EDA Agenda 03-19-2021 (Special Meeting) AGENDA
SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, March 19th, 2021—7:45 a.m.
Mississippi Room, Monticello Community Center
Participants can choose to attend in-person or remotely via Go-To:
Web: https://global.gotomeeting.com/join/471945821
Phone: (872) 240-3412 1 Access Code: 471-945-821
Commissioners: President Steve Johnson, Vice President Bill Tapper, Treasurer Jon
Morphew, Tracy Hinz, 011ie Koropchak-White and Councilmembers
Lloyd Hilgart and Jim Davidson
Staff: Executive Director Jim Thares, Angela Schumann, Sarah Rathlisberger and Jacob
Thunander
1. Call to Order
2. Roll Call
3. Consideration of Resolution #2021-02 Approving Loan Subordination Agreement with
Associated Bank, National Association and UMC Real Estate, LLC
4. Adjourn
EDA Agenda: 03/10/21
3. Consideration of Resolution #2021-02 Approving Loan Subordination Agreement with
Associated Bank, National Association and UMC Real Estate, LLC (JT)
A. REFERENCE AND BACKGROUND:
The EDA is asked to consider Resolution #2021-02 approving a Loan Subordination
Agreement with Associated Bank, National Association, the primary lender for the UMC
expansion project and UMC Real Estate, LLC (the property holding company for UMC,
Inc.). As a reminder, the EDA provided an Advance Funding Land Purchase Loan in the
amount of$300,000 to UMC, secured through a real estate mortgage against the 7.39-
acre development site located along Chelsea Road, allowing it to acquire the property
from the EDA. The repayment terms require UMC to pay the $300,000 loan in a lump
sum on July 31, 2021. The loan subordination step is a somewhat perfunctory action
that recognizes the EDA's funding component as a small portion of the nearly
$11,000,000 project cost and related financing being provided by Associated Bank and
Twin Cities-Metro, a Certified Development Company (CDC) SBA 504 lender. Based on
financing information provided to staff(provided in 2019), the project financing
structure for the 58,000 square foot expansion is envisioned as follows:
Proposed Sources Amount Proposed Uses Amount
Associated Bank $ 4,450,000 New Constr. $6,000,000
Twin Cities-Metro CDC SBA 504 $ 2,883,800 Equipment $3,300,000
TIF - land write down 7.39 acres $ 731,000 Land $1,031,000
EDA 2nd Deferred Mortgage— land $ 300,000 Site Improv. 500,000
MIF - Equipment $ 300,000 Total $10,831,000+/-
Owner Equity $ 2,166,200
Total $10,831,000+/-
Language in the Purchase and Development Agreement anticipates the need to enter
into a Loan Subordination Agreement though it does not explicitly pre-authorize
approval of a Loan Subordination of the EDA's $300,000 Advance Funding Loan (page
20). The EDA attorney recommends the EDA approve such actions through a
Resolution. Resolution #2021-02 is attached to this report. The EDA attorney reviewed
and revised the attached Loan Subordination Agreement which was drafted by
Associated Bank's legal counsel.
Finance closing between UMC Real Estate, LLC, UMC, Inc. and Associated Bank is
scheduled to occur on Friday, March 19, 2021. Staff is reacting to a request by UMC to
have the EDA consider the Loan Subordination in a Special Meeting and allow a
successful close on needed financing and further allow construction to start on the
expansion project the week of 3-22-21.
Al. Staff Impact: City staff's time commitment to the Loan Subordination Agreement
EDA Agenda: 03/10/21
review and processing is minimal.The EDA attorney reviewed and edited the Loan
Subordination Agreement and prepared the EDA Resolution.
A2. Budget Impact: An estimate of the EDA attorney's costs for review and editing
the Loan Subordination Agreement document and preparing the Resolution is
estimated to be $350.00 +/-. Staff time commitment to the item is part of typical
duties and is funded through the EDA's General Fund.
B. ALTERNATIVE ACTIONS:
1. Motion to approve Resolution #2021-02 entering into a Loan Subordination
Agreement with Associated Bank, National Association and UMC Real Estate, LLC
related to the EDA's $300,000 Advance Funding Land Purchase Mortgage secured
loan.
2. Motion of other as determined by the EDA.
C. STAFF RECOMMENDATION:
Staff recommends approval of the Loan Subordination Agreement. The EDA's $300,000
Advance Funding Loan is as a small piece of the total project funding structure and not
intended to preclude appropriate lien security positions related to the financing structure
by the primary and secondary lenders. Associated Bank is the primary lender and is
providing its commitment to lend sufficient dollars for the project based on securing a
first lien position.
D. SUPPORTING DATA:
A. Resolution 2021#-02
B. Loan Subordination Agreement— Final
C. Loan Subordination Agreement - Redline
D. Purchase and Development Agreement - page 20
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO.#2021-02
RESOLUTION APPROVING A SUBORDINATION OF MORTGAGE IN CONNECTION WITH A
PURCHASE AND DEVELOPMENT CONTRACT BETWEEN THE CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY AND UMC REAL ESTATE, LLC
BE IT RESOLVED By the Board of Commissioners ("Board") of the City of Monticello
Economic Development Authority ("Authority") as follows:
Section 1. Recitals.
1.01. The Authority previously entered into a Purchase and Redevelopment Contract
with UMC Real Estate, LLC (the "Developer"), dated as of February 26, 2020 and recorded in the
office of the Wright County Recorder on April 2, 2020 as Document No. A1422590 and as
subsequently amended (the "Contract"), in connection with the acquisition by the Developer of
certain Authority-owned property (the "Property") and the construction by the Developer of
certain improvements thereon.
1.02. Pursuant to the Contract, the Developer gave the Authority a promissory note in
the amount of $300,000 for a portion of the purchase price of the Property, secured by a
mortgage dated April 1, 2020 and recorded in the office of the Wright County Recorder on April
2, 2020 as Document No. A1422592, as amended (the "Mortgage").
1.03. The Developer proposes to obtain construction financing for the required
improvements to the Property from Associated Bank, National Association (the "Lender"), and
as a condition of such financing, the Lender requires that the Authority subordinate the
Mortgage to the Lender's loan documents securing such construction financing (the "Lender
Documents").
1.04. Authority staff and legal counsel have reviewed a proposed Subordination
Agreement between the Developer, the Lender, and the Authority (the "Subordination"), have
determined that subordination of the Mortgage to the Lender Documents complies with the
terms of the Contract, and recommend approval of the Subordination by the Board.
1.05. The Board has reviewed the Subordination and finds that the approval and
execution of the Subordination are in the best interest of the City and its residents.
Section 2. Authority Approval; Other Proceedings.
2.01. The Subordination as presented to the Board is hereby in all respects approved,
subject to modifications that do not alter the substance of the transaction and that are
DOCSO PE N\M N 190\160\709231.v1-3/17/21
approved by the President and Executive Director, provided that execution of the
Subordination by such officials shall be conclusive evidence of approval.
2.02. The President and Executive Director are hereby authorized to execute on behalf
of the Authority the Subordination.
2.03. Authority staff and consultants are authorized to take any actions necessary to
carry out the intent of this resolution.
Approved by the Board of Commissioners of the City of Monticello Economic Development
Authority this 19th day of March, 2021.
President
ATTEST:
Executive Director
DOCSO PE N\M N 190\160\709231.v1-3/17/21
THIS DOCUMENT WAS PREPARED BY
AND WHEN RECORDED RETURN TO:
FOX ROTHSCHILD LLP
222 South Ninth Street, Suite 2000
Minneapolis, MN 55402
Attn: Emily M. Hendricks, Esq.
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Agreement'), is made as of March 2021,
by and among UMC REAL ESTATE LLC, a Minnesota limited liability company ("Borrower"),
ASSOCIATED BANK, NATIONAL ASSOCIATION, a national banking association
("Lender") and the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a
public body corporate and politic and political subdivision under the laws of the State of
Minnesota (the "Development Authority").
RECITALS
A. Borrower is the owner of certain real property and all improvements on or hereafter
located or constructed thereon (collectively, the "Pro e "), as more fully described in
Exhibit A attached hereto.
B. Pursuant to that certain Construction Loan Agreement dated of even date herewith
between Borrower and Lender ("Loan Agreement"), Lender is making a loan to
Borrower in the principal amount of Thirteen Million Fifty Eight Thousand Two Hundred
Eighty Seven and 00/100 dollars ($13,058,287.00) ("Loan") for the purpose of
refinancing and constructing certain improvements on the Property. The Loan is
evidenced by that certain Promissory Note of even date herewith executed and delivered
by Borrower to Lender in the principal amount of the Loan in one or more promissory
notes (collectively, the "Note"), and secured by two Mortgage, Security Agreement,
Assignment of Leases and Rents and Fixture Financing Statement (collectively, the
"Mortgage") of even date herewith to be filed in the Office of the County Recorder,
County of Wright, Minnesota ("Recorder's Office"), concurrently with, or subsequent to
the recordation of this Agreement. As used herein, the term "Loan Documents" shall
120652978.0
mean the Loan Agreement, Note, Mortgage and any other instrument given in connection
with and/or related to the Loan.
C. Pursuant to that certain Promissory Note dated April 1, 2020 executed and delivered by
Borrower to Development Authority ("Development Authority Note"), Development
Authority made a loan to Borrower in the principal amount of Three Hundred Thousand
and 00/100 Dollars ($300,000.00) ("Development Authori e Loan"). The Development
Authority Loan is secured by that certain Mortgage ("Development Authoritygage")
dated April 1, 2020 and filed April 2, 2020 in the Recorder's Office as Document No.
A1422592, as amended by that certain Amended Mortgage dated September 21, 2020
and filed October 6, 2020 in the Recorder's Office as Document No. A1443065. As used
herein, the term "Development Authority Loan Documents" shall mean the Development
Authority Note, Development Authority Mortgage and any other instrument given in
connection with and/or related to the Development Authority Loan
D. As a condition to making the Loan to Borrower, Lender has required that the
Development Authority subordinate in the manner set forth herein, the lien position of the
Development Authority Mortgage.
NOW, THEREFORE, in consideration of the Loan and other financial accommodations
that have been made and may hereafter be made by Lender for the benefit of the Borrower, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, Development Authority and Lender hereby agree as follows::
1. Subordination. The Development Authority hereby agrees that the rights of the
Development Authority with respect to the Property under the Development Authority Mortgage
are and shall remain subordinate and subject to liens, rights and security interests created by the
Mortgage and to any and all amendments, modifications, extensions, replacements or renewals
of the Mortgage.
2. Notice to Development Authority. Lender agrees to notify Development
Authority of the occurrence of any Event of Default given to Borrower under the Loan
Documents.
3. No Assumption. The Development Authority acknowledges that the Lender is
not a party to the Contract and by executing this Agreement does not become a party to the
Contract, and specifically does not assume and shall not be bound by any obligations of the
Borrower to the Development Authority under the Contract, and that the Lender shall incur no
obligations whatsoever to the Development Authority except as expressly provided herein.
4. Consent. The Development Authority acknowledges that the Lender is making
the Loan to the Borrower and consents to the same.
5. Subordination. Lender and Development Authority agree that the liens, terms,
covenants and conditions of the Development Authority Mortgage and the other Development
Authority Loan Documents are and shall be subject to and subordinated in all respects to the
liens, terms, covenants and conditions of the Mortgage and the other Loan Documents and to all
2
advances heretofore made or which may hereafter be made pursuant to the Loan Documents
(including but not limited to, all sums advanced for the purposes of (1) protecting or further
securing the lien of the Mortgage, curing defaults by Borrower under the Loan Documents or for
any other purpose expressly permitted by the Loan Documents, or (2) constructing, renovating,
repairing, furnishing, fixturing or equipping the Property).
6. No Marshalling Required. The Development Authority hereby waives any and all
right to require the marshalling of assets in connection with the exercise of any of Lender's
remedies permitted by applicable law or agreement.
7. Notice from Development Authority. So long as the Development Authority
Loan is outstanding, the Development Authority agrees to give to the Lender copies of notices of
any Event of Default given to Borrower.
8. Notices. Any notices and other communications permitted or required by the
provisions of this Agreement (except for telephonic notices expressly permitted) shall be in
writing and shall be deemed to have been properly given or served by depositing the same with
the United States Postal Service, or any official successor thereto, designated as Certified Mail,
Return Receipt Requested, bearing adequate postage, or deposited with reputable private courier
or overnight delivery service, and addressed as hereinafter provided. Each such notice shall be
effective upon being deposited as aforesaid. The time period within which a response to any
such notice must be given, however, shall commence to run from the date of receipt of the notice
by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because
of changed address of which no notice was given shall be deemed to be receipt of the notice sent.
By giving to the other party hereto at least ten (10) days' notice thereof, either party hereto shall
have the right from time to time to change its address and shall have the right to specify as its
address any other address within the United States of America.
Each notice to Lender shall be addressed as follows:
Associated Bank, National Association
45 South 7th Street, Suite 2900
Minneapolis, MN 55402
Attention: Peter Bridston
With a copy to:
Fox Rothschild LLP
222 South Ninth Street, Suite 2000
Minneapolis, Minnesota 55402
Attention: David B. Galle
Each notice to Development Authority shall be addressed as follows:
City of Monticello Economic Development Authority
505 Walnut Street, Suite 1
Monticello, MN 55362
3
Attention: Executive Director
Each notice to Borrower shall be addressed as follows:
UMC Real Estate LLC
500 Chelsea Road
Monticello, MN 55362
Attn: Dick Salonek
9. Estoppel. The Development Authority hereby represents and warrants to Lender,
for the purpose of inducing Lender to make advances to Borrower under the Loan Documents
that no default or event of default by Borrower exists under the terms of the Development
Authority Loan on the date hereof.
10. No Waiver. No waiver shall be deemed to be made by Lender of any of its rights
hereunder unless the same shall be in writing signed on behalf of Lender, and each such waiver,
if any, shall be a waiver only with respect to the specific matter or matters to which the waiver
relates and shall in no way impair the rights of Lender or the obligations of the Development
Authority to Lender in any other respect at any time.
11. Binding Effect; Acceptance. This Agreement shall be binding upon the
Development Authority and the Development Authority's successors and assigns and shall inure
to the benefit of Lender and its participants, successors and assigns irrespective of whether this
or any similar agreement is executed by any other creditor of the Borrower. Notice of acceptance
by Lender of this Agreement or of reliance by Lender upon this Agreement is hereby waived by
the Development Authority.
12. Miscellaneous. The paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other purpose. This
Agreement may be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument. This Agreement shall be recorded in the
office of the Wright County Recorder. If any provision of this Agreement shall be invalid or
unenforceable to any extent, then the other provisions of this Agreement, shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
13. Governing Law; Consent to Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the substantive laws of the State of Minnesota.
14. Further Assurances. Borrower, Development Authority and Lender will execute
additional documents or instruments or take additional actions necessary, as reasonably required
by Lender, to effectuate the intent of this Agreement.
15. Waiver of Jury Trial. THE PARTIES WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
4
HEREUNDER, AND WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE
DATE OF THIS AGREEMENT.
[Signature page(s) to follow]
5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
BORROWER:
UMC REAL ESTATE, LLC,
a Minnesota limited liability company
By:
Name:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on , 2021, by
the of UMC Real Estate LLC, a Minnesota limited liability
company.
Notary Public
(Signature Page to Subordination Agreement)
LENDER:
ASSOCIATED BANK, NATIONAL
ASSOCIATION
By:
Name:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on 2021, by
the of Associated Bank, National Association.
Notary Public
(Signature Page to Subordination Agreement)
DEVELOPMENT AUTHORITY:
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
Name:
Its: President
By:
Name:
Its: Executive Director
STATE OF MINNESOTA )
ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me on , 2021, by
, the President of the City of Monticello Economic Development Authority, a
public body corporate and politic and political subdivision under the laws of the State of
Minnesota, on behalf of said economic development authority.
Notary Public
STATE OF MINNESOTA )
ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me on , 2021, by
, the Executive Director of the City of Monticello Economic Development
Authority, a public body corporate and politic and political subdivision under the laws of the
State of Minnesota, on behalf of said economic development authority.
Notary Public
(Signature Page to Subordination Agreement)
EXHIBIT A
THIS DOCUMENT WAS PREPARED BY
AND WHEN RECORDED RETURN TO:
FOX ROTHSCHILD LLP
222 South Ninth Street, Suite 2000
Minneapolis, MN 55402
Attn: Emily M. Hendricks, Esq.
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (`Agreement'), is made as of March , 2021,
by and among UMC REAL ESTATE LLC, a Minnesota limited liability company (`Borrower'),
ASSOCIATED BANK, NATIONAL ASSOCIATION, a national banking association ("Lender')
and the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body
corporate and politic and political subdivision under the laws of the State of Minnesota (the
`Development Authority').
RECITALS
A. Borrower is the owner of certain real property and all improvements on or hereafter
located or constructed thereon (collectively, the `Pro e '), as more fully described in
Exhibit A attached hereto.
B. Pursuant to that certain Construction Loan Agreement dated of even date herewith
between Borrower and Lender ('Loan Agreement'), Lender is making a loan to Borrower
in the principal amount of Thirteen Million Fifty Eight Thousand Two Hundred Eighty
Seven and 00/100 dollars ($13,058,287.00) ('Loan') for the purpose of refinancing and
constructing certain improvements on the Property. The Loan is evidenced by that certain
Promissory Note of even date herewith executed and delivered by Borrower to Lender in
the principal amount of the Loan in one or more promissory notes (collectively, the
`Note'), and secured by two Mortgage, Security Agreement, Assignment of Leases and
Rents and Fixture Financing Statement (collectively, the `Mortgage') of even date
herewith to be filed in the Office of the County Recorder, County of Wright, Minnesota
(`Recorder's Office'), concurrently with, or subsequent to the recordation of this
Agreement. As used herein, the term"Loan Documents"shall mean the Loan Agreement,
120652978.0
Note, Mortgage and any other instrument given in connection with and/or related to the
Loan.
C. Pursuant to that certain Promissory Note dated April 1, 2020 executed and delivered by
Borrower to Development Authority (`Development Authority Note'), Development
Authority made a loan to Borrower in the principal amount of Three Hundred Thousand
and 00/100 Dollars ($300,000.00) (`Development Authority Loan'). The Development
Authority Loan is secured by that certain Mortgage (`Development Authority Mortgage')
dated April 1, 2020 and filed April 2, 2020 in the Recorder's Office as Document No.
A1422592, as amended by that certain Amended Mortgage dated September 21, 2020 and
filed October 6, 2020 in the Recorder's Office as Document No. A1443065. As used
herein, the term `Development Authority Loan Documents"shall mean the Development
Authority Note, Development Authority Mortgage and any other instrument given in
connection with and/or related to the Development Authority Loan
D. As a condition to making the Loan to Borrower, Lender has required that the
Development Authority subordinate in the manner set forth herein, the lien position of the
Development Authority Mortgage.
b
feement aFe in the
NOW, THEREFORE, in consideration of the Loan and other financial accommodations
that have been made and may hereafter be made by Lender for the benefit of the Borrower, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, Development Authority and Lender hereby agree as follows::
1. Subordination. The Development Authority hereby agrees that the rights of the
Development Authority with respect to the Property under the Development Authority Mortgage
are and shall remain subordinate and subject to liens, rights and security interests created by the
Mortgage and to any and all amendments, modifications, extensions, replacements or renewals of
the Mortgage.
2. Notice to Development Authority. Lender agrees to notify Development
Authority of the occurrence of any Event of Default given to Borrower under the Loan
Documents.
3. No Assumption. The Development Authority acknowledges that the Lender is not
a party to the Contract and by executing this Agreement does not become a party to the Contract,
and specifically does not assume and shall not be bound by any obligations of the Borrower to
the Development Authority under the Contract, and that the Lender shall incur no obligations
whatsoever to the Development Authority except as expressly provided herein.
4. Consent. The Development Authority acknowledges that the Lender is making
the Loan to the Borrower and consents to the same.
2
5. Subordination. Lender and Development Authority agree that the liens, terms,
covenants and conditions of the Development Authority Mortgage and the other Development
Authority Loan Documents are and shall be subject to and subordinated in all respects to the
liens, terms, covenants and conditions of the Mortgage and the other Loan Documents and to all
advances heretofore made or which may hereafter be made pursuant to the Loan Documents
(including but not limited to, all sums advanced for the purposes of (1) protecting or further
securing the lien of the Mortgage, curing defaults by Borrower under the Loan Documents or for
any other purpose expressly permitted by the Loan Documents, or (2) constructing, renovating,
repairing, furnishing, fixturing or equipping the PropertyA.
6. No Marshalling Required. The Development Authority hereby waives any and all
right to require the marshalling of assets in connection with the exercise of any of Lender's
remedies permitted by applicable law or agreement.
7. Notice from Development Authority. So long as the Development Authority Loan
is outstanding, the Development Authority agrees to give to the Lender copies of notices of any
Event of Default given to Borrower.
8. Notices. Any notices and other communications permitted or required by the
provisions of this Agreement (except for telephonic notices expressly permitted) shall be in
writing and shall be deemed to have been properly given or served by depositing the same with
the United States Postal Service, or any official successor thereto, designated as Certified Mail,
Return Receipt Requested, bearing adequate postage, or deposited with reputable private courier
or overnight delivery service, and addressed as hereinafter provided. Each such notice shall be
effective upon being deposited as aforesaid. The time period within which a response to any
such notice must be given, however, shall commence to run from the date of receipt of the notice
by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because
of changed address of which no notice was given shall be deemed to be receipt of the notice sent.
By giving to the other party hereto at least ten (10) days'notice thereof, either party hereto shall
have the right from time to time to change its address and shall have the right to specify as its
address any other address within the United States of America.
Each notice to Lender shall be addressed as follows:
Associated Bank,National Association
45 South 7' Street, Suite 2900
Minneapolis, MN 55402
Attention: Peter Bridston
With a copy to:
Fox Rothschild LLP
222 South Ninth Street, Suite 2000
Minneapolis, Minnesota 55402
Attention: David B. Galle
3
Each notice to Development Authority shall be addressed as follows:
City of Monticello Economic Development Authority
505 Walnut Street, Suite 1
Monticello, MN 55362
Attention: Executive Director
Each notice to Borrower shall be addressed as follows:
UMC Real Estate LLC
500 Chelsea Road
Monticello, MN 55362
Attn: Dick Salonek
9. Estoppel. The Development Authority hereby represents and warrants to Lender,
for the purpose of inducing Lender to make advances to Borrower under the Loan Documents
that} no default or event of default by Borrower exists under the terms of the Development
Authority Loan on the date hereof.
10. No Waiver. No waiver shall be deemed to be made by Lender of any of its rights
hereunder unless the same shall be in writing signed on behalf of Lender, and each such waiver,
if any, shall be a waiver only with respect to the specific matter or matters to which the waiver
relates and shall in no way impair the rights of Lender or the obligations of the Development
Authority to Lender in any other respect at any time.
11. Binding Effect, Acceptance. This Agreement shall be binding upon the
Development Authority and the Development Authority's successors and assigns and shall inure
to the benefit of Lender and its participants, successors and assigns irrespective of whether this or
any similar agreement is executed by any other creditor of the Borrower. Notice of acceptance by
Lender of this Agreement or of reliance by Lender upon this Agreement is hereby waived by the
Development Authority.
12. Miscellaneous. The paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other purpose. This
Agreement may be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument. This Agreement shall be recorded in the
ptiblie effzees deemed ^^ te- y Len deroffice of the Wright County Recorder. If any
provision of this Agreement shall be invalid or unenforceable to any extent, then the other
provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.
13. Governing Law; Consent to Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the substantive laws of the State of Minnesota.
4
14. Further Assurances. Borrower, Development Authority and Lender will execute
additional documents or instruments or take additional actions necessary, as reasonably required
by Lender, to effectuate the intent of this Agreement.
15. Waiver of Jury Trial. THE PARTIES WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER, AND WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE
DATE OF THIS AGREEMENT.
[Signature page(s) to follow]
5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
BORROWER:
UMC REAL ESTATE, LLC,
a Minnesota limited liability company
By:
Name:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on , 2021, by
the of UMC Real Estate LLC, a Minnesota limited liability
company.
Notary Public
(Signature Page to Subordination Agreement)
LENDER:
ASSOCIATED BANK, NATIONAL
ASSOCIATION
By:
Name:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me on 2021, by
the of Associated Bank,National Association.
Notary Public
(Signature Page to Subordination Agreement)
DEVELOPMENT AUTHORITY:
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
By:
Name:
Its: President
B =;
Name"
Its: Executive Director
STATE OF MINNESOTA )
ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me on , 2021, by
the Pr i n of the City of Monticello Economic Development
Authority, a public body corporate and politic and political subdivision under the laws of the
State of Minnesota, on behalf of said economic development authority.
Notary Public
STATE OF MINNESOTA 1
1 ss.
COUNTY OF WRIGHT 1
The foregoing instrument was acknowledged before me on 2021, by
the Executive Director of the Cite of Monticello Economic Development
(Signature Page to Subordination Agreement)
Authority a public body comorate and oolitic and political subdivision under the laws of the
State of Minnesota_ on behalf of said economic development authority-
Notary Public
(Signature Page to Subordination Agreement)
EXHIBIT A
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ARTICLE VII
Financing
Section 7.1. Financing. (a) Before conveyance of the Development Property, the
Developer shall submit to the Authority evidence of one or more commitments for mortgage
financing which, together with committed equity for such construction, is sufficient for the
construction of the Minimum Improvements. Such commitments may be submitted as short term
financing, long term mortgage financing, a bridge loan with a long-term take-out financing
commitment, or any combination of the foregoing. Such commitment or commitments for short
term or long term mortgage financing shall be subject only to such conditions as are normal and
customary in the mortgage banking industry.
(b) If the Authority finds that the financing is sufficiently committed and adequate in
amount to provide for the construction of the Minimum Improvements, then the Authority shall
notify the Developer in writing of its approval. Such approval shall not be unreasonably
withheld and either approval or rejection shall be given within thirty (30) days from the date
when the Authority is provided the evidence of financing. A failure by the Authority to respond
to such evidence of financing shall be deemed to constitute an approval hereunder. If the
Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the
basis for the rejection. In any event the Developer shall submit adequate evidence of financing
within thirty (30) days after such rejection. Approval of any subordination agreement under
Section 7.3 hereof will constitute approval of financing for the purposes of this Section.
Section 7.2. Authority's Option to Cure Default on Mortgage. In the event that there
occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the
Developer shall cause the Authority to receive copies of any notice of default received by the
Developer from the holder of such Mortgage. Thereafter, the Authority shall have the right, but
not the obligation, to cure any such default on behalf of the Developer within such cure periods
as are available to the Developer under the Mortgage documents. In the event there is an event
of default under this Agreement, the Authority will transmit to the Holder of any Mortgage a
copy of any notice of default given by the Authority pursuant to Article IX of this Agreement7for
Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In o
facilitate the Developer obtaining financing for purchase of the Development Property construction according to the Construction Plans, the Authority agrees to subordinate it
under this Agreement, including without limitation its rights of reversion under Sections 9.3 and
9.4 hereof, provided that (a) such subordination shall be subject to such reasonable terms and
conditions as the Authority and Holder mutually agree in writing, (b) the Authority's obligation
to subordinate is contingent on the Authority's approval of the financing in accordance with
Section 7.1 hereof, and (c) in no event will the Authority subordinate its rights under the
Assessment Agreement described in Section 6.3.
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