Loading...
HomeMy WebLinkAbout2006 NS EDC - Consent for New Indebtedness for OE Enterprises, Inc.ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 16, 2006 Action Agenda Item No. 9- a SUBJECT: Consent for New Indebtedness for OE Enterprises, Inc. DEPARTMENT: Economic Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): A) Update on OE Enterprises' INFORMATION CONTACT: Performance Obligations Pursuant to Dianne Reid, 245-2326 Recorded Agreement between Orange Enterprises and Orange County B) Letter from First National Bank and Draft Deed of Trust PURPOSE: OE Enterprises, Inc. (formerly Orange Enterprises) has secured a commitment from First National Bank for $190,000 for the purpose of financing building improvement costs. The bank requires the following prior to closing: 1) Written consent from Orange County acknowledging and approving this new indebtedness; 2) Confirmation from Orange County that the Deed of Trust which will secure this loan shall be given priority to the recorded agreement between OE Enterprises, Inc. and Orange County dated April 26, 2005 (the Agreement); and 3) Written statement from Orange County that acknowledges violations of covenants referenced in said agreement and waives its exercisable rights associated with said violations for the purpose of facilitating this transaction and advancing the continuation of OE Enterprises, Inc.'s mission. OE Enterprises seeks the Board of County Commissioners' approval for these assurances. BACKGROUND: Last year, Orange County made a commitment to contribute $825,000 to OE Enterprises, Inc. (then known as Orange Enterprises) toward the purchase price and building support for property located at 348 Elizabeth Brady Road. The initial County support for the project in FY2005 was $525,000, with an additional $100,000 committed for FY2006, FY2007 and FY2008. The Agreement specified that the premises may be subjected to a deed of trust in favor of a commercial lending institution in an amount not to exceed $715,000. The original bank loan at the time of acquisition was $525,000. As of April 24, 2006, according to the Bank, the balance on the original note is $459,511.13. This amount, added to the proposed loan, totals $649,511.13, and within the $715,000 limit. OE Enterprises closed on the property on April 13, 2005. However, because of extensive renovations, OE did not move into the property until January 30, 2006, and was therefore unable to implement its expansion plans in the timetable envisioned in its original business plan. As a result, OE Enterprises has fallen short of its employment goals as follows: 2005-2006 Actually Achieved Projection as of 3/31106 Employees 225 192 Orange County 166 175 Residents Employees with 164 127 Disabilities New jobs for employees 11 8 With disabilities New jobs for non- 9 5 Disabled em to ees It should be noted that the. projection numbers are for the end of the fiscal year, which occurs June 30. As of the end of March, OE Enterprises has exceeded its projection for the number of Orange County residents employed but has not reached the projected numbers in the other four categories. While additional job creation is projected for the second quarter, these employment goals may not be achieved. OE Enterprises, Inc. has not yet conveyed to Orange County a Conservation Easement extinguishing alt development rights on the property in the flood hazard area of the Eno River. County staff has now received a survey of the premises which will be utilized to identify the conservation easement area; staff and the County Attorney will proceed with developing the easement agreement. Attachment A summarizes all other performance obligations. The Economic Development Commission will monitor the conditions of the Agreement as described in the summary. FINANCIAL IMPACT: None RECOMMENDATION(S): The Manager recommends that the Board consider the request by OE Enterprises for new indebtedness and communicate same to First National Bank. OE Enterprises closed on the property on April 13, 2005. However, because of extensive renovations, OE did not move into the property until January 30, 2006, and was therefore unable to implement its expansion plans in the timetable envisioned in its original business plan. As a result, OE Enterprises has fallen short of its employment goals as follows: 2005-2006 Actually Achieved Projection as of 3/31/06 Employees 225 19?_ Orange County 166 175 Residents Employees with 164 127 Disabilities New jobs for employees 11 8 With disabilities New jobs for non- 9 5 Disabled em to ees It should be noted that the projection numbers are for the end of the fiscal year, which occurs June 30. As of the end of March, OE Enterprises has exceeded its projection for the number of Orange County residents employed but has not reached the projected numbers in the other four categories. While additional job creation is projected for the second quarter, these employment goals may not be achieved. OE Enterprises, Inc. has not yet conveyed to Orange County a Conservation Easement extinguishing all development rights on the property in the flood hazard area of the Eno River. County staff has now received a survey of the premises which will be utilized to identify the conservation easement area; staff and the County Attorney will proceed with developing the easement agreement. Attachment A summarizes all other performance obligations. The Economic Development Commission will monitor the conditions of the Agreement as described in the summary. FINANCIAL IMPACT: None RECOMMENDATION(S): The Manager recommends that the Board consider the request by OE Enterprises for new indebtedness and communicate same to First National Bank. Attachment A Update on OE Enterprises, Inc. Performance Obligations OE Enterprises' performance obligations are spelled out on pages 7-10 of the Agreement. #3 states that OE shall purchase the premises for $950,000 and make improvements of $300,000. Further, it notes that the commercial lending institution's deed of trust shall not exceed $715,000. These points are addressed in the abstract and no further financing is anticipated. #4 provides that OE Enterprises will insure the premises, pay all taxes, assessments, and utilities, and maintain the property. The EDC will visit the premises annually to visually inspect the property. Staff will also require annual proof of insurance and documentation that taxes, assessment and utility charges have been paid. #5 specifies: • the employment obligations, which will be reported by OE Enterprises to the EDC quarterly; • the payment to staff of a living wage and to consumers of a commensurate wage, both of which will be reported to the EDC annually within 45 days of the end of the fiscal year; and • the development of an "affirmative enterprise." OE Enterprises will report progress on this goal annually within 45 days of the end of the fiscal year. #6 covers the conveyance of a Conservation Easement. As mentioned in the Abstract, OE has provided a survey on which the Easement will be based. Staff will develop a plan for completing the Easement and monitoring it to the Board of County Commissioners by Fall, 2006. #7 specifies that OE will keep the premises in safe condition and in good repair. The annual monitoring visit by the EDC will verify compliance. The EDC will also receive and review quarterly Profit and Loss statements and the end of year audit report to make sure that OE remains solvent. 4 Phone 919-643-1000 FIRST NATIONAL Fax 919-G43-1010 www.MyYesBank.com First National Bank & Trust Company P. O. Box 1239, Hillsborough, NC 27278 102 Millstone Drive, Hillsborough, NC 27278 May 5, 2006 O. E. Enterprises, Inc. 348 Elizabeth Brady Road Hillsborough, NC 27278 Dear Kathy Bryan: Please allow me to again express our eagerness to provide O.E. Enterprises, Inc. with the financing alluded to in our commitment letter. The requirements that Orange County consent to this indebtedness and grant priority to our proposed Deed of Trust which would secure said loan can be accomplished by written acknowledgement by the County Commissioners or their representatives. The same is true of the requirement that Orange County waive any rights to pursue a remedy for covenant violations. Thank you for your continued patience and for the opportunity to be a financial partner. Sincerely, eith Epstein Vice President Cc: Geoffrey Gledhill; Dianne Reid An FNB Corp. Company • NASDAQ• FNBN YeS ~®ZL CdYI. ® ~eS ZUe CdYl. ~ FIRST 4 Phone 919-643-1000 NATIONAL Fax 919-G43-1010 www.MyYesBank.com First National Bank & Trust Company P. O. Box 1239, Hillsborough, NC 27278 102 Millstone Drive, Hillsborough, NC 27278 May 5, 2006 O. E. Enterprises, Inc. 348 Elizabeth Brady Road Hillsborough, NC 27278 Dear Kathy Bryan: Please allow me to again express our eagerness to provide O.E. Enterprises, Inc. with the .financing alluded to in our commitment letter. The requirements that Orange County consent to this indebtedness and grant priority to our proposed Deed of Trust which would secure said loan can be accomplished by written acknowledgement by the County Commissioners or their representatives. The same. is true of the requirement that Orange County waive any rights to pursue a remedy for covenant violations. Thank you for your continued patience and for the opportunity to be a financial partner. Sincerely, ~~ eith Epstein Vice President Cc: Geoffrey Gledhill; Dianne Reid An FNB Corp. Company • NASDAQ• FNBN Yes you can. ~ Yes we can. DRAFT TI>is document was prepared by ............................................ .................................................................................... Please return after recording to :............................................ ..................................................................................... State of North Carolina Space Above This Line For Recording Data REAL ESTATE DEED OF TRUST (With Future Advance Clause) 1. DATE AND PARTIES. The date of this Deed of Trust is ...........IiaY...19...20.4b ................. and the p~lrties and their addresses are as follows: ~3RANTOR: OE . Enterprises,.. inc ....................... ........ . ............................................... 3lLS..Elizabath. b=add. Rnad ............... .....................:.................................. Hillsbn~ough.,. NC.27.278 .................. ........................................................ ....................................................... ........................................................ ....................................................... ........................................................ ^ Refer to the Addendum which is attached and incorporated herein for additional Grantors. TRUSTEE: First.Natianal.Investnr:.Szr~ricas...lnc.. ................................................... ................................................................................................................... ................................................................................................................... LENDER: First.National.Bamk ................................................................................... P..O....Bnx .1233 ........................................... . ................................................. 1(12.Mi11staue. Axiva ................................................................................... Hillsbnrough...NG..2.7.27,8 .............................................................................. ................................................................................................................... 2. CONVEYANCE. For good and valuable consideration, the receipt and sufficiency of which is a~:l:nowledged, and to secure the Secured Debt (hereafter defined), Grantor irrevocably grants, conveys and sl;lls to Trustee, in trust for the benefit of the Lender, with power of sale, the following described property: See Exhibit A attached herto and incorporated herein by reference. The property is located in .....O~at~B~ ............................................. at ....................................... (County) L4>1.Elizabeth..Bxady..Rvad......, .klf.i-.~Sb.4x.4~8h ................. North Carolina ..27278.................... (Address) (City) (ZIP Code) 'T'ogether with all rights, easements, appurtenances, royalties, mineral rights, oil and gas rights, crops, timber, all diversion payments or third party payments made to crop producers, and all existing and future improvements, structures, fixtures, and replacements that may now, or at any time in the future, be part of dte real estate described above (all referred to as "Property"). The term Property also includes, but is not limited to, any and all water wells, water, ditches, reservoirs, reservoir sites and dams located on the real estate and all riparian and water rights associated with the Property, however established. NONTH CAROLINA - A~RICULTUHAL/COMMEHCIAL DEED OF TRUST QIBT FOR FBM0. FHLMC, FNA OR YR USE, ANU NOT FOR CONSUMER PURPOSESI psge 1 0/ 7 E ®1993 Bwrken 9yRemt, Iro.. SG Cloud, MN Form AO/CO•DT-NC 9/22/2007 5 !. MAXIMUM OBLIGATION LIMIT. The total principal amount of the Secured Debt (hereafter defined) secured by this Deed of Trust at any one time shall not exceed $ .L9A,.ODQ.OQ ................................ This limitation of amount does not include interest, loan charges, commitment fees, brokerage commissions, Jvn attorneys' fees and other charges validly made pursuant to this Deed of Trust and does not apply to advances (or interest accrued on such advances) made under the terms of this Deed of Trust to protect Lender's security and to perform any of the covenants contained in this Deed of Trust. Future advances are contemplated and, along with other future obligations, are secured by this Deed of Trust even though all or part may not yet be advanced. Nothing in this Deed of Trust, however, shall constitute a commitment to snake additional or future loans or advances in any amount. Any such commitment would need to be agreed to in a separate writing. ~. SECURED DEBT DEFINED. The term "Secured Debt" includes, but is not limited to, the following: A. The promissory note(s), contract(s), guaranty(s) or other evidence of debt described below and all extensions, renewals, modifications or substitutions (Evidence of Debt) :...................................... .................................................................................................................... . ............. .The . fatal . amount..of..present . indebtedness..secured.heseby..is..$190.> QOA..OA............. .................................................................................................................................. .................................................................................................................................. (e.g., borrower's name, note amount, note date, interest rate, maturity date) B. All future advances from Lender to Grantor or other future obligations of Grantor to Lender under any promissory note, contract, guaranty, or other evidence of debt existing now or executed within fifteen years after the date of this Deed of Trust whether or not this Deed of Trust is specifically referred to in the evidence of debt. This Deed of Trust is intended to comply with the provisions of Article 7, Chapter 45 NCGS. C. All obligations Grantor owes to Lender, which now exist or may later azise, to the extent not prohibited by law, including, but not limited to, liabilities for overdrafts relating to any deposit account agreement between Grantor and Lender. D. All additional sums advanced and expenses incurred by Lender for insuring, preserving or otherwise protecting the Property and its value and any other sums advanced and expenses incurred by Lender under the terms of this Deed of Trust, plus interest at the highest rate in effect, from time to time, as provided in the Evidence of Debt. E. Grantor's performance under the terms of any instrument evidencing a debt by Grantor to Lender and any Deed of Trust securing, guarantying, or otherwise relating to the debt. If more than one person signs this Deed of Trust as Grantor, each Grantor agrees that this Deed of Trust will secure all future advances and future obligations described above that are given to or incurred by any one or more Grantor, or any one or more Grantor and others. This Deed of Trust will not secure any other debt if Lender fails, with respect to such other debt, to make any required disclosure about this Deed of Trust or if Lender fails to give any required notice of the right of rescission. 5. PAYMENTS. Grantor agrees to make all payments on the Secured Debt when due and in accordance with the terms of the Evidence of Debt or this Deed of Trust. 6. WARRANTY OF TITLE. Grantor covenants that Grantor is lawfully seized of the estate conveyed by this Deed of Trust and has the right to irrevocably grant, wnvey and sell to Trustee, in trust, with power of sale, the Property and warrants that the Property is unencumbered, except for encumbrances of record. 7. CLAIMS AGAINST TITLE. Grantor will pay ail taxes, assessments, liens, encumbrances, lease payments, ground rents, utilities, and other charges relating to the Property when due. Lender may require Grantor to provide to Lender copies of all notices that such amounts are due and the receipts evtdenctng Grantor's payment. Grantor will defend title to the Property against any claims that would impart the lien of this Deed of Trust. Grantor agrees to assign to Lender, as requested by Lender, any rights, claims or defenses which Grantor may have against parties who supply labor or materials to improve or maintain the Property. 8. PRIOR SECURITY INTERESTS. With regard to any other mortgage, deed of trust, or security agreement or other lien document that created a prior security interest or encumbrance on the Property and that may have priority over this Deed of Trust, Grantor agrees: A. To make all payments when due and to perform or comply with all covenants. B. To promptly deliver to Lender any notices that Grantor receives from the holder. C. Not to make or permit any modification or extension of, and not to request or accept any future advances under any note or agreement secured by, the other mortgage, deed of trust or security agreement unless Lender consents in writing. 9. DUE ON SALE OR ENCUMBRANCE. Lender may, at its option, declare the entire balance of the Secured Debt to be immediately due and payable upon the creation of any lien, encumbrance, transfer, or sale, or contract for any of these on the Property. However, if the Property includes Grantor's residence, this section shall be subject to the restrictions imposed by federal law (12 C.F.R. 591), as applicable. For the purposes of this section, the term "Property" also includes any interest to all or any part of the Property. This covenant shall run with the Property and shall remain in effect until the Secured Debt is paid in full and this Deed of Trust is released. 10. TRANSFER OF AN INTEREST IN THE GRANTOR. If Grantor is an entity other than a natural person (such as a corporation or other organization), Lender may demand irntnediate payment if (I) a beneficial interest in Grantor is sold or transferred; (2) there is a change in either the identity or number of members of a partnership or similar entity; or (3) there is a change in ownership of more than 25 percent of the voting stock of a corporation or similar entity. However, Lender may not demand payment in the above situations if it is prohibited by law as of the date of this Deed of Trust. 11. ENTITY WARRANTIES AND REPRESENTATIONS. If Grantor is an entity other than a natural person (such as a corporation or other organization), Grantor makes to Lender the following wazranties and representations which shall be continuing as long as the Secuted Debt remains outstanding: A. Grantor is an entity which is duly organized and validly existing in the Grantor's state of incorporation (or organization). Grantor is in good standing in all states in which Grantor transacts business. Grantor has the power and authority to own the Property and to carry on its business as now being conducted and, as applicable, is qualified to do so in each state in which Grantor operates. page 2 oI7 r--~I-~'~ ®7993 Br,kan Sy>tam>, IrK.. SL CI"W, MN Form AO/CO-DT-NC 9/22/2001 MAXIMUM OBLIGATION LIMIT. The total principal amount of the Secured Debt (hereafter defined) secured by this Deed of Trust at any one time shall not exceed S .19D,.ODLI.DQ ................................. This limitation of amount does not include interest, loan charges, commitment fees, brokerage commissions, attorneys' fees and other charges validly made pursuant to this Deed of Trust and does not apply to advances (or interest accrued on such advances) made under the terms of this Deed of Trust to protect Lender's srv~curity and to perform any of the covenants contained in this Deed of Trust. Future advances are amtemplated and, along with other future obligations, are secured by this Deed of Trust even though all or part may not yet be advanced. Nothing in this Deed of Trust, however, shall constitute a commitment to make additional or future loans or advances in any amount. Any such commitment would need to be agreed to in a sepazate writing. SECURED DEBT DEFINED. The term "Secured Debt" includes, but is not limited to, the following: A. The promissory note(s), contract(s), guaranty(s) or other evidence of debt described below and :tll extensions, renewals, modifications or substitutions (Evidence of Debt): ...................................... .The. tatal.amount..o.f..preasnt. indebtednes.s..sscured.hereby..is..a1Q0., t10A..01J............. .................................................................................................................................. (e.g., borrower's name, tiott at7rount, note date, interest rate, maturity date) B. All future advances from Lender ro Grantor or other future obligations of Grantor to Lendet under any promissary note, contract, guaranty, or other evidence of debt existing now or executed within fifteen years after the date of this Deed of Trust whether or not this Deed of Trust is specifically referred to in the evidence of debt. This Deed of Trust is intended to comply with the provisions of Article 7, Chapter 45 NCGS. C. All obligations Grantor owes to Lender, which now exist or may later arise, to the extent not prohibited by law, including, but not limited to, liabilities for overdrafts relating to any deposit account agreement between Grantor and Lender. D. All additional sums advanced and expenses incurred by Lender for insuring, preserving or otherwise protecting the Property and its value and any other sums advanced and expenses incurred by Lender under the terms of this Deed of Trust, plus interest at the highest rate in effect, from time to time, as provided in the Evidence of Debt. E. Grantor's performance under the terms of any inswment evidencing a debt by Granror ro Lender and any Deed of Trust securing, guarantying, or otherwise relating to the debt. If :snore than one person signs this Deed of Trust as Grantor, each Grantor agrees that this Deed of Trust will set:ure all future advances and future obligations described above that are given to or incurred by any one or more Grantor, or any one or more Grantor and others. This Deed of Trust will not secure any other debt if Leander fails, with respect to such other debt, to make any required disclosure about this Deed of Trust or if Leander fails to give any required notice of the right of rescission. 5. PAYMENTS. Grantor agrees to make all payments on the Secured Debt when due and in accordance with the terms of the Evidence of Debt or this Deed of Trust. 6. WARRANTY OF TITLE. Grantor covenants that Grantor is lawfully seized of the estate conveyed by this De*..d of Trust and has the right ro irrevocably grant, convey and sell to Trustee, in trust, with power of sale, the Property and warrants that the Property is unencumbered, except for encumbrances of record. 7. CLAIMS AGAINST TITLE. Grantor will pay all taxes, assessments, liens, encumbrances, lease payments, ground rents, utilities, and other chazges relating to the Property when due. Lender may require Grantor to provide to Lender copies of all notices that such amounts are due and the receipts evidencing Grantor's payment. Grantor will defend title to the Property against any claims that would impair the lien of this Deed of 'Frost. Grantor agrees to assign to Lender, as requested by Lender, any rights, claims or defenses which Grantor may have against parties who supply labor or materials to improve or maintain the Property. 8. PRIOR SECURITY INTERESTS. With regard to any other mortgage, deed of trust, or security agreement or ether lien document that created a prior security interest or encumbrance on the Property and that may have priority over this Deed of Trust, Grantor agrees: .4. To make all payments when due and to perform or comply with all covenants. 13. To promptly deliver to Lender any notices that Grantor receives from the holder. ~~. Not to make or permit any modification or extension of, and not to request or accept any future advances under any note or agreement secured by, the other mortgage, deed of trust or security agreement unless Lender consents to writing. 9. DUE ON SALE OR ENCUMBRANCE. Lender may, at its option, declare the entire balance of the Secured Det t to be immediately due and payable upon the creation of any litn, encumbrance, transfer, or sale, or contract for any of these on the Property. However, if the Property includes Grantor's residence, this section shall be subject to the restrictions imposed by federal law (12 C.F.R. 591), as applicable. For the purposes of this section, the term "Property" also includes any interest to all or any part of the Property. This covenant shall run with the Property and shall remain in effect until the Secured Debt is paid in full and this Deed of Trutt is released. 10. TRANSFER OF AN INTEREST IN THE GRANTOR. If Grantor is an entity other than a natural person (such as a corporation or other organization), Lender may demand immediate payment if (1) a beneficial interest in Grantor is sold or transferred; (2) there is a change in either the identity or number of members of a partnership or similar entity; or (3) there is a change in ownership of more than 25 percent of the voting stock of a corporation or similar entity. However, Lender may not demand payment in the above situations if it is prohibited by law as of the date of this Deed of Trust. 11. ENTITY WARRANTIES AND REPRESENTATIONS. If Grantor is an entity other than a natural person (such as a corporation or other organization), Grantor makes to Lender the following warranties and reprr;sentations which shall be continuing as long as the Secured Debt remains outstanding: A... Grantor is an entity which is duly organized and validly existing in the Grantor's state of incorporation (or organization). Grantor is in good standing in all states in which Grantor transacts business. Grantor has the power and authority to own the Property and to carry on its business as now being conducted and, as applicable, is qualified to do so in each state in which Grantor operates. pope Z oI 7 Fj~jB.,~~,' O /89J B,nkan 9Ynr„~, Ine., St CIoW, MN Farm AO/CO-DT~MC B/22/20tlt B. The execution, delivery and performance of this Deed of Trust by Grantor and the obligation evidenced by the Evidence of Debt are within the power of Grantor, have been duly authorized, have received ail necessazy governmental approval, and will not violate any provision of law, or order of court or governmental agency. C. Other than disclosed in writing Grantor has not changed its name within the last ten years and has not used any other trade or fictitious name. Without Lender's prior written consent, Grantor does not and will not use any other name and will preserve its existing name, trade names and franchises until the Secured Debt is satisfied. 12. PROPERTY CONDITION, ALTERATIONS AND INSPECTION. Grantor will keep the Property in good condition and make all repairs that are reasonably necessary. Grantor will give Lender prompt notice of any loss or damage to the Property. Grantor will keep the Property free of noxious weeds and grasses. Grantor will not initiate, join in or consent to any change in any private restrictive covenant, zoning ordinance or otk.er public or private restriction limiting or defining the uses which may be made of the Property or any part of the Property, without Lender's prior written consent. Grantor will notify Lender of all demands, proceedings, claims, and actions against Grantor or any other owner made under law or regulation regarding use:, ownership and occupancy of the Property. Grantor will comply with all legal requirements and restrictions, whether public or private, with respect to the use of the Property. Grantor also agrees that the nature of the occupancy and use will not change without Lender's prior wntten consent. No portion of the Property will be removed, demolished or materially altered without Lender's prior written consent except that Grantor has the right to remove items of personal property comprising a part of the Property that become worn or obsolete, provided that such personal property is replaced with other personal prcperty at least equal in value to the replaced personal property, free from any title retention device, security agreement or other encumbrance. Such replacement of personal property will be deemed subject to the security interest created by this Deed of Trust. Grantor shall not partition or subdivide the Property without Leader's prior written consent. Lender or Lender's agents may, at Lender's option, enter the Property at any reasonable time for the purpose of inspecting the Property. Any inspection of the Property shall be entirely for Lender's benefit and Grantor will in no way rely on Lender's inspection. 13. AL THORITY TO PERFORM. If Grantor fails to perform any of Grantor's duties under this Deed of Trust, or any other mortgage, deed of trust, security agreement or other lien document that has priority over this De1;d of Trust, Lender may, without notice, perform the duties or cause them to be performed. Grantor appoints Lender as attorney in fact to sign Grantor's name or pay any amount necessary for performance. If any construction on the Property is discontinued or not carried on in a reasonable manner, Lender may do wh;rtever is necessary to protect Lender's security interest in the Property. This may include completing the construction. Lender's right to perform for Grantor shall not create an obligation to perform, and Lender's failure to perform will not preclude Lender from exercising any of Lender's other rights under the law or this Deed of Trust. Any amounts paid by Lender for insuring, preserving or otherwise protecting the Property and Lender's security interest will be due on demand and will bear interest from the date of the payment until paid in full at the interest rate in effect from time to time according to the terms of the Evidence of Debt. 14. ASSIGNMENT OF LEASES AND RENTS. Grantor irrevocably grants, conveys and sells to Trustee, in trust for the benefit of the Lender, as additional security all the right, title and interest in and to any and all: ,~. Existing or future leases, subleases, licenses, guaranties and any other written or verbal agreements for the use and occupancy of any portion of the Property, including any extensions, renewals, modifications or substitutions of such agreements (all referred to as "Leases"). 13. Rents, issues and profits (all referred to as "Rents"), including but not limited to security deposits, minimum rent, percentage rent, additional rent, common azea maintenance charges, parking charges, real estate taxes, other applicable taxes, insurance premium contributions, liquidated damages following default, cancellation premiums, "loss of rents" insurance, guest receipts, revenues, royalties, proceeds, bonuses, accounts, contract rights, general intangibles, and all rights and claims which Grantor may have that in any way pertain to or are on account of the use or occupancy of the whole or any part of the Property. Grantor will promptly provide Lender with true and correct copies of all existing and future Leases. Grantor may collect, receive, enjoy and use the Rents so long as Grantor is not in default. Except for one month's rent, Grantor will not collect in advance any Rents due in future lease periods, unless Grantor first obtains Lender's written consent. Upon default, Grantor will receive any Rents in trust for Lender and Grantor will not commingle the Rents with any other funds. Any amounts collected shall be applied at L.ender's discretion to payments on the Secured Debt as therein provided, to costs of managing the Property, including, but not limned to, all taxes, assessments, insurance premiums, repairs, and commissions to rental agents, and to any other necessary related expenses including Lender's attorneys' fees, and court costs. Grantor acknowledges that this assignmem is immediately effective between the parties to this assignment and effd;tive as to third parties on the recording of this Deed of Trust. Grantor agrees that Lender is entitled to notify Grantor or Grantor's tenants to make payments of Rents due or to become due directly to Lender after such recording, however Lender agrees not to notify Grantor's tenants until Grantor defaults and Lender noti-ties Grantor of the default and demands that Grantor and Grantor's tenants pay all Rents due or to become due or to become due directly to Lender. On receiving the notice of default, Grantor will endorse and deliver to Lender any payments of Rent in Grantor's possession. Grantor warrants that no default exists under the Leases or any applicable landlord law. Grantor also warrants and agrees to maintain, and to require the tenants to comply with, the Leases and any applicable law. Grantor will promptly notify Lender of any noncompliance. If Grantor neglects or refuses to enforce compliance with the terms of the Leases, then Lender may, at Lender's option, enforce compliance. Grantor will obtain Lender's written authorization before Grantor consents to sublet, modify, cancel, or otherwise alter the Leases, to accept the surrender of the Property covered by such Leases (unless the Leases so require), or to assign, compromise or encumber the Leases or any future Rents. Grantor will hold Lender harniless and indemnify Lender for any and all liability, loss or damage that Lender may incur as a consequence of the assignment under this section. I5. CONDOMINIUMS; PLANNED UNIT DEVELOPMENTS. If the Property includes a unit in a condominium or a planned unit development, Grantor will perform all of Grantor's duties under the covenants, by-laws, or regulations of the condominium or planned unit development. ~~ O 1893 B+nker+ ByHem; Im:., BL Cloud, MN Fmm AO/CO-DT-NC 9/22/2001 page 3 0! 7 16. DEFAULT. Grantor will be in default if any of the following occur: A. Any party obligated on the Secured Debt fails to make payment when due; A B. A breach of any term or covenant in this Deed of Trust, any prior mortgage or any construction loan v[ agreement, security agreemem or any other document evidencing, guarantying, securing or otherwise relating to the Secured Debt; C. The making or furnishing of any verbal or written representation, statement or warranty to Lender that is false or incorrect in any material respect by Grantor or any person or entity obligated on the Secured Debt; D. The death, dissolution, or insolvency of, appointment of a receiver for, or application of any debtor relief law to, Grantor or any person or entity obligated on the Secured Debt; E. A good faith belief by Lender at any time that Lender is insecure with respect to any person or entity obligated on the Secured Debt or that the prospect of any payment is impaired or the value of the Property is impaired; F. A material adverse change in Grantor's business including ownership, management, and financial conditions, which Lender in its opinion believes impairs the value of the Property or repayment of the Secured Debt; or G. Any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M. 17. REMEDIES ON DEFAULT. In some instances, federal and state law will require Lender to provide Grantor with notice of the right to cure, mediation notices or other notices and may establish time schedules for foreclosure actions. Subject to these limitations, if any, Lender may accelerate the Secured Debt and foreclose this Deed of Trust in a manner provided by law if this Grantor is in default. At the option of Lender, all or any part of the agreed fees and charges, accrued interest and principal shall become immediately due and payable, after giving notice if required by law, upon the occurrence of a default or anytime thereafter. In addition, Lender shalt be entitled to all the remedies provided by law, the Evidence of Debt, other evidences of debt, this Deed of Trust and any related documents including without limitation, the power to sell the Property. If there is a default, Trustee shall, in addition to any other permitted remedy, at the request of the Lender, advertise and sell the Property as a whole or in separate parcels at public auction to the highest bidder for cash, after having fast given such notice of hearing as to commencement of foreclosure proceedings and obtained such findings or leave of court as may be then required by law, and convey absolute title free and clear of all right, title and interest of Grantor at such time and place as Trustee designates. Trustee shall give notice of sale including the time, terms and place of sale and a description of the property to be sold as required by the applicable law in effect at the time of the proposed sale. Upon sale of the Property and to the extent not prohibited by law, Trustee shall make and deliver a deed to the Property sold which conveys absolute title to the purchaser, and after first paying all fees, charges and costs, including the Trustee's commission, shall pay to Lender all moneys advanced for repairs, taxes, insurance, liens, assessments and prior encumbrances and interest thereon, and the principal and interest on the Secured Debt, paying the surplus, if any, to Grantor. The Trustee's commission shall be five percent of the gross proceeds of the sale for a completed foreclosure. Lender may purchase the Property. The recitals in any deed of conveyance shall be prima facie evidence of the facts set forth therein. All remedies are distinct, cumulative and not exclusive, and the Lender is entitled to all remedies provided at law or equity, whether expressly set forth or not. The acceptance by Lender of any sum in payment or partial payment on the Secured Debt after the balance is due or is accelerated or after foreclosure proceedings are filed shall not constitute a waiver of Lender's right to require full and complete cure of any existing default. By not exercising any remedy on Grantor's default, Lender does not waive Lender's right to later consider the event a default if it continues or happens again. 18. EXPENSES; ADVANCES ON COVENANTS; ATTORNEYS' FEES; COLLECTION COSTS. Except when prohibited by law, Grantor agrees to pay all of Lender's expenses if Grantor breaches any covenant in this Deed of Trust. Grantor will also pay on demand all of Lender's expenses incurred in collecting, insuring, preserving or protecting the Property or in any inventories, audits, inspections or other examination by Lender in respect to the Property. Grantor agrees to pay all costs and expenses incurred by Lender in enforcing or protecting Lender's rights and remedies under this Deed of Trust, including, but not limited to, attorneys' fees, court costs, and other legal expenses. Once the Secured Debt is fully and finally paid, Lender agrees to release this Deed of Trust and Grantor agrees to pay for any recordation costs. All such amounts are due on demand and will bear interest from the time of the advance at the highest rate in effect, from time to time, as provided in the Evidence of Debt and as permitted by law. 19. ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES. As used in this section, (1) "Environmental Law" means, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, 42 U.S.C. 9601 et seq.), all other federal, state and local laws, regulations, ordinances, court orders, attorney general opinions of interpretive letters concerning the public health, safety, welfare, environment or a hazardous substance; and (2) "Hazardous Substance" means any toxic, radioactive or hazardous material, waste, pollutant or contaminant which has characteristics which render the substance dangerous or potentially dangerous to the public health, safety, welfare or environment. The term includes, without limitation, any substances defined as "hazardous material," "toxic substances," "hazardous waste" or "hazardous substance" under any Environmental Law. Grantor represents, warrants and agrees that, except as previously disclosed and acknowledged in writing: A. No Hazardous Substance has been, is, or will be located, transported, manufactured, treated, refined, or handled by any person on, under or about the Property, except in the ordinary course of business and in strict compliance with all applicable Environmental Law. B. Grantor has not and will not cause, contribute to, or permit the release of any Hazardous Substance on the Property. C. Grantor will immediately notify Lender if (1) a release or threatened release of Hazardous Substance occurs on, under or about the Property or migrates or threatens to migrate from nearby property; or (2) there is a violation of any Environmental Law concerning the Property. In such an event, Grantor will take all necessary remedial action in accordance with Environmental Law. r--~l~, ~ O 1883 Bankers ByHam", IM., SL CIoW, MN frorm AOICO-DT-NC 8/22/2001 page 4 0! 7 16.1)EFAULT. Grantor will be in default if any of the following occur: A. Any party obligated on the Secured Debt fails to make payment when due; B. A breach of any term or covenant in this Deed of Trust, any prior mortgage or any construction loan Q agreement, security agreement or any other document evidencing, guarantying, securing or otherwise v relating to the Secured Debt; C. The making or furnishing of any verbal or written representation, statement or warranty to Lender that is false or incorrect in any material respect by Grantor or any person or entity obligated on the Secured Debt; D. The death, dissolution, or insolvency of, appointment of a receiver for, or application of any debtor relief law to, Grantor or any person or entity obligated on the Secured Debt; E. A good faith belief by Lender at any time that Lender is insecure with respect to any person or entity obligated on the Secured Debt or that the prospect of any payment is impaired or the value of the Property is impaired; F. A material adverse change in Grantor's business including ownership, management, and financial conditions, which Lender in its opinion believes impairs the value of the Property or repayment of the Secured Debt; or G. Any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G> Exhibit M. 17. REMEDIES ON DEFAULT. In some instances, federal and state law will require Lender to provide Grantor wrath notice of the right to cure, mediation notices or other notices and may establish time schedules for foreclosure actions. Subject to these limitations, if any, Lender may accelerate the Secured Debt and foreclose this Deed of Trust in a manner provided by law if this Grantor is in default. At the option of Lender, all or any part of the agreed fees and charges, accrued interest and principal shall become immediately due and payable, after giving notice if required by law, upon the occurrence of a default or anytime thereafter. In addition, Lender shall be entitled to all the remedies provided by law, the Evidence of Debt, other evidences of debt, this Deed of Trust and any related documents including without limitation, the: power to sell the Property. If there is a default, Trustee shall, in addition to any other permitted remedy, at the request of the Lender, advertise and sell the Property as a whole ar in separate parcels at public auction to the highest bidder for cash, after having first given such notice of hearing as to commencement of foreclosure proceedings and obrained such findings or leave of court as may be then required by law, and convey absolute title free and clear of all right, title and interest of Grantor at such time and place as Trustee designates. Trustee shall give notice of sale including the time, terms and place of sale and a description of the property to be sold as required by the applicable law in effect at the time of the proposed sale. Upon sale of the Property and to the extent not prohibited by law, Trustee shall make and deliver a deed to the Property sold which conveys absolute title to the purchaser, and after first paying all fees, charges and costs, including the Trustee's commission, shall pay to Lender all moneys advanced for repairs, taxes, insurance, liens, assessments and prior encumbrances and interest thereon, and the principal and interest on the Secured Debt, paying the surplus, if any, to Grantor. The Trustee's commission shall be five percent of the gross proceeds of the sale for a completed foreclosure. Lender may purchase the Property. The recitals in any deed of conveyance shall be prima facie evidence of the facts set forth therein. All remedies are distinct, cumulative and not exclusive, and the Lender is entitled to all remedies provided at law or equity, whether expressly set forth or not. The acceptance by Lender of any sum in payment or partial payment on the Secured Debt after the balance is due or is accelerated or after foreclosure proceedings are fiieli shall not wnstitute a waiver of Lender's right to require full and complete cure of any existing default. By not exercising any remedy on Grantor's default, Lender does not waive Lender's right to later consider the event a default if it continues or happens again. 18. EXPENSES; ADVANCES ON COVENANTS; ATTORNEYS' FEES; COLLECTION COSTS. Except when prohibited by law, Grantor agrees to pay all of Lender's expenses if Grantor breaches any covenant in this Deed of Trust. Grantor will also pay on demand all of Lender's expenses incurred in collecting, insuring, preserving or protecting the Property or in any inventories, audits, inspections or other examination by Le>Nier in respect to the Property. Grantor agrees to pay all costs and expenses incurred by Lender in enforcing or protecting Lender's rights and remedies under this Deed of Trust, including, but not limited to, attorneys' fees, court costs, and other legal expenses. Once the Secured Debt is fully and finally paid, Lender agrees to release this Deed of Trust and Grantor agrees to pay for any recordation costs. All such amounts are true on demand and will bear interest from the time of the advance at the highest rate in effect, from time to bane, as provided in the Evidence of Debt and as permitted by law. 19. ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES. As used in this section, (1) "EnTironmental Law" means, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, 42 U.S.C. 9601 et seq.), all other federal, state and local laws, regulations, ordinances, court orders, attorney general opinions or interpretive letters concerning the public health, safety, welfare, environment or a hazardous substance; and (2) "Hazardous Substance" means any toxic, radioactive or hazardous material, waste, pollutant or contaminant which has characteristics which render the substance dangerous or potentially dangerous to the public health, safety, welfare or environment. The term includes, without limitation, any substances defined as "hazardous material," "toxic substances," "hazardous waste" or "hazrrdous substance" under any Environmental Law. Grantor represents, warrants and agrees that, except as previously disclosed and acknowledged in writing: A. No Hazardous Substance has been, is, or will be located, transported, manufactured, treated, refined, or handled by any person on, under or about the Property, except in the ordinary course of business and in strict compliance with all applicable Environmental Law. B. Grantor has not and will not cause, contribute to, or permit the release of any Hazardous Substance on the Property. C. Grantor will immediately notify Lender if (1) a release or threatened release of Hazardous Substance occurs on, under or about the Property or migrates or threatens to migrate from nearby property; or (2) there is a violation of any Environmental Law concerning the Property. In such an event, Grantor will take all necessary remedial action in accordance with Environmental Law. ~~ O 1097 lndtvs Sy+cvr,", Iro., SL Cb,N, MN Ferro AOKO-0T-NC 8/22/2001 peye 4 0/ 7 D. Grantor has no knowledge of or reason to believe there is any pending or threatened investigation, claim, or proceeding of any kind relating to (1) any Hazardous Substance located on, under or about the Property; or (2) any violation by Grantor or any tenant of any Environmental Law. Grantor will immediately notify Lender in writing as soon as Grantor has reason to believe there is any such pending or threatened investigation, claim, or proceeding. In such an event, Lender has the right, but not the obligation, to participate in any such proceeding including the right to receive copies of any documents relating to such proceedings. E. Grantor and every tenant have been, are and shall remain in full compliance with any applicable Environmental Law. F. There are no underground storage tanks, private dumps or open wells located on or under the Property and no such tank, dump or well will be added unless Lender first consents in writing. G. Grantor will regularly inspect the Property, monitor the activities and operations on the Property, and confirm that all permits, licenses or approvals required by any applicable Environmental Law are obtained and complied with. H. Grantor will permit, or cause any tenant to permit, Lender or Lender's agent to enter and insect the Property and review all records at any reasonable time to determine (1) the existence, location and nature of any Hazardous Substance on, under or about the Property; (2) the existence, location, nature, and magnitude of any Hazardous Substance that has been released on, under or about the Property; or (3) whether or not Grantor and any tenant are in compliance with applicable Envirorunental Law. I. Upon Lender's request and at any time, Grantor agrees, at Grantor's expense, to engage a qualified environmental engineer to prepare an environmental audit of the Property and to submit the results of such audit to Lender. The choice of the environmental engineer who will perform such audit is subject to Lender's approval. J. Lender has the right, but not the obligation, to perform any of Grantor's obligations under this section at Grantor's expense. K. As a consequence of any breach of any representation, warranty or promise made in this section, (1) Grantor will indemnify and hold Lender and Lender's successors or assigns hazmless from and against all losses, claims, demands, liabilities, damages, cleanup, response and remediation costs, penalties and expenses, including without limitation all costs of litigation and attorneys' fees, which Lender and Lender's successors or assigns may sustain; and (2) at Lender's discretion, Lender may release this Deed of Trust and in return Grantor will provide Lender with collateral of at least equal value to the Property secured by [his Deed of Trust without prejudice to any of Lender's rights under this Deed of Trust. L. Notwithstanding any of the language contained in this Deed of Trust to the contrary, the terms of this section shall survive any foreclosure or satisfaction of this Deed of Trust regardless of any passage of title to Lender or any disposition by Lender of any or all of the Property. Any claims and defenses to the contrary are hereby waived. 20. CONDEMNATION. Grantor will give Lender prompt notice of any action, real or threatened, by private or put/lic entities to purchase or take any or all of the Property, including any easements, through condemnation, eminent domain, or any other means. Grantor further agrees to notify Lender of any proceedings instituted for the establishment of any sewer, water, conservation, ditch, drainage, or other district relating to or binding upon the Property or any part of it. Grantor authorizes Lender to intervene in Grantor's name in any of the above described actions or claims and to collect and receive all sums resulting from the action or claim. Gr~mtor assigns to Lender the proceeds of any award or claim for damages connected with a condemnation or other taking of all or any part of the Property. Such proceeds shall be considered payments and will be applied as provided in this Deed of Trust. This assignment of proceeds is subject to the terms of any prior mortgage, deed of trust, security agreement or other lien document. 21.INSURANCE. Grantor agrees to maintain insurance as follows: 4. Grantor shall keep the Property insured against loss by fire, theft and other hazards and risks reasonably associated with the Property due to its type and location. Other hazards and risks may include, for example, coverage against loss due to floods or flooding. This insurance shall be maintained in the amounts and for the periods that Lender requires. What Lender requires pursuant to the preceding sentence can change during the term of the loan. The insurance carrier providing the insurance shall be chosen by Grantor subject to Lender's approval, which shall not be unreasonably withheld. If Grantor fails to maintain the coverage described above, Lender may, at Lender's option, obtain coverage to protect Lender's rights in the Property according to the terms of this Deed of Trust. All insurance policies and renewals shall be acceptable to Lender and shall include a standard "mortgage clause" and, where applicable, "lender loss payee clause." Grantor shall immediately notify Lender of cancellation or termination of the insurance. Lender shall have the right to hold the policies and renewals. If Lender requires, Grantor shall immediately give to Lender all receipts of paid premiums and renewal notices. Upon loss, Grantor shall give immediate notice to the insurance canter and Lender. Lender may make proof of loss if not made immediately by Grantor. Unless Lender and Grantor otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged if the restoration or repair is economically feasible and Lender's security is not lessened. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the Secured Debt, whether or not then due, with any excess paid to Grantor. If Grantor abandons the Property, or does not answer within 30 days a notice from Lender that the insurance cazrier has offered to settle a claim, then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay the Secured Debt whether or not then due. The 30-day period will begin when the notice is given. Unless Lender and Grantor otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the due date of scheduled payments or change the amount of the payments. If the Property is acquired by Lender, Grantor's right to any insurance policies and proceeds resulting from damage to the Property before the acquisition shall pass to Lender to the extent of the Secured Debt immediately before the acquisition. F'.. Grantor agrees to maintain comprehensive general liability insurance naming Lender as an additional insured in an amount acceptable to Lender, insuring against claims arising from any accident or occurrence in or on the Property. ~~ ®7893 Bankan ByKame, Ine.. Sl. CbW, MN form AO/CO-0T~NC 9/22/2001 paga 5 of 7 C. Grantor agrees to maintain rental loss or business interruption insurance, as required by Lender, in an amount equal to at least coverage of one year's debt service, and required escrow account deposits (if agret:d to separately in writing), under a form of policy acceptable to Lender. 22.N0 ESCROW FOR TAXES AND INSURANCE. Unless otherwise provided in a separate agreement, +O Grantor will not be required to pay to Lender funds for taxes and insurance in escrow. l 23. FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Grantor will provide to Lender upon request, any financial statement or information Lender may deem necessary. Grantor wazrants that all financial statements and information Grantor provides to Lender are, or will be, accurate, correct, and complete. Grantor agrees to sign, deliver, and file as Lender may reasonably request any additional documents or certifications that Lender may consider necessary to perfect, continue, and preserve Grantor's obligations under this Deed of Trust and Lender's lien status on the Property. If Grantor fails to do so, Lender may sign, deliver, and file such documents or certificates in Grantor's name and Grantor hereby irrevocably appoints Lender or Lender's agent as attorney in fact to do the things necessary to comply with this section. 24.JOINT AND INDIVIDUAL LIABILITY; C0.SIGNERS; SUCCESSORS AND ASSIGNS BOUND. All duties under this Deed of Trust are joint and individual. If Grantor signs this Deed of Trust but does not sign the Evidence of Debt, Grantor does so only to mortgage Grantor's interest in the Property to secure payment of the Secured Debt and Grantor does not agree to be personally liable on the Secured Debt. Grantor agrees that Lender and any party to this Deed of Trust may extend, modify or make any change in the terms of this Deed of Trust or the Evidence of Debt without Grantor's consent. Such a change will not release Grantor from the terms of this Deed of Trust. The duties and benefits of this Deed of Trust shall bind and benefit the successors and assigns of Grantor and Lender. If this Deed of Trust secures a guazanty between Lender and Grantor and does not directly secure the obligation which is guarantied, Grantor agrees to waive any rights that may prevent Lender from bringing any action or claim against Grantor or any party indebted under the obligation including, but not limited to, anti-deficiency or one-action laws. 25. APPLICABLE LAW; SEVERABILITY; INTERPRETATION. This Deed of Trust is governed by the laws of the jurisdiction in which Lender is located, except to the extent otherwise required by the laws of the jurisdiction where the Property is located. This Deed of Trust is complete and fully integrated. This Deed of Trust may not be amended or modified by oral agreement. Any section or clause in this Deed of Trust, attachments, or any agreement related to the Secured Debt that conflicts with applicable law will not be effective, unless that law expressly or impliedly permits the variations by written agreement. If any section or clause of this Deed of Trust cannot be enforced according to its terms, that section or clause will be severed and will not affect the enforceability of the remainder of this Deed of Trust. Whenever used, the singular shall include the plural and the plural the singular. The captions and headings of the sections of this Deed of Trust are for convenience only and are not to be used to interpret or define the terms of this Deed of Trust. Time is of the essence in this Deed of Trust. 26. SUCCESSOR TRUSTEE. Lender, at Lender's option, may from time to time remove Trustee and appoint a successor trustee by an instrument recorded in the county in which this Deed of Trust is recorded. The successor trustee, without conveyance of the Property, shall succeed to all the title, power and duties conferred upon the Trustee by this Deed of Trust and applicable law. 27. NOTICE. Unless otherwise required by law, any notice shall be given by delivering it or by mailing it by fast class mail to the appropriate party's address on page 1 of this Deed of Trust, or to any other address designated in writing. Notice to one grantor will be deemed to be notice to all grantors. 28. U.C.C. PROVISIONS. If checked, the following are applicable to, but do not limit, this Deed of Trust: ^ Construction Loan. This Deed of Trust secures an obligation incurred for the construction of an improvement on the Property. ^ Fixture Filing. Grantor grants to Lender a security interest in all goods that Grantor owns now or in the future and that are or will become fixtures related to the Property. ^ Crops; Timber; Minerals; Rents, Issues, and Profits. Grantor grants to Lender a security interest in all crops, timber, and minerals located on the Property as well as all rents, issues, and profits of them including, but not limited to, all Conservation Reserve Program (CRP) and Payment in Kind (PIK) payments and similaz governmental programs (all of which shall also be included in the term "Property"). ^ Personal Property. Grantor grants to Lender a security interest in all personal property located on or connected with the Property. This security interest includes all farm products, inventory, equipment, accounts, documents, instruments, chattel paper, general intangibles, and all other items of personal property Grantor owns now or in the future and that are used or useful in the construction, ownership, operation, management, or maintenance of the Property. The term "personal. property" specifically excludes that property described as "household goods" secured in connection with a "consumer" loan as those terms are defined in applicable federal regulations governing unfair and deceptive credit practices. ^ Filing As Financing Statement. Grantor agrees and acknowledges that this Deed of Trust also suffices as a financing statement and as such, may be filed of record as a financing statement for purposes of Article 9 of the Uniform Commercial Code. A carbon, photographic, image or other reproduction of this Deed of Trust is sufficient as a financing statement. 29. OTHER TERMS. If checked, the following are applicable to this Deed of Trust: ^ Line of Credit. The Secured Debt includes a revolving line of credit provision. Although the Secured Debt may be reduced to a zero balance, this Deed of Trust will remain in effect until released. ^ Additional Terms .................. . ...... . ................................................................................ .................................................................................................................................. .............. . .............. . .................................................................................................... ~~ O 1883 Ba~kv~ Syvt"m~, Irc., B[. Cloud. MN Form AO/CO-0T-NC 8/22/2001 page 6 0/ 7 • SIGi`,`ATURES: By signing below under Seal, Grantor agrees to the terms and covenants contained in this Deed ' of Trust and in any in any attachments that Grantor has signed. Grantor also acknowledges receipt of a copy of this Deed of Trust on the date stated above on Page 1. CI Actual authority was granted to the parties signing below by resolution signed and dated ................... . Entity Name :................................................ Entity Name:................................................ ......................................................... (Seal) ...... .. (Seal) ................................................. (Signature) (Date) (Signature) (Date) ......................................................... (Seal) ..... ... (Seal) ................................................ . (Signature) (Date) (Signature) (Date) ^ Refer to the Addendum which is attached and incorporated herein for additional Grantor's, signatures and acknowledgments. ACKNOWLEDGMENT: STATE OF ........................................ COUNTY OF .............................................. } ss. (Individual)I ................................................... do hereby certify that .............................................. ...................................................................................... . ......................................... personally appeared before me this day and acknowledged the due execution of the foregoing instrument. Witness my hand and official seal, this the .............. day of ................................. . My commission expires: (Seal) ................................................... (Notary Public) STATE OF ........................................ COUNTY OF .............................................. } ss. (Business I ................................................... certify that ........................................................... or Entity ................................................................................................................................ Acknovv- personally came before me this day and acknowledged that he (or she) is ................................ of ledgment) ......................................................................................... (Name of Business or Entity), a corporation, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its ............................................. sealed with its corporate seal, and attested to by himself (or herself) as its .................................................................. Witness my hand and official seal, this the ....................... day of ....................................... . My commission expires: (Seal) ................................................... (Notary Public) The Foregoing Certificate(s) of ............................................................ is/are certified to be correct. Tbis instrument and this certificate are duly registered at the date and time in the Book and Page shown on the first page hereof. ............................................ REGISTER OF DEEDS FOR ................................COUNTY By ................................................. DeputylAssistant-Register of Deeds ~~~ O 1893 Bankers 8yatmme, Inc., SL Cloud, MN Form AO/CO-DT•NC 8/22/2001 page 7 O/ 7