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Muskegon City Commission
Commission Meeting Date: 2/10/2020 Title: Unruly Brewing Revolving Fund
Application
Submitted By: Jake Eckholm Department: Economic Development
Brief Summary: A recommendation to the City Commission to approve an economic development
loan for Unruly Brewing
Detailed Summary:
Unruly Brewing has finished their mass production system and started brewing for large scale
kegging distribution. However, their distributors and their cash flow projections indicate that they
should also build out and begin production on a canning system so that they can enter the retail
space to avoid some of the negative market forces that have recently been impacting micro-
breweries across the state. They have exhausted their ability to privately finance this portion of the
project and are requesting a loan from the City's Economic Development Revolving Fund.
Amount Requested: $80,000 Amount Budgeted: N/A (Capital Fund)
Fund(s) or Account(s) : Economic Fund(s) or Account(s) : N/A (Capital Fund)
Development Revolving Fund
Recommended Motion: Motion to approve the terms and documents of the loan to Unruly Brewing
in the amount of $80,000 as presented.
Check if the following Departments need to approve the item first:
Police Dept. D
Fire Dept. D
IT Dept. 0
For City Clerk Use Only:
Commission Action:
TERM LOAN AGREEMENT
This Agreement is made on 2:,(~7 ,2020 ("Effective Date"), between Unruly
Brewing, LLC, a Michigan limited liability company, of 360 W. Western Ave., Muskegon,
Michigan 49440 ("Borrower''), and the City of Muskegon, a Michigan municipal corporation, of
933 Terrace Street, Muskegon, Michigan 49440 ("City"), with reference to the following facts:
Background
A. Borrower has requested a term loan of $80,000.00 for the purpose of installing a
canning line to its beer production facility, which is located at 2221 Lemuel Street, Muskegon
Heights, Michigan 49444.
B. The City has agreed to make the loan subject to the terms and conditions set
forth below.
Therefore, for good and valuable consideration, the parties agree as follows:
1. Conditions of loan.
a. The Loan. The City agrees to make a loan to Borrower of $80,000.00
subject to the following conditions:
i. Fulfillment of all conditions contained in Section 3;
ii. The Loan Agreement must be closed on or before April 1, 2020.
iii. Delivery to the City of a promissory note ("Note") in form and
substance acceptable to the City, a copy of which is attached as Exhibit A; and
iv. At the time of borrowing no Event of Default as defined in Section
7 exists and no event exists which with notice and/or the passage of time could
become an Event of Default.
b. Payments. The principal amount of the Note shall be payable in monthly
installments of $1,603.04, each to be paid on the 1st of each month, beginning on May
1, 2020, and continuing until April 1, 2025, when the entire balance of principal and
interest shall be due and payable in full.
c. Interest. The Note shall bear interest on the outstanding balance at the
rate of 7.50% per annum.
d. Prepayments. The Borrower may at any time prepay without penalty all
or any portion of the principal, and any such payments shall be applied to the principal
installments last coming due.
2. Security.
a. Security Agreement. To secure the full and timely performance of
Borrower's covenants set out in this Agreement and to secure the repayment of the
loans and advances made and to be made (the "Indebtedness"), Borrower agrees to
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execute and deliver to the City a security agreement ("Security Agreement") in form and
substance satisfactory to the City, a copy of which is attached as Exhibit B, giving the
City a valid lien and security interest in the personal property described in the Security
Agreement.
b. Personal Guaranty. As additional security, Jeff Jacobson, and any other
member of Unruly Brewing, LLC, will jointly and severally personally guarantee
repayment of the Indebtedness, as well as any members of successor entities of Unruly
Brewing, LLC.
3. Conditions Precedent to Obligations of City. The obligations of the City under
this Agreement are subject to the occurrence, prior to or simultaneously with the Borrower's
receipt of the loan of each of the following conditions, any or all of which may be waived in
whole or in part by the City in writing:
a. Documents Executed. Borrower shall have executed and delivered to
the City all documents required to consummate this transaction.
b. Hazard Insurance. Borrower shall have furnished to the City, in a form
satisfactory to the City, hazard insurance policies, with loss payable clauses in favor of
the City as its interest appears, relating to the properties of Borrower described in
Section 2, in an amount equal to the full replacement cost of such properties.
c. Personal Guarantee. Jeff Jacobson shall execute and deliver to the City
an agreement of guarantee of the Indebtedness ("Personal Guaranty") in form and
substance satisfactory to the City, a copy of which is attached as Exhibit C.
d. Certified Resolutions. Borrower shall have furnished to the City a copy
of the resolution of Borrower authorizing the execution, delivery, and performance of this
Agreement, the borrowing of $80,000.00 from the City, the Note, and any other
documents contemplated by this Agreement.
e. Certificate of Good Standing. Borrower shall have furnished to the City
a certificate of good standing from the Michigan Department of Commerce with respect
to the Borrower, as of a recent date.
4. Warranties and Representations. Borrower represents and warrants to the
City that, as of the date of the borrowing:
a. Corporate Existence and Power. Borrower represents and warrants
that:
i. Borrower is duly organized, validly existing, and in good standing
under the laws of the State of Michigan;
ii. Borrower has the power and authority to enter into and perform its
obligations under this Agreement; and
iii. The Agreement, the Note, the Security Agreement, the Personal
Guaranty, and all other documents referred to in this Agreement, when executed
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on behalf of Borrower will be valid and binding obligations of Borrower, legally
enforceable in accordance with their terms.
b. Actions, Suits, or Proceedings. There are no actions, suits, or
proceedings, and no proceedings before any arbitrator or by or before any governmental
commission, board, bureau or other administrative agency, pending, or, to the best of
Borrower's knowledge, threatened, against or affecting Borrower or any properties or
rights of Borrower which, if adversely determined, could materially impair the right of
Borrower to carry on business substantially as now conducted or could have a materially
adverse effect upon the financial condition of Borrower.
c. No Liens, Pledges, Mortgages or Security Interests. Except for lien~
of the City, none of Borrower's assets are subject to any mortgage, pledge, lien, security
interest or other encumbrance of any kind or character, except the security interest of
the parties listed on Exhibit B in the personal property of Borrower described in Section 2
pursuant to the Security Agreement.
d. Accounting Principles. Balance sheets, earning statements, and other
financial data are furnished to the City, for the purposes of, or in connection with this
Agreement and the transactions contemplated by this Agreement have been prepared in
accordance with generally accepted accounting principles, consistently applied and do
or will fairly present the financial condition of the Borrower as of the dates, and the
results of their operations for the period, for which the same are furnished to the City.
e. Conditions Precedent. As of the date of this Agreement, all conditions
precedent referred to in Section 3 have been satisfied.
5. Affirmative Covenants. Until the principal and interest on the Note is paid in
full, Borrower covenants and agrees that it will:
a. Annual Financial Reports. Furnish to the City, in form satisfactory to
the City, not later than 90 days after the close of each fiscal year of Borrower, beginning
with Borrower's fiscal year ending December 31, 2019, a balance sheet as of the close
of each such fiscal year, statements of income and retained earnings and changes in
financial position for each such year, and such other comments and financial details as
are usually included in similar reports. The reports shall be prepared in accordance with
generally accepted accounting principles consistently applied.
b. Adverse Events. Promptly inform the City of the occurrence of any
Event of Default or of any event which, with notice and/or the passage of time would
become an Event of Default, or of any occurrence which has or could reasonably be
expected to have a materially adverse effect upon Borrower's business, properties,
financial condition or ability to comply with its obligations under this Agreement.
c. Other Information Upon Request. Promptly furnish to the City such
other information regarding the operations, business affairs, and financial condition of
Borrower as the City may reasonably request from time to time and permit the City and
its employees, attorneys and agents, to inspect all of the books, records, and properties
of Borrower at any reasonable time.
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d. Non-Discrimination. Ensure that no person in the United States shall on
the grounds of race, creed, color, national origin or sex be excluded from participating in,
be denied the benefits of, or be otherwise subject to discrimination in connection with
Borrower's activities as recipient of the financial assistance provided by this Loan.
e. Insurance. Keep its insurable properties adequately insured and
maintain:
i. insurance against fire and other risks customarily insured against
by businesses engaged in the same or similar activities as that of Borrower;
ii. necessary worker's compensation insurance;
iii. public liability and product liability insurance; and
iv. such other insurance as may be required by law or as may be
reasonably required in writing by the City.
All such insurance shall be in amounts, contain terms, in a form, for such purposes and
written by such companies as may be satisfactory to the City. Borrower will deliver to the City,
at its request, evidence satisfactory to the City that such insurance has been procured and
showing the City as additional insured or loss payee, as the case may be.
f. Affirmative Action Program. Comply with all applicable Affirmative
Action Programs, if any, approved by the City of Muskegon.
g. Maintain Business Entity and Property. Do or cause to be done all
things necessary to preserve and keep in full force and effect its own existence, rights
and franchises and comply with all applicable laws; continue to conduct and operate its
business substantially as conducted and operated during the present and preceding
calendar year; at all times maintain and preserve all of the remainder of its property used
or useful in the conduct of its business and keep the same in good repair, working order
and condition, and from time to time make, or cause to be made, all needed and proper
repairs, renewals, replacements, betterments and improvements thereto so that the
Borrower's business may be properly and advantageously conducted at all times.
h. Use of Loan Proceeds. Use the proceeds of the loan for the purpose
set forth in the Background to this Agreement.
6. Negative Covenants. From the date of this Agreement until the Note is paid in
full, Borrower covenants and agrees that Borrower will not, without the prior written consent of
the City:
a. Liens. Create, incur, assume, or allow to exist any mortgage, pledge,
encumbrance, security interest, lien, or charge of any kind (including any charge upon
property purchased under a conditional sale or other title retaining agreement) upon any
of its property or assets, whether now owned or hereafter acquired, other than in favor of
the City, except: (i) as required or permitted in this Agreement; (ii) liens for taxes not
delinquent, or being contested in good faith, and, if requested by the City, bonded in a
manner satisfactory to the City; and (iii) liens not delinquent created by statute in
4
connection with worker's compensation, unemployment insurance, social security, and
similar statutory obligations.
b. Indebtedness. Incur, create, assume, or permit to exist any
indebtedness or liability on account of deposits or advances or any indebtedness or
liability for borrowed money, or any other indebtedness or liability evidenced by notes,
bonds, debentures, or similar obligations, indebtedness required or permitted under this
Agreement or indebtedness subordinated to the prior payment in full of Borrower's
Indebtedness to the City upon the terms and conditions approved in writing by the City.
c. Extension of Credit. Make loans, advances or extensions of credit to
any Person, except for sales on open account and in the ordinary course of business.
For the purpose of this Agreement, the word "Person" means any individual, corporation,
limited liability company, partnership, trust, unincorporated association, joint stock
company, or other entity.
d. Guarantee Obligations. Guarantee or otherwise in any way become or
be responsible for obligations of any other Person, whether by agreement to purchase
the indebtedness of any other Person, or agreement for the furnishing of funds to any
other Person through the purchase of goods, supplies, or services (or by way of stock
purchase, capital contribution, advance, or loan) for the purpose of paying or discharging
the indebtedness of any other Person, or otherwise, except for the endorsement of
negotiable instruments by Borrower in the ordinary course of business for collection.
e. Subordinate Indebtedness. Subordinate any indebtedness due
Borrower from any Person to the indebtedness of other creditors of the obliger.
f. Sale of Assets. Sell, lease, or otherwise dispose of any of its assets
except in the ordinary course of business.
g. Merger. Enter into any merger, consolidation, reorganization, or
recapitalization or purchase or otherwise acquire all or substantially all of the assets of
any other Person.
h. Compensation. Without the prior written consent of the City, permit the
compensation of any manager, member, or proprietor to be excessive, taking into
consideration the financial circumstances of Borrower and the position and qualification
of the Person.
7. Default.
a. Events of Default. Should any of the following events (an "Event of
Default") occur, Borrower shall be in default under this Agreement:
i. Misrepresentation. If any warranty or representation of Borrower
in connection with or contained in this Agreement, or if any financial data or other
information now or later furnished to the City by or on behalf of Borrower, shall
prove to be false or misleading in any material respect;
ii. Failure to Pay Monies Due. If any principal of or interest on the
Indebtedness shall not be paid within ten days after the same becomes due;
5
iii. Noncompliance with City Agreement. If Borrower shall fail to
perform any of its obligations and covenants hereunder, or shall fail to comply
with any of the provisions of this Agreement or any other agreement with the City
to which it may be a party;
iv. Other Defaults. If Borrower shall default in the due payment of
any of its indebtedness (other than the Indebtedness) or in the observance or
performance of any term, covenant, or condition in any agreement or instrument
evidencing, securing, or relating to such other indebtedness, and such default
shall be continued for a period sufficient to permit acceleration of such
indebtedness;
v. Judgments. If there shall be rendered against Borrower one or
more judgments or decrees involving an aggregate liability of $10,000.00 or
more, which has or have become nonappealable and shall remain undischarged,
unsatisfied by insurance and unstayed for more than 20 days, whether or not
consecutive; or if a writ of attachment or garnishment against the property of
Borrower shall be issued and levied in an action claiming $10,000.00 or more,
and not released or appealed and bonded in a manner satisfactory to the City;
vi. Business Suspension, Bankruptcy, Etc. If Borrower shall
voluntarily suspend transaction of Borrower's business or make a general
assignment for the benefit of creditors; or shall be adjudicated a bankrupt; or
shall file a voluntary petition in bankruptcy or for a reorganization or to effect a
plan or other arrangement with Borrower's creditors; or shall file an answer to a
creditor's petition or other petition against Borrower (admitting the material
allegations thereof) for an adjudication in bankruptcy or for a reorganization; or
shall apply for or permit the appointment of a receiver, trustee, or custodian for
any substantial portion of the properties or assets of Borrower; or if any order
shall be entered by any court approving an involuntary petition seeking
reorganization; or if a receiver, trustee, or custodian shall be appointed for
Borrower or if any substantial bankruptcy, reorganization, or liquidation
proceedings are instituted against Borrower and remain undismissed for 30 days;
or if Borrower becomes unable to meet Borrower's obligations as they mature; or
if Borrower commits an act of bankruptcy;
vii. Change of Control or Management. If Borrower or a controlling
portion of its membership or a substantial portion of its assets comes under the
practical, beneficial or effective control of one or more persons, whether by
reason of death, merger, consolidation, sale or purchase of interest or assets or
otherwise; and if any such change of control adversely impacts, in the sole
judgment of the City, upon the ability of Borrower to carry on its business as
previously conducted;
b. Acceleration of Indebtedness. Upon the occurrence of any of the
Events of Default described in Sections 7(a)(i) or 7(a)(ii) or upon the occurrence of any
of the Events of Default described in Sections 7(a)(iii) through 7(a)(vii) inclusive, which is
not cured by Borrower or waived by the City within 30 days after notice to Borrower by
the City, all Indebtedness shall be immediately due and payable in full at the option of
6
the City without presentation, demand, protest, notice of dishonor, or other notice of any
kind, all of which are expressly waived. Unless all of the Indebtedness is then fully paid,
the City shall have and may exercise any one or more of the rights and remedies for
which provision is made for a secured party under the Uniform Commercial Code or
under any mortgage, security agreement, pledge agreement, assignment or any other
related document, including, without limitation, the right to take possession and sell,
lease, or otherwise dispose of any or all of the Collateral. Borrower agrees, upon
request of the City, to assemble the Collateral and make it available to the City at any
place designated by the City which is reasonably convenient to the City and Borrower.
c. Cumulative Remedies. The remedies provided for by this Agreement
are cumulative to the remedies for collection of the Indebtedness as provided by law or
by any mortgage, security agreement, or any related document. Nothing in this
Agreement is intended, nor should it be construed, to preclude the City from pursuing
any other remedy for the recovery of any other sum to which the City may be or become
entitled for the breach of this Agreement by Borrower.
d. Written Waivers. No default shall be waived by the City except in writing
signed by an officer of the City, and no waiver of any default shall operate as a waiver of
any other default or of the same default on a future occasion.
8. Miscellaneous.
a. Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of the state of Michigan.
b. Entire Agreement. This Agreement constitutes the entire agreement of
the parties and supersedes any other agreements, written or oral, that may have been
made by and between the parties with respect to the subject matter of this Agreement.
All contemporaneous or prior negotiations and representations have been merged into
this Agreement.
c. Amendment. This Agreement shall not be modified or amended except
in a subsequent writing signed by all parties.
d. Binding Effect. This Agreement shall be binding upon and enforceable
by the parties and their respective legal representatives, permitted successors, and
assigns.
e. Counterparts. This Agreement may be executed in counterparts, and
each set of duly delivered identical counterparts which includes all signatories, shall be
deemed to be one original document.
f. Full Execution. This Agreement requires the signature of all parties.
Until fully executed, on a single copy or in counterparts, this Agreement is of no binding
force or effect and if not fully executed, this Agreement is void.
g. Non-Waiver. No waiver by any party of any provision of this Agreement
shall constitute a waiver by such party of any other provision of this Agreement.
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h. Severability. Should any one or more of the provisions of this
Agreement be determined to be invalid, unlawful, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions of this Agreement shall
not in any way be impaired or affected.
i. No Reliance. Each party acknowledges that it has had full opportunity to
consult with legal and financial advisors as it has been deemed necessary or advisable
in connection with its decision to knowingly enter into this Agreement. Neither party has
executed this Agreement in reliance on any representations, warranties, or statements
made by the other party other than those expressly set forth in this Agreement.
j. Assignment or Delegation. Except as otherwise specifically set forth in
this Agreement, neither party shall assign all or any portion of its rights and obligations
contained in this Agreement without the express or prior written approval of the other
party, in which approval may be withheld in the other party's sole discretion.
k. Venue and Jurisdiction. The parties agree that for purposes of any
dispute in connection with this Agreement, the Muskegon County Circuit Court shall
have exclusive personal and subject matter jurisdiction and that Muskegon County is the
exclusive venue.
By:_q....tr.t.C.+-r---R-- - - - - - - -
Name· Je
Title: _ __ _ _ _...c._ _ __
Dated: - L-J-=--.,__-
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Exhibit A
Promissory Note
PROMISSORY NOTE
$80,000.00 Muskegon, Michigan
r• 'J--7
'2. / I 2020
FOR VALUE RECEIVED, Unruly Brewing, LLC, a Michigan limited liability company, of 360 W. Western Ave.,
Muskegon, Michigan 49440 ("Maker"), promises to pay to the City of Muskegon, a Michigan municipal
corporation, at 933 Terrace Street, Muskegon, Michigan 49440 ("City'.'), or at such other place as directed by
the City, the principal sum of Eighty Thousand and 00/100 Dollars ($80,000.00), together with interest from
the date hereof at the rate of 7.50% per annum on the unpaid balance remaining due from time to time.
This Note shall be payable as follows:
Equal and consecutive monthly installments of principal and interest of $1,603.04 shall be made
from the Maker to the City commencing May 1, 2020 and continuing on the 1st of each month
thereafter until April 1, 2025, when the entire balance of principal and interest shall be due and
payable in full. An amortization schedule is attached as Exhibit A, for reference only.
The Maker may prepay without penalty all or any portion of the principal at any time. Any partial
prepayment shall not eliminate the obligation of the Maker to pay all subsequent installments on their
normal due dates. All payment of any nature shall be applied first to accrued interest and the balance to
principal. The Maker shall maintain their business location commonly known as Unruly Brewery, of 360 W.
Western Ave., Muskegon, Michigan 49440 in the City of Muskegon. A move out of the City is a default
under this Note.
This Note is secured by a certain security agreement of even date between the Maker and the City ("Security
Agreement"). This Note is personally guaranteed by Jeff Jacobson, ("Personal Guaranty"). The terms of the
Security Agreement and Personal Guaranty are incorporated in this Note by reference. The City shall have
all of the rights and powers set forth in the Security Agreement and Personal Guaranty as though the same
were set forth fully in this Note. A default in the Security Agreement or Personal Guaranty shall constitute a
default of this Note.
Upon any default, including, but not limited to, any failure to make payments when due, the City may, upon
ten (10) days written notice to the Maker, declare the entire remaining balance of principal and interest to
be immediately due and payable. No delay by the City in exercising any right hereunder shall be considered
a waiver of such right.
The Maker (i) waives protest, presentment, demand for payment, and notice of dishonor: (ii) agrees that any
extension of the time for any payment, reduction of any payments, acceptance by the City of a renewal
note, or release or non-enforcement of any security, whether with or without notice, shall not release or
offset the obligations of the Maker; (iii) agrees to reimburse the City for any and all costs and expenses
(including but not limited to, reasonable and actual attorney fees) incurred in attempting to collect any and
all principal and interest on this Note.
By: __,,,___,..:+--.,__,1--.'-- - - - - - -
·Name: e
Title: - --"'--e'=--~- -- -=
Date: - -e=-+--~' - - - ' ' 2020
Exhibit A
Amortization Schedule
Compound Period: Monthly
Nominal Annual Rate: 7.50%
Cash Flow Data
Event Date Amount Payments Period End Date
Loan 2/1/2020 $80,000.00
Payment 3/1/2020 $1,603.04 60 Monthly 2/1/2025
Amortization Schedule - Normal Amortization
2020 Payment Schedule
Date Payment Interest Principal Balance
loan 2/1/2020 $80,000.00
1 3/1/2020 $1,603.04 $ 500.00 $1,103.04 $78,896.96
2 4/1/2020 $1,603.04 $ 493.11 $1,109.93 $77,787.03
3 5/1/2020 $1,603.04 $ 486.17 $1,116.87 $76,670.15
4 6/1/2020 $1,603.04 $ 479.19 $1,123.85 $75,546.30
5 7/1/2020 $1,603.04 $ 472.16 $1,130.88 $74,415.43
6 8/1/2020 $1,603.04 $ 465.10 $1,137.94 $73,277.48
7 9/1/2020 $1,603.04 $ 457.98 $1,145.06 $72,132.43
10/1/202
8 0 $1,603.04 $ 450.83 $1,152.21 $70,980.22
11/1/202
9 0 $1,603.04 $ 443.63 $1,159.41 $69,820.80
12/1/202
10 0 $1,603.04 . _ $ 436.38 -- $1,166.66 $68,654.14 _
2020Totals $16,030.40 $4,684.54 $11,345.86
--·----
2021 Payment Schedule
11 1/1/2021 $1,603.04 $ 429.09 $1,173.95 $67,480.19
12 2/1/2021 $1,603.04 $ 421.75 $1,181.29 $66,298.90
13 3/1/2021 $1,603.04 $ 414.37 $1,188.67 $65,110.23
14 4/1/2021 $1,603.04 $ 406.94 $1,196.10 $63,914.13
15 5/1/2021 $1,603.04 $ 399.46 $1,203.58 $62,710.55
16 6/1/2021 $1,603.04 $ 391.94 $1,211.10 $61,499.45
17 7/1/2021 $1,603.04 $ 384.37 $1,218.67 $60,280.79
18 8/1/2021 $1,603.04 $ 376.75 $1,226.29 $59,054.50
19 9/1/2021 $1,603.04 $ 369.09 $1,233.95 $57,820.55
10/1/202
20 1 $ 1,603.04 $ 361.38 $1,241.66 $56,578.89
11/1/202
21 1 $ 1,603.04 $ 353.62 $1,249.42 $55,329.47
12/1/202
________?~-~----- ____J __ $ 1,603.04
2021 Totals $19,236.48 $4,654.57 $14,581.91
2022 Payment Schedule
23 1/1/2022 $1,603.04 $ 337.95 $1,265.09 $52,807.15
24 2/1/2022 $ 1,603.04 $ 330.04 $1,273.00 $51,534.15
25 3/1/2022 $ 1,603.04 $ 322.09 $1,280.95 $50,253.20
26 4/1/2022 $ 1,603.04 $ 314.08 $1,288.96 $48,964.24
27 5/1/2022 $ 1,603.04 $ 306.03 $1,297.01 $47,667.23
28 6/1/2022 $ 1,603.04 $ 297 .92 $1,305.12 $46,362.11
29 7/1/2022 $1,603.04 $ 289.76 $1,313.28 $45,048.83
30 8/1/2022 $ 1,603.04 $ 281.56 $1,321.48 $43,727.35
31 9/1/2022 $ 1,603.04 $ 273.30 $1,329.74 $42,397.60
10/1/202
32 2 $1,603.04 $ 264.99 $1,338.05 $41,059.55
11/1/202
33 2 $1,603.04 $ 256.62 $1,346.42 $39,713.13
12/1/202
34
----------·--------~
2 $ 1,603.04 $ 248.21 $1,354.83 $38,358.30
2022 Totals $19,236.48 $3,522.54 $15,713.94
2023 Payment Schedule
35 1/1/2023 $1,603.04 $ 239.74 $1,363.30 $36,995.00
36 2/1/2023 $ 1,603.04 $ 231.22 $1,371.82 $35,623.18
37 3/1/2023 $ 1,603.04 $ 222.64 $1,380.40 $34,242.78
38 4/1/2023 $ 1,603.04 $ 214.02 $1,389.02 $32,853.76
39 5/1/2023 $ 1,603.04 $ 205.34 $1,397.70 $31,456.05
40 6/1/2023 $ 1,603.04 $ 196.60 $1,406.44 $30,049.62
41 7/1/2023 $1,603.04 $ 187.81 $1,415.23 $28,634.39
42 8/1/2023 $1,603.04 $ 178.96 $1,424.08 $27,210.31
43 9/1/2023 $1,603.04 $ 170.06 $1,432.98 $25,777.33
10/1/202
44 3 $1,603.04 $161.11 $1,441.93 $24,335.40
11/1/202
45 3 $1,603.04 $ 152.10 $1,450.94 $22,884.46
12/1/202
_____4_6_ _ _ _ 3_ $ !,603.04 $143.03 $1,460.01 $21,424.45
2023 Totals $ 19,236.48 $2,302.63 $16,933.85
2024 Payment Schedule
47 1/1/2024 $ 1,603.04 $ 133.90 $1,469.14 $19,955.31
48 2/1/2024 $1,603.04 $ 124.72 $1,478.32 $18,476.99
49 3/1/2024 $ 1,603.04 $ 115.48 $1,487.56 $16,989.43
50 4/1/2024 $1,603.04 $106.18 $1,496.86 $15,492.58
51 5/1/2024 $1,603.04 $ 96.83 $1,506.21 $13,986.36
52 6/1/2024 $1,603.04 $ 87.41 $1,515.63 $12,470.74
53 7/1/2024 $1,603.04 $ 77.94 $1,525.10 $10,945.64
54 8/1/2024 $1,603.04 $ 68.41 $1,534.63 $9,411.01
55 9/1/2024 $1,603.04 $ 58.82 $1,544.22 $7,866.79
10/1/202
56 4 $1,603.04 $ 49.17 $1,553.87 $6,312.92
11/1/202
57 4 $1,603.04 $ 39.46 $1,563.58 $4,749.33
12/1/202
58 4 $1,603.04 $3,175.98
2024 Totals $19,236.48
2025 Payment Schedule
59 1/1/2025 $1,603.04 $ 19.85 $1,583.19 $1,592.79
______________GQ___ 2/1/2025 $1,602.74 $ 9.95 - - ~ _$1,592.79 ------- $ -----------
2025 Totals $3,205.78 $ 29.80 $3,175.98
Total Paid Total Interest Total Principle
Grand
Totals $ 96,182.10 $ 16,182.10 $80,000.00
Last payment is reduced by $.30 due to rounding.
Exhibit B
Security Agreement
SECURITY AGREEMENT
This Security Agreement is entered into on J-/'), . 7 ,
2020 ("Effective
Date"), between Unruly Brewing, LLC, a Michigan limited liability company, of 360 W. Western
Ave., Muskegon, Michigan 49440 ("Debtor''), and the City of Muskegon, a Michigan municipal
corporation, at 933 Terrace Street, Muskegon, Michigan 49440 ("City"), with reference to the
following facts:
Background
A. Debtor has received from City a loan in the amount of $80,000.00 pursuant to the
terms and conditions of a certain term loan agreement between City and Debtor of even date
("Loan Agreement").
B. Debtor has agreed to grant a security interest in all of its assets as security for
payment of the loan pursuant to the terms of a certain promissory note between Debtor and City
of even date ("Note").
Therefore, for good and valuable consideration, the parties agree as follows:
1. Definitions. As used in this Security Agreement, the following definitions (in
addition to other terms and provisions set forth in Article IX of the Michigan Uniform Commercial
Code, MCL 440.9101 et seq.) shall apply:
a. Collateral. The collateral shall consist of all of the personal property of
Debtor, wherever situated, whether now owned or later acquired, including: Accounts;
Chattel paper; Deposit Accounts; Documents; Equipment; Farm Products; General
Intangibles, including payment intangibles; Goods; Instruments, including promissory
notes; Inventory; Investment Property; Letters of Credit and Letters of Credit Rights;
Supporting Obligations. To the extent not listed above as original Collateral, proceeds
and products of the foregoing, including all Inventory repossessed or returned; and, in
addition, as used in this Agreement, Inventory includes goods held for sale or lease or
furnished or to be furnished under contracts of service, or goods being processed for
sale in Debtor's business, as now or later conducted, including raw materials, work in
process, finished goods, and materials and supplies used or consumed in Debtor's
business. All of the above shall be referred to as the "Collateral".
b. Obligations. This Security Agreement secures the following (collectively,
the "Obligations"):
i. Debtor's obligations and liabilities under the ~oan Agreement,
including any agreements or instruments referred to therein, the Note and this
Agreement;
ii. The repayment of (1) any amounts that City may advance or
spend for the maintenance or preservation of the Collateral, and (2) any other
expenditures that City may make under the provisions of this Security Agreement
or for the benefit of Debtor;
1
111. All amounts owed under any modifications, renewals, or
extensions of any of the foregoing items; and
iv. Any of the foregoing that arises after the filing of a petition by or
against Debtor under the Bankruptcy Code, even if the obligations due do not
accrue because of the automatic stay under the Bankruptcy Code Section 362 or
otherwise.
c. Term. A period of time commencing on the date_ of this Agreement and
ending on the Termination Date.
d. Termination Date. The date when all Obligations owed by Debtor to City
have been satisfied.
e. UCC. Any term used in the Uniform Commercial Code as adopted from
time to time in the State of Michigan ("UCC") and not defined in this Security Agreement
has the meaning given to the term in the UCC.
2. Grant of Security Interest. As security for the payment or performance of the
Obligations, Debtor grants a Security Interest in the Collateral to City.
3. Perfection of Security Interests.
a. Filing of Financing Statement. Debtor authorizes City to file a financing
statement (the "Financing Statement") describing the Collateral.
b. Possession. Debtor shall have possession of the Collateral, except
where otherwise expressly provided in this Security Agreement.
c. Control. Debtor will cooperate at all times with City in obtaining control
with respect to the Collateral.
4. Post-Effective Date Covenants and Rights Concerning the Collateral.
a. Inspection. The parties to this Security Agreement may inspect any
Collateral in the other party's possession or control at any time upon reasonable notice.
b. Personal Property. The Collateral shall remain personal property at all
times; and Debtor shall not affix any of the Collateral to any real property in any manner
that would change its nature from that of personal property to real property or to a
fixture.
c. City Collection Rights. City shall have the right at any time to enforce
Debtor's rights against the account debtors and obligors.
d. Limitations on Duties Concerning Maintenance of Collateral.
i. Debtor has the risk of loss of the Collateral; and
2
ii. City has no duty to collect any income accruing on the Collateral
or to preserve any rights relating to the Collateral.
e. Inventory. Debtor has the power to sell Debtor's Inventory in the
ordinary course of Debtor's business, provided that Debtor is not in default. In addition,
the parties agree as follows:
i. A sale of Debtor's Inventory not in the ordinary course of business
shall constitute a default; and
ii. The interest of City shall continue in all proceeds of sales and all
dispositions of Debtor's Inventory.
5. Covenants, Warranties and Representations of Debtor. Debtor, as an
inducement to City to extend credit to Debtor, covenants, represents, and warrants to City the
following:
a. Title to and Transfer of Collateral. Debtor has rights in or the power to
transfer the Collateral, and its title to the Collateral is free of all adverse claims, liens,
security interests, and restrictions on transfer or pledge.
b. Location of Collateral. Debtor will maintain the Collateral at, and will not
remove the Collateral from, Debtor's business address of 2221 Lemuel Street,
Muskegon Heights, Michigan 49444, without the prior written consent of City. Debtor will
promptly notify City in writing of any change in the location of any place of business or
establishment of any new place of business of Debtor.
c. Organization and Name. Debtor is duly organized and operating a
business under the laws of the State of Michigan; and, further, until the Obligations are
paid in full, Debtor agrees that Debtor will:
i. Preserve its existence in good standing and not, in one
transaction or a series of related transactions, merge into or consolidate with any
other entity, or sell all or substantially all of Debtor's assets;
ii. Not change Debtor's name without the written consent of City.
Debtor's exact legal name is as set forth in the first paragraph of this Security
Agreement; and
iii. Not change its location as that term is defined in UCC 9-307 (MCL
440.9307).
d. Use. The Collateral will be used primarily for Debtor's business.
e. Records. Debtor will at all times during this Agreement keep accurate
and complete records of Debtor's Collateral, and will, at any time at the request of City,
deliver to City a schedule specifically identifying all of the Collateral.
3
f. Insurance. Debtor will keep the Collateral continuously insured with
insurance carriers in amounts and against risks that shall be reasonably satisfactory to
City, with the loss payable clause in favor of City.
g. Indemnification. Debtor agrees to indemnify and hold harmless City
from any loss or damage caused by the Collateral or its use, and immediately to give
written notice to City of any loss of or damage to the Collateral occasioned by any
cause.
h. Impairment of Collateral. If the Collateral becomes unsatisfactory to
City or deteriorates in market or actual value, Debtor will, after written demand given by
City to Debtor, promptly reduce the debt to City to the extent specified by City or, in the
alternative, increase the Collateral to the amount affixed by City.
i. Financial and Other Statements. During the term of this Agreement,
Debtor will deliver to City as soon as practicable upon request by City (and in any event,
within 90 days thereafter), the following:
i. Debtor's balance sheet at the end of such year;
ii. Debtor's tax return for such fiscal year; and
111. A certificate of good standing or similar document from the Office
of the Secretary of State affirming that Debtor remains duly organized under the
laws of the State of Michigan.
6. Events of Default. The occurrence of any of the following shall, at the option of
City, be an Event of Default:
a. Any default, Event of Default as defined under the Agreement, this
Security Agreement, or any of the other Obligations;
b. Debtor's failure to comply with any of the provisions of, or the
incorrectness of any representation or warranty contained in, this Security Agreement or
in any of the other Obligations;
c. Transfer or disposition of any of the Collateral, except as expressly
permitted by this Security Agreement;
d. Attachment, execution, or levy on any of the Collateral;
e. Debtor voluntarily or involuntarily becoming subject to any proceeding
under (i) the Bankruptcy Code or (ii) any similar remedy under state statutory or common
law; or
f. Debtor shall fail to comply with, or become subject to any administrative
or judicial proceeding under any federal, state, or local (i) hazardous waste or
4
environmental law, (ii) asset forfeiture or similar law which can result in the forfeiture of
property, or (iii) other law, where noncompliance may have any significant effect on the
Collateral.
7. Default Costs. Should an Event of Default occur, Debtor will pay to City all
costs reasonably incurred by City for the purpose of enforcing its rights hereunder, including:
a. Costs of foreclosure;
b. Costs of obtaining money damages; and
c. A reasonable fee for the services of attorneys employed by City for any
purpose related to this Security Agreement or the Obligations, including consultation,
drafting documents, sending notices, or instituting, prosecuting, or defending litigation or
arbitration.
8. Remedies Upon Default.
a. General. Upon any Event of Default, City may pursue any remedy
available at law (including those available under the provisions of the UCC), or in equity,
to collect, enforce, or satisfy any Obligations then owing, whether by acceleration or
otherwise.
b. Conformer Remedies. Upon any Event of Default, City shall have the
right to pursue any of the following remedies separately, successively, or
simultaneously:
i. File suit and obtain judgment and, in conjunction with any action,
City may seek any ancillary remedies provided by law, including levy of
attachment and garnishment;
ii. Take possession of any Collateral not already in its possession
without demand and without legal process. Upon City's demand, Debtor will
assemble and make the Collateral available to City as City may direct. Debtor
grants to City the right, for this purpose, to enter into or on any premises where
Collateral may be located; and
iii. Without taking possession, sell, lease, or otherwise dispose of the
Collateral at public or private sale in accordance with the UCC.
9. Foreclosure Procedures.
a. No Waiver. No delay or omission by City to exercise any right or remedy
accruing upon any Event of Default shall: (i) impair any right or remedy, (ii) waive any
default or operate as an acquiescence to the Event of Default, or (iii) affect any
subsequent default of the same or of a different nature.
5
b. Notices Regarding Sale. City shall give Debtor such notice of any
private or public sale as may be required by the UCC.
c. Condition of Collateral. City has no obligation to clean-up or otherwise
prepare the Collateral for sale.
d. No Obligation to Pursue Others. City has no obligation to attempt to
satisfy the Obligations by collecting them from any other person liable for them and City
may release, modify, or waive any Collateral provided by any other person to secure any
of the Obligations, all without affecting City's rights against Debtor. Debtor waives any
right it may have to require City to pursue any third person for any of the Obligations.
e. Compliance with Other Laws. City may comply with any applicable
state or federal law requirements in connection with a disposition of the Collateral, and
compliance will not be considered to adversely affect the commercial reasonableness of
any sale of the Collateral.
f. Warranties. City may sell the Collateral without giving any warranties as
to the Collateral. City may specifically disclaim any warranties of title or the like. This
procedure will not be considered to adversely affect the commercial reasonableness of
any sale or other disposition of the Collateral.
g. Sa/es on Credit. If City sells any of the Collateral upon credit, Debtor will
be credited only with payments actually made by the purchaser, received by City, and
applied to the indebtedness of the purchaser. If the purchaser fails to pay for the
Collateral, City may resell the Collateral, and Debtor shall be credited with the proceeds
of the sale.
h. Purchases by City. If City purchases any of the Collateral being sold,
City may pay for the Collateral by crediting some or all of the Obligations of Debtor.
i. No Marshaling. City shall have no obligation to marshal any assets in
favor of Debtor, or against or in payment of any of the Obligations or any other obligation
owed to City by Debtor or any other person.
10. Miscellaneous.
a. Assignment. This Security Agreement shall bind and shall inure to the
benefit of the heirs, legatees, executors, administrators, successors, and assigns of City
and shall bind all persons who become bound as a debtor to this Security Agreement.
City does not consent to any assignment by Debtor except as expressly provided in this
Security Agreement. City may assign its rights and interests under this Security
Agreement. If an assignment is made, Debtor shall render performance under this
Security Agreement to the assignee. Debtor waives and will not assert against any
assignee any claims, defenses, or set-offs that Debtor could assert against City except
defenses that cannot be waived.
b. Severability. Should any provision of this Security Agreement be found
to be void, invalid, or unenforceable by a court or panel of arbitrators of competent
6
jurisdiction, that finding shall only affect the provisions found to be void, invalid, or
unenforceable and shall not affect the remaining provisions of this Security Agreement.
c. Notices. Any notices required by this Security Agreement shall be
deemed to be delivered when a record has been (i) deposited in any United States
postal box if postage is prepaid, and the notice properly addressed to the intended
recipient, (ii) received by fax, (iii) received through the Internet, and (iv) when personally
delivered .
d. Headings. Section headings used in this Security Agreement are for
convenience only. They are not a part of this Security Agreement and shall not be used
in construing it.
e. Governing Law. This Security Agreement is being executed and
delivered and is intended to be performed in the State of Michigan and shall be
construed and enforced in accordance with the laws of the State of Michigan.
f. Waiver. Any party to this Security Agreement may waive the
enforcement of any provision to the extent the provision is for its benefit.
g. Further Assurances. Debtor agrees to execute any further documents,
and to take any further actions, reasonably requested by City to evidence or perfect the
security interest granted herein, to maintain the priority of the security interests, or to
effectuate the rights granted to City herein.
The parties have signed this Security Agreement on the date set forth below their
names, to be effective as of the date set forth above.
Name: Ste
Title: Mayor
wren s:J11r
By:
Name:
Title:
-
_________ __
+-i~ ---,h'-- - - - - - - -
....__
Dated: &)a44ih f , 2020 Dated: __,,,e:::::,-c...c;..._,___
By~~- -~ ~ / ~
Name: Ann Meisch
Title: City Clerk
Dated: Y'.Y)t,i/241.t . 2020
7
Exhibit C
Personal Guaranty
PERSONAL GUARANTY
This Personal Guaranty ("Guaranty") is given :;.-( '),.,? ,
2020 ("Effective Date"), by
Jeff Jacobson ("Jacobson") to the City of Muskegon ("City"), with reference to the following
facts:
Background
A. The City has extended to Unruly Brewing, LLC, a Michigan limited liability
company ("Unruly Brewing"), the principal sum of $80,000.00 represented by a promissory note
of even date ("Debt").
B. Jacobson is financially interested in the Unruly Brewing and he will receive
valuable consideration for the Debt to Unruly Brewing.
C. Therefore, Jacobson agrees that hhe will guarantee payment of the Debt to the
full extent of any property or interest held or owned by him under any form of legal or beneficial
ownership. Jacobson desires to enter into this Guaranty to induce the City to engage in
transactions in which Unruly Brewing may make, extend, renew, or refinance the Debt to the
City.
Therefore, for good and valuable consideration, Jacobson agrees as follows:
1. Guaranty. Jacobson guarantees to the City, its successors and assigns, the
prompt payment when due, whether by acceleration or otherwise, of the Debt, together with
interest at the rate stated in any document evidencing such liability, and any attorney fees, costs
and expenses of collection incurred by the City in connection with any liability covered by this
Guaranty. Such Guaranty shall extend to any property or interest held or owned by Jacobson
individually or jointly or under any other form of legal or beneficial ownership.
2. Duration. The obligation of Jacobson shall continue until full payment is made of
the Debt of Unruly Brewing to the City now due or hereafter to become due and until payment is
made of any loss or damage incurred by the City with respect to any liability covered by this
Guaranty.
3. Successors and Assigns Bound. Jacobson agrees that this Guaranty shall be
enforceable against his heirs, successors, and assigns.
4. Guaranty to be Supplemental. Jacobson agrees that this Guaranty shall
supplement and be in addition to any other guaranty, indemnity, pledge, security agreement,
mortgage, hypothecation, or any other form of collateral to secure any liability of Unruly
Brewing.
5. Consent. Jacobson consents, without affecting his obligations to the City, that
the City may, without notice to or the consent of Jacobson, in its sole discretion, deal in any
manner with the Debt and any collateral therefor, including, but not limited to, the following
powers, in addition to any powers granted by law:
a. To extend, in whole or in part, by renewal, refinancing or otherwise, the
time of payment of the Debt;
1
b. To release, surrender, exchange, modify, impair or extend the period or
duration or the time for performance or payment of any collateral securing the Debt;
c. To settle or compromise any claim of the City against Unruly Brewing, or
against any other person, firm or corporation, whose obligation is held by the City as
collateral security for payment of the Debt;
d. In the event of nonpayment when due, by acceleration or otherwise, of
the Debt, to realize on the collateral or any part thereof, in whole or in such parcels or
subdivided interests as the City may elect, at any public or private sales, on such terms
and conditions as the City may accept, without demand, advertisement or notice of the
time and place of sale or any adjournment thereof, or by foreclosure or otherwise, or to
forbear from realizing thereon, all as the City in its sole discretion may deem proper, and
to purchase all or any part of the collateral for its own account. At any such sale or
foreclosure, such powers are to be exercised only to the extent permitted by law; and
e. To modify or otherwise change any terms of all or any part of the Debt or
the rate of interest thereon.
Jacobson ratifies and affirms any such extension, renewal, release, surrender,
exchange, modification, impairment, settlement, compromise, purchase at a foreclosure or other
sale, and all such actions shall be binding upon Jacobson who waives all defenses,
counterclaims, or offsets which he might have by reason thereof.
6. Waiver. Jacobson waives: (a) notice of acceptance of this Guaranty by the City;
(b) notice of presentment, demand for payment, protest, or other default of any of Unruly
Brewing's liabilities or the obligation of any person, firm, or corporation held by the City as
collateral security for Unruly Brewing's obligation; (c) notice of the failure of any person, firm, or
corporation to pay to the City any indebtedness held by the City as collateral security for
payment of the Debt; and (d) all defenses, offsets, and counterclaims that Jacobson may at any
time have to any claim of the City against Unruly Brewing.
7. Discharge. The obligation of Jacobson and the rights of the City in collateral
securing repayment of the Debt shall not be released, discharged, or in any way affected, nor
shall Jacobson have any rights against the City by reason of the fact that: (a) collateral may be
in default at the time of acceptance by the City or subsequent to such date; (b) a valid lien or
security interest in any of the collateral may not be created in favor of or conveyed to the City;
(c) any of the collateral may be subject to equities or defenses or claims in favor of others or
may be invalid or defective in any way; (d) the financial condition of Borrower or Jacobson may
not have been correctly estimated or may have changed; and (e) any collateral may have
deteriorated, wasted or been lost by fire, theft, casualty, or otherwise unless such deterioration,
waste, or loss shall be caused by willful act of the City.
8. Remedies. The City may at its option proceed against Jacobson to collect any
obligation covered by this Guaranty, without first proceeding against Unruly Brewing, or any
other person, firm, corporation, or guarantor, and without first resorting to any property at any
time held by the City as collateral security. The City may proceed against Jacobson as if such
amounts due are the direct and primary obligation of Jacobson. Jacobson shall have no right of
subrogation, indemnification, or contribution with respect to the Debt or the collateral unless and
until the City shall have received full payment of the Debt.
2
9. Choice of Law. This Guaranty is established and accepted by the City under
the laws of the State of Michigan and all questions concerning its validity and construction shall
be determined under such laws.
10. Severability. If any clause, provision, or paragraph of this Guaranty is ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity or unenforceability
of such clause, provision, or paragraph shall not affect any of the remaining clauses, provisions,
or paragraphs.
This Guaranty has been executed on the day and year abov written.
bson, individually
?=(2- 2 '2020
3
PERSONAL GUARANTY
This Personal Guaranty ("Guaranty") is given 2.. / '2- '7 , 2020 ("Effective Date"), by
Eric Hoffman ("Hoffman") to the City of Muskegon ("City"), with reference to the following
facts:
Background
A. The City has extended to Unruly Brewing, LLC, a Michigan limited liability
company ("Unruly Brewing"), the principal sum of $80,000.00 represented by a promissory note
of even date ("Debt") .
B. Hoffman is financially interested in the Unruly Brewing and he will receive
valuable consideration for the Debt to Unruly Brewing.
,
C. Therefore, Hoffman agrees that he will guarantee payment of the Debt to the full
extent of any property or interest held or owned by him under any form of legal or beneficial
ownership. Hoffman desires to enter into this Guaranty to induce the City to engage in
transactions in which Unruly Brewing may make, extend, renew, or refinance the Debt to the
City.
Therefore, for good and valuable consideration, Hoffman agrees as follows:
1. Guaranty. Hoffman guarantees to the City, its successors and assigns, the
prompt payment when due, whether by acceleration or otherwise, of the Debt, together with
interest at the rate stated in any document evidencing such liability, and any attorney fees, costs
and expenses of collection incurred by the City in connection with any liability covered by this
Guaranty. Such Guaranty shall extend to any property or interest held or owned by Hoffman
individually or jointly or under any other form of legal or beneficial ownership.
2. Duration. The obligation of Hoffman shall continue until full payment is made of
the Debt of Unruly Brewing to the City now due or hereafter to become due and until payment is
made of any loss or damage incurred by the City with respect to any liability covered by this
Guaranty.
3. Successors and Assigns Bound. Hoffman agrees that this Guaranty shall be
enforceable against his heirs, successors, and assigns.
4. Guaranty to be Supplemental. Hoffman agrees that this Guaranty shall
supplement and be in addition to any other guaranty, indemnity, pledge, security agreement,
mortgage, hypothecation, or any other form of collateral to secure any liability of Unruly
Brewing .
5. Consent. Hoffman consents, without affecting his obligations to the City, that the
City may, without notice to or the consent of Hoffman, in its sole discretion, deal in any manner
with the Debt and any collateral therefor, including, but not limited to, the following powers, in
addition to any powers granted by law:
a. To extend, in whole or in part, by renewal, refinancing or otherwise, the
time of payment of the Debt;
1
b. To release, surrender, exchange, modify, impair or extend the period or
duration or the time for performance or payment of any collateral securing the Debt;
c. To settle or compromise any claim of the City against Unruly Brewing, or
against any other person, firm or corporation, whose obligation is held by the City as
collateral security for payment of the Debt;
d. In the event of nonpayment when due, by acceleration or otherwise, of
the Debt, to realize on the collateral or any part thereof, in whole or in such parcels or
subdivided interests as the City may elect, at any public or private sales, on such terms
and conditions as the City may accept, without demand, advertisement or notice of the
time and place of sale or any adjournment thereof, or by foreclosure or otherwise, or to
forbear from realizing thereon, all as the City in its sole discretion may deem proper, and
to purchase all or any part of the collateral for its own account. At any such sale or
foreclosure, such powers are to be exercised only to the extent permitted by law; and
e. To modify or otherwise change any terms of all or any part of the Debt or
the rate of interest thereon.
Hoffman ratifies and affirms any such extension, renewal, release, surrender, exchange,
modification, impairment, settlement, compromise, purchase at a foreclosure or other sale, and
all such actions shall be binding upon Hoffman who waives all defenses, counterclaims, or
offsets which he might have by reason thereof.
6. Waiver. Hoffman waives: (a) notice of acceptance of this Guaranty by the City;
(b) notice of presentment, demand for payment, protest, or other default of any of Unruly
Brewing's liabilities or the obligation of any person, firm, or corporation held by the City as
collateral security for Unruly Brewing's obligation; (c) notice of the failure of any person, firm, or
corporation to pay to the City any indebtedness held by the City as collateral security for
payment of the Debt; and (d) all defenses, offsets, and counterclaims that Hoffman may at any
time have to any claim of the City against Unruly Brewing.
7. Discharge. The obligation of Hoffman and the rights of the City in collateral
securing repayment of the Debt shall not be released, discharged, or in any way affected, nor
shall Hoffman have any rights against the City by reason of the fact that: (a) collateral may be
in default at the time of acceptance by the City or subsequent to such date; (b) a valid lien or
security interest in any of the collateral may not be created in favor of or conveyed to the City;
(c) any of the collateral may be subject to equities or defenses or claims in favor of others or
may be invalid or defective in any way; (d) the financial condition of Borrower or Hoffman may
not have been correctly estimated or may have changed; and (e) any collateral may have
deteriorated, wasted or been lost by fire, theft, casualty, or otherwise unless such deterioration,
waste, or loss shall be caused by willful act of the City.
8. Remedies. The City may at its option proceed against Hoffman to collect any
obligation covered by this Guaranty, without first proceeding against Unruly Brewing, or any
other person, firm, corporation, or guarantor, and without first resorting to any property at any
time held by the City as collateral security. The City may proceed against Hoffman as if such
amounts due are the direct and primary obligation of Hoffman. Hoffman shall have no right of
subrogation, indemnification, or contribution with respect to the Debt or the collateral unless and
until the City shall have received full payment of the Debt.
2
9. , Choice of Law. This Guaranty is established and accepted by the City under
the laws of the State of Michigan and all questions concerning its validity and construction shall
be determined under such laws.
10. Severability. If any clause, provision, or paragraph of this Guaranty is ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity or unenforceability
of such clause, provision, or paragraph shall not affect any of the remaining clauses, provisions,
or paragraphs.
This Guaranty has been executed on the day and year above written.
-<;1~
Eric Hoffman t dividually
Dated: z... , 'Z- 7 , 2020
3
Application for Term Loan
City of Muskegon Revolving Loan Fund
Application Date: l/7 /20._ _ _ _ _ _ __
Applicant Business: Unruly Brewing Company, LLC
_Sole Proprietorship _ Partnership _x_ Corporation
(taxed as a C-corp)
Principals: Name Address %Ownership
Jeffery Jacobson 22.76
Eric Hoffman 22.75
Mark Gongalski 22.75
Business Address: 360 W. Western Ave., Muskegon, MI 49440
Project Address:360 W. Western Ave., Muskegon, MI 49440
Employment: _ _X_Now ___ On Project Completion After One Year
Source of Funds Equity amount in business
(Including new loan): $250,000 22.5% of total
Bank Participation: $780,000 70.3% of total (made up of several lenders)
City RLF Loan Requested: $80,000 7 .2 % of total
TOTAL SOURCES: $1,110,000 100%
Use of Funds: Land and Building: $560,000
Site Improvements: $
Construction/Renovation: $95,000
Machinery & Equipment: $410,000
Furniture and Fixtures: $20,000
Working Capital: $25,000
Legal and Closing: $ (Due & payable at closing from loan
proceeds)
TOTAL USES: $1,110,000
Collateral Offered: Equipment located at 360 W. Western Ave., and the canning line to be purchased
(I) or (We) certify that the information in the application and other supporting documents is true and
accurate. Any other use of City of Muskegon Revolving Loan Funds than as requested constitutes fraud. (I)
or (We) further agree to comply with the Federal Civil Rights and Equal Opportunity statutes of Title VI
and Title VIII and Michigan Civil Rights Act and Fair Employment Practices Act and related rules and
regulations.
(s) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Date: 1/9/2020 Loan Reguest: $80,000
Company Information:
Project Location: 2221 Lemuel, Muskegon
Heights, MI/ 360 W. Western Ave.,
Current Location: 360 W. Western Ave., Muskegon, MI
Muskegon, MI Address: 360 W. Western Ave.,
Muskegon,MI49440
Principal: Jeffery Jacobson
Summary of Project:
Production and packaging at 2221 Lemuel Street, Muskegon Heights, MI: Unruly has licensed the premises as
a production Micro-Brewery for the production of craft beer and for production of wine products, such as cider
and other wines, as a Small Wine Maker only with no retail sales at that location. The production will include
kegs and a canning line to assist with retail sales at 360 W. Western, Ave., Muskegon MI and additional
wholesale sales around the State of Michigan. Additional product will allow Unruly to be competitive in the
market, which it has recently struggled to keep up with demand for its product. In addition, the wide spread
distribution both at off premises retail and at bars and restaurants around Michigan will act as advertising to
visit the brewery in downtown Muskegon, which is the only taproom where people can visit and purchase
beer, wine, and cider directly from the brewery. There are no plans to have any retail outlet at 2221 Lemuel
Street, Muskegon Heights, which will be solely used to support the downtown brewery and wholesale sales of
the Unruly products. This increased production will also make the operation more efficient and increase profit
margins to help support operations in downtown Muskegon and assist with improvements to that location. The
majority of the loan request from the City of Muskegon will be used to pay for a much needed canning line to
allow for additional retail sales within the taproom. Having canned product available for purchase from the
taproom will help increase taproom sales. In addition, having canned product in local and regional off
premises retail locations, such as Meijer, will help promote and drive traffic to Unruly's downtown Muskegon
location to sample other products that we have on tap. Beer and wine production will continue at the current
location, 360 West Western, Muskegon, MI to support the tap list and do small experimental batches.
Employment:
We currently employ 11 to 15 individuals throughout the year depending on the season, and have plans to
increase our employment as production and taproom traffic increase.
Sources and Uses Summary:
SOURCES USES
Equity Purchase of real estate, real estate improvements,
working capital, equipment purchase
Loans Purchase of real estate, real estate improvements, working
capital, equipment purchase
City RLF Loan Purchase equipment, equipment connections, inventory
purchase, raw materials purchase. Specifically $60,000
will be allocated to the purchase of a canning line and
related items to the operation of that equipment, including
sterile air components, loaders, and inventory.
Other Financial Comments:
We have borrowed significant amounts for our improvements after all of the equity investments we have
raised. We have requested further lines of credit from both PNC and Chemical Bank, which they have
denied extending us further loans. Once the production facility is up and running it will take a significant
burden off of the downtown taproom. Currently, the taproom is supporting all the expenses of the
expansion. The production facility will be operational by mid January of 2020 and we are working with
distributors to take orders. This will help to take some of the financial burden off of the taproom initially and
eventually help put additional investment back into the downtown location. The addition of a canning line
will help speed that increased production and sales by creating another avenue for distribution to off
premises locations such as gas stations, grocery stores, and convenience stores that we can not currently sell
product to because we only have kegs.
Loan Package Structure:
Collateral:
Recommendation:
*Information contained in this application and supporting documentation may be subject to review by the
public if a Freedom of Information Request is filed.
Revenue and Expenses for Operation of Unruly Production Facility
2019 2020
Revenue: November December January February March April May June July Aug Sept Oct Nov Dec Totals
Beer (lntercompany & Wholesale) in 1/2 bbls 0 0 60 120 240 500 765 765 775 775 755 775 775 781 7086
Keg Sales ($130 average per 1/2 bbl) 0.00 0.00 7,800.00 15,600.00 31,200.00 65,000.00 99,450.00 99,450.00 100,750.00 100,750.00 98,150.00 100,750.00 100,750.00 101,530.00 921,180.00
Cost of Goods Sold
Brewery
Chemicals 0.00 0.00 102.56 205.12 410.24 854.67 1,307.64 1,307.64 1,324.73 1,324.73 1,290.55 1,324.73 1,324.73 1,334.99 12,112.34
Packaging 0.00 0.00 204.60 409.20 818.40 1,705.00 2,608.65 2,608.65 2,642.75 2,642.75 2,574.55 2,642.75 2,642.75 2,663.21 24,163.26
Production Supplies 0.00 0.00 33.81 67.61 135.22 281.72 431.03 431.03 436.66 436.66 425.39 436.66 436.66 440.04 3,992.49
Raw Materials 0.00 0.00 1,111.50 2,223.00 4,446.00 9,262.50 14,171.63 14,171.63 14,356.88 14,356.88 13,986.38 14,356.88 14,356.88 14,468.03 131,268.15
Contingency 20% 0.00 0.00 290.49 580.99 1,161.97 2,420.78 3,703.79 3,703.79 3,752.20 3,752.20 3,655.37 3,752.20 3,752.20 3,781.25 34,307.25
Total COGS o.oo o.oo 1,742.96 3,485.92 6,971.84 14,524.66 22,222.73 22,222.73 22,513.22 22,513.22 21,932.24 22,513.22 22,513.22 22,687.52 205,843.48
Gross Profit 0.00 0.00 6,057.04 12,114.08 24,228.16 50,475.34 77,227.27 77,227.27 78,236.78 78,236.78 76,217.76 78,236.78 78,236.78 78,842.48 715,336.52
Expenses
Rent 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 2912.20 40770.80
Utilities
Gas 0.00 0.00 53.33 106.67 213.33 444.44 680.00 680.00 688.89 688.89 671.11 688.89 688.89 694.22 6298.67
Water 0.00 0.00 53.33 106.67 213.33 444.44 680.00 680.00 688.89 688.89 671.11 688.89 688.89 694.22 6298.67
Electric 0.00 0.00 53.33 106.67 213.33 444.44 680.00 680.00 688.89 688.89 671.11 688.89 688.89 694.22 6298.67
Internet/ Phone 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 2100.00
Insurance 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 14000.00
Professional Fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Accounting Fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
General Maintenance 0.00 0.00 SO.OD 50.00 SO.DO 50.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00 750.00 6200.00
Office 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Supplies 0.00 0.00 50.00 50.00 50.00 50.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 2600.00
Travel 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Advertising/ Marketing 0.00 0.00 133.33 266.67 533.33 1111.11 1700.00 1700.00 1722.22 1722.22 1677.78 1722.22 1722.22 1735.56 15746.67
Labor
Salary - Managers 0.00
Salary -Sales
Hourly - General Laborers 0.00 0.00 0.00 0.00 426.67 888.89 1,360.00 1,360.00 1,377.78 1,377.78 1,342.22 1,377.78 1,377.78 1,388.44 12,277.33
Hourly - Assistant Brewers 0.00 0.00 117.33 234.67 469.33 977.78 1,496.00 1,496.00 1,515.56 1,515.56 1,476.44 1,515.56 1,515.56 1,527.29 13,857.07
Hourly - Brewer 0.00 0.00 138.67 277.33 554.67 1,155.56 1,768.00 1,768.00 1,791.11 1,791.11 1,744.89 1,791.11 1,791.11 1,804.98 16,376.53
Hourly - Brewer 444.45 925.93 1,416.67 1,416.67 1,435.19 1,435.19 1,398.15 1,435.19 1,435.19 1,446.30 12,788.91
Payroll Taxes 0.00 0.00 71.95 143.91 287.82 599.62 917.41 917.41 929.41 929.41 905.42 929.41 929.41 936.60 8,497.77
Property Taxes 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 571.74 8,004.36
Equipment Leasing 0.00 0.00 800.00 1,666.67 2,550.00 2,550.00 2,583.33 2,583.33 2,516.67 2,583.33 2,583.33 2,603.33 23,620.00 0.00 46,640.00
Federal Beer and Wine Tax 0.00 0.00 94.50 189.00 378.00 787.50 1,204.88 1,204.88 1,220.63 1,220.63 1,189.13 1,220.63 1,220.63 1,230.08 11,160.45
State Beer and Wine Tax 0.00 0.00 170.10 340.20 680.40 1,417.50 2,168.78 2,168.78 2,197.13 2,197.13 2,140.43 2,197.13 2,197.13 2,214.14 20,088.81
State Sales Tax
Equipment Loan 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 7,181.00 100,534.00
Subtotal Expenses and Liabilities 11,814.94 11,814.94 13,600.83 15,353.38 18,879.60 23,662.15 29,520.01 29,520.01 29,637.28 29,703.95 29,336.06 29,723.95 50,740.62 27,230.98 350,538.70
Contingency 10% 1,181.49 1,181.49 1,360.08 1,535.34 1,887.96 2,366.22 2,952.00 2,952.00 2,963.73 2,970.40 2,933.61 2,972.40 5,074.06 2,723.10 35,053.87
Total Expenses and Liabilities 12,996.43 12,996.43 14,960.91 16,888.72 20,767.56 26,028.37 32,472.01 32,472.01 32,601.01 32,674.35 32,269.67 32,696.35 55,814.68 29,954.08 385,592.57
Income from Lease of 2217 Lemuel 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 24,500.00
Net Profit/Loss -11,246.43 -11,246.43 -7,153.87 -3,024.64 5,210.60 26,196.97 46,505.26 46,505.26 47,385.76 47,312.43 45,698.10 47,290.43 24,172.10 50,638.40 354,243.95