Document:

Prepared by MERRILL CORPORATION

EXHIBIT

10.1

 

AMENDMENT AND WAIVER dated as of September 17,

2001 (this “Amendment and Waiver”) to the Credit Agreement dated as of April

19, 2001 (the “Credit Agreement”) by and among VEECO INSTRUMENTS INC. a Delaware corporation (the “Company”),

FLEET NATIONAL BANK, a national

banking association, as Administrative Agent and as a Lender, THE CHASE MANHATTAN BANK, a New York

banking corporation, as Syndication Agent and as a Lender, HSBC BANK USA, a national banking

association organized under the laws of the United States of America, as

Documentation Agent and as a Lender, and the other Lenders party thereto.

 

WHEREAS, the Company has requested

that the Lenders amend certain provisions of the Credit Agreement, subject to

the terms and conditions set forth herein, and the Lenders have agreed to amend

such provisions of the Credit Agreement;

 

WHEREAS, the Company has requested

that the Lenders waive compliance with certain provisions of the Credit

Agreement, subject to the terms and conditions set forth herein, and the

Lenders have agreed to grant such Waivers.

 

NOW, THEREFORE, in consideration of the

premises and of the mutual agreements herein contained, the parties hereto

agree as follows:

 

1.             Amendments.

 

(a)           Section 1.01 of the Credit Agreement is hereby amended by

inserting the following definition therein immediately before the definition of

“Affiliate”:

 

“AE Closing Date” shall mean

the date on which the Company acquires substantially all of the business of

Applied Epi, Inc.”

 

(b)           Section 7.13(c) of the

Credit Agreement is hereby amended and restated to provide in its entirety as

follows:

 

“(c)         Consolidated Quick

Ratio.  Permit the Consolidated

Quick Ratio to be less than the amounts set forth below for the applicable

period:

 

	

  Period

  	

   

  	

  Ratio

  
	

  Closing

  through the AE Closing Date

  	

   

  	

  1.10:1.00

  
	

   

  	

   

  	

   

  
	

  The

  AE Closing Date through December 30, 2001

  	

   

  	

  0.80:1.00

  
	

   

  	

   

  	

   

  
	

  December

  31, 2001 through March 30, 2002

  	

   

  	

  0.90:1.00

  
	

   

  	

   

  	

   

  
	

  March

  31, 2002 through September 29, 2002

  	

   

  	

  1.00:1.00

  
	

   

  	

   

  	

   

  
	

  September

  30, 2002 and thereafter

  	

   

  	

  1.10:1.00

  

 

2.             Waiver

 

Compliance

by the Company with Section 7.06 (Loans and Investments) of the Credit

Agreement is hereby waived solely with respect to the Company having completed

the acquisition of Applied Epi, Inc.

 

3.             Fee.

 

In

consideration of the agreement of the Lenders to the execution and delivery of

this Amendment and Waiver by the Administrative Agent, the Company shall pay a

fee of $5,000 to each Lender that has consented to the execution of this

Amendment.  Such fee shall be paid to

the Administrative Agent for the benefit of such Lenders on or before September

24, 2001.

 

4.             Miscellaneous.

 

Capitalized

terms used herein and not otherwise defined herein shall have the same meanings

as defined in the Credit Agreement.

 

Except

as expressly amended hereby, the Credit Agreement shall remain in full force

and effect in accordance with the original terms thereof.

 

The

waivers and amendments set forth above are limited specifically to the matters

set forth above and for the specific instances and purposes given and do not

constitute directly or by implication a waiver or amendment of any other

provision of the Credit Agreement or a waiver of any Default or Event of

Default, whether now existing or hereafter arising, which may occur or may have

occurred under the Credit Agreement.

 

The

Company hereby represents and warrants that (a) after giving effect to this

Amendment and Waiver the representations and warranties by the Company and each

of its Subsidiaries pursuant to the Credit Agreement and the Loan Documents to

which each is a party are true and correct in all material respects as of the

date hereof with the same effect as though such representations and warranties

have been made on and as of such date, unless such representation is as of a

specific date, in which case, as of such date, and (b) after giving effect to

this Amendment and Waiver, no Default or Event of Default has occurred and is

continuing.

 

This

Amendment and Waiver may be executed in one or more counterparts, each of which

shall constitute an original, but all of which when taken together shall

constitute but one Amendment and Waiver. This Amendment and Waiver shall become

effective when duly executed counterparts hereof which, when taken together,

bear the signatures of each of the parties hereto shall have been delivered to

the Administrative Agent.

 

This

Amendment and Waiver shall constitute a Loan Document.

 

This

Amendment and Waiver shall be governed by, and construed in accordance with,

the laws of the State of New York.

 

IN WITNESS WHEREOF, the Company and the

Administrative Agent, as authorized on behalf of the Lenders, have caused this

Amendment and Waiver to be duly executed by their duly authorized officers, all

as of the day and year first above written.

 

 

	

   

  	

  VEECO INSTRUMENTS INC.

  
	

   

  	

   

  
	

   

  	

  By:_____________________________

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  FLEET

  NATIONAL BANK,

  
	

   

  	

  as Administrative Agent

  
	

   

  	

   

  
	

   

  	

  By:_____________________________

  
	

   

  	

  Name:

  
	

   

  	

  Title:Prepared by MERRILL CORPORATION

EXHIBIT 10.2

 

PPM No.  99-0114

 

 

 

 

 

LOAN AGREEMENT

 

 

by and between

 

 

JACKSON NATIONAL LIFE

INSURANCE COMPANY, as Lender

 

 

and

 

 

CHORUS CORPORATION, as

Borrower

 

 

 

 

 

 

 

 

 

 

Date:  As of December 15, 1999

 

 

 

 

 

 

LOAN AGREEMENT

 

This Loan Agreement is made as of this 15th

day of December, 1999, by and between CHORUS CORPORATION, a Minnesota corporation

(“Borrower”), and JACKSON NATIONAL LIFE INSURANCE COMPANY, a Michigan

corporation (“Lender”).

 

RECITALS

 

A.            Borrower

is a corporation which has its principal place of business at 4900

Constellation Drive, White Bear Township, Minnesota 55110, and is the owner of

certain real estate located in White Bear Township, Minnesota, consisting of

approximately 11.85 acres, and legally described in Exhibit A hereto

(the “Land”), which is improved with a 75,360 square foot office/warehouse

facility, parking for 198 vehicles and other site improvements (collectively,

the “Improvements”).

 

B.            Borrower

has applied to Lender for a loan (the “Loan”) in the maximum amount of Four Million

Five Hundred Thousand and No/100 ($4,500,000.00) Dollars and Lender has agreed

to make the Loan on the terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the mutual

covenants and agreements herein contained, the parties hereto agree as follows:

 

1.             DEFINED

TERMS.  The

following terms as used herein shall have the following meanings:

 

Affiliated Party:  (i) if Borrower or any Affiliated Party is a

general or limited partnership, the general partners thereof and any person or

entity directly or indirectly controlling any general partner thereof; (ii) if

Borrower or any Affiliated Party is a joint venture, its joint venture partners

and any person or entity directly or indirectly controlling any joint venture

partner thereof, (iii) if Borrower is a corporation or limited liability

company, any person or entity directly or indirectly controlling Borrower; and

(iv) each Indemnitor.

 

Agreement:

This Loan Agreement, as originally executed or as may be hereafter supplemented

or amended from time to time in writing.

 

Application/Commitment:

Collectively, the “Application” to PPM Finance, Inc.  for the Loan dated October 19, 1999, and the acceptance thereof

as a commitment dated November 29, 1999.

 

Appraisal:

An appraisal prepared by a member of a national appraisal organization that has

adopted the Uniform Standards of Professional Appraisal Practice (USPAP)

established by the Appraisal Standards Board of the Appraisal Foundation.  The appraiser shall use assumptions and

limiting conditions established by Lender, and the appraisal shall be in

conformity with Lender’s appraisal guidelines and the requirements of the

Application/Commitment.

 

Building Laws:

All federal, state and local laws, statutes, regulations, codes, ordinances,

orders, rules and requirements applicable to the development, construction,

use, operation, management and maintenance of the Project, including without

limitation, all access, building, zoning, planning, subdivision, fire, traffic,

safety, health, labor, discrimination, environmental, air quality, wetlands,

shoreline, flood plain laws, regulations and ordinances, including, without

limitation, all applicable requirements of the Fair Housing Act of 1988, as

amended, the Americans with Disabilities Act of 1990, as amended, and all

orders or decrees of any court adopted or enacted with respect thereto

applicable to the Project, as any of the same may from time to time be amended,

modified or supplemented.

 

Default:

Any event which, if it were to continue uncured, would, with notice or lapse of

time or both, constitute an Event of Default (as such term is defined in

Section 7.1 of this Agreement).

 

Default Rate:

The default interest rate specified in the Note.

 

Development Agreement:

Development Agreement dated September 1, 1998, by and between the Economic

Development Authority of the Town of White Bear, Minnesota (the “EDA”),

Continental Technology Center, LLP, a Minnesota limited partnership

(“Continental”), and Borrower, as assigned, assumed and amended by that certain

Assignment and Assumption Agreement dated as of December 1, 1999, by and

between Continental and Borrower and consented to by the EDA.

 

Environmental Indemnity

Agreement: The Environmental Indemnity Agreement described in

Section 2.2 of this Agreement, executed by Borrower and Indemnitor, as

originally executed or as may be hereafter supplemented or amended from time to

time in writing.

 

ERISA:

Employee Retirement Income Security Act of 1974, as amended, and the

regulations promulgated thereunder from time to time.

 

Estoppel and Agreement:

The Estoppel and Agreement dated of even date herewith, executed by and among

Borrower, Lender and the EDA with respect to the Development Agreement, as

originally executed or as may be hereafter supplemented or amended from time to

time in writing.

 

Government Approvals:

The meaning set forth in Section 4.11 of this Agreement.

 

Governmental Authority:

Any federal, state, county or municipal government, or political subdivision

thereof, any governmental or quasi-governmental agency, authority, board,

bureau, commission, department, instrumentality, or public body, or any court,

administrative tribunal, or public utility.

 

Guaranty:

The Guaranty described in Section 2.2 of this Agreement, executed by

indemnitor, as originally executed or as may be hereafter supplemented or

amended from time to time in writing.

 

Improvements:

The meaning set forth in Recital A of this Agreement.

 

Indemnification Agreement:

The indemnification agreement described in Section 2.2 of this Agreement,

executed by Indemnitor, as originally executed or as may be hereafter

supplemented or amended from time to time in writing.

 

Include or including:

Including but not limited to.

 

Indemnitor:

Chorus International Corporation, a Minnesota corporation, EPI Europe, Ltd., a

Minnesota corporation, Paul E.  Colombo,

Frank C.  Kraemer and David G.  Reamer, whether one or more.

 

Internal Revenue Code:

The Internal Revenue Code of 1986, as amended, and the regulations promulgated

thereunder from time to time.

 

Knowledge:

When used to modify a representation or warranty, actual knowledge or such

knowledge as a reasonable person under the circumstances should have after

diligent inquiry and investigation

 

Land:

The land legally described in Exhibit A hereto.

 

Laws:

Collectively, all federal, state and local laws, statutes, codes, ordinances,

orders, rules and regulations, including judicial opinions or precedential

authority in the applicable jurisdiction, as any of the same may from time to

time be amended, modified or supplemented.

 

Loan Documents:

This Agreement, the Environmental Indemnity, the Indemnification Agreement, the

Mortgage, the Note, the Guaranty, the Estoppel and Agreement, the other

documents and instruments listed in Section 2.2 of this Agreement, and

all other documents and instruments given to Lender from time to time in

connection with or to secure the Loan, as originally executed or as any of the

same may be hereafter supplemented or amended from time to time, in writing.

 

Loan Maturity:

Maturity Date (as defined in the Note).

 

Loan Opening Date:

The date of the disbursement of the Loan.

 

Mortgage:

The mortgage, deed of trust, security deed, deed to secure debt or similar

instrument described in Section 2.2 of this Agreement, as originally

executed or as may be hereafter supplemented or amended from time to time in

writing.

 

Note:

The mortgage note described in Section 2.2 of this Agreement, as

originally executed or as may be hereafter supplemented or amended from time to

time in writing.

 

Permitted Exceptions:

Those matters listed in Exhibit B hereto to which the interest of

Borrower in the Real Property may be subject and any such other title

exceptions, if any, as Lender, or its counsel, may approve in advance in

writing.

 

Project:

The Land together with the Improvements and any and all other buildings,

structures and improvements located or to be located thereon and all rights,

privileges, easements, hereditaments and appurtenances, thereunto relating or

appertaining, including parking for at least 198 vehicles, but in any event

parking in compliance with any applicable zoning ordinance and tenant leases,

and all personal property, fixtures and equipment required or used (or to be

used) for the operation thereof, but specifically excluding all personal

property, trade fixtures and equipment, not constituting a part of the

structural, utility or mechanical components or systems of the Improvements,

required or used (or to be used) for the operation of Borrower’s business at

the Project.

 

Real Property:

That portion of the Project constituting real property.

 

Title Insurer:

First American Title Insurance Company, or such other title insurance company

licensed in the State of Minnesota, as may be approved by Lender in connection

with the Loan.

 

Defined terms may be used in the singular or the plural.  When used in the singular preceded by “a”,

“an”, or “any”, such term shall be taken to indicate one or more members of the

relevant class.  When used in the

plural, such term shall be taken to indicate all members of the relevant class.

 

2.             TERMS

OF LOAN AND DOCUMENTS.

 

a.             Agreement

to Borrow and Lend. 

Subject to all of the terms, provisions and conditions set forth in this

Agreement, Lender agrees to make and Borrower agrees to accept the Loan

described in the Recitals of this Agreement. 

Borrower agrees to pay all indebtedness evidenced and secured by the

Loan Documents in accordance with the terms thereof.

 

b.             Loan

Documents.  In

consideration of Lender’s entry into this Agreement and Lender’s agreement to

make the Loan, Borrower agrees that it will, in sufficient time for review by

Lender and its counsel prior to the Loan Opening Date, execute and deliver or

cause to be executed and delivered to Lender the following documents and

instruments in form and substance acceptable to Lender:

 

i.              A mortgage note from Borrower payable to the order of

Lender in the original principal amount of 

Four Million Five Hundred Thousand and No/100 ($4,500,000.00) Dollars;

 

ii.             A first mortgage on Borrower’s fee

simple estate in the Project securing the Note, subject only to  the Permitted Exceptions;

 

iii.            An assignment to Lender of all

rents, income, issues and profits of, and all leases, licenses, concessions and

other similar agreements relating to or connected with the Project which shall

be a present first priority absolute assignment of all present and future

leases of all or any part of the Project, all guarantees thereof and all rents

and other sums payable thereunder;

 

iv.            A security agreement granting Lender

a security interest in all personal property, tangible and intangible, owned or

hereafter acquired by Borrower and relating to the Project, including bank

accounts, accounts receivable, all escrow, impound or reserve accounts required

in the Loan Documents, and other intangible property, which agreement may be

combined with the Mortgage;

 

v.             Uniform Commercial Code financing statements, in

duplicate, executed by Borrower as debtor with respect to all of the personal

property;

 

vi.            An indemnity agreement with respect

to certain matters including environmental covenants (the “Environmental

Indemnity”);

 

vii.           An indemnity agreement with respect

to certain matters executed by Indemnitor (the “Indemnity Agreement”);

 

viii.          A Guaranty, limited as to amount, of

Borrower’s obligations under the Loan Documents, executed by Indemnitor (the

“Guaranty”);

 

ix.            A borrower’s affidavit containing

certain warranties and representations by Borrower (the “Borrower’s

Certificate”);

 

x.             The Estoppel and Agreement;

 

xi.            Any other documents required by the

Application/Commitment; and

 

xii.           Such other papers and documents as

may be required by this Agreement or as Lender may reasonably require.

 

c.             Terms

of the Loan.  The

Loan will bear interest for the period and at the rate or rates set forth in

the Note, and be payable in accordance with

the terms of the Note.  The unpaid

principal balance, all accrued and unpaid interest and all other sums due and

payable under the Note or other Loan Documents, if not sooner paid, shall be

paid in full at Loan Maturity.

 

d.             Prepayments.  Borrower shall have no right to make

prepayments of the Loan in whole or in part except in accordance with the terms of the Note.

 

e.             Conditions to Disbursement.  Borrower agrees to perform and satisfy all

conditions precedent to the disbursement of the Loan set forth in the

Application/Commitment, including those set forth in Sections 2.4 (Third Party

Reports) and 3 (The Closing) thereof.

 

f.              Sources

and Uses. 

Borrower shall use the proceeds of the Loan solely for the purposes set

forth in Exhibit C hereto.  This

sources and uses statement must be in substantial accordance with the sources

and uses statement attached to the Application/Commitment.

 

3.             BORROWER’S

COVENANTS.  Borrower

further covenants and agrees with Lender as follows:

 

a.             Escrow Deposits.  (a) Unless specifically waived by a separate

written agreement, Borrower shall deposit monthly with Lender a sum equal to

one-twelfth (1/12th) of the amount estimated by Lender to be required to pay,

at least thirty (30) days prior to their respective due dates, annual taxes,

assessments, ground rent and insurance premiums for the Project (the “Escrow

Account”).  Lender shall not pay

interest on or segregate the Escrow Account unless required to do so under

applicable law.  If Lender is required

to segregate the Escrow Account, Borrower shall execute such documents as

Lender, in its sole discretion, deems necessary to perfect its security

interest in the Escrow Account.  On the

Loan Opening Date, Borrower shall make an initial deposit with Lender of a sum

equal to one-twelfth (1/12th) of the estimated annual property taxes and

assessments, a sum equal to one-twelfth (1/12th) of the annual ground rent, if

applicable, and a sum equal to one-twelfth (1/12th) of the estimated annual

insurance premiums, multiplied by the number of months elapsed in the

respective billing periods.  For

example, if annual taxes and assessments are paid every six (6) months (in June

and December) and the Loan Opening Date occurs in March, the initial tax

impound would be four-twelfths (4/12ths) of the estimated annual property taxes

and assessments; and

 

                (b)

The Escrow Account is hereby pledged as additional security for the Loan and

shall be held to be irrevocably applied

for the purposes for which made hereunder and shall not be subject to

the direction or control of Borrower; provided, however, that neither Lender

nor any depository holding such funds shall be liable for any failure to apply

to the payment of taxes, assessments, ground rent or insurance premiums any

amount so deposited unless (i) there shall exist no Default or Event of Default

hereunder or under any of the Loan Documents, (ii) there are sufficient funds

in the Escrow Account to pay the particular taxes, assessments, ground rent or

insurance premiums and (iii) following payment of such taxes, assessments,

ground rent or insurance premiums, the Escrow Account will be “in balance” in

the reasonable opinion of Lender.

 

b.             Payment of Taxes.  Borrower shall pay all real estate taxes,

assessments and charges of every kind upon the Project before the same become

delinquent; provided, however, that Borrower shall have the right to pay any

such tax, assessment or charge under protest or to otherwise contest any such

tax, assessment or charge but only if (i) such contest has the effect of

preventing the collection of such tax, assessment or charge so contested and

also preventing the sale or forfeiture of the Project or any part thereof or

any interest therein, (ii) Borrower has notified Lender in writing in advance

of its intent to contest such tax, assessment or charge, and (iii) Borrower has

deposited security in form and amount satisfactory to Lender, in its reasonable

judgment, and increases the amount of such security so deposited promptly after

Lender’s request therefor.  If Borrower

shall fail to commence such contest or, having commenced such contest, and

having deposited such security required by Lender for its full amount, shall

thereafter fail to prosecute such contest in good faith or with due diligence,

or, upon adverse conclusion of any such contest, shall fail to pay the tax,

assessment or charge so contested, Lender may at its election (but shall not be

required to), pay and discharge any such tax, assessment or charge, and any

interest or penalty thereon, and any amounts so expended by Lender shall be

deemed to constitute disbursements of the Loan proceeds hereunder (even if the

total amount of disbursements would exceed the face amount of the Note), and

shall bear interest from the date expended at the Default Rate and be payable

with such interest upon demand.  Lender

in making any payment hereby authorized relating to any tax, assessment or

charge, may do so according to any bill, statement or estimate procured from

the appropriate public office without inquiry into the accuracy of such bill,

statement or estimate or into the validity of any tax, assessment, charge,

sale, forfeiture, tax lien or title or claim thereof.

 

c.             Maintenance

of Insurance. 

(a)  Insurance Coverage Requirements:

Borrower shall maintain insurance coverages as contained on Exhibit D

hereto and as follows, all in forms, with companies and in amounts satisfactory

to Lender:

 

(1)           All

risk/open perils special form property insurance must be in force with limits

of 100% replacement cost.  Borrower

agrees to furnish upon Lender’s request evidence of replacement cost, without

cost to Lender, such as is regularly and ordinarily obtained by insurance

companies to determine such replacement cost. 

If a coinsurance clause is in effect, an agreed amount endorsement is

required.  Blanket policies must include

limits by property location.  The

coverage shall insure the Real Property and all tangible personal property.

 

(2)           Broad

form boiler and machinery coverage, including a form of business income, must

be in force if any such item is located on or about the Real Property.

 

(3)           If

available, flood insurance must be in force if the Real Property is located in

a special flood hazard area according to the most current flood insurance rate

map issued by the Federal Emergency Management Agency.  The coverage shall include the Real Property

and the tangible personal property.

 

(4)           A

form of business income or rent loss coverage must be in force in the amount of

one year’s business income or rental income from the Property.  Blanket policies must include limits by

property location.

 

(5)           Comprehensive/general

liability coverage must be in force with a $3,000,000 combined single limit per

occurrence with a minimum aggregate limit of $5,000,000.  Umbrella/excess liability insurance may be

used to satisfy this requirement. 

Liquor liability coverage must be in force if alcoholic beverages are or

will be sold, served or given on the Real Property, either in the name of

Borrower or in the name of the tenant which sells, serves or gives such

alcoholic beverages.

 

(6)           Such

additional coverages appropriate to the property type and site location as

Lender may reasonably require. 

Additional coverages may include earthquake, mine subsidence, sinkhole,

personal property, supplemental liability, or coverages of other

property-specific risks.

 

(b)           Insurance

Procedures:

 

(i)            How Lender Should Be Named.  On all property policies and coverages

(including coverage against loss of business or rental income), Lender must be

named as “First Mortgagee” and “Lenders Loss Payee” under a standard mortgage

clause.  On all liability policies and

coverages, including any liquor liability coverage maintained by any tenant,

Lender must be named as an “Additional Insured.” Lender should be referred to

verbatim as follows: Jackson National Life Insurance Company and its

successors, assigns and affiliates, as their interest may appear; c/o PPM

Finance, Inc., 225 West Wacker Drive, Suite 1200, Chicago, Illinois 60606, or

its Mortgage Correspondent.

 

(ii)           Rating.  The insurance carrier must be rated A, Class

VII or better by Best’s Rating Service, without regard to its parent’s or any

reinsurer’s rating.

 

(iii)          Deductible.  The maximum deductible on all coverages and

policies is $25,000.

 

(iv)          Notices, Changes and Renewals.  All policies must require the insurance

carrier to give Lender a minimum of thirty (30) days notice in the event of

modification, cancellation or non-renewal. 

Any vacancy, change of title, tenant occupancy or use, physical damage,

additional improvements or other factors affecting any insurance contract must

be reported to Lender immediately. 

Borrower must provide Lender with a paid insurance agent’s receipt for

all current coverages unless such bills are paid by Lender from proceeds on

deposit in the Escrow Account established pursuant to Section 3.1.  An original or certified copy of each policy

is required on or prior to the Loan Opening Date and upon renewal.  If no such copy is available, Lender will

accept a binder for a period not to exceed 90 days.  All binders, certificates of insurance, and original or certified

copies of policies must name Borrower as a named insured, or as an additional

insured, must include the complete and accurate property address and must bear

the original signature of the issuing insurance agent.

 

(v)           No Other Insurance.  Borrower shall not take out separate

insurance concurrent in form or contributing in the event of loss with that

required to be maintained hereunder unless Lender is included thereon under a

standard, non-contributory Lender clause acceptable to Lender.  Borrower shall immediately notify Lender

whenever any such separate insurance is taken out and shall promptly deliver to

Lender the original policy or policies of such insurance.

 

(c)           Lender’s Right to Obtain Insurance.  Notwithstanding this Section 3.3, in

the event of a Default under this Agreement or any of the other Loan Documents,

Lender shall have the right (but not the obligation) to place and maintain

insurance required to be placed and maintained by Borrower hereunder, and use

funds on deposit in the Escrow Account for the payment of insurance to pay for

same.  Any additional amounts expended

therefor shall constitute additional disbursements of Loan proceeds (even if

the total amount of disbursements would exceed the face amount of the Note),

and shall bear interest from the date expended at the Default Rate and be

payable together with such interest upon demand.

 

d.             Mechanics’ Liens

and Contest Thereof. 

Borrower will not suffer or permit any mechanics’ lien claims to be

filed or otherwise asserted against the Project and will discharge the same

within fifteen (15) days after the filing or commencement thereof (or sooner if

necessary to prevent loss, forfeiture or impairment of the Project or any part

thereof) if any claims for lien or any proceedings for the enforcement thereof

are filed or commenced; provided, however, that Borrower shall have the right

to contest in good faith and with due diligence the validity of any such lien

or claim upon furnishing to the Title Insurer such security or indemnity as it

may require to induce the Title Insurer to insure against all such claims,

liens or proceedings; and provided further that Lender will not be required to

make any further disbursements of the Loan proceeds unless (a) any mechanics’

lien claims shown by any title insurance commitments or interim binders or

certifications have been released or insured against by the Title Insurer or

(b) Borrower shall have provided Lender with such other security with respect

to such claim as may be acceptable to Lender, in its sole discretion.

 

e.             Settlement of

Mechanics’ Lien Claims. 

If Borrower shall fail to discharge within fifteen (15) days after the

filing or assertion thereof (or sooner if necessary to prevent loss, forfeiture

or impairment of the Project or any part thereof) any mechanics’ lien claim

filed or otherwise asserted or to contest any such claims and give security or

indemnity in the manner provided in Section 3.4 hereof, or, having

commenced to contest the same, and having given such security or indemnity,

shall thereafter fail to prosecute such contest in good faith or with due

diligence, or fail to maintain such indemnity or security so required by the

Title Insurer for its full amount, or, upon adverse conclusion of any such

contest, shall fail to cause any judgment or decree to be satisfied and lien to

be promptly released, then, and in any such event, Lender may, at its election,

but shall not be required to, (i) procure the release and discharge of any such

claim and any judgment or decree thereon, without inquiring into or

investigating the amount, validity or enforceability of such lien or claim and

(ii) effect any settlement or compromise of the same, or may furnish such

security or indemnity to the Title Insurer, and any amounts expended by Lender

in doing so, including premiums paid or security furnished in connection with

the issuance of any surety company bonds, shall be deemed to constitute

disbursements of the Loan proceeds hereunder (even if the total amount of

disbursements would exceed the face amount of the Note), and shall bear

interest from the date expended at the Default Rate and be payable together

with such interest upon demand.

 

f.              Maintenance,

Repair and Restoration of Improvements.  Borrower shall (i) promptly repair, restore

or rebuild any Improvements which may become damaged or be destroyed; and (ii)

keep the Improvements in good condition and repair, without waste.

 

g.             Leases

and Lease Reports. 

Borrower shall not enter into, modify, amend, waive any material

provision of, terminate or cancel any lease(s) of space in the Project without

the prior written consent of Lender. 

All lessees shall be required, at Lender’s election, to execute estoppel

certificates and subordination, non-disturbance and attornment agreements in

form and substance satisfactory to Lender. 

Within fifteen (15) days following the end of each year, Borrower shall

deliver to Lender a report showing the status of the leasing of space in the

Project certified by Borrower.  Such

report shall include information on the amount of space covered by any letters

of intent, leases out for execution, and fully executed leases; the rental

amount under each lease agreement or proposed lease agreement; the term of each

lease agreement; and a summary of any terms which vary from the standard form

of lease, if applicable, previously approved by Lender.  Any new lease, modification, amendment,

waiver of any material provision, termination or cancellation of any lease of

space in the Project without the prior written consent of Lender may be deemed

by Lender, in its sole discretion, as an Event of Default.

 

h.             Compliance

With Laws. 

Borrower shall promptly comply with all applicable Laws of any

Governmental Authority having jurisdiction over Borrower or the Project, and

shall take all actions necessary to bring the Project into compliance with all

applicable Laws, including without limitation all Building Laws (whether now

existing or hereafter enacted).

 

i.              Alterations.  Without the prior written consent of Lender,

Borrower shall not make any material alterations to the Project (other than

completion of tenant work required in accordance with leases entered into in

accordance with the terms of this Agreement).

 

j.              Personal

Property.  (i) All

of Borrower’s personal property, fixtures, furnishings, furniture, attachments

and equipment located on or used in connection with the Project, and in which

Borrower grants Lender a lien and security interest pursuant to the Mortgage,

shall always be located at the Project and shall also be kept free and clear of

all chattel mortgages, conditional vendor’s liens and all other liens,

encumbrances and security interests of any kind whatever, (ii) Borrower will be

the absolute owner of said personal property, fixtures, furnishings, furniture,

attachments and equipment, and (iii) Borrower shall, from time to time, furnish

Lender with evidence of such ownership satisfactory to Lender, including

searches of applicable public records.

 

k.            Prohibition Against Cash

Distributions and Application of Cash Flow.  Borrower shall first apply all cash flow

from the Project to pay Project expenses, including amounts due to Lender

pursuant to the Loan Documents.  No cash

flow from the Project shall be distributed to any partners, principals, members

or shareholders of Borrower or applied to the payment of any obligations, debts

or expenses not related to the Project if an Event of Default has occurred or

if there is a reasonable likelihood in Borrower’s reasonable determination that

such money will be necessary for the operation of the Project or the payment of

principal and interest due in connection with the Loan within 90 days following

any contemplated cash flow distribution.

 

l.              Inspection

by Lender. 

Borrower will cooperate (and will cause the managing agent to cooperate)

with Lender in arranging for inspections of the Project from time to time by

Lender and its agents and representatives following reasonable prior notice.

 

m.            Furnishing

Information. 

Borrower shall deliver or cause to be delivered to Lender annual

financial statements for Borrower and annual financial statements for

Indemnitor as soon as available and in all events no later than one hundred

twenty (120) days after the close of each fiscal year.  Annual statements shall be certified as true

and correct by an authorized financial officer of Borrower or Indemnitor, as

the case may be.  While only annual

financial statements will be required initially, Lender shall have the right to

require that the Borrower provide quarterly financial statements at any time

during the Loan term.  If a Default has

occurred or Lender reasonably believes that previously provided financial

statements are materially inaccurate, then if required by Lender the annual

statements shall be audited by certified public accountants acceptable to

Lender and prepared in accordance with generally accepted accounting

principles.  Borrower shall also furnish

a current operating statement for the Project (including a rent roll if there

are any leases of the Project or any part thereof), at the time it delivers its

financial statements.  Additionally,

Borrower and Indemnitor will:

 

(1)           promptly

supply Lender with such information concerning their respective affairs and

property relating to the development and operation of the Project as Lender may

hereafter request from time to time;

 

(2)           at

any time following reasonable prior notice and during regular business hours permit

Lender or any of its agents or representatives to have access to and examine

all of its books and records regarding the development and operation of the

Project;

 

(3)           permit

Lender to copy and make abstracts from any and all of such books and records provided

that Lender shall keep all such books and records confidential, provided

further that Lender may disclose the same to its attorneys, accountants and

auditors and any party acquiring an interest in the Loan and otherwise as

required by law or regulation; and

 

(4)           immediately

notify Lender if Borrower receives any actual notice, action or lien notice or

otherwise becomes aware that the Project violates or is alleged to violate any

Building Law, or of a condition or situation on the Property which will

constitute violation of a Building Law (whether now existing or hereafter

enacted).  The notice to Lender shall

describe with particularity the Building Law violation and the Borrower’s plan

to promptly correct the violation.

 

n.             Documents

of Further Assurance. 

Borrower shall, from time to time, upon Lender’s request, execute,

deliver, record and furnish such documents as Lender may reasonably deem

necessary or desirable to (i) perfect and maintain perfected as valid liens

upon the Project, the liens granted by Borrower to Lender under the Mortgage

and the collateral assignments and other security interests under the other

Loan Documents as contemplated by this Agreement, (ii) correct any errors of a

typographical nature or inconsistencies which may be contained in any of the

Loan Documents, and (iii) consummate fully the transaction contemplated under

this Agreement.

 

o.             Furnishing

Reports.  Borrower

shall provide Lender promptly after receipt with copies of all inspections,

reports, test results and other information received by Borrower from time to

time from its employees, agents, representatives, architects and engineers,

which in any way relate to the Project, or any part thereof.

 

p.             Operation

of Project and Zoning. 

As long as any portion of the Loan remains outstanding, the Project

shall be operated in a first class manner as an office/warehouse facility.  Borrower shall fully and faithfully perform

all of its covenants, agreements and obligations under each of the leases of

space in the Project.  Borrower shall

not initiate or acquiesce in a zoning variation or reclassification without

Lender’s consent.

 

q.             Management

Agents’ and Brokers’ Contracts.  Borrower shall not enter into, modify, amend, waive any material

provision of, terminate or cancel any management contracts for the Project

without the prior written approval of Lender, which approval shall not be

unreasonably withheld.  If, in the

ordinary course of business, Borrower shall enter into, modify, amend, waive

any provision of, terminate or cancel any contracts or agreements (other than

management contracts) with agents or brokers, Borrower shall notify Lender

within 10 days after such action.

 

r.             Furnishing Notices.  Borrower shall deliver to Lender copies of all material notices

received or given by Borrower (or its agents or representatives) in connection

with the Project.

 

s.             Indemnification.  Borrower shall indemnify, defend and hold

Lender, and its officers, directors, employees, shareholders, advisers, and

agents (collectively, “Indemnified Parties”) harmless from and against all

claims, injury, damage, loss, costs (including reasonable attorney fees and

costs) and liability of any and every kind incurred by Indemnified Parties by

reason of (i) the operation or maintenance of the Project or any construction

at the Project; (ii) the payment of any brokerage commissions or fees of any

kind with respect to the Application/Commitment or the Loan, and for any

reasonable legal fees or expenses incurred by Lender in connection with any

claims for such commissions or fees; (iii) any other action or inaction by, or

matter which is the responsibility of, Borrower; and (iv) the breach of any

representation or warranty or failure to fulfill any of Borrower’s obligations

under this Agreement or any other Loan Document.  The foregoing indemnity shall include the cost of all

alterations, repairs and replacements to the Project (including without

limitation architectural, engineering, legal and accounting costs), all fines,

fees and penalties, and all legal and other expenses (including reasonable

attorney fees), incurred in connection with the Project being in violation of

Building Laws and for the cost of collection of the sums due under this

indemnity, whether or not Borrower is in possession of the Project.  If Lender shall become the owner of or

acquire an interest in or rights to the Project by foreclosure or deed in lieu

of foreclosure of the Mortgage or by other means, the foregoing indemnification

obligation shall survive such foreclosure or deed in lieu of foreclosure or

other acquisition of the Project, unless Lender’s own negligent acts or

omissions cause what would otherwise be considered an indemnification

obligation by Borrower and/or Indemnitor.

 

t.              Organizational Documents.  Without the prior written consent of Lender,

Borrower shall not permit or suffer any material amendment or modification of

its articles of incorporation or bylaws, and shall not permit or suffer the

admission of any new shareholder, except as permitted pursuant to Section 6.3.

 

u.             Publicity.  During the term of the Loan, Lender may

issue or publish releases or announcements stating that the financing for the

Project is being provided by Lender to Borrower, and Borrower hereby consents

thereto.

 

v.             Intentionally

Omitted.

 

w.            Lender’s

Attorney Fees and Expenses.  If at any time hereafter prior to repayment of the Loan in full,

Lender employs counsel for advice or other representation (whether or not any

suit has been or shall be filed and whether or not other legal proceedings have

been or shall be instituted and, if such suit is filed or legal proceedings

instituted, through all administrative, trial, and appellate levels) with

respect to the Loan, the Project or any part thereof, this Agreement or any of

the Loan Documents, including any proposed or actual restructuring of the Loan,

or to protect, collect, lease, sell, take possession of, or liquidate any of

the Project, or to attempt to enforce any security interest or lien on any of

the Project, or to enforce any rights of Lender or any of Borrower’s

obligations hereunder or those of any other person, firm or corporation which

may be obligated to Lender by virtue of this Agreement or any other agreement,

instrument or document heretofore or hereafter delivered to Lender by or for

the benefit of Borrower, or to analyze and respond to any request for consent

or approval made by Borrower, then, in any such event, all of the reasonable

attorney fees and expenses arising from such services, and all expenses, costs

and charges relating thereto, shall bear interest from the date expended at the

Default Rate and shall be paid by Borrower on demand and if Borrower fails to

pay such fees, costs and expenses payment thereof by Lender shall be deemed to

constitute disbursement of the Loan proceeds hereunder (even if the total

amount of disbursements would exceed the face amount of the Note) and shall

constitute additional indebtedness of Borrower to Lender, payable on demand and

secured by the Mortgage and other Loan Documents.

 

x.             Loan Expenses.  Borrower agrees to pay all reasonable

expenses of the Loan, including all amounts payable pursuant to Section 3.25 of

this Agreement, and also including all recording charges, title insurance

charges, costs of surveys, costs for certified copies of instruments, escrow

charges, fees, expenses and charges of architectural/engineering consultants of

Lender, fees and expenses of Lender’s attorneys, and all costs and expenses

incurred by Lender in connection with the determination of whether Borrower has

performed the obligations undertaken by Borrower under this Agreement or has

satisfied any conditions precedent to the obligations of Lender under this

Agreement.  All such expenses, charges,

costs and fees shall be the Borrower’s obligation regardless of whether the

Loan is disbursed in whole or in part unless any failure to disburse is due to

Lender’s wrongful failure to disburse hereunder.  Any and all advances or payments made by Lender under this

Agreement from time to time, or for fees of architectural and engineering

consultants and attorney fees and expenses, if any, and all other Loan expenses

shall, as and when advanced or incurred by Lender, constitute additional

indebtedness evidenced by the Note and secured by the Mortgage and the other Loan

Documents to the same extent and effect as if the terms and provisions of this

Agreement were set forth therein, whether or not the aggregate of such

indebtedness shall exceed the aggregate face amount of the Note.

 

y.             Loan

Fees.  Borrower

agrees to pay the loan fees (“Loan Fees”) as are set forth in the

Application/Commitment, subject to the terms and conditions set forth

therein.  Borrower shall pay all Loan

Fees at the times set forth in the Application/Commitment and shall pay all

expenses incurred by Lender at the Loan Opening Date and on demand at such

subsequent times as Lender may determine including administrative fees and

expenses in connection with any modification of any of the terms of the

Loan.  Lender may require the payment of

such fees and expenses as a condition to the disbursement of the Loan.

 

z.             No

Additional Debt. 

Borrower shall not, without the prior written consent of Lender, incur

any indebtedness (whether personal or nonrecourse, secured or unsecured) in

connection with the Project, as opposed to debt in connection with Borrower’s

operation of its business in the Project, other than customary trade payables

paid within sixty (60) days after they are incurred.

 

aa.           Development

Agreement. 

Borrower shall keep and perform all of the covenants, obligations and

agreements to be kept and performed by Borrower pursuant to the Development

Agreement and will not modify, amend, cancel or terminate the Development

Agreement without the prior written consent of Lender.  Without limiting the generality of the

foregoing, Borrower hereby covenants and agrees that: (a) on or before April

15, 2000, Borrower (i) will obtain, and provide Lender with evidence reasonably

satisfactory to Lender that Borrower has obtained, the State Grant (as such

term is defined in the Development Agreement) and the proceeds thereof, and the

Authority Loan (as such term is defined in the Development Agreement) and the

proceeds thereof, and (ii) will obtain and deliver to Lender a certification

from the Authority (as such term is defined in the Development Agreement) in

form and substance reasonably acceptable to Lender that all conditions

precedent to the Authority’s obligation to make tax increment assistance

payments pursuant to Sections 3.1 and 3.2 of the Development Agreement have

been satisfied and are in existence; and (b) on or before September 1, 2000,

Borrower shall satisfy the minimum wage and employment goals set forth in

Section 3.8 of the Development Agreement and shall obtain and deliver to Lender

a certification from the Authority in form and substance reasonably acceptable

to Lender to the effect that such goals have been satisfied and that the

Development Agreement is in full force and effect without any default existing

thereunder.

 

4.             REPRESENTATIONS

AND WARRANTIES.  To induce Lender to execute this Agreement

and perform the obligations of Lender hereunder, Borrower hereby represents and

warrants to Lender as follows:

 

a.             Title.  On the Loan Opening Date and thereafter,

Borrower will have good and marketable fee simple title to the Real Property,

subject only to the Permitted Exceptions.

 

b.             No

Litigation. 

Except for claims fully covered by insurance, where the insurance

company is defending such claims and such defense is not being provided under a

reservation of rights, and except as disclosed in writing to Lender prior to

the date hereof, there is no pending litigation or unsatisfied judgment entered

of record against Borrower or the Project. 

No litigation or proceedings are pending, or to Borrower’s knowledge are

threatened, against any Affiliated Party (i) which might affect the validity or

priority of the lien of the Mortgage, (ii) which might affect the ability of

Borrower or any Indemnitor to perform their respective obligations pursuant to

and as contemplated by the terms and provisions of this Agreement and the other

Loan Documents, or (iii) which could materially affect the operations or

financial condition of the Project, Borrower, or any Affiliated Party.

 

c.             Due

Authorization. 

The execution and delivery of the Loan Documents and all other documents

executed or delivered by or on behalf of Borrower and pertaining to the Loan

have been duly authorized or approved by Borrower and, when executed and

delivered by Borrower or when caused to be executed and delivered on behalf of

Borrower, will constitute the legal, valid and binding obligations of the

obligor thereon, enforceable in accordance with their respective terms except

as limited by bankruptcy, insolvency, or other laws of general application relating

to the enforcement of creditor’s rights, and the payment or performance thereof

will be subject to no offsets, claims or defenses of any kind or nature

whatsoever.

 

d.             Breach

of Laws or Agreements. 

The execution, delivery and performance of this Agreement and the other

Loan Documents have not constituted (and will not, upon the giving of notice or

lapse of time or both, constitute) a breach or default under any other

agreement to which Borrower or any Indemnitor is a party or may be bound or affected,

or to Borrower’s knowledge a violation of any Law which may affect the Project,

any part thereof, any interest therein, or the use thereof, or Borrower or any

Indemnitor.

 

e.             Leases.  Borrower and its agents have not entered

into any leases or other arrangements for occupancy of space within the Project

other than leases shown on the most recent rent roll furnished to Lender (the

“Rent Roll”) or entered into in accordance with the requirements of this

Agreement.  All leases disclosed on the

Rent Roll are in full force and effect and to Borrower’s knowledge, there are

no existing defaults thereunder other than as disclosed in writing to Lender.

 

f.              Condemnation.  (i) No condemnation of any portion of the

Project, (ii) no condemnation or relocation of any roadways abutting the

Project, and (iii) no denial of access to the Project from any point of access

to the Project, has commenced or, to Borrower’s knowledge, is contemplated by

any Governmental Authority.

 

g.             Condition

of Improvements. 

To the best of Borrower’s knowledge after due inquiry, the foundations

and structure of the Improvements are structurally sound and the various

mechanical systems have adequate capacities and are in good working

condition.  To the best of Borrower’s

knowledge after due inquiry, the Improvements were built in substantial

compliance with applicable plans and specifications furnished to the Lender’s

engineering consultant, and to Borrower’s actual knowledge the Improvements are

in full compliance with all applicable Building Laws.  Certificates of occupancy with respect to the Improvements, and

any other certificates which may be required to evidence compliance with

building codes and permits and approval for full occupancy of the Improvements

and all installations therein have been issued by all appropriate

authorities.  Borrower has no knowledge

of required capital expenditures or deferred maintenance other than those that

would be normally expected for a building of similar age and type.  Borrower has not received any notice of

violation of any Building Law.

 

h.             Information

Correct.  All

financial statements furnished to Lender by Borrower or any Affiliated Party

fairly present the financial condition of such persons or entities and were

prepared in accordance with a method of preparation approved by Lender,

consistently applied, and all other information previously furnished by

Borrower or any Affiliated Party to Lender in connection with the Loan are

true, complete and correct in all respects except as otherwise disclosed to

Lender in writing and do not fail to state any material fact necessary to make

the statements made not misleading. 

Neither Borrower nor Indemnitor has misstated or failed to disclose to

Lender any material fact relating to: (i) the condition, use or operation of

the Project, (ii) the status or any material condition if any tenant or lease

at the Project known to it, (iii) Borrower, (iv) any Indemnitor, or (v) the

litigation disclosure provided by Borrower and Indemnitor, except as disclosed

in writing to Lender prior to the date hereof.

 

i.              Material

Adverse Change. 

No material adverse change in the operations or financial condition of

Borrower or Indemnitor has occurred since the respective effective dates of

their financial statements previously submitted to Lender, and no material

adverse change in the condition (physical or otherwise) of the Project has

occurred since the date of the Application/Commitment.

 

j.              Solvency.  Neither Borrower, nor, if Borrower is a

partnership, any general partner of Borrower nor any Indemnitor is (a)

currently insolvent on a balance sheet basis, or (b) currently unable to pay

its debts as they come due; and no bankruptcy or receivership proceedings are

contemplated or pending as to any of them.

 

k.            Zoning.  The use of the Project (including

contemplated accessory uses) does not violate (i) any Law (including

subdivision, zoning, building, environmental protection and wetlands protection

Laws), or (ii) any restrictions of record, or any agreement affecting the

Project or any part thereof.  Without

limiting the generality of the foregoing, all consents, licenses and permits

and all other authorizations or approvals (collectively, “Governmental

Approvals”) relating to the use and operation of the Project have been complied

with.

 

l.              Utilities.  The Project has adequate water, gas and

electrical supply, storm and sanitary sewerage facilities, and other required

public utilities.  The Project has fire

and police protection and means of appropriate access between the Project and

public highways.

 

m.            Brokerage

Fees.  No

brokerage fees or commissions are payable by or to any person in connection

with this Agreement or the Loan to be disbursed hereunder other than fees

payable to Northland/Marquette Capital Group, Inc., which fees shall be paid by

Borrower.

 

n.             Encroachments.  No building or other improvement in the

Project encroaches upon any building line, setback line, side yard line, or any

recorded or visible easement (or other easement of which Borrower has knowledge

of with respect to the Project).

 

o.             Separate

Parcel.  The

Project is taxed separately without regard to any other property and for all

purposes the Project may be mortgaged, conveyed, and otherwise dealt with as an

independent parcel.

 

p.             ERISA.  The assets of Borrower are not “plan assets”

of any employee benefit plan covered by ERISA or Section 4975 of the Internal

Revenue Code.  The transactions

contemplated by this Agreement by or with Borrower are not in violation of

state statutes regulating investments of and fiduciary obligations with respect

to “governmental plans,” as defined in Section 3(32) of ERISA.

 

q.             No

Default.  No

Default or Event of Default has occurred and is continuing.

 

r.             Principal

Place of Business. 

The principal place of business of Borrower is as stated on page 1

hereof.

 

s.             FIRPTA.  Borrower is not a “foreign person” within

the meaning of Sections 1445 or 7701 of the Internal Revenue Code.

 

t.              RICO.  Borrower has not been charged with nor, to

its knowledge, is it under investigation for, possible violations of the

Racketeer Influenced and Corrupt Organizations Act, the Continuing Criminal

Enterprise Act, the Controlled Substance Act of 1978, or similar laws providing

for the possible forfeiture of any of its respective assets or properties.

 

u.             No

Casualty.  No part

of the Project has been damaged by fire or other casualty except as disclosed

in writing to Lender.

 

v.             Truth

of Recitals.  All

statements set forth in the Recitals are true and correct.

 

5.             CASUALTY

AND CONDEMNATION.

 

a.             Lender’s

Election to Apply Insurance and Condemnation Proceeds to Indebtedness.  In the event of any loss or damage to any

portion of the Project due to fire or other casualty, or any taking of any

portion of the Project by condemnation or under power of eminent domain, Lender

shall have the right, but not the obligation, to settle insurance claims and

condemnation claims or awards for more than $100,000.00 and if Lender elects

not to settle such claim or award then Borrower shall settle such claim or

award and such settlement or award shall be subject to Lender’s prior written

approval.  Borrower shall have the right

to settle claims or awards for less than such amount, provided that Lender

shall have the right to settle any claim or award that Borrower has not settled

on or before one hundred twenty (120) days after the date of such loss or prior

to the date of such taking.  If (i) no

Default exists under this Agreement, the Note or the other Loan Documents; (ii)

no payment default has occurred during the preceding twelve months; (iii) no

non-monetary default has occurred that has been noticed and remained uncured

beyond the applicable cure period; (iv) the proceeds received by Lender,

together with any additional funds deposited with Lender by Borrower, are

sufficient, in Lender’s discretion, either to restore the Project to its

condition before the casualty or to remedy the condemnation; (v) the

Loan-to-value ratio of the Project on completion of the restoration will be 75%

or less, as determined by an Appraisal (unless the amount of proceeds is less

than 3% of the original Loan amount); (vi) a loss of no more than 10% of the

commercial tenant rental income will result through commercial tenants

exercising rights to terminate their leases as a result of the casualty or

condemnation; and (vii) Borrower complies with all conditions set forth in

Section 5.2 of this Agreement, Borrower shall be entitled to use the

insurance or condemnation proceeds to rebuild the Project or to remedy the

effect of the condemnation, as the case may be.  The Appraisal required pursuant to the foregoing provision shall

be at Borrower’s expense and Borrower is required to provide proof of such

payment to Lender and Lender’s Mortgage Correspondent.  In all other cases, Lender shall have the

right (but not the obligation) to collect, retain and apply to the indebtedness

of Borrower under this Agreement and the other Loan Documents all insurance and

condemnation proceeds (after deduction of all expense of collection and

settlement, including attorney and adjusters’ fees and expenses), and if such

proceeds are insufficient to pay such amount in full, to declare the balance

remaining unpaid on the Note and Mortgage to be due and payable forthwith and

to avail itself of any of the remedies afforded thereby as in the case of any

default beyond applicable cure periods thereunder.  Any proceeds remaining after application to the indebtedness of

Borrower under this Agreement and the other Loan Documents shall be paid by

Lender to Borrower or the party then entitled thereto.

 

b.             Borrower’s Obligation to Rebuild and

Use of Proceeds Therefor. 

If Lender does not elect to or is not entitled to apply fire or casualty

insurance proceeds to the indebtedness, as provided under Section 5.1 of

this Agreement, Lender shall have the right (but not the obligation) to settle,

collect and retain such proceeds, and after deduction of all expenses of

collection and settlement, including attorney and adjusters’ fees and expenses,

to release the same to Borrower periodically provided that Borrower shall:

 

i.              Expeditiously repair and restore all damage to the

portion of the Project in question resulting from such fire or other casualty,

including completion of the construction if such fire or other casualty shall

have occurred prior to completion, so that the Project will be completed in

accordance with the plans and specifications therefor; and

 

ii.             If the proceeds of fire or casualty

insurance (and the undisbursed available Loan proceeds for construction) are,

in Lender’s sole judgment, insufficient to complete the repair and restoration

of the buildings, structures and other improvements constituting the Project,

then Borrower shall promptly deposit with Lender the amount of such deficiency.

 

Any request by Borrower for a disbursement by Lender

of fire or casualty insurance proceeds and funds deposited by Borrower pursuant

to this Section 5.2 and the disbursement thereof shall be conditioned

upon Borrower’s compliance with and satisfaction of the same conditions

precedent as would be applicable in connection with construction loans made by

institutional lenders for projects similar to the Project, including approval

of plans and specifications, submittal of evidence of completion, updated title

insurance, lien waivers, and other customary safeguards.

 

6.             ASSIGNMENTS.

 

a.             Lender’s

Right to Assign. 

Lender shall have the right to assign, transfer, sell, negotiate, pledge

or otherwise hypothecate this Agreement and any of its rights and security

hereunder, including the Note, Mortgage, and any other Loan Documents.  Borrower hereby agrees that all of the

rights and remedies of Lender in connection with the interest so assigned shall

be enforceable against Borrower by such assignee with the same force and effect

and to the same extent as the same would have been enforceable by Lender but

for such assignment.  Borrower agrees

that Lender shall have the right to sell participations in the Loan or to

include the Note in a securitized pool of indebtedness without the consent of

Borrower.

 

b.             Prohibition

of Assignments by Borrower.  Borrower shall not assign or attempt to assign its rights under

this Agreement.  Borrower will not

suffer or permit any of its interest or rights in the Project to be assigned,

sold, pledged, encumbered, transferred, hypothecated or otherwise disposed of

until the provisions of this Agreement have been fully complied with and the

Loan and all other sums evidenced by the Note and/or secured by the Mortgage

and other Loan Documents have been repaid in full.

 

c.             Transfers

of Interests in Borrower.  For estate-planning purposes only, Borrower, or any partner,

member or shareholder of Borrower shall be permitted to make a sale,

conveyance, transfer or other vesting of any direct or indirect interest in

Borrower (other than a general partnership interest in Borrower if Borrower is

a partnership) up to an aggregate, over the term of the Loan, of twenty-five

(25%) percent of the total interests in Borrower, without the prior consent of

Lender, provided that any such sale, conveyance, transfer or other vesting does

not change the direct or indirect control or management of Borrower and at all

times Paul ___.  Colombo owns at least

60% of the stock of Borrower.  Copies of

any and all documents evidencing any such sale, conveyance, transfer or other

vesting must be provided to Lender within fifteen (15) days after the

occurrence of said action including, without limitation, a statement detailing

the action and a listing of real locations and percentages of ownership

interest in Borrower.  Notwithstanding

the foregoing, any sale, conveyance, transfer or other vesting of any direct or

indirect interest in Borrower, other than the above said 25% aggregate amount,

or for purposes other than estate-planning, or any change of direct or indirect

control or management of Borrower or any encumbrance of or granting of any

security interest in Project or Borrower, if such event occurs without Lender’s

written consent (which Lender may withhold at its sole discretion), shall

constitute an event of default under the Loan Documents.  Borrower shall pay Lender’s reasonable

out-of-pocket expenses incurred in connection with the review of any sale,

conveyance, transfer or other vesting pursuant to this Section 6.3 and

pursuant to Section 6.2 hereof.

 

d.             Successors

and Assigns. 

Subject to the foregoing restrictions on transfer and assignment

contained in this Section 6, this Agreement shall inure to the benefit

of and shall be binding on the parties hereto and their respective successors

and assigns.

 

7.             EVENTS

OF DEFAULT.

 

a.             The

occurrence of any one or more of the following shall constitute an “Event of

Default,” as such term is used herein:

 

i..             If Borrower fails in pay principal

or interest under the Note when due;

 

ii.             If Borrower defaults in the

performance of any of its other covenants, agreements and obligations under

this Agreement involving the payment of money;

 

iii.            If Borrower defaults in the

performance of any of its nonmonetary covenants, agreements and obligations

under this Agreement (other than those referred to in clauses (f) and (g)

below) and fails to cure such default within thirty (30) days after written

notice thereof from Lender provided, however, that if such default is

reasonably susceptible of cure, but cannot be cured within such thirty (30) day

period, then so long as Borrower promptly commences cure and thereafter

diligently pursues such cure to completion, the cure period shall be extended

for an additional thirty (30) days, within which Borrower may complete such cure;

 

iv.            If at any time or times hereafter

any representation or warranty (including the representations and warranties of

Borrower set forth in any Loan Document), statement, report or certificate

furnished to Lender in connection with the Loan is not true and correct in any

material respect;

 

v.             If any petition is filed by or against Borrower or any

Affiliated Party under the Federal Bankruptcy Code or any similar state or

federal Law, whether now or hereafter existing (and, in the case of involuntary

proceedings, failure to cause the same to be vacated, stayed or set aside

within thirty (30) days after filing);

 

vi.            If any assignment, pledge,

encumbrance, transfer, hypothecation or other disposition is made in violation

of Section 6.2 or Section 6.3 of this Agreement;

 

vii.           If Borrower modifies, amends, cancels

or terminates the Development Agreement in violation of Section 3.27 of

this Agreement or fails to keep and perform the covenants and agreements set

forth in clauses (a) and (b) of Section 3.27 of this Agreement;

 

viii.          If Borrower, any general partner of

Borrower or any Guarantor or Indemnitor shall fail to pay any debt owed by it

or is in default under any agreement with Lender or any other party (other than

a failure or default for which the maximum liability of Borrower or such

general partner, Guarantor or Indemnitor does not exceed 25% of their

respective assets) and such failure or default continues after any applicable

grace period specified in the instrument or agreement relating thereto; or

 

ix.            If a default occurs under any of the

Loan Documents and continues beyond the applicable grace period, if any,

contained therein.

 

8.             REMEDIES.

 

a.             Remedies

Conferred Upon Lender. 

Upon the occurrence of any Event of Default, including without

limitation the filing, by Borrower, of a voluntary petition under Chapter 11 of

the Bankruptcy Code, Lender shall have the right (but not the obligation) to

pursue any one or more of the following remedies concurrently or successively,

it being the intent hereof that all such remedies shall be cumulative and that

no such remedy shall be to the exclusion of any other:

 

i.              Declare the Note to be immediately due and payable;

 

ii.             Use and apply any monies deposited

by Borrower with Lender, including amounts in the Escrow Account, regardless of

the purpose for which the same was deposited, to cure any such default or to

apply on account of any indebtedness under this Agreement which is due and

owing to Lender; and

 

iii.            Exercise or pursue any other right

or remedy permitted under this Agreement or any of the Loan Documents or

conferred upon or available to Lender at law or in equity or otherwise.

 

b.             NonWaiver

of Remedies.  No

waiver of any breach or default hereunder shall constitute or be construed as a

waiver by Lender of any subsequent breach or default or of any breach or

default of any other provision of this Agreement.

 

c.             Cash

Collateral Account. 

Upon the occurrence of an Event of Default, Borrower shall deposit all

revenues from the operation of the Project, as opposed to revenues from the

operation of Borrower’s business at the Project, into an account held by and

pledged to Lender (“Cash Collateral Account”). 

Lender shall not pay interest on any amounts held on deposit in the Cash

Collateral Account, unless required to do so under applicable law.  Borrower shall execute such documents as

Lender, in its sole discretion, deems necessary to perfect its interest in the

Cash Collateral Account.

 

9.             GENERAL

PROVISIONS.

 

a.             Captions.  The captions and headings of various

Articles and Sections of this Agreement and Exhibits pertaining hereto are for

convenience only and are not to be considered as defining or limiting in any

way, the scope or intent of the provisions hereof.

 

b.             Merger.  This Agreement, the Application/Commitment

and the Loan Documents and instruments delivered in connection herewith, as may

be amended from time to time in writing, constitute the entire agreement of the

parties with respect to the Project and the Loan, and all prior discussions,

negotiations and document drafts are merged herein and therein.  If there are any inconsistencies between the

Application/Commitment and this Agreement or the Loan Documents, the terms

contained in this Agreement and the other Loan Documents shall prevail.  Neither Lender nor any employee of Lender

has made or is authorized to make any representation or agreement upon which

Borrower may rely unless such matter is made for the benefit of Borrower and is

in writing signed by an authorized officer of Lender.  Borrower agrees that it has not and will not rely on any custom

or practice of Lender, or on any course of dealing with Lender, in connection

with the Loan unless such matters are set forth in this Agreement or the Loan

Documents or in an instrument made for the benefit of Borrower and in a writing

signed by an authorized officer of Lender.

 

c.             Notices.  Any notice, demand, request or other

communication which any party hereto may be required or may desire to give

hereunder shall be in writing, addressed as follows and shall be deemed to have

been properly given if hand delivered, if sent by reputable overnight courier

(effective the business day following delivery to such courier) or if mailed

(effective two business days after mailing) by United States registered or

certified mail, postage prepaid, return receipt requested:

 

If to Borrower:

 

Chorus Corporation

4900 Constellation Drive

White Bear Township, MN

55110

Attn:  President

 

with a copy to:

 

Lindquist & Vennum,

P.L.L.P.

4200 IDS Center

80 South Eighth Street

Minneapolis, MN 55402

Attn:  Michael S. 

Margulies

 

If to Lender:

 

Jackson National Life

Insurance Company

c/o PPM Finance, Inc.

225 West Wacker Drive

Suite 1200

Chicago, Illinois 60606

Attn:  Manager of Commercial Mortgage Servicing

 

or at such other address as the party to be served with notice may have

furnished in writing to the party seeking or desiring to serve notice as a

place for the service of notice. 

Notices given in any other fashion shall be deemed effective only upon

receipt.

 

d.             Modification;

Waiver.  No

modification, waiver, amendment, discharge or change of this Agreement shall be

valid unless the same is in writing and signed by the party against which the

enforcement of such modification, waiver, amendment, discharge or change is

sought.  Lender reserves the right to

charge an administrative fee for any such modification, waiver, amendment,

discharge, or change of this Agreement.

 

e.             Governing

Law.  THIS

AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE INTERNAL LAWS (AS

OPPOSED TO THE LAWS OF CONFLICTS) OF THE STATE OF MINNESOTA.

 

f.              Acquiescence

Not to Constitute Waiver of Lender’s Requirements.  Each and every covenant and condition for

the benefit of Lender contained in this Agreement may be waived by Lender.

 

g.             Disclaimer

by Lender.

 

i.              This Agreement is made for the sole benefit of Borrower

and Lender (and Lender’s successors and assigns and participants, if any), and

no other person or persons shall have any benefits, rights or remedies under or

by reason of this Agreement, or by reason of any actions taken by Lender

pursuant to this Agreement.  Lender

shall not be liable for any debts or claims accruing in favor of any third

parties against Borrower or others or against the Project.  Borrower is not and shall not be an agent of

Lender for any purposes.  Except as

expressly set forth in the Loan Documents, Lender is not and shall not be an

agent of Borrower for any purposes. 

Lender, by making the Loan or taking any action pursuant to any of the

Loan Documents, shall not be deemed a partner or a joint venturer with Borrower

or fiduciary of Borrower.

 

ii.             Any review, investigation or

inspection conducted by Lender, any architectural or engineering consultants

retained by Lender or any agent or representative of Lender in order to verify

independently Borrower’s satisfaction of any conditions precedent to the

disbursement of the Loan, Borrower’s performance of any of the covenants,

agreements and obligations of Borrower under this Agreement, or the truth of

any representations and warranties made by Borrower hereunder (regardless of

whether or not the party conducting such review, investigation or inspection

should have discovered that any of such conditions precedent were not satisfied

or that any such covenants, agreements or obligations were not performed or

that any such representations or warranties were not true), shall not affect,

or constitute a waiver by Lender of, (i) any of Borrower’s representations and

warranties under this Agreement or Lender’s reliance thereon, or (ii) Lender’s

reliance upon any certifications required under this Agreement or any other

facts, information or reports furnished Lender by Borrower hereunder.

 

iii.            By accepting or approving anything

required to be observed, performed, fulfilled or given to Lender pursuant to

the Loan Documents, including any certificate, statement of profit and loss or

other financial statement, survey, appraisal, lease or insurance policy, Lender

shall not be deemed to have warranted or represented the sufficiency, legality,

effectiveness or legal effect of the same, or of any term, provision or

condition thereof, and such acceptance or approval thereof shall not constitute

a warranty or representation to anyone with respect thereto by Lender.

 

h.             Right of Lender to Make Advances to

Cure Borrower’s Defaults. 

If Borrower shall fail to perform in a timely fashion any of Borrower’s

covenants, agreements or obligations contained in this Agreement or the Loan

Documents, Lender may (but shall not be required to) perform any of such covenants,

agreements and obligations.  Any funds

advanced by Lender in the exercise of its judgment that the same are needed to

protect its security for the Loan are deemed to be obligatory advances

hereunder and any amounts expended (whether by disbursement of undisbursed Loan

proceeds or otherwise) by Lender in so doing, shall constitute additional

indebtedness evidenced and secured by the Note, the Mortgage and the other Loan

Documents, shall bear interest from the date expended at the Default Rate and be

payable together with such interest upon demand.

 

i.              Definitions

Include Amendments. 

Definitions contained in this Agreement which identify documents,

including the Loan Documents, shall be deemed to include all amendments and

supplements to such documents from the date hereof, and all future amendments

and supplements thereto entered into from time to time to satisfy the

requirements of this Agreement or otherwise with the consent of the

Lender.  Reference to this Agreement

contained in any of the foregoing documents shall be deemed to include all

amendments and supplements to this Agreement.

 

j.              Time

is of the Essence. 

Time is hereby declared to be of the essence of this Agreement and of

every part hereof.

 

k.            Execution

in Counterparts. 

This Agreement may be executed in any number of counterparts and by

different parties hereto in separate counterparts, each of which when so

executed shall be deemed to be an original and all of which taken together

shall constitute one and the same agreement.

 

l.              Waiver

of Consequential Damages.  In no event shall Lender be liable to Borrower for consequential

damages, whatever the nature of a breach by Lender of its obligations under

this Agreement, or any of the Loan Documents, and Borrower for itself and all

Affiliated Parties hereby waives all claims for consequential damages.

 

m.            Claims

Against Lender. 

Lender shall not be in default under this Agreement, or under any other

Loan Documents, unless a written notice specifically setting forth the claim of

Borrower shall have been given to Lender within 30 days after Borrower first

had knowledge of, or reasonably should have had knowledge of, the occurrence of

the event which Borrower alleges gave rise to such claim and Lender does not

remedy or cure the default, if any there be, promptly thereafter.  If it is determined in any proceedings that

Lender has improperly failed to grant its consent or approval, where such

consent or approval is required by this Agreement or any other Loan Documents,

Borrower’s sole remedy shall be to obtain declaratory relief determining such

withholding to have been improper, and for itself and all Affiliated Parties,

Borrower hereby waives all claims for damages or setoff against Lender

resulting from any withholding of consent or approval by Lender.

 

n.             Jurisdiction

and Venue.  With

respect to any suit, action or proceedings relating to this Agreement, the

Project, or any of the other Loan Documents (“Proceedings”) each party

irrevocably (i) submits to the nonexclusive jurisdiction of (A) the state and

federal courts located in the State where the Project is located, (B) the

federal court for the Northern District of Illinois and (C) the Circuit Court

of Cook County, Illinois, and (ii) waives any objection which it may have at

any time to the laying of venue of any proceedings brought in any such court,

waives any claim that such Proceedings have been brought in an inconvenient

forum and further waives the right to object, with respect to such Proceedings,

that such court does not have jurisdiction over such party.  Nothing in this Agreement shall preclude

either party from bringing Proceedings in any other jurisdiction nor will the

bringing of Proceedings in any one or more jurisdictions preclude the bringing

of Proceedings in any other jurisdiction.

 

o.             Severability.  The parties hereto intend and believe that

each provision in this Agreement comports with all applicable local, state and

federal Laws.  However, if any provision

or provisions, or if any portion of any provision or provisions, in this

Agreement is found by a court of law to be in violation of any applicable Law,

and if such court declares such portion, provision, or provisions of this

Agreement to be illegal, invalid, unlawful, void or unenforceable as written,

then it is the intent of all parties hereto that such portion, provision, or

provisions shall be given force to the fullest possible extent that they are

legal, valid and enforceable, and that the remainder of this Agreement shall be

construed as if such illegal, invalid, unlawful, void, or unenforceable

portion, provision, or provisions were not contained herein, and that the

rights, obligations, and interests of Borrower and Lender under the remainder

of this Agreement shall continue in full force and effect.

 

p.             Incorporation

of Recitals.  The

Recitals set forth herein and the Exhibits attached hereto are incorporated

herein and expressly made a part hereof.

 

q.             WAIVER

OF JURY TRIAL.  BORROWER AND

LENDER EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING

TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT

OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE

SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE

TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

IN WITNESS WHEREOF, Borrower and Lender

have executed this Agreement as of the day and year first set forth above.

 

	

   

  	

  BORROWER:

  
	

   

  	

   

  
	

   

  	

  CHORUS CORPORATION, a Minnesota corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Frank Kraemer

  
	

   

  	

  Its:

  	

  CFO

  

 

Signature page for Loan Agreement

 

	

   

  	

  LENDER:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  JACKSON NATIONAL LIFE INSURANCE COMPANY, a Michigan

  corporation)

  
	

   

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  PPM Finance, Inc., it authorized agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ David M. Zachar

  
	

   

  	

   

  
	

   

  	

  Its:

  	

  David M. Zachar, Executive Vice President

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