Default”:
(a) The interest or principal due under the Promissory Note, or any other payments
due and payable under this Loan Agreement or any other document referred to herein, are not
paid when due and such nonpayment is not remedied within ten (10) business days after
written notice thereof to the Borrower by the Lender;
(b) The Borrower is in breach of any of the requirements, terms, conditions,
covenants or other agreements in the Loan Documents and remains in breach in any material
respect for thirty (30) business days after written notice thereof to the Borrower by the Lender;
provided, however, that if such breach shall reasonably be incapable of being cured within such
thirty (30) business days after notice, and if the Borrower commences and diligently prosecutes
the appropriate steps to cure such breach, no default shall exist so long as the Borrower is
proceeding to cure such breach in reasonable period of time;
(c) Any representation or warranty made by the Borrower in the Loan Documents,
any other document referred to in such documents, or any financial statement, certificate, or
report furnished pursuant to this Loan Agreement, or any representation or warranty made
order to induce the Lender to close the Loan or disburse the Loan Proceeds, which proves to
have been untrue in any material respect or materially misleading as of the time such
representation or warranty was made.
(d) Borrower shall make an assignment for the benefit of its creditors, or shall be
dissolved, or shall commit an act of bankruptcy under the United States Bankruptcy Act (as now
or hereafter amended), or shall admit in writing its inability to pay its debts as they become
due, or shall file a petition in bankruptcy, or shall become or be adjudicated as bankrupt or
insolvent, however defined, or shall file a petition seeking any reorganization, dissolution,
liquidation, arrangement, composition, readjustment or similar relief under any present or
future bankruptcy or insolvency statute, law or regulation, or shall file an answer admitting to
or not contesting the material allegations of a petition filed against it in such proceedings, or
shall not, within 60 days after the filing of such a petition against it, have the same dismissed or
vacated, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of a material part of its properties, or shall not, within 60 days after the appointment
(without its consent or acquiescence) of a trustee, receiver or liquidator of any material part of
its properties, have such appointment vacated.
(e) A court of competent jurisdiction shall enter an order, judgment or decree
approving a petition filed against Borrower seeking any reorganization, dissolution or similar
relief under any present or future federal, state or other statute, law or regulation relating to
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bankruptcy, insolvency or other relief for debtors, or any trustee, receiver or liquidator of such
entity, shall be appointed without the consent or acquiescence of State.
(f) Borrower shall refuse to allow DEED, at any reasonable time and upon prior
written notice, to inspect, audit, copy or abstract, any and all of its books, records, papers or
other documents relevant to the Borrower's use of the Loan Proceeds.
(g) Borrower shall refuse to allow the Minnesota Legislative Auditor or the State
Auditor for the State of Minnesota, at any reasonable time and upon prior written notice, to
inspect, audit, copy or abstract, any and all books referred to in Section 5.1(f).
(h) Borrower shall fail to provide annual reporting information as described herein.
(i) The Borrower sells, conveys, transfers, encumbers, or otherwise disposes of all
or any part of the Development Property or the Equipment without the prior written approval
of the State and Lender;
(j) The Borrower merges or consolidates with any other entity without the prior
written approval of the Lender;
(k) There is a loss, theft, substantial damage, or destruction of all or any part of the
Development Property or the Equipment that is not remedied to the Lender's satisfaction
within sixty (60) business days after written notice thereof by the Lender to the Borrower; or
(l) The Borrower is in breach of the requirements of Article 7 and Article 8, the
Business Subsidy Agreement and Progress Reporting.
(m) The occurrence of any other act or event that is noncompliant under the MIF
Program.
Section 5.2. Rights and Remedies. Upon the occurrence of an Event of Default and at any time
thereafter until such Event of Default is cured to the satisfaction of the Lender, the Lender may,
at its option, exercise any and all of the following rights and remedies (as well as any other rights
and remedies available to it):
(a) The Lender may, by notice in writing to the Borrower, refrain from disbursing
any of the Loan Proceeds; provided, however, the Lender may make such disbursements after
the occurrence of an Event of Default without thereby waiving its rights and remedies
hereunder, or waiving its right to make any additional disbursements.
(b) The Lender may, by written notice to the Borrower, declare immediately due and
payable all principal and interest due under the Promissory Note, together with all other sums
payable under the Loan Documents and the same shall thereupon be immediately due and
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payable without presentment or other demand, protest, notice of dishonor or any other notice
of any kind, all of which are hereby expressly waived.
(c) The Lender shall have the right to draw down the Security for a default under
Section 5.1(a), following the 10 days written notice provided therein, or without notice if the
Security is allowed to lapse prior to the end of the required term. If the Security is drawn down,
the proceeds shall be used to cure the default. Upon satisfaction of Borrower’s financial
obligations to the Lender under the terms of this Agreement, with Lender approval, the Security
shall be released.
(d) The Lender shall have the right, in addition to any other rights provided by law or
equity, to enforce its rights and remedies under the Loan Documents.
(e) The Lender shall have the right, in addition to any other rights provided by law or
equity, to initiate litigation for the breach of any term, condition, covenant, requirement or
provision contained in the Loan Documents, and to recover damages for such breach.
(f) The Lender shall have the right, in addition to any other rights provided by law or
equity, to apply to any court, state or federal, for specific performance of any term, condition,
covenant, requirement or provision contained in the Loan Documents; for an injunction against
any violation of any such term, condition, covenant, requirement and/or provision; or for such
other relief as may be appropriate, since the injury to the Lender arising from a default under
any of the terms, conditions, covenants requirements and/or provisions of the Loan
Documents, would be irreparable and the amount of damage would be difficult to ascertain.
(g) The Lender shall have all of the rights and remedies available under all applicable
laws.
Section 5.3. Rights and Remedies Cumulative. The rights and remedies of the parties to this
Loan Agreement, whether provided by operation of law or by this Loan Agreement, shall be
cumulative, and the exercise by either party of any one or more of such remedies shall not be
construed to preclude or waive its right to exercise, at the same or different times, any of the
other such remedies for the same default or breach, or of any of its remedies for any other
default or breach by the other party.
No waiver made by either such party with respect to the performance, manner or time thereof,
of any obligation of the other party or any condition to its own obligation under this Loan
Agreement or any document referred to herein, shall be considered a waiver of any rights of the
party making the waiver with respect to the particular obligation of the other party or condition
to its own obligation beyond those expressly waived in writing and to the extent thereof, or a
waiver in any respect in regard to any other rights of the party making the waiver or any other
obligations of the other party. No delay or failure by either party to exercise any right or remedy
shall be a waiver of such right or remedy, and no single or partial exercise by either party of any
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right or remedy shall preclude other or further exercise thereof for the exercise of any other right
or remedy at any other time.
Section 5.4. Collection. Upon the occurrence of an Event of Default and at any time thereafter
until such Event of Default is cured to the satisfaction of the Lender and State, Borrower agrees
to pay all costs and expenses of the Lender, including, but not limited to, reasonable attorney's
fees, in the collection of any of the obligations or the enforcement of any of the Lender's rights.
If any notice of sale, disposition or other intended action by the Lender is required by law to be
given to Borrower, such notice shall be deemed reasonably and properly given if mailed to
Borrower at the address specified in Section 9.15(b), or at such other address of Borrower as may
be shown on the Lender's records, at least 15 days before such sale, disposition or other intended
action.
Section 5.5. Assignment. If, prior to the Termination Date, the Borrower sells, conveys, transfers,
further mortgages or encumbers, or disposes of the Development Property, or any part thereof
or interest therein, or enters into an agreement to do any of the foregoing, the Borrower shall
immediately repay all amounts then outstanding on the Loan. This shall be in addition to any
other remedies at law or equity available to the Lender.
Section 5.6. Appointment for Foreclosure. Upon the occurrence of an Event of Default and at
any time thereafter until such Event of Default is cured to the satisfaction of the Lender and
State, Borrower agrees that the Lender may appoint an individual or entity to handle the
default proceedings.
ARTICLE 6
Disbursement Provisions
Section 6.1. Payment Requisition Documentation. The Lender will disburse the loan funds upon
receipt and approval by the Lender and the State of the following documentation:
(a) This Loan Agreement, fully executed;
(b) The Promissory note, fully executed
(c) The Letter of Credit in the amount of $125,000 in the form attached hereto as
Exhibit D;
(d) Evidence of private financing in the amount of $10,500,000 which may be drawn
from any combination of the following sources:
1. Bank
2. Equity
3. Interim construction financing
(e) Evidence of Tax Increment Financing from the City of Lakeville for in an amount
up to $526,015
(f) Invoices for items funded by the Loan and invoices for items paid with $100,000
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in matching funds.
(g) The Borrower shall maintain insurance in adequate amounts covering loss or
damage to the collateral. The Lender must be listed as loss payee.
(h) Evidence that equipment or other items purchased with the Loan are in the
Jurisdiction.
Upon receipt of such information, the Loan funds will be disbursed upon approval of the lender
and DEED up to a total disbursement amount of $100,000.
Documentation of total project expenditures will be required prior to Compliance Date One.
Section 6.2. Review of Documents. The Borrower shall not be entitled to any disbursement of
loan proceeds until the Lender's legal counsel and the State have reviewed and approved this
Loan Agreement and the exhibits attached hereto.
Section 6.3. Adverse Changes. The Lender and the State will not authorize disbursement of funds
if there has been any adverse change in the Borrower’s financial condition, organization,
operations or their ability to repay the project financing.
ARTICLE 7
Progress Reporting
Section 7.1. Progress Information. The Borrower shall provide to the Lender information for
incorporation into the Minnesota Investment Fund progress reports, as required by the State and
as needed by the Lender, to monitor the Project for compliance with State and Lender guidelines.
This information must be provided until the project goals have been met or until Compliance
Date Two, whichever is later. At the discretion of the State or Lender additional reporting may
be required. This information must be submitted to the Lender no later than:
(a) January 15, 2020 for the period ending December 31, 2019;
(b) January 15, 2021 for the period ending December 31, 2020;
(c) January 15, 2022 for the period ending December 31, 2021;
(d) Fifteen days after Compliance Date Two.
Section 7.2 Documentation to be provided to the Lender:
(a) Project status and the status of payments.
(b) Additional Leverage. The Borrower must provide to the Lender invoices, sworn
construction statements, and or any other information, with each progress report, to document
Other Project Funds in addition to the originally included project costs.
(c) Job Creation Documentation. The Borrower shall provide to the Lender
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information on the hiring of each New Job on forms provided by the Lender. This information
must include:
(1) Permanent jobs created;
(2) Job title of each New Job;
(3) Date of hire of each new employee;
(4) Hourly base wage paid;
(5) List of Benefits provided; and
(6) Hourly value of Benefits paid.
(d) Payroll Report. A formal payroll report verifying job information will be due at
Compliance Date One and Compliance Date Two.
ARTICLE 8
Business Subsidy Agreement and Reporting
Section 8.1. Business Subsidy Agreement. The provisions of this Section constitute the “Business
Subsidy Agreement” for purposes of the Minnesota Business Subsidy Act (Minn. Stat. § 116J.993
– § 116J.995 and its successor statute.)
(a) The Borrower acknowledges and agrees that the provisions of Minnesota’s
Business Subsidy Act apply to this Loan Agreement, as Borrower is receiving government
assistance under the terms of this Loan Agreement.
(1) The subsidy provided to the Borrower includes the $100,000 loan made
hereunder which will be used for the purchase of machinery and equipment.
(2) The public purposes and goals of the subsidy are to increase net jobs in the
City.
(3) The goals for the subsidy are to create jobs that pay a livable wage, per
Section 8.1(b) of this Loan Agreement.
(4) If the goals are not satisfied, the Borrower shall make payments to the
Lender as required in Section 8.2 of this Loan Agreement.
(5) The subsidy is needed because the cost of equipment make the Project
economically infeasible without the Loan.
(6) The Borrower must continue operations in the Jurisdiction for at least five
years following the Benefit Date.
(7) The Borrower does not have a parent corporation.
(8) In addition to the assistance provided under this Loan Agreement, the
Borrower has received or expects to receive as part of this project, the
following financial assistance from other “grantors” as defined in the
Business Subsidy Act:
Tax Increment Financing in an amount up to $526,015 from the City of
Lakeville
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(b) On the Compliance Dates One and Two, the Borrower shall have:
(1) Maintained ninety-five (95) permanent, non-contract, non-seasonal FTE
jobs; and
(2) The Borrower will create an additional twelve (12) permanent non-
contract FTE jobs between the Effective Date and Compliance Date One.
Each job created may be included in only one “wage bracket” as stated
below:
a. Three ( 3 ) paying at least $15.00 per hour in cash wages, exclusive of
Benefits. The Borrower is entitled to Loan Proceeds in the amount of
$3,677.00 for each job created in this “wage bracket”;
b. Two ( 2 ) paying at least $18.00 per hour in cash wages, exclusive of
Benefits. The Borrower is entitled to Loan Proceeds in the amount of
$4,779.50 for each job created in this “wage bracket”;
c. Seven ( 7 ) paying at least $21.00 per hour in cash wages, exclusive of
Benefits. The Borrower is entitled to Loan Proceeds in the amount of
$5,882.00 for each job created in this “wage bracket”; and
(3) The Borrower will create an additional eight (8) permanent non-contract
FTE jobs between the Effective Date and Compliance Date Two. Each job
created may be included in only one “wage bracket” as stated below:
a. Four ( 4 ) paying at least $15.00 per hour in cash wages, exclusive of
Benefits. The Borrower is entitled to Loan Proceeds in the amount of
$3,677.00 for each job created in this “wage bracket”;
b. Four ( 4 ) paying at least $21.00 per hour in cash wages, exclusive of
Benefits. The Borrower is entitled to Loan Proceeds in the amount of
$5,882.00 for each job created in this “wage bracket”; and
(4) Any job created between the Effective Date and the Compliance Date Two
shall pay at least $13.27 per hour, including Benefits.
(5) New Jobs created on or after the Effective Date that meet the criteria
outlined in 8.1(b)(2) will count toward the Borrower’s job creation goal.
Section 8.2. Default on Business Subsidy Act Requirements.
(a) If the Borrower fails to meet the job creation goal and wage level commitment on
Compliance Date One, the Lender may, after holding a public hearing, and obtaining approval
from the City Council, extend the Compliance Date One for one year, after approval from the
State. If after the extension, the Borrower fails to meet the job creation goal and wage
commitment, set forth in Section 8.1, the Borrower will be required to repay to the Lender a pro
rata share of the Loan principal plus interest as defined in Section 8.2 (b) at an accelerated rate,
based upon the difference between the “wage bracket” values defined in Section 8.1(b)(2) above
and the “wage bracket” value of actual jobs created. Forgivable loan proceeds will be subject to
collection first; once the forgivable funds are exhausted, repayable loan proceeds will be subject
to accelerated repayment. In the event that no jobs are created by the Borrower by Compliance
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Date Two, or all jobs created do not meet the commitment noted in 8.1 (b), the Grantee will be
required to return all loan funds plus interest as defined in Section 8.2 (b) to the State on an
accelerated basis.
(b) In an Event of Default arising from a breach by the Borrower of any provision of
Section 8.1 of this Loan Agreement, then the Borrower shall repay to the Lender the principal
amount as calculated in Section 8.2(a) hereof plus interest at the greater of 5.0% or the implicit
price deflator for government consumption expenditures and gross investment for state and
local governments prepared by the Bureau of Economic Analysis of the United States Department
of Commerce for the 12-month period ending March 31st of the previous year, in addition to any
other payment required hereunder,
(c) Interest required to be paid pursuant to Section 8.2 (b) shall commence to accrue
as of the Initial Disbursement Date;
(d) Nothing in this Section 8.2 shall be construed to limit the Lender’s rights or
remedies under any other provision of this Loan Agreement, and the provisions of Section 8.2
are in addition to any other such right or remedy the Lender may have available.
(e) The Borrower shall provide to the Lender information regarding job and wage
goals and results for two years after the Benefit Date or until the goals are met, whichever is
later. This reporting requirement will expire if the goals are met on Compliance Date Two. If the
goals are not met, the Borrower must continue to provide information on the Loan until the Loan
is repaid. The information must be filed on the Non-JOBZ Minnesota Business Assistance form as
found on the MN Department of Employment and Economic Development website and shall
include the following:
(1) the type, public purpose, and amount of subsidies and type of district, if the
subsidy is tax increment financing;
(2) the hourly wage of each job created with separate bands of wages;
(3) the sum of the hourly wages and cost of health insurance provided by the
employer with separate bands of wages;
(4) the date the job and wage goals will be reached;
(5) a statement of goals identified in the subsidy agreement and an update on
achievement of those goals;
(6) the location of the recipient prior to receiving the business subsidy;
(7) the number of employees who ceased to be employed by the recipient when
the recipient relocated to become eligible for the business subsidy;
(8) why the recipient did not complete the project outlined in the subsidy
agreement at their previous location, if the recipient was previously located at
another site in Minnesota;
(9) the name and address of the parent corporation of the recipient, if any;
(10) a list of all financial assistance by all grantors for the project; and
(11) other information the Commissioner of the MN Dept. of Employment and
Economic Development may request.
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(f) This information must be provided to the Lender no later than March 1 of each
year for the previous year. If the Borrower does not submit the report, the Lender
shall mail the Borrower a warning within one week of the required filing date. If,
after 14 days of the postmarked date of the warning, the Borrower fails to provide
a report, the Borrower must pay to the Lender a penalty of $100 for each
subsequent day until the report is filed. The maximum penalty shall not exceed
$1,000.
ARTICLE 9
Other Conditions
Section 9.1. Project Time Frame. The time frame outlined in the Grant Application and Grant
Contract pertaining to the Project shall be met by the Borrower.
Section 9.2. Promissory Note. The Borrower shall execute the Promissory Note in substantially
the form set forth by the State.
Section 9.3. Collateral. The Borrower shall furnish the Lender a letter of credit, within a
reasonable time after acquiring the same.
Section 9.4. Annual Financial Statements. For the term of the Loan, upon request of the Lender,
the Borrower shall submit the most recent annual financial statements, certified by an officer of
Borrower. The annual financial statements shall include a profit and loss statement, balance
sheet, and statement of cash flow, notes and an opinion from the accountants of such statements
acceptable to the Lender.
Section 9.5. Discrimination on Account of Race, Creed, or Color. The provisions of Minn. Stat.
§ 181.59 and any successor statutes, which relate to civil rights and discrimination, shall be
considered a part of this Loan Agreement as though wholly set forth herein and the Borrower
shall comply with each such provision throughout the term of this Loan Agreement.
Section 9.6 Affirmative Action. The Borrower is encouraged to prepare and implement an
affirmative action plan for the employment of minority persons, women, and the qualified
disabled.
Section 9.7. Job Listing Agreement. (Minn. Stat. § Section 116L.66 and any successor statutes).
When the Loan is for $200,000 or more, the Borrower shall enter into a Job Listing Agreement
with the local CareerForce Center, MN Department of Employment and Economic Development.
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Section 9.8. Prevailing Wage. If the Borrower is awarded $500,000 or more of loan proceeds and
the Loan is used for construction, installation (including equipment), remodeling and or repairs,
the Borrower shall fully and completely comply with all applicable prevailing wage requirements
contained in Minn. Stat. § 116J.871 and § 177.42, subd. 6.
(a) Documentation. The Borrower shall maintain or ensure access to all documentation
necessary to establish that the required prevailing wage was paid and shall allow the
Lender, the Commissioner of the Department of Labor and Industry and the State
reasonable access to such data.
(b) Penalty. It is a misdemeanor for the Borrower, who has certified that prevailing
wages will be paid to laborers and mechanics to subsequently fail to pay the prevailing wage.
Each day a violation of this subdivision continues is a separate offense.
Section 9.9. Surety Deposits Required for Construction Contracts. If the Loan is used for
construction, and the Borrower is hiring, contracting, or having a contract with a nonresidential
person or foreign corporation to perform construction work, the Borrower must comply with
Minnesota Statutes 290.9705, as amended, by deducting and witholding eight percent of
cumulative calendar year payments to the contractor which exceeds $50,000.
This condition may be waived if (1) the contractor gives the commissioner a cash surety or a
bond, secured by an insurance company licensed by Minnesota, conditioned that the contractor
will comply with all applicable provisions of this chapter and chapter 297A, or (2) the contractor
has done construction work in Minnesota at any time during the three calendar years prior to
entering the contract and has fully complied with all provisions of this chapter and chapter 297A
for the three prior years.
Section 9.10. Publicity and Endorsement
(a) Publicity. Any publicity regarding the subject matter of this Loan Agreement must
identify the State as the sponsoring agency. For purposes of this provision, publicity includes
notices, informational pamphlets, press releases, research, reports, signs, and similar public
notices prepared by or for the Borrower individually or jointly with others, or any subcontractors,
with respect to the MIF Program, publications, or services provided resulting from this Grant
Contract.
(b) Endorsement. The Lender and the Borrower must not claim that the State endorses
its products or services.
Section 9.11. Workers Compensation Insurance. The Borrower has obtained workers
compensation insurance as required by Minn. Stat. § Section 176.181, subd. 2. The Borrower's
workers compensation insurance information is as follows:
(a) Company Name: ____________________________________________
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(b) Policy Number: _____________________________________________
(c) Local Agent: ________________________________________________
Section 9.12. Effect on Other Agreements. Nothing in this Loan Agreement shall be construed
to modify any term of any other agreement to which the Lender and the Borrower are parties.
Section 9.13. Release and Indemnification Covenants. Except for any breach of the
representations and warranties of the Lender or the negligence or other wrongful act or omission
of the following named parties, the Borrower agrees to protect and defend the Lender and the
governing body members, officers, agents, servants, and employees thereof, now and forever,
and further agrees to hold the aforesaid harmless from any claim, demand, suit, action, or other
proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from
the acquisition, construction, installation, ownership, maintenance, and operation of the Project
and the Borrower's activities on the Development Property.
Section 9.14. Modifications. This Loan Agreement may be modified solely through written
amendments hereto executed by the Borrower and the lender and approved by the State.
Section 9.15. Notices and Demands. Any notice, demand, or other communication under this
Loan Agreement by either party to the other shall be sufficiently given or delivered only if it is
dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered
personally:
(a) as to the Lender: City of Lakeville
ATTN: City Administrator
20195 Holyoke Ave.
Lakeville, MN 55044
(b) as to the Borrower: QA1 Precision Products, Inc.
ATTN: President
21730 Hanover Ave.
Lakeville, MN 55044
or at such other address with respect to any party as that party may, from time to time, designate
in writing and forward to the others as provided in this Section 9.15(b).
Section 9.16 Conflict of Interests; Representatives Not Individually Liable.
(a) No employee, officer or agent of the Lender shall participate in the
administration of a contract supported by this loan if a conflict of interest, real or apparent,
would be involved. No employee, officer or agent of the Lender may obtain a financial interest
in any agreement with respect to the Loan. No employee, officer, or agent of the Lender shall
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be personally liable to the Borrower or any successor in interest in the event of any default or
breach by the Lender or for any amount that may become due to the Borrower or on any
obligation or term of this Loan Agreement.
(b) To the best of the Borrower's knowledge, no member, officer, or employee of the
Lender, or its officers, employees, designees, or agents, no consultant, member of the governing
body of the Lender, and no other public official of the Lender, who exercises or has exercised any
functions or responsibilities with respect to the Project during his or her tenure shall have any
interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to
be performed in connection with the Project or in any activity, or benefit there from, which is
part of the Project.
Section 9.17. Binding Effect. The covenants and agreements in this Loan Agreement shall bind
and benefit the heirs, executors, administrators, successors, and assigns of the parties to this
Loan Agreement.
Section 9.18. Provisions Not Merged With Deed. None of the provisions of this Loan Agreement
are intended to or shall be merged by reason of any deed transferring any interest in the
Development Property and any such deed shall not be deemed to affect or impair the provisions
and covenants of this Loan Agreement.
Section 9.19. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections
of this Loan Agreement are inserted only for convenience of reference and shall be disregarded
in construing or interpreting any of its provisions.
Section 9.20. Counterparts. This Loan Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 9.21. Choice of Law and Venue. This Loan Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota without regard to its conflict of
laws provisions. Any disputes, controversies, or claims arising out of this Loan Agreement shall
be heard in the state of Minnesota, and all parties to this Loan Agreement waive any objection
to the jurisdiction of these courts, whether based on convenience or otherwise.
Section 9.22. Waiver. The failure or delay of any party to take any action or assert any right or
remedy, or the partial exercise by any party of any right or remedy shall not be deemed to be a
waiver of such action, right, or remedy if the circumstances creating such action, right, or remedy
continue or repeat.
Section 9.23. Entire Agreement. This Loan Agreement, with the exhibits hereto, constitutes the
entire agreement between the parties pertaining to its subject matter and it supersedes all prior
contemporaneous agreements, representations, and understandings of the parties pertaining to
the subject matter of this Loan Agreement.
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Section 9.24. Separability. Wherever possible, each provision of this Loan Agreement and each
related document shall be interpreted so that it is valid under applicable law. If any provision of
this Loan Agreement or any related document is to any extent found invalid by a court or other
governmental entity of competent jurisdiction, that provision shall be ineffective only to the
extent of such invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Loan Agreement or any other related document.
Section 9.25. Immunity. Nothing in this Loan Agreement shall be construed as a waiver by the
Lender of any immunities, defenses, or other limitations on liability to which the Lender is entitled
by law, including but not limited to the maximum monetary limits on liability established by Minn.
Stat. § Chapter 466.
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IN WITNESS WHEREOF, the Lender has caused this Loan Agreement to be duly executed
in its name and behalf and the Borrower has caused this Loan Agreement to be duly executed
in its name and behalf as of the date first above written.
City of Lakeville
By _________________________
Its _________________________
By _________________________
Its _________________________
QA1 Precision Products, Inc.
By _________________________
Melissa Scoles, President/CEO
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EXHIBIT A
Legal Description of Development Property
That part of the Southeast Quarter of Section 31, Township 114, Range 20, and Outlot C and
Outlot D, INTERSTATE SOUTH LOGISTICS PARK, according to the recorded plat thereof, Dakota
County, Minnesota, described as follows:
Commencing at the northwest corner of said Outlot C; thence South 89 degrees 59 minutes 25
seconds East, along the north line of said Outlot C, a distance of 88.42 feet to the point of
beginning; thence South 23 degrees 29 minutes 24 seconds West a distance of 447.46 feet;
thence South 66 degrees 30 minutes 36 seconds East a distance of 618.78 feet to the
southwesterly extension of the southeasterly line of said Outlot D; thence North 23 degrees 31
minutes 55 seconds East, along said southeasterly line and its extension, a distance of 663.14
feet to the northeast corner of said Outlot D; thence northwesterly and westerly along the
north line of said Outlot D and the south line of 217th Street West, as dedicated on said plat,
and the north line of said Outlot C, to the point of beginning;
To be platted as Lot 1, Block 1, Interstate South Logistics Park Second Addition.
[to be confirmed upon final plat recording]
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EXHIBIT B
Equipment List
100 HP Air Compressor + Dryer $110,000.00
Wash System (Shock Line), Almco system
$95,000.00
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EXHIBIT C
Grant Contract
Will need to be attached once executed.
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EHXIBIT D
Letter of Credit
IRREVOCABLE LETTER OF CREDIT
No. ___________________
Date: _________________
TO: City of Lakeville
20195 Holyoke Avenue
Lakeville, Minnesota 55044
Dear Sir or Madam:
We hereby issue, for the account of (Name of Developer) and in your favor, our Irrevocable
Letter of Credit in the amount of $____________, available to you by your draft drawn on sight on the
undersigned bank.
The draft must:
a) Bear the clause, "Drawn under Letter of Credit No. __________, dated ________________,
2_____, of (Name of Bank) ";
b) Be signed by the City Administrator or Finance Director of the City of Lakeville.
c) Be presented for payment at (Address of Bank) , on or before 4:00 p.m. on ____________,
2_____.
This Letter of Credit shall automatically renew for successive one-year terms unless, at least forty-
five (45) days prior to the next annual renewal date (which shall be _____________ of each year), the Bank
delivers written notice to the Lakeville Finance Director that it intends to modify the terms of, or cancel, this
Letter of Credit. Written notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S.
Mail, at least forty-five (45) days prior to the next annual renewal date addressed as follows: Lakeville Finance
Director, Lakeville City Hall, 20195 Holyoke Avenue, Lakeville, MN 55044, and is actually received by the
Finance Director at least thirty (30) days prior to the renewal date.
This Letter of Credit sets forth in full our understanding which shall not in any way be modified,
amended, amplified, or limited by reference to any document, instrument, or agreement, whether or not
referred to herein.
This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one draw may
be made under this Letter of Credit.
This Letter of Credit shall be governed by the most recent revision of the Uniform Customs and
Practice for Documentary Credits, International Chamber of Commerce Publication No. 600.
We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly
honored upon presentation.
BY: ____________________________________
Its _____________________________________
PROMISSORY NOTE
$100,000
____________________, 2019
QA1 Precision Products, Inc. a Minnesota corporation (the "Borrower"), for value
received, hereby promises to pay to the City of Lakeville (the "Lender") or its assigns (the
Lender and any assigns are hereinafter referred to as the "Lender"), at its designated
principal office or such other place as the Lender may designate in writing, the principal
sum of one hundred thousand and No/100 Dollars ($100,000) or so much thereof as may
be advanced under this Note, with interest as hereinafter provided, in any coin or
currency which at the time or times of payment is legal tender for the payment of private
debts in the United States of America.
1. Except as provided in Section 3 of this Note, the Loan shall bear interest at zero
percent (0.0%). Interest, if any in accordance with Section 3 of this Note, shall
commence to accrue as to the amount disbursed in accordance with the Loan
Agreement between the Borrower and the Lender of even date herewith (the “Loan
Agreement”) evidencing the terms of the loan evidenced by this Note.
2. Subject to Section 3 of this Note up to $100,000 of the principal balance of this Note
(the “Forgivable Loan”) shall be forgiven and deemed paid on the Expiration Date (as
defined in the Loan Agreement).
3. However, if the goals set forth in Section 8.1(b) of the Loan Agreement are not met
by Compliance Date Two, as the same may be extended, the Borrower agrees to repay
all or a part of the principal amount of this Note on a pro rata basis plus interest set
at the greater of 5.0% or the implicit price deflator defined in Minnesota Statutes,
Section 275.70, Subdivision 2 (“Recapture Interest”), accruing from and after the
Initial Disbursement Date, compounded annually. Recaptured Principal plus
Recapture Interest thereon shall be repaid not later than 30 days after the Lender
notifies the Borrower of the amount to be repaid pursuant to Section 8.2 of the Loan
Agreement. If the goals are only met in part by Compliance Date Two, the Borrower
will repay a pro rata portion of the principal amount of this Note (plus Recapture
Interest), as set forth in Section 8.2 of the Loan Agreement.
4. The Borrower shall have the right to prepay the principal of this Note, in whole or in
part, without prepayment penalty.
5. This Note is given pursuant to the Loan Agreement and is secured by a Security
Agreement of even date herewith (the "Security agreement") covering certain
property located in Dakota County, Minnesota. In the event any such security is found
to be invalid for whatever reason, such invalidity shall constitute an event of default
hereunder.
All of the agreements, conditions, covenants, provisions, and stipulations contained
in the Loan Agreement, or any instrument securing this Note are hereby made a part
of this Note to the same extent and with the same force and effect as if they were
fully set forth herein. It is agreed that time is of the essence of this Note and is not
cured within applicable notice and cure periods. If a default occurs under the Loan
Agreement, or any instrument securing this Note, then the Lender of this Note may
at its right and option, without notice, declare immediately due and payable the
principal balance of this Note, together with any costs of collection including attorney
fees incurred by the Lender of this Note in collecting or enforcing payment hereof,
whether suit be brought or not, and all other sums due hereunder, or under any
instrument securing this Note. The Borrower agrees that the Lender of this Note may,
without notice to the Borrower of this Note and without affecting the liability of the
Borrower of this Note, accept additional or substitute security for this Note, or release
any security or any party liable for this Note or extend or renew this Note.
6. The remedies of the Lender of this Note as provided herein, and in the Loan
Agreement, or any other instrument securing this Note, shall be cumulative and
concurrent and may be pursued singly, successively, or together, and, at the sole
discretion of the Lender of this Note, may be exercised as often as occasion therefore
shall occur; and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
The Lender of this Note shall not be deemed, by any act of omission or commission,
to have waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Lender of this Note and then only to the extent specifically set forth
in the writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent event.
This Note may not be amended, modified, or changed except only by an instrument
in writing signed by the party against whom enforcement of any such amendment,
modifications, or change is sought.
7. This Note shall be governed by and construed in accordance with the laws of the state
of Minnesota without regard to its conflict of laws provisions. Any disputes,
controversies, or claims arising out of this Note shall be heard in the state or federal
courts of Minnesota, and all parties to this Note waive any objection to the jurisdiction
of these courts, whether based on convenience or otherwise.
8. The headings used in this Note are solely for convenience of reference, are no part of
this Note, and are not to be considered in construing or interpreting this Note.
9. This Note, with the other Loan Documents, constitutes the entire Note between the
parties pertaining to its subject matter and it supercedes all prior contemporaneous
Notes, representations, and understandings of the parties pertaining to the subject
matter of this Note.
10. Separability. Wherever possible, each provision of this Note and each related
document shall be interpreted so that it is valid under applicable law. If any provision
of this Agreement or any related document is to any extent found invalid by a court
or other governmental entity of competent jurisdiction, that provision shall be
ineffective only to the extent of such invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Note or any other related
document.
11. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to
exist, happen, and be performed precedent to or in the issuance of this Note do exist,
have happened, and have been performed in regular and due form as required by law.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
as of the ___day of _______________, 2019.
BORROWER:
QA1 PRECISION PRODUCTS,
INC.,
a Minnesota corporation
By:
______________________________
Melissa Scoles, President & CEO