EXHIBIT 10.1
PROMISSORY NOTE
Borrower: BRAINERD INTERNATIONAL Lender: First National Bank of Deerwood
RACEWAY & RESORT, INC. Brainerd Branch
PO Box 527
5523 BIRCHDALE RD 724 W Washington St
BRAINERD, MN 56401 Brainerd, MN 56401-0527
(218) 828-2111
Principal Amount: $500,000.00 Interest Rate: 7.500% Date of Note:February 14, 2003
PROMISE TO PAY. BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
("Borrower") promises to pay to First National Bank of Deerwood ("Lender"), or
order, in lawful money of the United States of America, the principal amount of
Five Hundred Thousand & 00/100 Dollars ($500,000.00), together with interest at
the rate of 7.500% per annum on the unpaid principal balance from February 14,
2003, until paid In full.
PAYMENT. Borrower will pay this loan in one principal payment of $500,000.00
plus interest on October 15, 2003. This payment due on October 15, 2003, will
be for all principal and all accrued interest not yet paid. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due
as of each payment date, beginning March 14, 2003, with all subsequent
interest payments to be due on the same day of each month after that. Unless
otherwise agreed or required by applicable law, payments will be applied
first to accrued unpaid interest, then to principal, and any remaining amount
to any unpaid collection costs. The annual interest rate for this Note is
computed on a 365/360 basis: that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject
to refund upon early payment (whether voluntary or as a result of default),
except as otherwise required by law. Except for the foregoing, Borrower may
pay without penalty all or a portion of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments under the
payment schedule. Rather, early payments will reduce the principal balance
due. Borrower agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note,
and Borrower will remain obligated to pay any further amount owed to Lender.
All written communications concerning disputed amounts, including any check
or other payment instrument that indicates that the payment constitutes
"payment in full" of the amount owed or that is tendered with other
conditions or limitations or as full satisfaction of a disputed amount must
be mailed or delivered to: First National Bank of Deerwood, Brainerd Branch,
PO Box 527, 724 W Washington St, Brainerd, MN 56401-0627.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the total sum due under this Note will bear interest from the date
of acceleration or maturity at the interest rate on this Note. The interest
rate will not exceed the maximum rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this
Note.
Other Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in any
of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under
any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower's property or
Borrower's ability to repay this Note or perform Borrower's obligations
under this Note or any of the related documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any
of the indebtedness or any guarantor, endorser, surety, or accommodation
party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any guaranty of the Indebtedness evidenced by
this Note. In the event of a death, Lender, at its option, may, but shall
not be required to, permit the guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
Change In Ownership. Any change in ownership of twenty-five percent (25%)
or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it
may be cured (and no event of default will have occurred) if Borrower,
after receiving written notice from Lender demanding cure of such
default: (1) cures the default within fifteen (15) days; or (2) if the
cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's reasonable
attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,
including reasonable attorneys' fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals. If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.
GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Minnesota. This Note
has been accepted by Lender In the State of Minnesota.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Crow Wing County, State of
Minnesota.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $18.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please notify us if we report any inaccurate information about your account(s)
to a consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: First National
Bank of Deerwood PO Box 520 Deerwood, MN 56444-0520
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.
SECTION DISCLOSURE. This loan is made under Minnesota Statutes, Section 47.59.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
By,__________________________________________________
BILL SINGLETERRY, President of BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC.
MORTGAGE
RECORDATION REQUESTED BY:
First National Bank of Deerwood
Brainerd Branch
PO Box 527
724 W Washington St
Brainerd, MN 56401-0527
WHEN RECORDED MAIL TO:
First National Bank of Deerwood
Brainerd Branch
PO Box 527
724 W Washington St
Brainerd, MN 56401-0527
SEND TAX NOTICES TO:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC.
5523 BIRCHDALE RD
BRAINERD, MN 56401
THIS MORTGAGE dated February 14, 2003, is made and executed between BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC., whose address is 5523 BIRCHDALE RD, BRAINERD,
MN 56401 (referred to below as "Grantor") and First National Bank of Deerwood,
whose address is PO Box 527, 724 W Washington St, Brainerd, MN 56401-0527
(referred to below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to
Lender all of Grantor's right, title, and interest in and to the following
described real property, together with all existing or subsequently erected or
affixed buildings, improvements and fixtures; all easements, rights of way, and
appurtenances; all water, water rights, watercourses and ditch rights (including
stock in utilities with ditch or irrigation rights); and all other rights,
royalties, and profits relating to the real property, Including without
limitation all minerals, oil, gas, geothermal and similar matters, (the "Real
Property") located in CROW WING County, State of Minnesota:
See EXHIBIT "A", which is attached to this Mortgage and made a part of this
Mortgage as if fully set forth herein.
The Real Property or its address is commonly known as 5523 BIRCHDALE RD,
BRAINERD, MN 56401.
Grantor presently assigns to Lender all of Grantor's right, title, and interest
in and to all present and future leases of the Property and all Rents from the
Property. In addition, Grantor grants to Lender a Uniform Commercial Code
security interest in the Personal Property and Rents.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE
INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE AND
THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor
shall pay to Lender all amounts secured by this Mortgage as they become due and
shall strictly perform all of Grantor's obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's
possession and use of the Property shall be governed by the following
provisions:
Possession and Use. Until the occurrence of an Event of Default, Grantor
may (1) remain in possession and control of the Property; (2) use, operate
or manage the Property; and (3) collect the Rents from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Compliance With Environmental Laws. Grantor represents and warrants to
Lender that: (1) During the period of Grantor's ownership of the Property,
there has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance by any
person on, under, about or from the Property; (2) Grantor has no knowledge
of, or reason to believe that there has been, except as previously
disclosed to and acknowledged by Lender in writing, (a) any breach or
violation of any Environmental Laws, (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Property by any prior
owners or occupants of the Property, or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters;
and (3) Except as previously disclosed to and acknowledged by Lender in
writing, (a) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or
from the Property and (b) any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations
and ordinances, including without limitation all Environmental Laws.
Grantor authorizes Lender and its agents to enter upon the Property to make
such Inspections and tests, at Grantor's expense, as Lender may deem
appropriate to determine compliance of the Property with this section of
the Mortgage. Any inspections or tests made by Lender shall be for Lender's
purposes only and shall not be construed to create any responsibility or
liability on the part of Lender to Grantor or to any other person. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Property for Hazardous Substances. Grantor
hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Grantor becomes liable for cleanup
or other costs under any such laws; and (2) agrees to indemnify and hold
harmless Lender against any and all claims, losses, liabilities, damages,
penalties, and expenses, including attorneys' fees, consultants' fees, and
costs which Lender may directly or indirectly sustain or suffer resulting
from a breach of this section of the Mortgage or as a consequence of any
use, generation, manufacture, storage, disposal, release or threatened
release occurring prior to Grantor's ownership or interest in the Property,
whether or not the same was or should have been known to Grantor. The
provisions of this section of the Mortgage, including the obligation to
indemnify, shall survive the payment of the Indebtedness and the
satisfaction and reconveyance of the lien of this Mortgage and shall not be
affected by Lender's acquisition of any interest in the Property, whether
by foreclosure or otherwise,
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of
the foregoing, Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), coal, clay,
scoria, soil, gravel or rock products without Lender's prior written
consent.
Removal of Improvements. Grantor shall not demolish or remove any
Improvements from the Real Property without Lender's prior written consent.
As a condition to the removal of any Improvements, Lender may require
Grantor to make arrangements satisfactory to Lender to replace such
improvements with improvements of at least equal value.
Lender's Right to Enter. Lender and Lender's agents and representatives may
enter upon the Real Property at all reasonable times to attend to Lender's
interests and to inspect the Real Property for purposes of Grantor's
compliance with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans with Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Grantor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender may require Grantor
to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender's interest.
Duty to Protect. Grantor agrees neither to abandon or leave unattended the
Property. Grantor shall do all other acts, in addition to those acts set
forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare
immediately due and payable all sums secured by this Mortgage upon the sale or
transfer, without Lender's prior written consent, of all or any part of the Real
Property, or any interest in the Real Property. A "sale or transfer" means the
conveyance of Real Property or any right, title or interest in the Real
Property; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option, contract, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Real Property,
or by any other method of conveyance of an interest in the Real Property. If any
Grantor is a corporation, partnership or limited liability company, transfer
also includes any change in ownership of more than twenty-five percent (25%) of
the voting stock, partnership interests or limited liability company interests,
as the case may be, of such Grantor. However, this option shall net be
exercised, by Lender if such exercise is prohibited by federal law or by
Minnesota law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are part of this Mortgage:
Payment. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, payroll taxes, special taxes, assessments, water
charges and sewer service charges levied against or on account of the
Property, and shall pay when due all claims for work done on or for
services rendered or material furnished to the Property. Grantor shall
maintain the Property free of any liens having priority over or equal to
the interest of Lender under this Mortgage, except for those liens
specifically agreed to in writing by Lender, and except for the lien of
taxes and assessments not due as further specified in the Right to Contest
paragraph.
Right to Contest. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay,
so long as Lender's interest in the Property is not jeopardized. If a lien
arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15)
days after Grantor has notice of the filing, secure the discharge of the
lien, or if requested by Lender, deposit with Lender cash or a sufficient
corporate surety bond or other security satisfactory to Lender in an amount
sufficient to discharge the lien plus any costs and reasonable attorneys'
fees, or other charges that could accrue as a result of a foreclosure or
sale under the lien. In any contest, Grantor shall defend itself and Lender
and shall satisfy any adverse judgment before
enforcement against the Property. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest
proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (15)
days before any work Is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the work,
services, or materials and the cost exceeds $5,000.00. Grantor will upon
request of Lender furnish to Lender advance assurances satisfactory to
Lender that Grantor can and will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Mortgage:
Maintenance of Insurance. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all improvements on
the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor shall maintain such other insurance,
including but not limited, to hazard, business interruption and boiler
insurance as Lender may require. Policies shall be written by such
insurance companies and in such form as may be reasonably acceptable to
Lender. Grantor shall deliver to Lender certificates of coverage from each
insurer containing a stipulation that coverage will not be cancelled or
diminished without a minimum of thirty (30) days' prior written notice to
Lender and not containing any disclaimer of the insurer's liability for
failure to give such notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be impaired
in any way by any act, omission or default of Grantor or any other person.
Should the Real Property be located in an area designated by the Director
of the Federal Emergency Management Agency as a special flood hazard area,
Grantor agrees to obtain and maintain Federal Flood Insurance, if
available, within 45 days after notice is given by Lender that the Property
Is located in a special flood hazard area, for the full unpaid principal
balance of the loan and any prior liens on the property securing the loan,
up to the maximum policy limits set under the National Flood Insurance
Program, or as otherwise required by Lender, and to maintain such insurance
for the term of the loan.
Application of Proceeds. Grantor shall promptly notify Lender of any loss
or damage to the Property if the estimated cost of repair or replacement
exceeds $5,000.00. Lender may make proof of loss if Grantor fails to do so
within fifteen (15) days of the casualty. Whether or not Lender's security
Is impaired, Lender may, at Lender's election, receive and retain the
proceeds of any insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If Lender elects to apply the
proceeds to restoration and repair, Grantor shall repair or replace the
damaged or destroyed improvements in a manner satisfactory to Lender.
Lender shall, upon satisfactory proof of such expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration
if Grantor is not in default under this Mortgage. Any proceeds which have
not been disbursed within 180 days after their receipt and which Lender has
not committed to the repair or restoration of the Property shall be used
first to pay any amount owing to Lender under this Mortgage, then to pay
accrued interest, and the remainder, if any, shall be applied to the
principal balance of the Indebtedness. If Lender holds any proceeds after
payment in full of the Indebtedness, such proceeds shall be paid to Grantor
as Grantor's interests may appear.
Grantor's Report on Insurance. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (1) the name of the insurer; (2) the risks
insured; (3) the amount of the policy; (4) the property insured, the then
current replacement value of such property, and the manner of determining
that value; and (5) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Property or if Grantor fails to
comply with any provision of this Mortgage or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Mortgage or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Property and paying all costs
for insuring, maintaining and preserving the Property. All such expenditures
incurred or paid by Lender for such purposes will then bear interest at the rate
charged under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses will become a part of the Indebtedness
and, at Lender's option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned among and be payable with any installment
payments to become due during either (1) the term of any applicable insurance
policy; or (2) the remaining term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note's maturity. The Mortgage also
will secure payment of these amounts. Such right shall be in addition to all
other rights and remedies to which Lender may be entitled upon Default.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage:
Title. Grantor warrants that: (a) Grantor holds good and marketable title
of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued
in favor of, and accepted by, Lender in connection with this Mortgage, and
(b) Grantor has the full right, power, and authority to execute and deliver
this Mortgage to Lender,
Defense of Title. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Lender under
this Mortgage, Grantor shall defend the action at Grantor's expense.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request
from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.
Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor in this Mortgage shall survive
the execution and delivery of this Mortgage, shall be continuing in nature,
and shall remain in full force and effect until such time as Grantor's
Indebtedness shall be paid in full.
CONDEMNATION. The following provisions relating to condemnation proceedings are
a part of this Mortgage:
Proceedings. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Grantor will deliver or cause
to be delivered to Lender such instruments and documentation as may be
requested by Lender from time to time to permit such participation.
Application of Net Proceeds. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the Indebtedness or
the repair or restoration of the Property. The net proceeds of the award
shall mean the award after payment of all reasonable costs, expenses, and
attorneys' fees incurred by Lender in connection with the condemnation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
execute such documents in addition to this Mortgage and take whatever other
action is requested by Lender to perfect and continue Lender's lien on the
Real Property. Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this
Mortgage.
Taxes. The following shall constitute taxes to which this section applies:
(1) a specific tax upon this type of Mortgage or upon all or any part of
the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor
which Grantor is authorized or required to deduct from payments on the
Indebtedness secured by this type of Mortgage; (3) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (4) a
specific tax on all or any portion of the indebtedness or on payments of
principal and interest made by Grantor.
Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default, and Lender may exercise any or all of its
available remedies for an Event of Default as provided below unless Grantor
either (1) pays the tax before it becomes delinquent, or (2) contests the
tax as provided above in the Taxes and Liens section and deposits with
Lender cash or a sufficient corporate surety bond or other security
satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Mortgage as a security agreement are a part of this Mortgage:
Security Agreement. This instrument shall constitute a Security Agreement
to the extent any of the Property constitutes fixtures, and Lender shall
have all of the rights of a secured party under the Uniform Commercial Code
as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing
statements and take whatever other action is requested by Lender to perfect
and continue Lender's security interest in the Rents and Personal Property.
In addition to recording this Mortgage in the real property records, Lender
may, at any time and without further authorization from Grantor, file
executed counterparts, copies or reproductions of this Mortgage as a
financing statement. Grantor shall reimburse Lender for all expenses
incurred in perfecting or continuing this security interest. Upon default,
Grantor shall not remove, sever or detach the Personal Property from the
Property. Upon default, Grantor shall assemble any Personal Property not
affixed to the Property in a manner and at a place reasonably convenient to
Grantor and Lender and make it available to Lender within three (3) days
after receipt of written demand from Lender to the extent permitted by
applicable law.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured
party) from which information concerning the security interest granted by
this Mortgage may be obtained (each as required by the Uniform Commercial
Code) are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage:
Further Assurances. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, refiled, or rerecorded,
as the case may be, at such times and in such offices and places as Lender
may deem appropriate, any and all such mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may,
in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (1) Grantor's
obligations under the Note, this Mortgage, and the Related Documents, and
(2) the liens and security interests created by this Mortgage as first and
prior liens on the Property, whether now owned or hereafter acquired by
Grantor. Unless prohibited by law or Lender agrees to the contrary in
writing, Grantor shall reimburse Lender for all costs and expenses incurred
in connection with the matters referred to in this paragraph.
Attorney-in-Fact. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as may
be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Mortgage, Lender
shall execute and deliver to Grantor a suitable satisfaction of this Mortgage
and suitable statements of termination of any financing statement on file
evidencing Lender's security interest in the Rents and the Personal Property.
Grantor will pay, if permitted by applicable law, any reasonable termination fee
as determined by Lender from time to time.
EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute
an Event of Default under this Mortgage:
Payment Default. Grantor fails to make any payment when due under the
Indebtedness.
Default on Other Payments. Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
Other Defaults. Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Mortgage or in any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Grantor.
Default in Favor of Third Parties. Should Grantor default under any loan,
extension of credit, security agreement, purchase or sales agreement, or
any other agreement in favor of any other creditor or person that may
materially affect any of Grantor's property or Grantor's ability to repay
the Indebtedness or Grantor's ability, to perform Grantor's obligations
under this Mortgage or any related document.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this Mortgage
or the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Defective Collateralization. This Mortgage or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any property securing the Indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
Breach of Other Agreement. Any breach by Grantor under the terms of any
other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender,
whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
Indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. In the event of a death,
Lender, at its option, may, but shall not be required to, permit the
guarantor's estate to assume unconditionally the obligations arising under
the guaranty in a manner satisfactory to Lender, and, in doing so, cure any
Event of Default.
Adverse Change. A material adverse change occurs In Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If such a failure is curable and if Grantor has not been
given a notice of a breach of the same provision of this Mortgage within
the preceding twelve (12) months, it may be cured (and no Event of Default
will have occurred) if Grantor, after Lender sends written notice demanding
cure of such failure: (a) cures the failure within fifteen (15) days; or
(b) if the cure requires more than fifteen (15) days, Immediately initiates
steps sufficient to cure the failure and thereafter continues and completes
all reasonable and necessary steps sufficient to produce compliance as soon
as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and
at any time thereafter, Lender, at Lender's option, may exercise any one or more
of the following rights and remedies, in addition to any other rights or
remedies provided by law:
Accelerate Indebtedness. Lender shall have the right at its option without
notice to Grantor to declare the entire Indebtedness immediately due and
payable, including any prepayment penalty, which Grantor would be required
to pay.
UCC Remedies. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code. If notice to Grantor of the intended disposition
of the Personal Property is required by law in a particular instance, such
notice shall be deemed commercially reasonable if given to Grantor at least
ten (10) calendar days prior to the date of intended disposition. Grantor
shall pay on demand all costs and expenses, including but not limited to
reasonable attorneys' fees and legal expenses, incurred by Lender in
exercising these rights and remedies.
Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
Foreclosure and Sale. Lender may, and is hereby authorized and empowered
to, foreclose this Mortgage by action or advertisement pursuant to the
statutes of the State of Minnesota providing for such foreclosure. Power is
expressly granted to Lender (1) to sell the Property at public auction and
to convey the Property, in fee simple, to the purchasers at such sale, and
(2) to pay, out of the proceeds of the sale, all of the Indebtedness
secured by this Mortgage, with interest, and all legal costs and charges of
the foreclosure including the maximum attorneys' fees permitted by law and
Grantor agrees to pay all such costs, and charges and fees.
Other Remedies. Lender shall have all other rights and remedies provided in
this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor
hereby waives any and all right to have the Property marshalled. In
exercising its rights and remedies, Lender shall be free to sell all or any
part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitled to bid at any public sale on all or any
portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and
place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall mean notice given at least
ten (10) days before the time of the sale or disposition. Any sale of the
Personal Property may be made in conjunction with any sale of the Real
Property.
Election of Remedies. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Grantor under this Mortgage,
after Grantor's failure to perform, shall not affect Lender's right to
declare a default and exercise its remedies. Nothing under this Mortgage or
otherwise shall be construed so as to limit or restrict the rights and
remedies available to Lender following an Event of Default, or in any way
to limit or restrict the rights and ability of Lender to proceed directly
against Grantor and/or against any other co-maker, guarantor, surety or
endorser and/or to proceed against any other collateral directly or
indirectly securing the Indebtedness.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and upon any appeal. Whether or not any court action is involved, and
to the extent not prohibited by law, all reasonable expenses Lender incurs
that in Lender's opinion are necessary at any time for the protection of
its interest or the enforcement of its rights shall become a part of the
Indebtedness payable on demand and shall bear interest at the Note rate
from the date of the expenditure until repaid. Expenses covered by this
paragraph include, without limitation, however subject to any limits under
applicable law, Lender's reasonable attorneys' fees and Lender's legal
expenses, whether or not there is a lawsuit, including reasonable
attorneys' fees and expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services, the cost of searching
records, obtaining title reports (including foreclosure reports),
surveyors' reports, and appraisal fees and title insurance, to the extent
permitted by applicable law. Grantor also will pay any court costs, in
addition to all other sums provided by law.
NOTICES. Any notice required to be given under this Mortgage, including without
limitation any notice of default and any notice of sale shall be given in
writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Mortgage.
All copies of notices of foreclosure from the holder of any lien which has
priority over this Mortgage shall be sent to Lender's address, as shown near the
beginning of this Mortgage. Any party may change its address for notices under
this Mortgage by giving formal written notice to the other parties, specifying
that the purpose of the notice is to change the party's address. For notice
purposes, Grantor agrees to keep Lender informed at all times of Grantor's
current address. Unless otherwise provided or required by law, if there is more
than one Grantor, any notice given by Lender to any Grantor is deemed to be
notice given to all Grantors.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Mortgage. No alteration of or amendment to this Mortgage
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. "Net operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.
Caption Headings. Caption headings in this Mortgage are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Mortgage.
Grantor's Copy of Documents. Lender agrees to provide Grantor with a
conformed copy of both the Note and this Mortgage at the time they are
executed or within a reasonable time after request.
Governing Law. This Mortgage will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Minnesota. This
Mortgage has been accepted by Lender in the State of Minnesota.
Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's
request to submit to the jurisdiction of the courts of Crow Wing County,
State of Minnesota.
No Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Mortgage unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Mortgage shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Mortgage. No prior waiver by
Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Mortgage, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
Severability. If a court of competent jurisdiction finds any provision of
this Mortgage to be illegal; invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Mortgage. Unless otherwise required
by law, the illegality, invalidity, or unenforceability of any provision of
this Mortgage shall not affect the legality, validity or enforceability of
any other provision of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this
Mortgage with any other interest or estate in the Property at any time held
by or for the benefit of Lender in any capacity, without the written
consent of Lender.
Successors and Assigns. Subject to any limitations stated in this Mortgage
on transfer of Grantor's interest, this Mortgage shall be binding upon and
inure to the benefit of the parties, their successors and assigns. If
ownership of the Property becomes vested in a person other than Grantor,
Lender, without notice to Grantor, may deal with Grantor's successors with
reference to this Mortgage and the Indebtedness by way of forbearance or
extension without releasing Grantor from the obligations of this Mortgage
or liability under the Indebtedness.
Time is of the Essence. Time is of the essence in the performance of this
Mortgage.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Mortgage. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Mortgage shall have the meanings
attributed to such terms in the Uniform Commercial Code:
Borrower. The word "Borrower" means BRAINERD INTERNATIONAL RACEWAY &
RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC,
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC., and all other persons and entities
signing the Note in whatever capacity.
Default. The word "Default" means the Default set forth in this Mortgage in
the section titled "Default".
Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto or common law, and shall also include
pollutants, contaminants, polychlorinated biphenyls, asbestos, urea
formaldehyde, petroleum and petroleum products, and agricultural chemicals.
Event of Default. The words "Event of Default" mean any of the events of
default set forth in this Mortgage in the events of default section of this
Mortgage.
Grantor. The word "Grantor" means BRAINERD INTERNATIONAL RACEWAY &
RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC.
Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation a
guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The
words
"Hazardous Substances" are used In their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials or
waste as defined by or listed under the Environmental Laws. The term
"Hazardous Substances" also includes, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos.
Improvements. The word "Improvements" means all existing and future
improvements, buildings, structures, mobile homes affixed on the Real
Property, facilities, additions, replacements and other construction on the
Real Property.
Indebtedness. The word "Indebtedness" means all principal, interest, and
other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of,
consolidations of and substitutions for the Note or Related Documents and
any amounts expended or advanced by Lender to discharge Grantor's
obligations or expenses incurred by Lender to enforce Grantor's obligations
under this Mortgage, together with interest on such amounts as provided in
this Mortgage.
Lender. The word "Lender" means First National Bank of Deerwood, Its
successors and assigns.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and
Lender.
Note. The word "Note" means the promissory note dated February 14, 2003, in
the original principal amount of $500,000.00 from Grantor to Lender,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory
note or agreement. The maturity date of the Note is October 15, 2003.
Personal Property. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all
proceeds (including without limitation all insurance proceeds and refunds
of premiums) from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the
Personal Property.
Real Property. The words "Real Property" mean the real property, interests
and rights, as further described in this Mortgage.
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
GRANTOR AGREES TO ITS TERMS.
GRANTOR:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC;
FKA: BRAINERD INTERNATIONAL RACEWAY, INC,
FKA: BRAINERD INTERNATIONAL, INC.
By:_____________________________________________________
BILL SINGLETERRY, President of BRAINERD INTERNATIONAL RACEWAY & RESORT,
INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC. FKA:
BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC.
This Mortgage was drafted by:
NICHOLE FRANZMEIER. LOAN PROCESSOR
First National Bank. of Deerwood
PO Box 527
Brainerd, MN 56401-0527
CORPORATE ACKNOWLEDGMENT
STATE OF__________________________ )
)
COUNTY OF________________________ )
On this _____________________day of ______________________, 20 _____ , before
me, the undersigned Notary Public, personally appeared BILL SINGLETERRY,
President of BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC., and known to me to be an authorized agent of
the corporation that executed the Mortgage and acknowledged the Mortgage to be
the free and voluntary act and deed of the corporation, by authority of its
Bylaws or by resolution of its board of directors, for the uses and purposes
therein mentioned, and on oath stated that he or she is authorized to execute
this Mortgage and in fact executed the Mortgage on behalf of the corporation.
By _______________________________________ Residing at ______________________
Notary Public in and for the State of ____ My commission expires ____________
LEGAL DESCRIPTION:
Parcel 1: The W1/2 of the SW 1/4 Sec. 13, Twp. 134, Rge. 29, except the South
650 feet thereof and except the part thereof described as follows: Beginning at
the point on the West line of said Section 13 which is 650 feet North of the
Southwest corner of said Section 13; thence North 0 degrees 02 minutes East
788.3 feet to the point 1200 feet South of the Northwest corner of said W1/2 of
SW1/4; thence North 89 degrees 57 minutes 30 seconds East 470 feet parallel with
the South line of said W1/2 of SW1/4; thence South 19 degrees 47 minutes 50
seconds East 291 feet; thence South 69 degrees 55 minutes 30 seconds East 383.5
feet; thence South 0 degrees 02 minutes West 382.26 feet to the North line of
the South 650 feet of said W1/2 of SW1/4; thence South 89 degrees 57 minutes 30
seconds West 929.63 feet along said North line to the place of beginning.
Parcel 2: N1/2NE1/4, Sec. 24, Twp. 134, Rge, 29.
Parcel 3: The W1/2SE1/4, the SE1/4SE1/4, and All of Govt. Lot 1, all in Sec. 13,
Twp. 134 North, Rge. 29 West, except that part of said Govt. Lot 1 platted as
"Ellandale"; and except that part of said Govt. Lot 1 described as follows:
Beginning at the point on the East line of said Section 13 which is 2201.3 feet
North of the Southeast corner of said Section 13, said point being in the
Northwesterly line of Lot 10, "Ellandale" to the Northwest corner of Hilltop
Road in said plat; thence North 30 degrees 45 minutes West 260 feet; thence
North 41 degrees 17 minutes 30 seconds West 660.07 feet more or less to the
North line of said Govt. Lot 1; thence North 89 degrees 45 minutes 30 seconds
East along the North line of said Lot 1 to the shore of Long Lake; thence
Southeasterly along said shore to the East line of said Section 13, thence South
along the East line of Section 13 to the place, of beginning.
Parcel 4: Govt. Lot 6, Sec. 13, Twp. 134, Rge. 29.
Parcel 5: NE1/4SW1/4, Sec. 13, Twp. 134, Rge. 29, and the SW1/4NW1/4, Sec. 13,
Twp. 134, Rge. 29, except the Westerly 300 feet of the Northerly 770 feet
thereof, and that part of the; SE1/4NW1/4 and the SW1/4NE1/4, Sec. 13, Twp. 134,
Rge. 29, lying Southwesterly of the following described line: Beginning at the
point on the South line of said SW1/4NE1/4 which is 3570.41 feet North 89
degrees 45 minutes 30 seconds East of the West quarter corner of said Section
13; thence North 41 degrees 11 minutes West 502.18 feet; thence South 83 degrees
55 minutes 40 seconds West 429.47 feet; thence North 63 degrees 49 minutes 30
seconds West 840.0 feet; thence North 18 degrees 3 minutes West 650.0 feet to
the North line of said SE1/4NW1/4 and there ending.
Parcel 6: That part of the NW1/4SW1/4, Sec. 13, Twp. 134, Rge. 29, described as
follows: Beginning at the point on the West line of said West half of the
Southwest Quarter, said Section 13, which is 1362.15 feet North 0 degrees 02
minutes East, assumed bearing, front the Southwest corner of said West half of
the Southwest Quarter; thence North 0 degrees 02 minutes East 76.15 feet along
said West line to the point which is 1200.00 feet South 0 degrees 02 minutes
West from the northwest corner of said West half of the Southwest Quarter;
thence North 89 degrees 57 minutes 30 seconds East 470.00 feet parallel with the
South line of said West half of the Southwest Quarter; thence South 19 degrees
47 minutes 50 seconds East 23.41 feet; thence South 83 degrees 30 minutes West
481.11 feet to the point of beginning, according to the U.S. Government Survey
thereof on file and of record in the office of the County Recorder for said
County and State.
AND
The West 362.00 feet of the North 870.00 feet of the Northwest Quarter of the
Southwest Quarter and the West 362.00 feet of the Southwest Quarter of the
Northwest Quarter, Section 13, Township 134 North, Range 29 West, Crow Wing
County, Minnesota. Subject to the right-of-way for Minnesota Trunk Highway No.
371 Subject to the right-of-way for Birchdale Road. Subject to easements
reservations and restrictions of record, if any.
AND
That part of Government Lot 4, Section 13, Township 134 North, Range 29 West,
Crow Wing County, Minnesota described as follows: Beginning at the southwest
corner of said Government Lot 4; thence South 89 degrees 29 minutes 12 seconds
East, assumed bearing, 900.00 feet along the south line of said Government Lot
4; thence North 00 degrees 15 minutes 53 seconds East, parallel with the west
line of said Government Lot 4, 440.00 feet; thence North 89 degrees 29 minutes
12 seconds West 478.50 feet; thence South 03 degrees 14 minutes 32 seconds West
140.16 feet; thence North 89 degrees 29 minutes 12 seconds West to the west line
of said Government Lot 4; thence South 00 degrees 15 minutes 53 seconds West
along said west line of Government Lot 4 to the point of beginning, except that
part that lies westerly of the easterly right-of-way line of Birchdale Road.
Subject to the easements, reservations and restrictions of record, if any.
AND
That part of the Northwest Quarter of the Southwest Quarter and that part of
Government Lot 5, all in Section 13,Township 134 North, Range 29 West, Crow Wing
County, Minnesota, described as follows: Commencing at the Northwest corner of
said Northwest Quarter of the Southwest Quarter; thence South 00 degrees 02
minutes 00 seconds West, assumed bearing along the West line of said Northwest
Quarter of the Southwest Quarter 1200.00 feet; thence North 89 degrees 57
minutes 30 seconds East 470.00 feet; parallel with the South line of the West
Half of said South west Quarter; thence South 19 degrees 47 minutes, 50 seconds
East 23.41 feet to the point of beginning of the tract to be herein described;
thence south 19 degrees 47 minutes 50 seconds East 267.59 feet; thence South 69
degrees 55 minutes 30 seconds East 312.33 feet; thence North 20 degrees 04
minutes 30 seconds East 152.38 feet; thence North 69 degrees 55 minutes 30
seconds West 348.65 feet; thence North 00 degrees 17 minutes 07 seconds West
3151.54 feet; thence south 83 degrees 27 minutes 31 seconds West 236.64 feet;
thence North 19 degrees 33 minutes 30 seconds West 25.58 feet; thence North 89
degrees 33 minutes 34 seconds West 341.39 feet, more or less to the West line of
said Section 13; thence South 00 degrees 02 minutes 00 seconds West along said
West line 277.93 feet, more or less to a point North 00 degrees 02 minutes 00
seconds East as measured along said West line 1362.15 feet from the Southwest
corner of said Section; thence North 83 degrees 27 minutes 31 seconds East
481.11 feet, more or less to the point of beginning. Subject to the right-of way
of Minnesota State Highway Number 371 along the West line thereof. Also subject
to easements, restrictions, and reservations of record, if any.
AGREEMENT TO PROVIDE INSURANCE
Grantor: BRAINERD INTERNATIONAL Lender: First National Bank of Deerwood
RACEWAY & RESORT, INC. Brainerd Branch
FKA: THE COLONEL'S BRAINERD PO Box 527
INTERNATIONAL RACEWAY, INC. 724 W Washington St
FKA: BRAINERD INTERNATIONAL Brainerd, MN 56401-0527
RACEWAY, INC. (218) 828-2111
FKA: BRAINERD
INTERNATIONAL, INC.
5523 BIRCHDALE RD
BRAINERD, MN 56401
INSURANCE REQUIREMENTS. Grantor, BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC. ("Grantor"), understands that insurance
coverage is required in connection with the extending of a loan or the providing
of other financial accommodations to Grantor by Lender. These requirements are
set forth in the security documents for the loan. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):
Collateral: 5523 BIRCHDALE RD, BRAINERD, MN 56401
Type: Fire and extended coverage.
Amount: Full Insurable Value.
Basis: Replacement value.
Endorsements: Standard mortgagee's clause with stipulation
that coverage will not be cancelled or diminished without a
minimum of 30 days prior written notice to Lender, and without
disclaimer of the insurer's liability for failure to give such
notice.
Latest Delivery Date: By the loan closing date.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased through
Lender.
FLOOD INSURANCE. Flood insurance for the Collateral securing this loan is
described as follows:
Real Estate at 5523 BIRCHDALE RD, BRAINERD, MN 56401.
Should the Collateral at any time be deemed to be located in an area
designated by the Director of the Federal Emergency Management Agency as a
special flood hazard area, Grantor agrees to obtain and maintain Federal
Flood Insurance, if available, within 45 days after notice is given by
Lender that the Collateral is located in a special flood hazard area, for
the full unpaid balance of the loan and any prior liens on the property
securing the loan, up to the maximum policy limits set under the National
Flood Insurance Program, or as otherwise required by Lender, and
to-maintain such insurance for the term of the loan. Flood Insurance may be
purchased under the National Flood Insurance Program or from private
insurers.
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on the latest
delivery date stated above, evidence of the required insurance as provided
above, with an effective date of February 14, 2003, or earlier. Grantor
acknowledges and agrees that if Grantor fails to provide any required insurance
or fails to continue such insurance in force, Lender may do so at Grantor's
expense as provided in the applicable security document. The cost of any such
insurance, at the option of Lender, shall be added to the Indebtedness as
provided in the security document. GRANTOR ACKNOWLEDGES THAT IF LENDER SO
PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION
AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER
OF (1) THE UNPAID BALANCE OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES,
OR (2) THE VALUE OF THE COLLATERAL; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL
MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC
LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS
OF ANY FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 14, 2003.
GRANTOR:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC.
By: _____________________________________________
BILL SINGLETERRY, President of BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL
RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC.
For Lender Use Only
Insurance Verification
Date: ___________________________ Phone: ____________________
Agent's Name: ____________________
Agency: _________________________
Insurance Company: _______________
Policy Number: ____________________
Effective Date: ____________________
Comments: _________________________________________________________________
DISBURSEMENT REQUEST AND AUTHORIZATION
Borrower: BRAINERD INTERNATIONAL Lender: First National Bank of Deerwood
RACEWAY & RESORT, INC. Brainerd Branch
PO Box 527
5523 BIRCHDALE RD 724 W Washington St
BRAINERD, MN 56401 Brainerd, MN 56401-0527
(218) 828-2111
LOAN TYPE. This is a Fixed Rate (7.500%) Nondisclosable Loan to a Corporation
for $500,000.00 due on October 15, 2003.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
Maintenance of Borrower's Primary Residence.
Personal, Family or Household Purposes or Personal
Investment.
Agricultural Purposes.
X Business Purposes.
SPECIFIC PURPOSE. The specific purpose of this loan is: BUSINESS EXPENSE.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000.00 as follows:
Amount paid to Borrower directly: $498,155.00
$498,155.00 Deposited to Checking Account # 30882
Other Disbursements: $1,845.00
$1,845.00 CLOSING FEES
Note Principal: $500,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
Prepaid Finance Charges Paid in Cash: $500.00
$500.00 Documentation Fee
Other Charges Paid ) in Cash: $1,345.00
$20.00 Recording Fees
$25.00 Food Determination Fee
$150.00 O & E REPORT TO CROW WING COUNTY ABSTRACT
$1,150.00 MORTGAGE TAX
Total Charges Paid in Cash: $1,845.00
NOTICE OF RIGHT TO DISCONTINUE ESCROW. If Borrower's mortgage loan involves an
escrow account for taxes and homeowner's insurance, Borrower may have the right
in five years to discontinue the account and pay Borrower's own taxes and
homeowner's insurance. If Borrower is eligible to discontinue the escrow
account, Borrower will be notified in five years.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE 1N BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED FEBRUARY 14, 2003.
BORROWER:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
By:_________________________________
BILL SINGLETERRY, President of BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC.
AGREEMENT TO PROVIDE INSURANCE
Grantor: BRAINERD INTERNATIONAL Lender: First National Bank of Deerwood
RACEWAY & RESORT, INC. Brainerd Branch
PO Box 527
5523 BIRCHDALE RD 724 W Washington St
BRAINERD, MN 56401 Brainerd, MN 56401-0527
(218) 828-2111
INSURANCE REQUIREMENTS. Grantor, BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
("Grantor"), understands that insurance coverage is required in connection with
the extending of a loan or the providing of other financial accommodations to
Grantor by Lender. These requirements are set forth in the security documents
for the loan. The following minimum insurance coverages must be provided on the
following described collateral (the "Collateral"):
Collateral: All Equipment.
Type: All risks, including fire, theft and liability.
Amount: Full Insurable Value.
Basis: Replacement value.
Endorsements: Lender loss payable clause with stipulation that
coverage will not be cancelled or diminished without a minimum
of 30 days prior written notice to Lender.
Latest Delivery Date: By the loan closing date.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased through
Lender.
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on the latest
delivery date stated above, proof of the required insurance as provided above,
with an effective date of February 14, 2003, or earlier. Grantor acknowledges
and agrees that if Grantor fails to provide any required insurance or fails to
continue such insurance in force, Lender may do so at Grantor's expense as
provided in the applicable security document. The cost of any such insurance, at
the option of Lender, shall be added to the indebtedness as provided in the
security document. GRANTOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER OF (1) THE UNPAID BALANCE
OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES, OR (2) THE VALUE OF THE
COLLATERAL; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN
ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 14, 2003.
GRANTOR:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
By: ____________________________________________
BILL SINGLETERRY, President of BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC.
For Lender Use Only
Insurance Verification
Date: ___________________________ Phone: ____________________
Agent's Name: ____________________
Agency: _________________________
Insurance Company: _______________
Policy Number: ____________________
Effective Date: ____________________
Comments: _________________________________________________________________
COMMERCIAL SECURITY AGREEMENT
Grantor: BRAINERD INTERNATIONAL Lender: First National Bank of Deerwood
RACEWAY & RESORT, INC. Brainerd Branch
PO Box 527
5523 BIRCHDALE RD 724 W Washington St
BRAINERD, MN 56401 Brainerd, MN 56401-0527
(218) 828-2111
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER (optional) NICHOLE FRANZMEIER @828-2111
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
First National Bank of Deerwood
P.O. Box 520
Deerwood, MN 56444-0520
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1 a or 1 b) . do not abbreviate or combine names
1a. ORGANIZATION'S NAME
-BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
OR 1 b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
5523 BIRCHDALE RD BRAINERD MN 56407 USA
1 d. TAX ID #. SSN OR EIN ADUL INFORE I1 TYPE OF ORGANIZATION 1f. JURISDICTION OF ORGANIZATION ORGANIZATIONAL ID #, if any
ORGANIZATION
DEBTOR Corporation MN NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b) - do not abbreviate or combine names
2a ORGANIZATION'S NAME
OR 2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID #: SSN OR EIN ADD'L INFO RE 2e. TYPE OF ORGANIZATION JURISDICTION OF ORGANIZATION 2g.
ORGANIZATION
DEBTOR NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P)- insert only one secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
First National Bank of Deerwood
OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
PO Box 527, 724 W Washington St Brainerd MN 56401-0527
4. This FINANCING STATEMENT covers the following collateral:
All Equipment: whether any of the foregoing is owned now or acquired later; all accessions, additions,
replacements, and substitutions relating to any of the foregoing; all records of any kind relating to any of
the foregoing; all proceeds relating to any of the foregoing (including insurance, general intangibles and
accounts proceeds)
5. ALTERNATIVE DESIGNATION (if applicable): LESSEE/LESSOR CONSIGNEE/CONSIGNOR BAILEE/BAILOR SELLER/BUYER AG. LIEN NON-UCC FILING
6. This FINANCING STATEMENT Is to be filed (for record) (or recorded) in the
REAL
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) All Debtors Debtor 1 Debtor 2
8. OPTIONAL FILER REFERENCE DATA
filed against the Collateral.
Inspection of Collateral. Lender and Lender's designated representatives and
agents shall have the right at all reasonable times to examine and inspect the
Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments
and liens upon the Collateral, its use or operation, upon this Agreement, upon
any promissory note or notes evidencing the Indebtedness, or upon any of the
other Related Documents. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is
subjected to a lien which is not discharged within fifteen (15) days, Grantor
shall deposit with Lender cash, a sufficient corporate surety bond or other
security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, reasonable attorneys' fees or
other charges that could accrue as a result of foreclosure or sale of the
Collateral. In any contest Grantor shall defend itself and Lender and shall
satisfy any final adverse judgment before enforcement against the Collateral.
Grantor shall name Lender as an additional obligee under any surety bond
furnished In the contest proceedings. Grantor further agrees to furnish Lender
with evidence that such taxes, assessments, and governmental and other charges
have been paid in full and in a timely manner. Grantor may withhold any such
payment or may elect to contest any lien if Grantor is in good faith conducting
an appropriate proceeding to contest the obligation to pay and so long as
Lender's interest in the Collateral is not jeopardized.
Compliance with Governmental Requirements. Grantor shall comply promptly with
all laws, ordinances, rules and regulations of all governmental authorities, now
or hereafter in effect, applicable to the ownership, production, disposition, or
use of the Collateral, including all laws or regulations relating to the undue
erosion of highly-erodible land or-relating to the conversion of wetlands for
the production of an agricultural product or commodity. Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Lender's interest in
the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the Collateral never
has been, and never will be so long as this Agreement remains a lien on the
Collateral, used in violation of any Environmental Laws or for the generation,
manufacture, storage, transportation, treatment, disposal, release or threatened
release of any Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the Collateral for
Hazardous Substances. Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes.
liable for cleanup or other costs under any Environmental Laws, and (2) agrees
to indemnify and hold harmless Lender against any end all claims and losses
resulting from a breach of this provision of this Agreement. This obligation to
indemnify shall survive the payment of the Indebtedness and the satisfaction of
this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks
Insurance, including without limitation fire, theft and liability coverage
together with such other insurance as Lender may require with respect to the
Collateral, in form, amounts, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender including
stipulations that coverages will not be cancelled or diminished without at least
thirty (30), days prior written notice to Lender and not including any
disclaimer of the insurer's liability for failure to give such a notice. Each
insurance policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person. In connection with all policies covering assets
in which Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such insurance
as Lender deems appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify Lender of any
loss or damage to the Collateral. Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty. Ail proceeds of any insurance
on the Collateral, including accrued proceeds thereon, shall be held by Lender
as part of the Collateral. If Lender consents to repair or replacement of the
damaged or destroyed Collateral, Lender shall, upon satisfactory proof of
expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost
of repair or restoration. If Lender does not consent to repair or replacement of
the Collateral, Lender shall retain a sufficient amount of the proceeds to pay
all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds
which have not been disbursed within six (6) months after their receipt and
which Grantor has not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with Lender reserves
for payment of insurance premiums, which reserves shall be created by monthly
payments from Grantor of a sum estimated by Lender to be sufficient to produce,
at least fifteen (15) days before the premium due date, amounts at least equal
to the insurance premiums to be paid. If fifteen (15) days before payment is
due, the reserve funds are insufficient, Grantor shall upon demand pay any
deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account, which Lender may
satisfy by payment of the insurance premiums required to be paid by Grantor as
they become due. Lender does not hold the reserve funds in trust for Grantor,
and Lender is not the agent of Grantor for payment of the insurance premiums
required to be paid by Grantor. The responsibility for the payment of premiums
shall remain Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as Lender
may reasonably request including the following: (1) the name of the insurer; (2)
the risks insured;
(3) the amount of the policy; (4) the property insured; (b) the then current
value on the basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy. In addition,
Grantor shall upon request by Lender (however not more often than annually) have
an independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.
Financing Statements. Grantor authorizes Lender to file a UCC-1 financing
statement, or alternatively, a copy of this Agreement to perfect Lender's
security Interest. At Lender's request, Grantor additionally agrees to sign all
other documents that are necessary to perfect, protect, and continue Lender's
security interest in the Property. Grantor will pay all filing fees, title
transfer fees, and other fees and costs involved unless prohibited by law or
unless Lender is required by law to pay such fees and costs. Grantor irrevocably
appoints Lender to execute financing statements and documents of title in
Grantor's name and to execute all documents necessary to transfer title if there
is a default. Lender may file a copy of this Agreement as a financing statement.
If Grantor changes Grantor's name or address, or the name or address of any
person granting a security interest under this Agreement changes, Grantor will
promptly notify the Lender of such change.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, In Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any request
by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due end payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.
DEFAULT. Each of the following shelf constitute an Event of Default under this
Agreement:
Payment Default. Grantor fails to make any payment when due under the
Indebtedness.
Other Defaults. Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of
the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Grantor.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Grantor's property or Grantor's
or any Grantor's ability to repay the Indebtedness or perform their
respective obligations under this Agreement or any of the Related
Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this Agreement
or the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or
lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any collateral securing the Indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to guarantor, endorser, surety, or accommodation party of any of
the Indebtedness or guarantor, endorser, surety, or accommodation party
dies or becomes incompetent or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of a breach of the same
provision of this Agreement within the preceding twelve (12) months, it
may be cured (and no event of default will have occurred) if Grantor,
after receiving written notice from Lender demanding cure of such default:
(1) cures the default within fifteen (15) days; or (2) if the cure
requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Minnesota Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:
Accelerate indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice of any kind to Grantor.
Assemble Collateral. Lender may require Grantor to deliver to Lender all
or any portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require Grantor to
assemble the Collateral and make it available to Lender at a place to be
designated by Lender. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the Collateral. If
the Collateral contains other goods not covered by this Agreement at the
time of repossession, Grantor agrees Lender may take such other goods,
provided that Lender makes reasonable efforts to return them to Grantor
after repossession.
Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
Lender's own name or that of Grantor. Lender may sell the Collateral at
public auction or private sale. Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Lender will give Grantor, and other persons as required by law, reasonable
notice of the time and place of any public sale, or the time after which
any private sale or any other disposition of the Collateral is to be made.
However, no notice need be provided to any person who, after Event of
Default occurs, enters into and authenticates an agreement waiving that
person's right to notification of sale. The requirements of reasonable
notice shall be met if such notice is given at least ten (10) days before
the time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the expenses
of retaking, holding, insuring, preparing for sale and selling the
Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note rate
from date of expenditure until repaid.
Appoint Receiver. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Collateral, with the power to
protect and preserve the Collateral, to operate the Collateral preceding
foreclosure or sale, and to collect the Rents from the Collateral and
apply the proceeds, over and above the cost of the receivership, against
the Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Collateral exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person
from serving as a receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may at any time in Lender's discretion transfer any
Collateral into Lender's own name or that of Lender's nominee and receive
the payments, rents, income, and revenues therefrom and hold the same as
security for the Indebtedness or apply it to payment of the Indebtedness
in such order of preference as Lender may determine. Insofar as the
Collateral consists of accounts, general intangibles, insurance policies,
instruments, chattel paper, choices in action, or similar property, Lender
may demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Collateral as Lender may determine, whether
or not Indebtedness or Collateral is then due. For these purposes, Lender
may, on behalf of and in the name of Grantor, receive, open and dispose of
mail addressed to Grantor; change any address to which mail and payments
are to be sent; and endorse notes, checks, drafts, money orders, documents
of title, instruments and items pertaining to payment, shipment, or
storage of any Collateral. To facilitate collection, Lender may notify
account debtors and obligors on any Collateral to make payments directly
to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining
on the Indebtedness due to Lender after application of all amounts
received from the exercise of the rights provided in this Agreement.
Grantor shall be liable for a deficiency even if the transaction described
in this subsection is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and remedies
of a secured creditor under the provisions of the Uniform Commercial Code,
as may be amended from time to time. In addition, Lender shall have and
may exercise any or all other rights and remedies it may have available at
law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable law, all
of Lender's rights and remedies, whether evidenced by this Agreement, the
Related Documents, or by any other writing, shall be cumulative and may be
exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this Agreement,
after Grantor's failure to perform, shall not affect Lender's right to
declare a default and exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment to
this Agreement shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alteration or
amendment.
Attorneys' Fees: Expenses. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including Lender's reasonable attorneys' fees
and Lender's legal expenses, incurred in connection with the enforcement
of this Agreement. Lender may hire or pay someone else to help enforce
this Agreement, and Grantor shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender's reasonable attorneys'
fees and legal expenses whether or not there is a lawsuit, including
reasonable attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Grantor
also shall pay all court costs and such additional fees as may be directed
by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
Governing Law. This Agreement will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Minnesota.
This Agreement has been accepted by Lender in the State of Minnesota.
Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's
request to submit to the jurisdiction of the courts of Crow Wing County,
State of Minnesota.
No Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice's constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by
Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law),
when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Agreement. Any party may change its
address for notices under this Agreement by giving formal written notice
to the other parties, specifying that the purpose of the notice is to
change the party's address. For notice purposes, Grantor agrees to keep
Lender informed at all times of Grantor's current address. Unless
otherwise provided or required by law, If there is more than one Grantor,
any notice given by Lender to any Grantor is deemed to be notice given to
all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect, amend, or to continue the security interest granted in this
Agreement or to demand termination of filings of other secured parties.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lender's security interest in the
Collateral.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified,
it shall be considered deleted from this Agreement. Unless otherwise
required by law, the illegality, invalidity, or unenforceability of any
provision of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Collateral becomes vested in a person other
than Grantor, Lender without notice to Grantor, may deal with Grantor's
successors with reference to this Agreement and the Indebtedness by way of
forbearance or extension without releasing Grantor from the obligations of
this Agreement or liability under the Indebtedness.
Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor In this Agreement shall survive
the execution and delivery of this Agreement, shall be continuing in
nature, and shall remain in full force and effect until such time as
Grantor's Indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
DEFINITIONS. The, following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:
Agreement. The word "Agreement" means this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.
Borrower. The word "borrower" means BRAINERD INTERNATIONAL RACEWAY &
RESORT, INC. and all other persons and entitles signing the Note, in
whatever capacity.
Collateral. The word "Collateral" means all of Grantor's right, title and
interest in and to all the Collateral as described in the Collateral
Description section of this Agreement.
Default. The word "Default" means the Default set forth in this Agreement
in the section titled "Default".
Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. No.-99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act;
42 U.S.C. Section 6901, et seq., or other applicable state or federal
laws, rules, or regulations adopted pursuant thereto or common law, and
shall also include pollutants, contaminants, polychlorinated biphenyls,
asbestos, urea formaldehyde, petroleum and petroleum products, and
agricultural chemicals.
Event of Default. The words "Event of Default" mean any of the events of
default set forth in this Agreement in the default section of this
Agreement.
Grantor. The word "Grantor" means BRAINERD INTERNATIONAL RACEWAY & RESORT,
INC.
Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation a
guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly used, treated,
stored, disposed of, generated, manufactured, transported or otherwise
handled. The words "Hazardous Substances" are used in their very broadest
sense and include without limitation any and all hazardous or toxic
substances, materials or waste as defined by or listed under the
Environmental Laws. The term "Hazardous Substances" also includes, without
limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos.
Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by
the Note or Related Documents, including all principal and interest
together with all other Indebtedness and costs and expenses for which
Grantor is responsible under this Agreement or under any of the Related
Documents.
Lender. The word "Lender" means First National Bank of Deerwood, its
successors and assigns.
Note. The word "Note" means the Note executed by BRAINERD INTERNATIONAL
RACEWAY & RESORT, INC. in the principal amount of $500,000.00 dated
February 14, 2003, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions
for the note, or credit agreement.
Property. The word "Property" means all of Grantor's right, title and
interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 14, 2003.
GRANTOR:
BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
By: ____________________________________________
BILL SINGLETERRY, President of BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC,