EXHIBIT (10)(s)
THIRD MODIFICATION AGREEMENT AND
AMENDMENT TO MORTGAGE
THIS THIRD MODIFICATION AGREEMENT AND AMENDMENT TO MORTGAGE ("Mortgage")
made and executed to be effective as of the first day of January, 1997 by and
between The Canada Life Assurance Company, a corporation under the laws of
the Dominion of Canada ("Mortgagee"), whose address is 000 Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0 and Xxxxxx Communications, Inc. a Minnesota
corporation ("Mortgagor"), whose address is 0000 Xxxx 00xx Xxxxxx,
Xxxxxxxxxxx, XX 00000.
PRELIMINARY STATEMENTS OF FACTS:
A. Mortgagor has heretofore executed and delivered to Mortgagee its
Promissory Note dated February 26, 1988 in the original principal amount of
One Million Six Hundred Thousand and no/100 Dollars ($1,600,000.00) ("Note"),
reference being made to the Note for a statement of the terms and conditions
contained therein.
B. As security for the repayment of the Note, Mortgagor has heretofore
executed and delivered to Mortgagee the following documents (hereinafter
referred to as the "Security Documents"):
(a) A certain Mortgage and Security Agreement and Fixture
Financing Statement dated February 26, 1988, filed for record in
the Office of the Registrar of Titles, Hennepin County, Minnesota
on March 7, 1988 as Document No. 1912828 (hereinafter referred to
as the "Mortgage"); and
(b) A certain Assignment of Rents and Leases dated February
26,1988, filed for record in the Office of the Registrar of Titles,
Hennepin County, Minnesota on March 7, 1988 as Document No. 1912829
(hereinafter referred to as the "Assignment of Rents and Leases");
and
(c) Certain Financing Statements, filed in the Office of the
Secretary of State of Minnesota on March 7, 1988 as Document No.
1#126575#00 and in the office of the County Recorder of Hennepin
County, Minnesota on March 10, 1988 as Document No. 1029298
(hereinafter referred to as the "Financing Statement").
C. The Security Documents create a first lien upon certain real property
situated in the County of Hennepin, State of Minnesota more fully described
in Exhibit "A" attached hereto and made a part hereof (the "Premises"), grant
a security interest in the Premises and the personal property described
therein and assign all rents, leases, income and profits from the Premises.
D. The Note and Mortgage were amended by that certain Modification
Agreement and Amendment to Mortgage dated March 1, 1991, filed April 23, 1991
as Hennepin County Registrar of Titles Document No. 2168409 (hereinafter
referred to as the "First Modification").
E. The Note and Mortgage were further amended by that certain Second
Modification Agreement and Amendment to Mortgage dated to be effective
March 1, 1994, filed November 4, 1994 as Hennepin County Registrar of Titles
Document No. 2565157 (hereinafter referred to as the "Second Modification").
F. Additionally, Mortgagor has heretofore executed and delivered a
certain Indemnity and Hold Harmless Agreement dated as of February 26, 1988
reference being made thereto for statement of its terms and conditions (the
"Hazardous Waste Indemnity").
G. The Note and Security Documents as modified by the First Modification
and the Second Modification and the Hazardous Waste Indemnity are hereinafter
referred to as the "Loan Documents").
H. The unpaid principal balance of the Note after payment of the
installment due on January 1, 1997 is in the amount of One Million Three
Hundred Seventy Thousand Four Hundred and Eighty-Four and 91/100 Dollars
($1,370,484.91).
I. The parties desire to extend the term and otherwise further modify the
Loan Documents as provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed by the parties as follows:
1. MODIFICATION TO NOTE
1.1 The Maturity Date of the Note is extended to January 1, 2000 ("Third
Extended Maturity Date").
1.2 From and after January 1, 1997, interest shall accrue on the unpaid
principal balance of the Note at the per annum rate of Seven and Five-Eights
(7.625%) percent per annum ("Third Extension Rate").
1.3 The payment provisions of the Note are hereby amended by restating and
replacing additional paragraph 4 which was recited in paragraph 1.3 of the
Second Modification as follows:
"4. On the first day of April, 1994 and on the first day of each month
thereafter up to and including January 1, 1997, principal and interest shall
be paid in equal monthly installments of Twelve Thousand, Seven Hundred and
Twelve and 44/100 Dollars ($12,712,44) each; thereafter on the first day of
February, 1997 and on the first day of each month thereafter up to and
including December 31, 1999, principal and interest shall be paid in equal
monthly installments of Twelve Thousand Eight Hundred and Two and 11/100
Dollars ($12,802.11) each with a final payment of all unpaid principal and
accrued interest being due and payable in full on January 1, 2000 ("Third
Extended Maturity Date")."
1.4 The following additional paragraph is hereby made part of the Note:
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"The parties agree that the Undersigned shall, subject to the Lender's
available three (3) year funds, have the option to extend the Third
Extended Maturity Date of this Note for an additional term of three (3)
years ("Fourth Extended Term") expiring January 1, 2003 ("Fourth Extended
Maturity Date") on the following terms and conditions:
(a) At the time of exercising such option, the Undersigned shall not
then be in default under this Note and not have been in default more
than twenty (20) days at any time since the date hereof in the payment
of this Note, and any late fees and Default Rate Interest shall have
been paid in full;
(b) No Event of Default shall then be existing, nor have existed at any
time since the date hereof unless cured prior to the expiration of any
applicable permitted cure period, under the Mortgage hereafter referred
to;
(c) The per annum interest rate on this Note shall be adjusted for the
Fourth Extended Term to the Holders then prevailing three (3) year
commercial mortgage lending rate for loans of similar type and quality
("Fourth Extension Rate");
(d) The required monthly installments of principal and interest shall
be changed to an amount sufficient to amortize in constant equal
monthly payments beginning on the first day of the second month of
the Fourth Extended Term, the then remaining unpaid principal
balance together with interest at the Fourth Extension Rate over a
period of twelve (12) years and shall continue to be paid on the
first day of each month during the Fourth Extended Term with a
final payment of all unpaid principal together with accrued
interest thereon being due and payable in full on the Fourth
Extended Maturity Date;
(e) The Premises shall have been well maintained and be in a physical
condition acceptable to the Holder.
(f) At the time of renewal, the Premises, in Lender's sole
determination based upon stabilized market rents and expenses,
shall be capable of producing, on an annual basis, net operating
income of not less than Two Hundred and Thirty-One Thousand and
no/100 Dollars ($231,000.00) and a ratio of such net operating
income to the annual debt service based upon the interest rate to
be in effect in any renewal period of not less than 1.40 to 1.00.
(g) The Undersigned must notify the Holder in writing at the address
for payment of this Note by certified U.S. mail, return receipt
requested, or similar mailing not less than sixty (60) days nor more
than one hundred and twenty (120) days before the Third Extended
Maturity Date of its intention to exercise this right to extend this
Note for the Fourth Extended Term. Within thirty (30) days after
receipt of such notice the Holder will notify the Undersigned of the
Fourth Extension Rate and the Undersigned shall have fifteen (15) days
thereafter to notify Holder in writing of its acceptance of the Fourth
Extension Rate. If the Fourth Extension Rate is not acceptable to the
Undersigned, then the notice of intent to exercise the right to
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extend may be revoked and the Note shall be due and payable in full
in accordance with its terms.
If the above terms and conditions are satisfied and the Undersigned
extends the term of this Note for the Fourth Extended Term at the Fourth
Extension Rate, the Undersigned agrees to execute such documents and
provide such evidence as the Holder shall deem necessary to continue the
obligation of the Undersigned under this Note and each of the
instruments securing the same in full force and effect at the Fourth
Extension Rate including among other things a Note and Mortgage
Modification Agreement and an endorsement to the Mortgagee's Title
Insurance Policy issued to the Holder insuring the uninterrupted
continuity of the Holder's first lien under the Mortgage with no
additional exceptions to title. All expenses incurred in connection
with the adjustment of the interest rate and extension of the term,
including any necessary recording fees, mortgage registration tax, title
insurance fees and premiums, reasonable fees of Holder's counsel and the
like, shall be paid by the Undersigned."
1.5 The prepayment provisions as set forth in the second and third full
paragraphs on page 3 of the Note and as amended and restated in
paragraph 1.4 of the First Modification Agreement are hereby amended and
restated in their entirety to read as follows:
"PREPAYMENT. The Undersigned may make full (but not partial)
prepayment of the principal amount due upon giving the Holder sixty (60)
days prior written notice.
In addition to the outstanding principal and interest accrued thereon,
and all other fees, costs and charges owing hereunder the Undersigned
shall pay to the Holder a prepayment premium ("Premium").
The Premium shall be the greater of:
(a) 1% of the Note balance, or
(b) The difference between:
(i) the discounted value of all required monthly payments for the
remaining term of the Note and the discounted value of the Note
balance at maturity, calculated by utilizing a discount rate
based on the monthly equivalent yield-to-maturity rate of a U.S.
Treasury Note or bond, and
(ii) the Note balance at the date of prepayment.
The monthly equivalent yield-to-maturity rate shall be predicated on the
U.S. Treasury Note or Bond closest in maturity to the remaining term of
the Note, as selected by the Holder (as reported in The Wall Street
Journal or, if The Wall Journal is no longer published, some other
similar daily financial publication of national circulation) on the
fifth business day preceding the date of prepayment.
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The Undersigned expressly agrees that: (i) the Premium provided for
herein is reasonable; (ii) the Premium shall be payable notwithstanding
the then prevailing market rates existing at the time prepayment is
made; (iii) there has been a course of conduct between the Holder and
the Undersigned giving specific consideration in this transaction for
such agreement to pay the Premium; and (iv) the Undersigned shall be
estopped hereafter from claiming differently than as agreed to in this
paragraph. The Undersigned expressly acknowledges that its agreement to
pay the Premium to the Holder as herein described is a material
inducement to the Holder to extend the Note.
The Undersigned shall have the option of prepayment in full during the
final sixty (60) days of the Third Extended Term, with no Premium.
Provided the Loan is not in default, the Premium shall be waived by the
Holder where prepayment is the result of the application of condemnation
or insurance proceeds.
The Undersigned expressly agrees that in the event of an acceleration of
the maturity of this Note as a result of any event of default,
including, without limitation, any acceleration upon the transfer of any
interest in the Premises, a tender by the Undersigned or by anyone on
behalf of the Undersigned of payment of the amount necessary to satisfy
the indebtedness evidenced hereby made at any time prior to a
foreclosure sale, or a sale under the power of sale contained in the
Mortgage, shall constitute an evasion of the prepayment terms hereof and
shall be deemed to be a voluntary prepayment hereunder. Therefore, with
any such payment, the Undersigned shall pay the Premium. The
Undersigned expressly waives the provisions of any present or future
statute, law or judicial interpretation or principle which prohibits or
may prohibit the collection of the foregoing Premium in connection with
any such acceleration.
1.6 Except as amended hereby, the Note shall continue in full force and
effect in accordance with the terms as originally executed and modified by the
First Modification Agreement and Second Modification Agreement.
2. AMENDMENT TO MORTGAGE
2.1 The Mortgage shall continue to secure the indebtedness evidenced by
the Note, as amended and modified hereby, with all priorities enjoyed at
its inception.
2.2 Paragraph C. of the Preliminary Recitals of the Mortgage is amended
and restated in its entirety at follows:
"C. The Note bears interest at the per annum rate of Seven and
Five-Eights percent (7.625%) ("Interest Rate") subject to adjustment as
provided therein, except that during the period of and continuance of a
default under the Note or Event of Default under this Mortgage, the Note
shall bear interest at a per annum rate of interest of Four (4%) percent
in excess of the interest rate then in effect on the Note whether or not
the Mortgagee has exercised its option to accelerate the maturity of the
Note and declare the entire unpaid Indebtedness Secured Hereby due and
payable as more fully set forth in the Note ("Default Rate")."
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2.3 Paragraph E of the Preliminary Recitals of the Mortgage is amended and
restated in its entirety to read as follows:
"E. The Note is payable in installments with a final installment
payment of all unpaid principal and interest due on January 1, 2000
("Maturity Date").
2.4 Except as modified hereby, the Mortgage shall continue in full force
and effect in accordance with its terms as originally executed.
3. INDEMNITY
3.1 The Mortgagor hereby reaffirms and certifies as of the date hereof,
each and every representation, warranty, covenant and agreement contained in
the Hazardous Waste Indemnity.
3.2 In addition to and not in any manner a limitation of the terms and
conditions of the Hazardous Waste Indemnity, the Mortgagor shall hereinafter
indemnify and hold harmless the Mortgagee, its successors and assigns, from
any loss, damage, expense or cost arising out of or incurred by Mortgagee or
by which Mortgagee may sustain as a result of or in connection with any of
the following:
(a) Any violation or alleged violation of any Handicap Access
Laws. Handicap Access Laws shall include the Fair Housing
Amendments Act of 1988, the Americans with Disabilities Act of
1990, all rules and regulations from time to time in effect under
either such law and all other laws, rules and regulations that may
from time to time concern barrier-free access to the Premises.
(b) Any rents or other income generated at or by the Premises and received
by Mortgagor subsequent to an Event of Default under the Mortgage or
any time within the twelve (12) month period preceding such Event of
Default and which are not applied to the payment of debt service,
taxes, insurance or other reasonable and necessary expenses
attributable to the Premises.
(c) Failure by Morgagor to deliver to Mortgagee all security deposits or
similar deposits or guarantees and prepaid rents paid by tenants or
other occupants of the Premises.
(d) Any misappropriation or misapplication by Mortgagor of insurance
proceeds or condemnation awards.
(e) Failure by Mortgagor to pay taxes or insurance premiums or charges for
labor or materials or any and all charges which may create liens on
the Premises or any part thereof in violation of the Mortgage.
(f) Any fraud, misrepresentation or breach of warranty by Mortgagor in any
instrument relating to the Loan Documents.
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(g) Any amounts necessary to repair or replace damage to the Premises
caused by the willful or wanton acts or omissions of the Mortgagor.
3.3 The foregoing additional items shall be deemed to be additional
indemnities under the Hazardous Waste Indemnity and are hereby incorporated
therein and made a part thereof.
3.4 Except as modified hereby, the Hazardous Waste Indemnity shall
continue in full force and effect in accordance with its terms as originally
executed.
4. CONDITIONS TO EFFECTIVENESS
4.1 This Agreement and its effectiveness are specifically
conditioned on:
(a) Mortgagor, at its sole cost and expense, obtaining and
delivering to Mortgagee an Endorsement to the Mortgagee Title
Policy insuring the lien of the Mortgage, in form and content
acceptable to Mortgagee, stating that the coverage of said
Mortgagee Title Policy is in effect and unimpaired with no change
notwithstanding the execution and delivery of this Agreement.
(b) The payment by Mortgagor to Mortgagee of the reasonable
attorneys fees incurred by the Mortgagee in the negotiation and
delivery of this Agreement together with all out of pocket costs
incurred by the Mortgagee, including but not limited to any
mortgage registration tax and recording fees.
(c) The payment by Mortgagor to Mortgagee of an extension fee of
One Thousand Five Hundred and no/100 Dollars ($1,500,00).
5. MISCELLANEOUS
5.1 This Agreement is delivered in and shall in all respects be construed
according to the laws of the State of Minnesota.
5.2 This Agreement and each and every part hereof shall be binding upon
the parties hereto and their successors and assigns and shall inure to the
benefit of each and every future Holder of the Note including any successors
and assigns of the Mortgagee.
5.3 Nothing herein shall be construed to be a novation of the Note and the
Loan Documents and it is intended that the Mortgagee shall continue to be
entitled to all of the priorities existing under the Mortgage as of the date
first executed and delivered.
5.4 The liens, security interests, assignments and other rights evidenced
by the Mortgage, Assignment of Rents and Leases and other Loan Documents are
hereby renewed and extended to secure payment of the Note as modified hereby.
5.5 Mortgagor and Maker, upon request from Mortgagee, agree to execute
such other and further documents as may be reasonably necessary or
appropriate to consummate the
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transactions contemplated herein or to perfect the liens and security
interests to secure the payment of the loan evidenced by the Note.
5.6 Except as provided herein, the terms and provisions of the Note, the
Mortgage, the Assignment of Rents and Leases and the other Loan Documents
shall remain unchanged and shall remain in full force and effect. Any
modification herein of the Note, the Mortgage and the other Loan Documents
shall in no way affect the security of the Mortgage and the other Loan
Documents for the payment of the Note. The promissory note described in the
Mortgage and other Loan Documents and the note secured thereby shall
hereafter mean the Note as modified by this Agreement. The Note, the
Mortgage and the other Loan Documents as modified and amended hereby are
hereby ratified and confirmed in all respects.
5.7 The parties acknowledge that the liens and security interests created
and evidenced by the mortgage and the Assignment of Rents and Leases are
valid and subsisting and further acknowledge and agree that there are no
offsets, claims or defenses to the Note or the Mortgage or any other Loan
Documents.
5.8 This Agreement may be executed in any number of counterparts with the
same effect as if all parties hereto had signed the same document. All such
counterparts shall be construed together and shall constitute one instrument.
5.9 The requirement that the Mortgagor make monthly deposits of taxes,
assessments and insurance premiums in accordance with the Mortgage shall
continue to be waived in accordance with the waiver letter dated
February 2, 1988.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be executed
as of the date and year first above written.
XXXXXX COMMUNICATIONS, INC.
By
-------------------------------
Its
-------------------------------
THE CANADA LIFE ASSURANCE
COMPANY
By
-------------------------------
Its
-------------------------------
By
-------------------------------
Its
-------------------------------
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DOMINION OF CANADA )
) ss.
PROVINCE OF ONTARIO )
The foregoing instrument was acknowledged before me this 13th day of
January, 1997, by __________________, the Associate Treasurer and
_____________________, the Assistant Treasurer of the Canada Life Assurance
Company, a corporation under the laws of the Dominion of Canada, on behalf of
the corporation.
-----------------------------------
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 8th day of
January, 1997, by M. Xxxxxxx Xxxxxxxx, the Secretary of Xxxxxx
Communications, Inc., a Minnesota corporation, on behalf of the corporation.
-----------------------------------
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
Xxxxx X. Xxxxxxxxxxx, Esq.
XXXXXXXXXXX XXXXX & XXXXXXXX
3400 Plaza VII
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
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