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CITY OF MUSKEGON
CITY COMMISSION MEETING
OCTOBER 11, 2005
CITY COMMISSION CHAMBERS@ 5:30P.M.
AGENDA
o CALL TO ORDER:
o PRAYER:
o PLEDGE OF ALLEGIANCE:
o ROLL CALL:
o HONORS AND AWARDS:
o INTRODUCTIONS/PRESENTATION:
o CONSENT AGENDA:
A. Approval of Minutes. CITY CLERK
B. Request for Additional Liquor License. CITY CLERK
C. Fireworks Display Permit. CITY CLERK
D. Community Relations Committee Appointment to Zoning Board of
Appeals CITY CLERK
E. Endorsement of Muskegon Area-Wide Plan. PLANNING & ECONOMIC
DEVELOPMENT
F. Annual Assessment Phase II Storm Water Compliance. PUBLIC WORKS
G. Purchase of 451 Isabella. COMMUNITY & NEIGHBORHOOD SERVICES
H. Purchase of 214 Myrtle COMMUNITY & NEIGHBORHOOD SERVICES
I. 2005-2006 Transportation Planning Program Funding. CITY MANAGER
o PUBLIC HEARINGS:
o COMMUNICATIONS:
o CITY MANAGER'S REPORT:
o UNFINISHED BUSINESS:
o NEW BUSINESS:
A. FIRST READING - Amend the City Code of Ordinances to Repeal and
Reserve Chapter 102, Vehicles for Hire. CITY CLERK & PUBLIC SAFETY
B. Approval of Loan in the Amount of $20,000 to the Michigan Mayhem
Basketball. PLANNING & ECONOMIC DEVELOPMENT
o ANY OTHER BUSINESS:
o PUBLIC PARTICIPATION:
)> Reminder: Individuals who would like to address the City Commission shaJI do the following:
)> Fill out a request to speak form attached to the agenda or located in the back of the room.
J> Submit the form to the City Clerk.
)> Be recognized by the Chair.
> Step forward to the microphone.
)> State name and address.
)> Limit of 3 minutes to address the Commission.
)> (Speaker representing a group may be allowed 10 minutes if previously registered with City Clerk.)
o ADJOURNMENT:
ADA POLICY: THE CITY OF MUSKEGON WILL PROVIDE NECESSARY AUXILIARY AIDS AND SERVICES TO INDIVIDUALS WHO
WANT TO ATTEND THE MEETING UPON TWENTY FOUR HOUR NOTICE TO THE CITY OF MUSKEGON. PLEASE CONTACT GAIL A.
KUNDINGER. CITY CLERK, 933 TERRACE STREET, MUSKEGON, Ml 49440 OR BY CALLING (231) 724-6705 OR TOO: (231)
724·4172.
Date: October 11, 2005
To: Honorable Mayor and City Commissioners
From: Gail A. Kundinger, City Clerk
RE: Approval of Minutes
SUMMARY OF REQUEST: To approve the minutes of the Regular
Commission Meeting that was held on Tuesday, September 27, 2005.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes.
CITY OF MUSKEGON
CITY COMMISSION MEETING
OCTOBER 11 I 2005
CITY COMMISSION CHAMBERS @ 5:30 P.M.
MINUTES
The Regular Commission Meeting of the City of Muskegon was held at City Hall,
933 Terrace Street, Muskegon, Michigan at 5:30p.m., Tuesday, October 11, 2005.
Mayor Warmington opened the meeting with a prayer from Commissioner
Stephen Gawron after which the Commission and public recited the Pledge of
Allegiance to the Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
Present: Mayor Stephen Warmington, Vice Mayor Bill Larson, Commissioner
Lawrence Spataro, Chris Carter, Stephen Gawron, and Clara Shepherd, City
Manager Bryon Mazade, City Attorney John Schrier, and Deputy Clerk Linda Potter.
Absent: Commissioner Kevin Davis (excused)
2005-93 HONORS AND AWARDS:
A. U.S. Green Building Council LEED- NC Gold Award.
Paul Dickinson from Integrated Architecture presented the U.S. Green Building
Council LEED - NC Gold Award for leadership in energy and environmental design to
the Mayor.
2005-94 CONSENT AGENDA:
A. Approval of Minutes. CITY CLERK
SUMMARY OF REQUEST: To approve the minutes of the Regular Commission Meeting
that was held on Tuesday, September 27, 2005.
FINANCIAL IMPACT: None
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: Approval of the minutes.
B. Request for Additional Liquor License. CITY CLERK
SUMMARY OF REQUEST: The Liquor Control Commission is seeking local
recommendation on a request from Vickibob Corporation for a new Specially
Designated Distributor License to be held in conjunction with their existing Specially
Designated Merchant License with Direct Connection ( 1).
FINANCIAL IMPACT: None
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: All departments are recommending approval.
C. Fireworks Display Permit. CITY CLERK
SUMMARY OF REQUEST: West Michigan Burnerz is requesting approval of a fireworks
display permit for the October 22nd Muskegon Fury game at the L C Walker Arena.
Fire Marshall Metcalf will inspect the fireworks on the day of the event.
FINANCIAL IMPACT: None
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: Approval contingent on inspection of the fireworks and
approval of the insurance.
D. Community Relations Committee Appointment to Zoning Board of Appeals.
CITY CLERK
SUMMARY OF REQUEST: To appoint Lamont James Blackmon to the Zoning Board of
Appeals.
FINANCIAL IMPACT: None
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: To make the appointment.
COMMITTEE RECOMMENDATION: The Community Relations Committee
recommended the appointment at their October 3rd meeting.
E. Endorsement of Muskegon Area-Wide Plan. PLANNING & ECONOMIC
DEVELOPMENT
SUMMARY OF REQUEST: To approve the resolution endorsing the Muskegon Area-
Wide Plan and agreeing to incorporate the general principles, policies, and visions
into our local planning efforts.
FINANCIAL IMPACT: None
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: To approve the resolution and authorize the Mayor and
Clerk to sign.
F. Annual Assessment Phase II Storm Water Compliance. PUBLIC WORKS
SUMMARY OF REQUEST: The Muskegon County Storm Water Committee has invoiced
the City for its share of the 2005 payment to the consultant, FTC&H, to prepare
planning documents as required by the Phase II Storm Water permit issued to the
City.
FINANCIAL IMPACT: $9,917 is allocated for Contractual Services in the Storm Water
Management Budget.
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: Approval.
G. Purchase of 451 Isabella. COMMUNITY & NEIGHBORHOOD SERVICES
SUMMARY OF REQUEST: To approve the purchase of 451 Isabella from the U. S.
Department of HUD for $1 through its Good Neighbor program. Through the Good
Neighbor program, a municipality can purchase a home for one dollar, if a property
is on the market for more than six months. After 451 Isabella is obtained, the City will
totally rehabilitate the structure and sell it to a qualified family continuing the City's
aggressive neighborhood revitalization efforts.
FINANCIAL IMPACT: The dollar will come from CNS program income fund.
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: To approve the request to purchase the $1 home.
H. Purchase of 214 Myrtle. COMMUNITY & NEIGHBORHOOD SERVICES
SUMMARY OF REQUEST: To approve the purchase of the property located at 214
Myrtle from American Residential Equities, 381 S. West Temple, Salt Lake City, Utah, for
$7,800. After approval of the purchase by the Commission, the CNS Department will
work with an architect to develop new plans and specifications for the rehabilitation
of the property. The CNS office will then solicit contractors to rehab the property. This
property is located near the City's current lnfill Development Project "Walton Street
Renaissance". It is the hope that the rehabilitation of this home will continue the
City's aggressive neighborhood revitalization efforts in the Angel Neighborhood area.
FINANCIAL IMPACT: Funding for purchase will come from the City's 2004 HOME
program income funding.
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: To approve the request.
I. 2005-2006 Transportation Planning Program Funding. CITY MANAGER
SUMMARY OF REQUEST: To approve the City's share of the local matching funds for
the West Michigan Metropolitan Transportation Planning Program for fiscal year
10/1/05 to 9/30/06. The City receives grant funds through this program for certain
major streets.
FINANCIAL IMPACT: $16,040 from the Major Street Fund.
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: To approve this request.
Motion by Commissioner Carter, second by Commissioner Spataro to approve the
Consent Agenda as read.
ROLL VOTE: Ayes: Warmington, Carter, Gawron, Larson, Shepherd, and Spataro
Nays: None
MOTION PASSES
2005-95 NEW BUSINESS:
A. Approval of Loan in the Amount of $20,000 to the Michigan Mayhem
Basketball. PLANNING & ECONOMIC DEVELOPMENT
SUMMARY OF REQUEST: To approve the loan agreement and related documents for
a $20,000 loan to the Michigan Mayhem.
BUDGET ACTION REQUIRED: None
STAFF RECOMMENDATION: To approve the loan to the Michigan Mayhem.
COMMITIEE RECOMMENDATION: The Revolving Loan Fund Advisory Committee has
recommended approval of the loan.
Motion by Commissioner Shepherd, second by Vice Mayor Larson to approve the
loan in the amount of $20,000 to the Michigan Mayhem.
ROLL VOTE: Ayes: Carter, Gawron, Larson, Shepherd, Spataro, and Warmington
Nays: None
MOTION PASSES
B. Salaries for the City Commission for 2006 and 2007. CITY MANAGER
SUMMARY OF REQUEST: The Local Officer's Compensation Commission voted at their
October 6, 2005, meeting to increase the salaries by $500. This would result in annual
salaries of $8,000 for the Mayor and $6,500 for the City Commissioners for 2006 and
2007.
Motion by Vice Mayor Larson, second by Commissioner Spataro to not approve the
salary increase for the Mayor and City Commission that was recommended by the
Local Officer's Compensation Commission.
ROLL VOTE: Ayes: Gawron, Larson, Shepherd, Spataro, Warmington, and Carter
Nays: None
MOTION PASSES
ADJOURNMENT: The City Commission Meeting adjourned at 5:57 p.m.
R~uOul: .
0
Gail A. Kundinger, MMC
City Clerk
Date: October 11, 2005
To: Honorable Mayor and City Commissioners
From: Gail A. Kundinger, City Clerk
RE: Request for Additional Liquor License
Bob's Bait and General Store
1050 W. Western Avenue, Suite 111
SUMMARY OF REQUEST: The Liquor Control Commission is seeking
local recommendation on a request from Vickibob Corporation for a new
Specially Designated Distributor License to be held in conjunction with
their existing Specially Designated Merchant License with Direct.
Connection (1).
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: All departments are recommending
approval.
Muslcegon Police Department
Anthony L. Kleibecker
Director of Public Safety
980 Jefferson www.muskegonpolice.com Phone: 231-724-6750
Muskegon, Michigan FAX: 231-722-5140
49443-0536
September 20, 2005
To: City Commission through the City Manager
I
From: L.}~
ny L. Kleibecker, Director of Public Safety
Re: Liquor License Request - 1050 W. Western Ave. Suite 111
Request for new SDD License
The Muskegon Police Department has received a request from the Michigan Liquor Control Commission
for an investigation of applicant Vickibob Corporation, comprised of Robert and Vicki Warber of 8050
Michillinda Rd., Twin Lake Michigan, 49457.
Vickibob Corp. is requesting a new Specially Designated Distributor License (SDD) to be held in
conjunction with existing SDM license with Direct-Connection (1) located at 1050 W. Western Avenue,
Suite Ill, Muskegon, MI. 49441. Both Robert and Vicki have owned the listed establishment since June
2004 with no negative police contacts.
A check of Muskegon Police Department records and criminal history showed no reason to deny this
request.
ALK/kd
Alllrmath•e Acllou
(231)724-6703
FAX: (Bl)722·11.l~
As sessor/Eq u all:mtlon
{231)724-6708
FAX: (231)726-5181
Cemetery Department
(231)724-6783
FAX: (231)726-5617
City Manager
(231)724-6724 Wt>S ~L.I~
Signat:(Sherilf er Chief of Police) Date
MUSKEGON POLICE DEPARTMENT
LC-1800 Rev. 07/02
DEPARTMENT OF LABOR & ECONOMIC GROWTH
LIQUOR CONTROL COMMISSION
7150 Harris Drive
P.O. Box 30005
Lansing, Michigan 48909-7505
POLICE INVESTIGATION REQUEST
[Authorized by MCL 436.1201{4)]
August24, 2005
Muskegon Police Department Request I. D. #226000
Chief of Police
1990 E Apple
Muskegon, Michigan 49442
Chief Law Enforcement Officer
Applicant: VICKIBOB CORPORATION requesting a New Specially Designated Distributor License, located
at I 050 W Western, Suite Ill, Muskegon Michigan, 49441, Muskegon County, to be held in conjunction
with existing Specially Designated Merchant License with Direct-Connection(!).
STOCKHOLDERS: ATTORNEY:
Robert B and Vicki Warber Edward A Newmyer
8050 Michillinda Road 880 First Street, Suite 507
Twin Lake, Michigan 49457 Muskegon, Michigan 49443
B.P.(231 )726-347 4 H.P.(231 )821-2650 B.P (231)725-7540
Please make an investigation of the application. If you do not believe that the applicants are qualified for
licensing, give your reasons in detail. Complete the Police Inspection Report on Liquor License Request,
LC-1800, or for Detroit police, the Detroit Police Investigation of License Request, LC-1802. If there is
not enough room on the front of the form, you may use the back.
Forward your report and recommendations of the applicant to the Licensing Division.
( X ) NO FINGERPRINTS NECESSARY
PLEASE INCLUDE FINGERPRINT CARDS AND $30.00 FOR EACH CARD, AND MAIL TO
THE MICHIGAN LIQUOR CONTROL COMMISSION.
If you have any questions, contact the Off-Premise Unit at (517) 322-1400.
jr
RECEIVED
SEP 2 0 2005
MUSKEGON POLICE DEPT.
CHIEF of POLICE
To: Tony Kleibecker, Director of Public Safety
From: Det. Kurt Dykman
Date: 09-20-05
Re: Liquor License Request
Chief Kleibecker,
The Muskegon Police Department has received a request from the Michigan Liquor
Control Commission for an investigation from applicant Vickibob Corporation.
Vickibob Corp. is requesting to a new Specially Designated Distributor License (SDD) to
be held in conjunction with existing SDM license with Direct-Connection (I) located at
1050 W. Western Avenue, Suite Ill, Muskegon, MI. 49441. Vickibob Corp. consists of
both Robert and Vicki Warber of 8050 Michillinda Rd., Twin Lake Michigan, 49457.
Both Robert and Vicki have owned the listed establishment since June 2004 with no
negative police contacts.
A check of MPD records and Criminal History showed no reason to deny this request.
Respectfully submitted,
data/common/Vickibob02
7/ . ,--·-
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LIQUOR LICENSE RE'liEVl }~0Rl'1
Business Name: . S-Ir/f' L___ __
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Reason for Review:
New License J?J Transfer of Ownership D Dance Permit D
Drop/Add Name on License D Transfer Location D
Drop/Add Stockholder Name D New Entertainment Permit D
Other _____________________________________________
Deadline for receipt of all information: --------------------------
Public Safety • Approved ~ Denied D No Action Needed D
Income Tax Approved D Owing D Amount: -------
Treasurer Approved D Owing D Amount:
Zoning Approved D Denied D Pending ZBA 0
Clerk's Approved D Owing D Amount: - -----
Fire/Inspections Approved D Denied D Remaining Defects D
Department Signature____~
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Please return to the City Clerk' s oride
Gail A. K undinger,
Liquor License Coordinator
LIQUOR LICENSE REVIE\V FOit.\1
Business~a~e: ~~~~·~auf~~-~~~~~~?ua_._;L/~t_-~(£~~~u!~tL;'~q_._/~-·~S~·I~l~'l~-(-~~~~~~
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Operator/Manager's Name: /5 r" i~ J- (; (:).~ 1!/:..r/l/ c' /'
Business Address: it/
Reason for Review:
~ew License ~ Transfer of Ownership D Dance Permit D
Drop/Add Name on License D Transfer Location D
Drop/Add Stockholder ~arne D New Entertainment Permit D
Other __~~~~~~~------------------------------------~-
Deadline for receipt of all information: --------------~--------~-
Public Safety Approved~ Denied D No Action Needed D
Income Tax Approved Owing D Amount:
Treasurer Approved D Owing D Amount:
Zoning Approved D Denied D Pending ZBA 0
Clerk's Approved D Owing D Amount:
Fire/Inspections Approved D Denied D Remaining Defects D
Department Signa ture.~-~
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Please return to the City Clerk's Office
Gail A. Kundinger,
Liquor License Coordinator
·'
LIQUOR LICENSE REVIE,/\7 FORl'l
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AKA Business Name (if applicable): --J.j__ l _...t.;.....o
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Operator/Manager's Name: f5 c1!.; i - ( (:;{"~ ({/~y/)j'c / '
Business Address: ;~,/
Reason for Review:
New License ~ Transfer of Ownership D Dance Permit D
Drop/Add Name on License D Transfer Location D
Drop/Add Stockholder Name D New Entertainment Permit D
Other
------------------------------------------------------
Deadline for receipt of all information: ---------------------------
Public Safety Approved D Denied D No Action Needed D
Income Tax Approved D Owing D Amount:
Treasurer Approved% Owing D Amount:
Zoning Approved D Denied D Pending ZBA 0
Clerk's Approved D Owing D Amount:
Fire/Inspections Approved D Denied D Remaining Defects D
Department Signatur
Please return to the City
Gail A. Kundinger,
Liquor License Coordinator
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Business ~a1ne: ~~~~3~a~~~,·-~~
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Reason for Review:
~ ew License )gJ Transfer of Ownership D Dance Permit D
Drop/Add Name on License D Transfer Location D
Drop/Add Stockholder Name D ~ew Entertainment Permit D
Other _ _ ~~~~~~---------------------
Deadline for receipt of all information: -----------~~-
Public Safety Approved D Denied D No Action Needed D
I ncome Tax Approved D Owing D Amount:
Treasurer Approved D Owing D Amount:
Zoning ' Approved ~ Denied D Pending ZBA 0
Clerk's Approved D Owing D Amount:
Fire/Inspections Approved D Denied D Remaining Defects D
Department Signatur~z./ .-------
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i' Co/"thtlee FOR /?.1C!!'t'I4NP ;/e"4 L./IVC-_
Why would you be a good member of this co ittee? What do you bring to the committee ?
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PERSONAL REFERENCES: (Please list the name and phone numbers of three personal references)
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to receive $10 to $15 million annually in federal transportation funds
through the West Michigan Shoreline Regional Development
Commission's MPO Program.
Commission Meeting Date: October 11, 2005
Date: October 3, 2005
To: Honorable Mayor & City Commission
From: Planning & Economic Development Department c:iJ'
RE: Approval of loan in the amount of $20,000 to the
Michigan Mayhem Basketball
SUMMARY OF REQUEST: To approve the attached loan agreement
and related documents for a $20,000 loan to the Michigan Mayhem.
FINANCIAL IMPACT:
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the loan to the Michigan
Mayhem.
COMMITTEE RECOMMENDATION: The Revolving loan Fund
Advisory Committee has recommended approval of the loan.
PARMENTER
- ------· - ·-----O'TOOLI":
"------~---------------
Auomeys at Law
175 West Apple Avenue • P.O. Box 786 • lv1uskegon, Mict1igan 49443-0786
Phone 231.722.1621 • Fax 231.722.7866 or 231.728 2206
www.Parmenterlaw.com
October 24, 2005
Gail A. Kundinger, MMC
City Clerk
City of Muskegon
933 Terrace
P.O. Box 536
Muskegon, MI 49443-0536
Re: Lakeshore Basketball, LLC Loan
Dear Ms. Kundinger:
Enclosed please find the original closing documents conceming the loan with Lakeshore
Basketball, LLC.
Very truly yours,
~6\~\_C. ,~c/G"~
John C. Schrier 1J--.
Direct: 231.722.5401
Fax: 231.728.2206
E-Mail Address: jcs@pannenterlaw.com
Enclosures
c: Jannie Scott, Lakeshore Basketball, LLC
Joel Fitzpatrick
Tim Paul
G:\EDSI\FILES\00100\ 1986.001\LTR\CG0031.DOC
LAKESHORE BASKETBALL, LLC
D/B/A MICHIGAN MAYHEM
&
CITY OF MUSKEGON
CLOSING DOCUMENTS
OCTOBER 12,2005
G:\EDSI\FI LES\00 100\ I 986.00 I \rNDEX\CG0693. DOC
INDEX
Term Loan Agreement
Promissory Note
Security Agreement
Mortgage
Guaranty Agreement
UCC Financing Statement(s)
Title Insurance Commitment
G:\EDSI\FJLES\001 OOI\986.001 \INDEXICG0693.DOC
TERM LOAN AGREEMENT
This Agreement is entered into on I ~v ,
2005 (the "Effective Date"), between
Lal•eshore Basketball, LLC, a Michigan lini'ited liability company, d/b/a Michigan Mayhem, of 1050
W. Western Ave, Ste. 310, Muskegon, MI, 49441 (the "Mayhem"), and the City of Muskegon, a
Michigan municipal corporation, at 933 Terrace Street, Muskegon, MI 49443 (the "City") with reference
to the following facts:
BACKGROUND
.r A. The Mayhem has requested a term loan of $20,000 for the purpose of <:: ""'?' S' It
rLo<-./
B. The City has agreed to make the loan subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, the
Mayhem and the City agree as follows:
Section 1. CONDITIONS OF LOAN- NOTE- INTEREST- MATURITY.
1.1 The Loan. The City agrees to make a loan to The Mayhem in the amount of
$20,000 subject to the following conditions:
(a) Fulfillment of all conditions contained in Section 3;
(b) The Loan Agreement must be closed on or before I Vt '2005.
(c) Delivery to the City of a note ("Note") in form and substance as attached
on Exhibit A; and
(d) 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.
1.2 Payments. The principal amount of the Note and interest accrued thereon shall
be payable, unless accelerated under the terms stated in Section 7, in monthly
installments of $463.99, each to be paid on the fifteenth of each month, beginning
January 15,2006 and continuing until December 15,2009, when the entire balance of
principal and interest shall be due and payable in full.
1.3 Interest. The Note shall bear interest on the outstanding balance at the rate of
5.375% per annum.
1.4 Preoavments. The Mayhem may at any time prepay without penalty all or any
portion of the principal, and any such payments shall be applied first to accrued interest,
and then to the principal installments last coming due.
G:\EDSI\FILES\00 I 00\ l 986.00 I \LOAN_AGR\CF4627 .DOC Page 1 of8
Section 2. SECURITY. To secure the full and timely performance of the Mayhem's
covenants set out in this Agreement and to secure the repayment of the loans and advances made and to
be made (the "Indebtedness"), the Mayhem agree to execute and deliver or cause to be executed and
delivered to City the following:
2.1 A security agreement in form and substance satisfactory to City, giving City a
valid lien and security interest in the personal property described in the security
agreement. The Mayhem agrees to execute such financing statements as the City may
request in connection with the security interest granted.
2.2 Mortgage on the real property owned by Arthur and Jannie Scott located at 2411
Lake Ave., #49, North Muskegon, Michigan, 49441, including all improvements now or
hereafter located on the properties.
2.3 The personal guaranty of Arthur and Jannie Scott.
Section 3. CONDITIONS PRECEDENT TO OBLIGATIONS OF CITY. The
obligations of City under this Agreement are subject to the occurrence, prior to or simultaneously with the
Mayhem's receipt of the loan of each of the following conditions, any or all of the following, which may
be waived in whole or in part by the City in writing:
3 .I Documents Executed. The Mayhem and the Scotts shall have executed and
delivered to the City all documents required to consummate this transaction.
3.2 Hazard Insurance. The Mayhem and the Scotts shall have furnished to City, in a
form satisfactory to City, hazard insurance policies, with loss payable clauses in favor of the City
as its interest appears, relating to the properties of the Mayhem and the Scotts described in
Section 2, in an amount equal to the full replacement cost of such properties.
3.3 Approval of City's Counsel. All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement or reasonably
requested in connection with this Agreement and all other related legal matters shall have been
satisfactory to and approved by the law fi1m of Parmenter O'Toole, counsel for City.
Section 4. WARRANTIES AND REPRESENTATIONS. The Mayhem and the Scotts
represent and warrant to the City that, as of the date of the borrowing:
4.1 Comorate Existence and Power. The Mayhem represents and warrants that:
(a) The Mayhem is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Michigan;
(b) The Mayhem has the corporate power and authority to own its properties
and assets and to carry out its business as now being conducted and the
Mayhem is qualified to do business in every jurisdiction wherein such
qualification is necessary;
(c) The Mayhem has the corporate power and authority to execute and
perform this Agreement, to borrow money in accordance with its terms,
to execute and deliver the Note and other related documents, to grant
G:\EDS 1\Fl LES\00 I 00\ 1986.00 1\LOAN_AG R\CF4627. DOC Page 2 of8
liens on the Collateral and to do any and all other things required of it by
this Agreement; and
(d) This Agreement, the Note, and all other documents referred to in this
Agreement, when executed on behalf of the Mayhem or the Scotts, will
be valid and binding obligations of the Mayhem or the Scotts, legally
enforceable in accordance with their terms.
4.2 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 knowledge of the Mayhem, threatened,
against or affecting the Mayhem or any properties or rights of the Mayhem, which if adversely
determined, could materially impair the right of the Mayhem to carry on business substantially as
now conducted or could have a materially adverse effect upon the financial condition of the
Mayhem.
4.3 Accounting Principles. Balance sheets, earning statements, and other financial
data furnished to City, for the purpose 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 Mayhem as of the dates, and the results of their operations for the period, for
which the same are furnished to the City.
4.6 Conditions Precedent. As of the date of this Agreement, all conditions precedent
referred to in Section 3 have been satisfied.
Section 5. AFFIRMATIVE COVENANTS. Until the principal and interest on the Note is
paid in full, the Mayhem covenants and agrees that it will:
5.1 Annual Financial Reports. Furnish to the City, in a form satisfactory to the City,
not later than 90 days after the close of each fiscal year of the Mayhem, beginning with the
Mayhem's fiscal year ending December 31, 2005, a balance sheet as at 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.
5.2 Quarterly Financial Statements. Furnish to City, not later than 30 days after the
close of each fiscal year of the Mayhem, financial statements containing the balance sheet of the
Mayhem as of the end of each period of income and retained earnings and changes in financial
position for the portion of the fiscal year up to the end of such period. These statements shall be
prepared on substantially the same accounting basis as the statements required in Section 5 .I and
shall be in such detail as the City may require.
5.3 Adverse Events. Promptly inform the City of the occurrence of any Event of
Default or any other 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 affect upon the Mayhem's business, properties, financial condition or ability to comply
with its obligations under this Agreement.
G:\EDSI\FILES\00 100\ 1986.00 l \LOAN_ AGR\CF 462 7. DOC Page 3 of8
5.4 Other lnfonnation Upon Request. Promptly furnish to the City such other
infonnation regarding the operations, business affairs and financial condition of the Mayhem 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 the Mayhem at any
reasonable time.
5.5 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 the Mayhem's
activities as recipient of the financial assistance provided by this Loan.
5.6 Insurance. Keep its insurable properties adequately insured and maintain:
(a) insurance against fire and other risks customarily insured against by
businesses engaged in the same or similar activities as that of the
Mayhem;
(b) necessary worker's compensation insurance;
(c) public liability and product liability insurance; and
(d) such other insurance as may be required by law or as may be reasonably
required in writing by the City.
All such other insurance shall be in amounts, contain terms, in a fmm, for such
purposes and written by such companies as may be satisfactory to the City. The
Mayhem will deliver to the City, at its request, evidence satisfactory to City that
such insurance has been procured and showing the City as additional insured or
loss payee, as the case may be.
5.7 Affirmative Action Program. Comply with all applicable Affinnative Action
Programs, if any, approved by the Economic Development Administration's Office of Civil
Rights.
5.8 Maintain Business Entitv 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, bette1ments and improvements
thereto so that the Mayhem's business may be property and advantageously conducted at all
times.
5.9 Use of Loan Proceeds. Use the proceeds of the loan for the purpose set forth in
the Background to this Agreement.
G:\EDSI\FILES\OOt00\!986.00I\LOAN_AGR\CF4627.DOC Page 4 of8
Section 6. NEGATIVE COVENANTS. From the date of this Agreement until the Note is
paid in full, the Mayhem covenants and agrees that the Mayhem will not, without the prior written
consent of City:
6.1 Subordinate Indebtedness. Subordinate any indebtedness due the City from the
Mayhem to the indebtedness of other future creditors of the Mayhem.
6.2 Merger. Enter into any merger, consolidation, reorganization or recapitalization
or purchase of the Mayhem without the express written consent of the City.
6.3 Affiliated Persons. Permit any business entetprise in which the Mayhem or a
member, officer or director of the Mayhem, or a member of the immediate family of any such
stockholder, officer or director, has any financial interest to receive any proceeds of this loan
directly or indirectly without first disclosing in full such financial relationship to the City.
6.4 Compensation. Permit the compensation of any member, officer, director,
partner or proprietor to be excessive, taking into consideration the financial circumstances of the
Mayhem and the position and qualifications of the Person.
6.5 Sell Stock or Assets. Sell, lease, transfer, liquidate, or otherwise dispose of any
of the membership interests of, or substantially all of the assets, of the Mayhem.
6. 6 L. C. Walker Arena. Conduct a majority of the Michigan Mayhem annual season
basketball games at a location other than the L.C. Walker Arena in Muskegon, Michigan.
Section 7. EVENT OF DEFAULT- ENFORCEMENT- APPLICATION OF
PROCEEDS.
7.1 Events of Default. Should any of the following events (an "Event of Default")
occur, the Mayhem shall be in default under this Agreement:
(a) Misrepresentation. If any warranty or representation of the Mayhem in
connection with or contained in this Agreement, or if any financial data
or other information now or later furnished to City by or on behalf of the
Mayhem, shall prove to be false or misleading in any material respect;
(b) 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;
(c) Noncompliance with Citv Agreement. If the Mayhem 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;
(d) Other Defaults. If the Mayhem 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;
G:\EDSI\FJLES\00 I 00\1986.00 I \LOAN_ AGR\CF4627.DOC Page 5 of8
(e) JJ!slgment~ If there shall be rendered against the Mayhem one or more
judgments or decrees involving an aggregate liability of $10,000 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 the Mayhem shall be issued and
levied in an action claiming $10,000 or more, and not released or
appealed and bonded in a manner satisfactory to City;
(f) Business Suspension, Bankruptcy, Etc. If the Mayhem shall voluntarily
suspend transaction of the Mayhem'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 the
Mayhem's creditors; or shall file an answer to a creditor's petition or
other petition against the Mayhem (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 the
Mayhem; 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 the Mayhem or if any substantial
bankruptcy, reorganization or liquidation proceedings are instituted
against the Mayhem and remain undismissed for 30 days; or if the
Mayhem becomes unable to meet the Mayhem's obligations as they
mature; or if the Mayhem commits an act of bankruptcy;
(g) Change or Control of Management. Ifthe Mayhem or a controlling
portion of its voting stock 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 stocks or assets or otherwise; and if any such change of
control or office holder adversely impacts, in the sole judgment of City,
upon the ability of the Mayhem to carry on its business as previously
conducted;
7.2 Acceleration oflndebtedness. Upon the occurrence of any of the Events of
Default described in Sections 7.1 (a) or 7.1 (b) or upon the occurrence of any of the Events of
Default described in Sections 7.I (c) through 7.I (g) inclusive, which is not cured by the Mayhem
or waived by City within 30 days after notice to the Mayhem by the City, all Indebtedness shall
be immediately due and payable in full at the option of 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 Unifotm
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. The Mayhem 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 the Mayhem.
G:\EDSI\FILES\00 I00\1986.00 !\LOAN_AGR\CF4627 .DOC Page 6 of8
7.3 Cumulative Remedies. The remedies provided for by this Agreement are
cumulative to the remedies for collection of the Indebtedness as provided by Jaw or by any
m01tgage, 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 the Mayhem.
7.4 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.
Section 8. MISCELLANEOUS.
8.1 Independent Rights. No single or partial exercise or delay in the exercise of any
right, power or privilege created by this Agreement, shall preclude other or further exercise of the
rights of the parties to this Agreement
8.2 Covenant Independence. Each covenant in this Agreement shall be deemed to be
independent of any other covenant, and an exception in one covenant shall not create an
exception in other covenants.
8.3 No Waiver. No forbearance on the part of the City in enforcing any of its rights
under this Agreement, nor any renewal, extension or rearrangement or any payment or covenant
to be made or performed by the Mayhem or the Scotts hereunder shall constitute a waiver of any
terms of this Agreement or of any such right
8.4 Governing Law. This Agreement shall be construed in accordance with the Jaws
of the State of Michigan. If any provisions of this Agreement shall for any reason be held invalid
or unenforceable such invalidity or unenforceabilityshall not affect any other provision, but this
Agreement shall be construed as if such invalid or unenforeeability provisions had never been in
this Agreement
8.5 Survival of Warranties, Etc. All of the Mayhem's covenants, agreements,
representations and warranties made in connection with this Agreement and any related document
shall survive incurrence of the Indebtedness and shall be deemed to have been relied upon by the
City, notwithstanding any investigation made by the City. All statements contained in any
certificate or other document delivered to City at any time by or on behalf of the Mayhem
pursuant to this Agreement or in connection with the transactions contemplated in this Agreement
shall constitute representations and warranties by the Mayhem in connection with this
Agreement
8.6 Fees for Preparation. The Mayhem agrees that the Mayhem will pay all costs
and expenses in connection with the preparation of this Agreement and all documents
contemplated by this Agreement, including the reasonable fees and disbursements of Parrnenter
O'Toole, as counsel for the City.
8.7 Payments on Saturdavs. Etc. Whenever any payment to be made shall be stated
to be due on a Saturday, Sunday or a legal holiday, such payment may be made on the next
succeeding business day, and such extension, if any, shall be included in computing interest in
connection with such payment.
G:\EDSI\FILES\00 I 00\1986.001 \LOAN _AGR\CF4627 .DOC Page 7 of8
8.8 Binding Effect. This Agreement shall inure to the benefit of and shall be binding
upon the parties and their respective heirs, successors and assigns; provided, however, that the
Mayhem shall not assign or transfer its right or obligations under this Agreement without the
prior written consent of City.
8.9 Maintenance of Records. The Mayhem will keep all of its records concerning the
Collateral at its principal place of business. The Mayhem will give City prompt written notice of
any change in its principal place of business, or in the location of said records.
8.10 Notices. All notices and communications in this Agreement or any related
document or required by law to be given shall be effective when received, except that all notices
and communications to the Mayhem shall be deemed to have been give for all purposes when
sent by first class mail, postage prepaid, addressed to the address of the Mayhem set forth in the
heading of this Agreement, or such other address as the Mayhem shall have designated to City in
writing. The giving of at least five days' notice before City shall take any action described in any
notice shall conclusively be deemed reasonable for all purposes.
8.11 Counterparts. This Agreement may be signed in any number of counterparts
with the same effect as if the signatures were upon the same instrument.
8.12 Headings. Article and section headings in this Agreement are included for the
convenience of reference only and shall not constitute a part of this Agreement for any purpose.
Duplicate counterparts of this Agreement have been executed by the Mayhem, the Scotts
and the City on the day and year first written above.
City- City of Musk
____ .,_____. __ _
By: ~~¥~~;::z'===---=:-=-o>
Name:
Title:
Date:
By: ;?~
Name: Linea Pot tor
Title: Do;outy Clerk
Date: ID · f D - 0 \
Basketball; LLC
l...-/r.......---- ___..
annie Scot
f'f€ s..rvc_..../ r
Date: I o2f:~../ .:> ::i'
' "
G:\EDSI\FJLES\OOI00\19&6.001\LOAN _AGR\CF4627.DOC Page 8 of 8
PROMISSORY NOTE
$20,000.00 Muskegon, Michigan
October 12 ,2005
For value received, Lakeshore Basketball, LLC, a Michigan limited liability company, d/b/a Michigan
Mayhem, of 1050 W. Western Ave, Ste. 310, Muskegon, MI, 49441 (the "Mayhem") promises to pay to
the City of Muskegon, a Michigan municipal corporation, at 933 Terrace Street, Muskegon, MI, 49443
(the "City"), or at such other place as directed by the City, the principal sum of Twenty Thousand Dollars
($20,000), together with interest from the date hereof at the rate of Five and Three-eighths Percent
(5.375%) 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$463.99 shall be
made from the Mayhem to the City commencing January 15, 2006, and continuing on the
fifteenth of each month until December 15, 2009, when the entire balance of principal and
interest shall be due and payable in full.
The Mayhem may prepay without penalty all or any portion of the principal at any time. Any prepayment
shall not eliminate the obligation ofthe Mayhem 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 Mayhem shall maintain their business location in the City of Muskegon, and conduct a majority of
the Michigan Mayhem annual season basketball games at the L.C. Walker Arena in Muskegon, Michigan,
for the term of the loan. A move out of the City or the L.C. Walker Arena is a case of default.
This Note is secured by a certain Security Agreement of even date between the Mayhem and the City and
a certain Mortgage of even date between Arthur and Jannie Scott ("Scotts") and the City, the terms of
which are incorporated herein by reference. The City shall have all of the rights and powers set forth in
the Mortgage and Security Agreement as though the same were set forth fully in this Note. A default in
the Mortgage or Security Agreement 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 (I 0) days written notice to the Mayhem, 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 Mayhem (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 Mayhem; (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.
Scotts- individually, as owners of the Real
Estate •",
under
____________
e Mortgage
- ~
President
Date: October 12, 2005
G:\EDSI\FI LES\00 I0011986.00 1\PRO~·IISSO\CF4629.DOC
SECURITY AGREEMENT
This Agreement is entered into on / D (Y , 2005 (the "Effective Date"), between
Lakeshore Basketball, LLC, a Michigan limited liability company, d/b/a Michigan Mayhem, of I 050
W. Western Ave, Ste. 310, Muskegon, MI, 49441 (the "Mayhem"), and the City of Muskegon, a
Michigan municipal corporation, at 933 Terrace Street, Muskegon, MI 49443 (the "City") with reference
to the following facts:
Background
A. The Mayhem has received from the City a loan in the amount of $20,000 pursuant to the
terms and conditions of a certain term loan agreement between the City and the Mayhem, dated
/0 &--
J ( , 2005 ("Term Loan Agreement").
B. The Mayhem has agreed to grant a security interest in certain collateral as security for
payment of the loan pursuant to the terms of a certain promissory note between the Mayhem and the City
of even date ("Promissory 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 assets of Lakeshore Basketball,
LLC's business, including all furniture, fixtures, machinery, equipment, supplies, and inventory,
wherever situated, whether now owned or later acquired, and, to the extent not listed above as
original Collateral, proceeds of the foregoing.
b. Obligations. This Security Agreement secures the following (collectively, the
"Obligations"):
I. The Mayhem's liabilities under the Promissory Note and this Security
Agreement;
ii. The repayment of (I) any amounts that the City may advance or spend
for the maintenance or preservation of the Collateral, and (2) any other expenditures that
the City may make under the provisions of this Security Agreement or for the benefit of
the Mayhem;
iii. 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
the Mayhem 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.
Page I of8
G :\EOSl\FilES\001 00\1966.001 \SECURITY\CF4641.DOC
d. Termination Date. The date when all Obligations owed by the Mayhem to the
City have been satisfied.
e. UCC. Any tenn 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, the Mayhem grants a Security Interest in the Collateral to the City.
3. Perfection of Security Interests.
a. Filing of Financing Statement. The Mayhem authorizes the City to file a
financing statement (the "Financing Statement") describing the Collateral.
b. Possession. The Mayhem shall have possession of the Collateral, except where
otherwise expressly provided in this Security Agreement.
c. Control. The Mayhem will cooperate at all times with the City in obtaining
control with respect to 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 the Mayhem 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. The City shall have the right at any time to enforce the
Mayhem's rights against the account debtors and obligors.
d. Limitations on Duties Concerning Maintenance of Collateral.
1. The Mayhem has the risk of loss of the Collateral; and
ii. The City has no duty to collect any income accruing on the Collateral or
to preserve any rights relating to the Collateral.
e. Inventory. The Mayhem has the power to sell the Mayhem's Inventory in the
ordinary course of the Mayhem's business, provided that the Mayhem is not in default. In
addition, the parties agree as follows:
i. A sale of the Mayhem's Inventory not in the ordinary course of business
shall constitute a default;
ii. The interest of the City shall continue in all proceeds of sales and all
dispositions of the Mayhem's Inventory; and
Page 2 of 8
G:\EOSI\FILES\00 100\1986.001 \SECURITY\CF4641. DOC
iii.If the Mayhem desires to grant a purchase money security interest in any
Inventory (forming a part of the Collateral) to a party other than the City ("Third Party"),
the Mayhem shall: (I) give prior written notice thereof to the City; (2) obtain the prior
written consent of the City; and (3) require Third Party to give written notice to the City
in the manner required by law.
5. Covenants, Warranties and Representations of Mayhem. The Mayhem, as an
inducement to the City to extend credit to the Mayhem, covenants, represents, and warrants to the City the
following:
a. Title to and Transfer of Collateral. The Mayhem 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, except as created by this Security Agreement and
a prior security agreement given by the Mayhem to Community Shores Bank, evidenced by a
financing statement filed with the Michigan Secretary of State on September 13, 2005.
b. Location of Collateral. Except as set forth in this Security Agreement, the
Mayhem will maintain the Collateral at, and will not remove the Collateral from, the Mayhem's
Address without the prior written consent of the City. The Mayhem will promptly notify the City
in writing of any change in the location of any place of business or establishment of any new
place of business of the Mayhem.
c. Organization and Name. The Mayhem is duly organized and operating a
business under the laws of the State of Michigan; and, further, until the Obligations are paid in
full, the Mayhem agrees that the Mayhem will:
1. 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 Mayhem's assets;
ii. Not change the Mayhem's name without the written consent of City. The
Mayhem'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 the Mayhem's business.
e. Records. The Mayhem will at all times during this Agreement keep accurate and
complete records of the Mayhem's Collateral, and will, at any time at the request of the City,
deliver to the City a schedule specifically identifying all of the Collateral.
f. Insurance. The Mayhem will keep the Collateral continuously insured with
insurance carriers in amounts and against risks that shall be reasonably satisfactory to the City,
with the loss payable clause in favor of the City.
g. Indemnification. The Mayhem agrees to indemnify and save harmless the City
from any loss or damage caused by the Collateral or its use, and immediately to give written
notice to the City of any Joss of or damage to the Collateral occasioned by any cause.
Page 3 of8
G:\EDSI\F ILES\001 00\1986.001 \SECURITY\CF4641.DOC
h. Impairment of Collateral. If the Collateral becomes unsatisfactory to the City
or deteriorates in market or actual value, the Mayhem will, after written demand given by the City
to the Mayhem, promptly reduce the debt to the City to the extent specified by the City or, in the
alternative, increase the Collateral to the amount affixed by the City.
i. Financial and Other Statements. During the term of this Agreement, the
Mayhem will deliver to the City as soon as practicable upon request by the City (and in any
event, within 90 days thereafter), the following:
1. The Mayhem's balance sheet at the end of such year;
ii. The Mayhem's tax return for such fiscal year; and
iii. A certificate of good standing or similar document from the Office of the
Secretary of State affirming that the Mayhem 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 the
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. The Mayhem'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 pem1itted by
this Security Agreement;
d. Attachment, execution or levy on any of the Collateral;
e. The Mayhem 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. The Mayhem shall fail to comply with, or become subject to any administrative
or judicial proceeding under any federal, state, or local (i) hazardous waste or 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, the Mayhem will pay to the City all
costs reasonably incurred by the 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 the 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.
Page 4 of8
G:\EOS 1\FILES\001 00\1986.001\SECURITY\CF4641.DOC
8. Remedies Upon Default.
a. General. Upon any Event of Default, the 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, the 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, the
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 the City's demand, the Mayhem will assemble
and make the Collateral available to the City as the City may direct. The Mayhem grants
to the 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 the 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.
b. Notices Regarding Sale. The City shall give the Mayhem such notice of any
private or public sale as may be required by the UCC.
c. Condition of Collateral. The City has no obligation to clean-up or otherwise
prepare the Collateral for sale.
d. No Obligation to Pursue Others. The City has no obligation to attempt to
satisfy the Obligations by collecting them from any other person liable for them and the City may
release, modify, or waive any Collateral provided by any other person to secure any of the
Obligations, all without affecting the City's rights against the Mayhem. The Mayhem waives any
right it may have to require the City to pursue any third person for any of the Obligations.
e. Compliance with Other Laws. The 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. The City may sell the Collateral without giving any warranties as
to the Collateral. The 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.
Page 5 of8
G:\EOSI\FILES\001 00\1986.00 1\SECURITY\CF4641.DOC
g. Sales on Credit. If the City sells any of the Collateral upon credit, the Mayhem
will be credited only with payments actually made by the purchaser, received by the City, and
applied to the indebtedness of the purchaser. If the purchaser fails to pay for the Collateral, the
City may resell the Collateral, and the Mayhem shall be credited with the proceeds of the sale.
h. Purchases by City. lfthe City purchases any of the Collateral being sold, the
City may pay for the Collateral by crediting some or all of the Obligations of the Mayhem.
i. No Marshaling. The City shall have no obligation to marshal any assets in favor
of the Mayhem, or against or in payment of any of the Obligations or any other obligation owed
to the City by the Mayhem or any other person.
10. Miscellaneous.
a. Assignment.
i. This Security Agreement shall bind and shall inure to the benefit of the
heirs, legatees, executors, administrators, successors, and assigns of the City and shall
bind all persons who become bound as a debtor to this Security Agreement.
ii. The City does not consent to any assignment by the Mayhem except as
expressly provided in this Security Agreement.
iii. The City may assign its rights and interests under this Security
Agreement. If an assignment is made, the Mayhem shall render performance under this
Security Agreement to the assignee. The Mayhem waives and will not assert against any
assignee any claims, defenses, or set-offs that the Mayhem could assert against the 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 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 patt 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. Rules of Construction.
Page 6 of8
G:\EDSI\FILES\00100\1986.00 1\SECURITY\CF4641.DOC
I. No reference to "proceeds" in this Security Agreement authorizes any
sale, transfer, or other disposition of the Collateral by the Mayhem;
ii. "Includes" and "including" are not limiting;
iii. 11
0r" is not exclusive; and
tv. 11
All" includes "any" and "any" includes "all. 11
g. Integration and Modifications.
I. This Security Agreement is the entire agreement of the Mayhem and the
City conceming its subject matter; and
ii. Any modification to this Security Agreement must be made in writing
and signed by the party adversely affected.
h. Waiver. Any party to this Security Agreement may waive the enforcement of
any provision to the extent the provision is for its benefit.
i. Further Assurances. The Mayhem agrees to execute any further documents,
and to take any further actions, reasonably requested by the 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 the City herein.
[signatures appear on following page]
Page 7 of8
G:\EOSI\FILES\001 00\1986.001 \SECURITY\CF4641.DOC
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: Linea Potter
- ..
Title: Deputy Clerk _
Date: ID -/d -(.)<,
President
Date: JD · t..?- -()~-
Page 8 of8
G:\EDSI\FILES\00100\1986.00 1\SECUR!TY\CF4641.DOC
5171759
L-3671 P-333
10/14/2005 09:00R
Page: 1 of 4
Mark Fairchild, Muskegon Co ROD M01
MORTGAGE
This Mortgage is given on /0 -1:2- , 2005, by Arthur and Jannie Scott, of 15811 Jennifer Lane,
Spring Lake, Michigan, 49456 (the "Scotts"), to the City of Muskegon, a Michigan municipal corporation, at 933
Terrace Street, Muskegon, MI 49443 (the "City") with reference to the following facts:
Background
A. The City has extended credit to Lakeshore Basketball, LLC, a Michigan limited liability company,
d/b/a Michigan Mayhem, of 1050 W. Western Ave, Ste. 310, Muskegon, MI, 49441 (the "Mayhem") in the amount of
Twenty Thousand and 00/100 Dollars ($20,000.00) ("Debt'), which principal amount and any applicable interest are
being repaid to the City pursuant to the terms of a certain promissory note between the Mayhem and the City of even
date ("Promissory Note").
B. The Scotts are financially interested in the Mayhem and they will receive valuable consideration
for the Debt to Borrower; and
C. To secure the payment of the Promissory Note, the Scotts desire to grant the City a mortgage in the
Real Estate until such time as the Promissory Note is fully paid.
Therefore, the parties agree as follows:
I. Grant of Mortgage. To secure the payment of all indebtedness evidenced by the Promissory Note, the
Scotts grant to the City, with power of sale, a mortgage on the property located at 2411 Lake Ave, #49, North
Muskegon, Michigan, 49441, and legally described on attached Exhibit A (the "Real Estate").
2. Obligations of Mortgagor. While the Mortgage remains in effect, the Scotts and/or the Mayhem
agree:
a. To pay the Promissory Note in the time and manner provided therein;
b. To pay all taxes, assessments, water rates, and other charges that may be levied or assessed on
the Real Estate within 30 days after the tax or other charge is due;
c. To pay when due any taxes on the interest or estate in the lands created or represented by this
Mortgage, whether levied against the Scotts or otherwise; and
d. To keep all improvements on the Real Estate continually intact and in good order and repair
and to pay promptly for all repairs and improvements.
3. Default Remedies. If the Scotts default in any obligation under this Mortgage, the City shall have the
option, in addition to, and not in lieu of, all other rights and remedies provided by law, to do any or all of the
following:
G:\EOS!\FILES\00100\1986.001\MORTGAGE\CF4653.DOC
a. Declare the principal sum secured by the Mortgage, together with all interest and all other
sums secured by this Mortgage, to be immediately due and payable; and to institute any proceedings that
the City deems necessary to collect and otherwise to enforce the indebtedness and obligations secured by
this Mortgage and to protect the lien of this Mortgage. Before exercising this right of acceleration, the City
shall send notice to the Scotts according to the terms ofSection4.
b. Begin foreclosure proceedings against the Real Estate pursuant to applicable laws.
c. Pay the charges, if the Scotts default in paying the taxes, assessments, water rates, liens,
insurance, or other charges on the premises. The amounts so paid, with interest at the same rate as
provided for under the Note, are an additional lien on the premises.
4. Notices. Before exercising any default remedies under this Mortgage, the City shall send, by certified
mail, return receipt requested, a notice of the default, and the notice shall provide the Scotts, from the date of
the Scott's receipt, with not less than 30 days to cure the default.
5. Releases. Upon payment of all sums secured by this Mortgage, the City shall prepare and deliver a
discharge of this Mortgage.
6. Successors. If the ownership of the Real Estate becomes vested in a person other than the Scotts, the
City may deal with the successor(s) with reference to this Mortgage and the debt secured by this Mortgage in
the same way as with the Scotts, without in any manner vitiating or discharging the Scott's liability under this
Mortgage or on the debt secured by this Mortgage.
7. Second Mortgage. This Mortgage is second and junior to a mortgage executed by the Scotts to
Shoreline Mortgage, a Michigan corporation, of843 W. Summit Ave., Muskegon, Ml, 49441, or its successors
and assigns. The Scotts and the City agree to execute all documents reasonably required by holder of said first
mortgage or its successors and assigns to subordinate the lien of this Mortgage to said first mortgage.
This Mortgage shall be binding upon, and the benefits and advantages shall accrue to, the successors and
assigns of the parties.
This Mortgage agreement was made on the date on the first page above.
[notary block appears on following page]
5171759
L-3671 P-333
10/14/2005 09:00A
Mark Fairehi ld, Muskegon Co ROD M01
Page: 2 of 4
G:\EDSI\FILES\00100\1986.001\MORTGAGE\CF4653.DOC
STATE OF MICHIGAN)
COUNTY OF MUSKEGON)
/J+- day of
Arthur and Jannie Scott acknowledged the foregoing instrument before me this
0_:_c?-fvbe/' . 0 ~
~ c~
,2oos.
·.
~"-;-'-c-----::-:---~-:-::-
:nh1J C;~iLhD. ¢' r , Notary Public
/JjlLS kt: Ch\() , Michigan
My commiss n
expires: () g I 0~ /.:2/Ji 0
Acting in Muskegon County '
Prepared by and when recorded return to:
Adam G. Zuwerink
Parmenter O'Toole
P.O. Box 786
Muskegon, Ml 49443-0786
5171759
L-3671 P-333
10/14/2005 09:00A
Page: 3 of 4
G:\EDSI\FILES\00100\1986.001\MORTGAGE\CF4653.DOC
Exhibit A
Legal Description
Unit No. 49, North Pier Condominiums, together with general common elements and limited
common elements, as set forth in the Master Deed thereof as recorded in Liber 1837, Pages 288
through 393, inclusive, Muskegon County Records, and First Amendment to Master Deed
recorded in Liber 1842, Page 22, and as designated as Muskegon County Condominium
Subdivision Plan No. 48 and as described in Act 229 of Public Acts of 1963 and Act 59 of the
Public Acts of 1978 and amended thereto, and other matters set forth in the above described
Master Deed and statute and Second Amendment to Master Deed recorded in Liber 214 7, Page
100.
Parcel #61-23-443-000-0049-00
5171759
L-3671 P-333
10/14/2005 09:00A
Page: 4 of 4
G:\EDSI\FILES\00100\1986.001\MORTGAGE\CF4653.DOC
GUARANTY AGREEMENT
This Guaranty Agreement made this /}+-day of ()Cfrber , 2005, between Arthur
and Jannie Scott, of 15811 Jennifer Lane, Spring Lake, Michigan, 49456 ("Scotts"), and the City of
Muskegon, a Michigan municipal corporation, at 933 Terrace Street, Muskegon, Ml49443 ("City") with
reference to the following facts:
Background
A. The City has extended to Lakeshore Basketball, LLC, a Michigan limited liability company,
d/b/a Michigan Mayhem, of I 050 W. Western Ave, Ste. 310, Muskegon, MI, 49441 ("Mayhem") the
principal sum of $20,000 represented by a promissory note of even date ("Debt"); and
B. The Scotts are financially interested in the Mayhem and they will receive valuable consideration
for the Debt to the Mayhem; and
C. The Scotts therefore agree that they will guarantee payment of the Debt to the full extent of any
property or interest held or owned by them under any form oflegal or beneficial ownership. The Scotts
desires to enter into this Guaranty to induce the City to engage in transactions in which the Mayhem may
make, extend, renew or refinance the Debt to the City.
Therefore, in consideration of the mutual promises of the parties set forth in this agreement and
other valuable consideration, the receipt and adequacy of which is ackuowledged, the parties agree
as follows:
1. Guaranty. The Scotts guarantee 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 the Scotts individually or
jointly or under any other form of legal or beneficial ownership.
2. Duration. The obligation of the Scotts shall continue until payment is made of the Debt of the
Mayhem 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. The Scotts agree that this Guaranty shall be enforceable against
the Scott's heirs, successor and assigns.
4. Guaranty to be Supplemental. The Scotts agree that this Guaranty shall supplement and be in
addition to any other guaranty, indemnity, pledge, security agreement, mortgage, hypothecation
or any other fom1 of collateral to secure any liability of the Mayhem.
5. Consent. The Scotts consent, without affecting their obligations to the City, that the City may,
without notice to or the consent of the Scotts, 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;
G:\EDSI\FILES\001 00\1986.001 \PERSONAL\CF4667.DOC
Page 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 the Mayhem, or against any other
person, fi1m 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.
The Scotts ratify and affim1 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 the Scotts who waive all defenses, counterclaims or offsets
which they might have by reason thereof.
6. Waiver. The Scotts waive: (a) notice of acceptance of this Guaranty by the City; (b) notice of
presentment, demand for payment, protest, or other default of any of the Mayhem's liabilities or
the obligation of any person, firm or corporation, held by the City as collateral security for the
Mayhem'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 which the Scotts may at any time have to any claim of the
City against the Mayhem.
7. Discharge. The obligation of the Scotts 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 the
Scotts 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 the Scotts may not have been
coJTectly 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 the Scotts to collect any obligation
covered by this Guaranty, without first proceeding against the Mayhem, or any other person,
firm, corporation or the Scotts, and without first resorting to any property at any time held by the
City as collateral security. The City may proceed against the Scotts as if such amounts due are
the direct and primary obligation of the Scotts. The Scotts 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.
9. Joint and Several Liability. The liability of the Scotts shall be expressly joint and several.
G:\EDSI\FILES\001 00\1986.001 \PERSONAL \CF4667 .DOC
Page 2
I 0. Entire Agreement. This instmment contains the entire agreement between the Scotts and the
City with respect to the subject matter. Neither party shall be bound by any verbal or written
agreement, statement, term or condition not contained within this instrument. This Guaranty may
be modified only by a subsequent instmment in writing signed by the party to be charged.
II. 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.
12. Severability. If any clause, provision or paragraph of this Guaranty is mled 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.
13. Binding Effect. This Agreement shall be binding upon the Scotts and their heirs, successors and
assigns.
This Guaranty Agreement has been executed on the day and year above written.
G:\EDSI\FILES\001 0011986.001 \PERSONAL \CF4667 .DOC Page 3
MICHIGAN DEPARTMENT OF STATE
1Jniform Commercial Code Section
P.O. Box 30197
Lansing, Michigan 48909-7697
www .michigan.gov/sosucc
Filing Acknowledgement
October 19, 2005
Job Number Initial Filing Number
U20051019-0317 2005181410-9
Filing Description Document Filing Number Date/Time of Filing
Initial Financing Statement 2005181410-9 10119/2005 05:00PM
Debtors Secured Parties
CITY OF MUSKEGON, A
LAKESHORE
MICHIGAN MUNICIPAL
BASKETBALL, LLC
CORPORATION
1050 W. WESTERN
933 TERRACE STREET, PO
AVENUE, SUTIE 310
BOX 536
MUSKEGON MI 49441
MUSKEGON MI 494430536
The attached document( s) were filed with the Michigan Secretary of State, Uniform
Commercial Code Section. The filing date and time have been affixed to each
document, indicating the date and time of filing. A filing number is also affixed and can
be used to reference this document in the future.
Michigan Department of State
Jeffry C. Nickerson
Filing Officer
UCC FINANCING STATEMENT
~~~~C. SCHRIF.~
PAR~1F.:"\TER ll'TOOLf
175 W, APPHF. ,\ \'El'iUl:
POBOX 7K6
~lt;SKEGON M149443..07H6
L
- - - - ----..,~·""""''"••""'-,--------·~;o~ ·---·-·--rsoFF ~ - -
- - - - - - · - - - - · -··- -erlv . ·---.-STAi!:- ~csrAi.1..0i.~· - Cv..NIWI'
U.S.A.
----
"""
L.S.A.
·nc Collater•l shalt consbr of all :a:5:~ccs of lakeshore Bil~kelb.all, LLC's busincs:;, includln~ all furuilurt!, fh:runs,
machinery. equipment, ~upplh:s. and in,·entury, whcrc:nr situated, whtfhtr now own ttl or lat~r ~cqtiln:d. IHJd, to the extent
not listed abO\'C as original ('nllatenl, proceeds c,( the fore~uin-g.
tESSEEitE~·:>R
FILING OFFICE COPY- UCC FINANCING STATEMENT !FORM UCC1) (REV 05!22/02)
,---·----~---------·---·-----·------ ..............
COMMITMENT FOR TITLE INSURANCE
Issued by Trans nation Title Insurance Company 05-0527369
II'A..-, landAmerica Transnafion Tille Insurance Company is a member of the LandAmerica family of tille insurance undenvrilers.
Bllll Transnation
; /
Transnation Title Insurance Company, an Arizona corporation, licensed to do business in the State of
MICHIGAN, herein called the Company, for a valuable consideration, hereby commits to issue its
policy or policies of title insurance, as identified in Schedule A, in favor of the proposed insured
named in Schedule A, as owner or mortgagee of the estate or interest covered hereby in the land
described or referred to in Schedule A, upon payment of the premiums and charges therefor; all
subject to the provisions of Schedule A and B and to the Conditions and Stipulations
hereof.
This Commitment shall be effective only when the identity of the proposed Insured and the amount of
the policy or policies committed for have been inserted in Schedule A hereof by the Company, either
at the time of the issuance of this Commitment or by subsequent endorsements.
This Commitment is preliminary to the issuance of such policy or policies of title insurance and all
liability and obligations hereunder shall cease and terminate ninety (90) days after the effective date
hereof or when the policy or policies committed for shall issue, whichever first occurs, provided that
the failure to issue such policy or policies is not the fault of the Company.
The Commitment shall not be valid or binding until countersigned below by a validating officer or
authorized signatory.
IN WITNESS WHEREOF, TRANSNATION TITLE INSURANCE COMPANY has caused its corporate
name and seal to be hereunto affixed by its duly authorized officers on the date shown in Schedule A.
-------~------)
TRANSNATION TITLE INSURANCE COMPANY
Countersigned:
Secretary
REQUIREMENTS FOR ISSUANCE OF MORTGAGE POLICIES
fOR ALL MORTGAGE POLICIES:
Estoppel certificate on form provided by this company signad by or on behalf of all rnortgogors acknowledging receipt of the mortgage consideration and making represenlations as
the ages of individual mortgagors and such other matters as are therein set forth.
FOR ALTA MORTGAGE POLICIES WITHOUT EXCEPTIONS:
Proper swam statements and waivers showing payment or release of lien rights covering Improvements made on subject land In the last 90 days or satisfactory proof that
improvements have been made wit:1in the last 90 days.
Satisfactory survey by an approved surveyor showing no variation in location or dimensions, encroachments, or adverse rights, and such evidence of possession as may be required
PROVISIONS APPLICABLE TO ALL POLICIES
If any requirement is not satisfied, the til!e policy will be issued subject to the excepl!on which would otherwise be eliminated by compliance with such requirement. The policy will als
contain exceptions as to matters affecting the title to subject land which may arise after the date hereof and which have not been eliminated to the satlsfaction of the Company. Thi
commitment is subject to the terms, provisions, conditions and stipulations of the form of policy applied for by the respective applicants. Owner's Policies and Mortgage Policies Wit
Exceptions will be issued with the standard exceptions set forth below.
If, at the time the policy Is issued, the estate or interest of the Insured In the subject land described therein is created or evidenced by Instruments anyone of which has not bee
recorded in the office of the Register of Deeds of the county in which the subject land is located, the policy to be issued will contain a clause providing that there shall be no Uabillt
thereunder to the extent that loss or damage arises from the failure to record the Instrument or instruments necessary to evidence such estate or Interest.
EXCLUSIONS FROM COVERAGE OF ALL POLICIES
1. (a) Any law, ordinance or governmental regulation (Including but not limited to building and zoning Jaws, ordinances, or regulations) restricting, regulating, prohibiting or relatin!
to (I) the occupancy, use, or enjoyment of the land; (if} the character, dimensions or location of any Improvement now or hereafter erected on the land; (Iii) a separation il
ownership or a change In the dimensions or area of the land or any parcel of which the land Is or was a part; or (lv) environmental protection, or the effect of any violation c
these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from ;
violation or alleged violation affecting the land has been recorded In the public records, at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resullinr
from a violation or alleged violation affecting the land has been recorded In the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded In the public records at Dale of Polley, but not excluding from coverage any taking which ha1
occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge.
EXCLUSIONS FROM COVERAGE APPEARING ONLY IN MORTGAGE POLICIES
1. Defects, liens, encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded In the public records at Date of Polley, but known to the Insured claimant and not disclosed in writing to the Company by the insurE
claimant prior to the date the insured claimant became an insured under this policy;
{c) resutung in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Polley (except to the extent that this policy insures the priority of the Hen of the insured mortgage over any statutory lien f,
services, labor or materiel); or
(e) resulting in loss or damage which would not have been sustained if the Insured claimant had paid value for the insured mortgage.
2. Unenforceabllity of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of I~
Indebtedness, to comply with applicable doing business laws of the state In which the land is situated.
3. Invalidity or unenforcaabitity of the lien of the insured mortgage, or claim thereof, which arises out of the transacllon evidenced by the Insured mortgage and Is based upon usu1
or any consumer credit protection or truth in lending Jaw.
4. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the Insured mortgage) arising from a
improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and Is not financed in whole or in part by proceeds of th
indebtedness secured by the insured mortgage which at Date of Polley the Insured has advanced or is obligated to advance.
EXCLUSION FROM COVERAGE APPEARING ONLY IN OWNER'S POLICIES
Defects, liens, encumbrances, adverse claims or other matters;
(a) created, suffered, assumed or agreed to by the Insured claimant;
(b) not known to the Company, not recorded In the public records at Date of Polley, but known to the insured claimant and not disclosed in writing to the Company by the insure
claimant prior to the date the insured claimant became an Insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e) resulting in loss or damage which would not have been sustained if the Insured claimant had paid value for the estate or interest insured by this policy.
STANDARD EXCEPTIONS WHICH APPEAR UNDER SCHEDULE BON:
OWNER'S POLICIES:
1. Rights or claims of parties in possession not shown of record.
2. Unrecorded water, mineral and oil rights, unrecorded easements and claims of easement, boundary line disputes not disclosed of record and any matters which would be disclose
by an accurate survey and inspection of the premises.
3. Mechanic's !lens not of record.
4. The dower or homestead rights, if any, of the wife of any Individual insured or of any Individual shown herein to be a party in Interest.
5. Building and use restrictions not appearing in the record chain of title, but omitting restrictions, If any, based on race, color, religion or national origin.
MORTGAGE POLICIES WITH EXCEPTIONS:
1. Rights or claims of par1ies In possession not shown of record.
2. Mechanic's liens not of record.
3. Such state of facts as would be disclosed by an accurate survey and personal inspection of the premises.
CONDITIONS AND STIPULATIONS
1. The term mortgage, when used herein, shall include deed of trust, trust deed, or other security instrument.
2. If the proposed Insured has or acquires actual knowledge of any defect, lien, encumbrance, adverse claim or other matter affecting the estate or interest or mortgage th~reon
covered by this Commitment other than those shown in Schedule B hereof, and shall fait to disclose such knowledge to the Company In writing, the Company shall be reheved
from liability for any toss or damage resulting from any act of reliance hereon to the extent the Company is prejudiced by failure to so disclose such knowledge. If the proposed
Insured shall disclose such knowledge to the Company or If the Company otherwise acquires actual knowledge of any such .defect, lien, encumbran~e, .~dverse. claim .or other
matter, the Company at its option may amend Schedule B of this Commitment accordingly, but such amendment shall not relieve the Company from liability prevmusly mcurred
pursuant to Paragraph 3 of these Conditions and Sllpulatlons. .
3. Liability of the Company under this Commitment shall be only to the named proposed Insured and such parties Included under l~e definition of Insured In t~ !arm
of pohc.y or
policies committed for and only for actual loss incurred In reliance hereon in undertaking In good faith (a) to comply with the reqUirements hereof, or (b) to ehmmate excephons
shown in Schedule 8, or (c) to acquire or create the estate or Interest or mortgage thereon covered by this Commitment. In no event shall such liability exceed t~ amount
stated In Schedule A for the policy or policies committed for and such liability is subject to the insuring provisions, the Conditions and Stipulations, and the ~xc!USIOn~ from
Coverage of the fonn of policy or policies commlt1ed for In favor of the proposed Insured which are hereby incorporated by reference and are made a part of th1s Comm1tment
except as expressly modified herein. .
4. Any action or actions or rights of action that the proposed Insured may have or may bring against the Company arising out of the status of the t1tle to the estate or Interest or the
status of the mortgage thereon covered by this Commitment must be based on and are subject to the provisions of this Commitment.
TransnB'ion Title Insurance Company
Commitment Number: 05-0527369
SCHEDULE A
1. Commitment Effective Date: October 4, 2005 at 08:01AM
2. Policy (or Policies) to be issued: Amount
(a) Owner's Policy
Proposed Insured:
(b) Loan Policy with Standard Exceptions (ALTA Loan w/Exc (10/17/92) $20,000.00
Proposed Insured:
City of Muskegon, its successors and/or assigns as their respective interests may appear
3. Fee Simple interest in the land described in this Commitment is owned, at the Commitment Date, by:
Arthur Scott and Jannie Scott, husband and wife
4. The land referred to in this Commitment, situated in the City of North Muskegon, County of Muskegon,
State of Michigan, is described as:
Unit 49, North Pier Condominiums, according to the Master Deed recorded in Liber 1837, Page 288 through
393 inclusive and First Amendment to Master Deed as recorded in Liber 1842, Page 22, and Second
Amendment to Master Deed as recorded in Liber 2147, Page 100, Muskegon County Records, as amended,
and designated as Muskegon County Condominium Subdivision Plan No. 48, together with rights in the
general common elements and the limited common elements as shown on the Master Deed and as
described in Act 59 of the Public Acts of 1978, as amended.
P. P .# 61-23-443-000-0049-00
Commitment for Title
Ilf L Ti Title Agency
Phone: (231)924-4286 Fax: (231)924-4952
Valid Only if Schedule B and
Insurance-Schedule A Cover are Attached
(1 0/6/82) (05-0527369.PFD/05-0527369/18)
Examined By: Kurt A
Transnation Title Insurance Company
Commitment Number: 05-0527369 Commitment Effective Date: October 4, 2005 at 08:01AM
SCHEDULE B - SECTION I
REQUIREMENTS
The following are the requirements to be complied with:
1. The following requirements must be met:
(a) Pay the agreed amounts for the interest in the land and/or the mortgage to be insured. (b) Pay us the
premiums, fees, and charges for the policy.
(c) Record documents satisfactory to us creating the interest in the land and/or the mortgage to be insured
must be signed, delivered, and recorded.
(d) You must tell us in writing the name of anyone not referred to in this Commitment who will get an interest
in the land or who will make a loan on the land. We may make additional requirements or exceptions.
(e) Pay taxes and assessments unless shown as paid.
2. Record the mortgage to be insured from Arthur Scott and Jannie Scott, husband and wife to City of Muskegon.
3. Taxes examined and found paid through Summer 2005.
2005 Summer taxes are paid in the amount of $ 526.10.
2004 Winter taxes are paid in the amount of$ 3,040.61.
Tax Information: 2411 Lake Avenue #49; Muskegon, Ml 49445
Tax Parcel No.: 61-23-443-000-0049-00
State Equalized Value: $ 66,600 (2005)
Taxable Value$ 66,600 (2005)
School District: North Muskegon
Special Assessments: NONE
4. NOTE: Tax information obtained from the local taxing authority discloses the 2005 taxes were assessed as
0% Homestead property. The homestead exemption status is for informational purposes only, the accuracy of
which is neither guaranteed nor insured. No liability is assumed by the company issuing the title insurance
policy(ies) for any tax increase occasioned by retroactive reassessment of change in land usage or loss of any
homestead exemption status for the insured premises. Any questions regarding the current homestead status
of the property should be directed to the local taxing authority.
5. Utilities not examined. For current information contact the City of North Muskegon.
Commitment for Title
lnsurance~Schedule B-1
11 016182)
(05-0527 369. PF D/05-0527 369/18)
Transnation Title Insurance Company
Commitment Number: 05-0527369 Commitment Effective Date: October 4, 2005 at 08:01AM
SCHEDULE B - SECTION II
EXCEPTIONS
Schedule B of the policy or policies to be issued will contain exceptions to the following matters unless
the same are disposed of to the satisfaction of the company:
1. Covenants, conditions and restrictions, if any, appearing in the public records.
Any easements or servitude appearing in the public records.
Any lease, grant, exception or reservation of minerals or mineral rights appearing in the public records.
2. Taxes and assessments not yet due and payable at Commitment Effective Date.
3. Standard Exceptions as will be set forth in Loan Policy to be issued:
(a) Rights or claims of parties in possession not shown of record.
(b) Mechanic's liens not of record.
(c) Such state of facts as would be disclosed by an accurate survey and personal inspection of the premises.
4. Taxes and assessments that become a lien against the property after date of closing. The Company
assumes no liability for tax increases occasioned by retroactive revaluation, changes in the land usage or loss
of any homestead exemption status for the insured premises.
5. Mortgage between Arthur Scott and Jannie Scott, husband and wife, as mortgagor and Shoreline Mortgage, as
mortgagee in the original stated principal amount of $133,800.00, dated October 28, 2004, recorded November
9, 2004 in Liber 3626, Page 545, Muskegon County Records.
Commitment for Tille
Insurance-Schedule B-11 (05-0527369.PFDI05-0527369/18)
(1 0/6/82)
LTi Title Agency
PRIVACY POLICY
We Are Committed to Safeguarding Customer Information
In order lo better serve your needs now and in the future, we may ask you to provide us with certain information. We understand that you may be concerned about who·
we will do with this information- particularly any personal or financial information. We agree that you have a right to know how we will use the personal information thai
you provide to us. Therefore, we have adopted this Privacy Policy to govern the use and handling of your personal information.
Applicability
This Privacy Policy governs our use of the infonnation that you provide to us. It does not govern the manner in which we may use infonnallon we have obtained from
any other source, such as information obtained from a public record or from another person or entity.
Information We Collect About You
Depending upon which of our services you are using, the types of nonpubllc personal informatien that we may collect include:
)> Information we receive from you on applications, forms and In other communications to us, whether In writing, In person, by telephone or any other means
)> Information we collect from you to underwrite a policy
)> Information obtained when verifying the Information you provide on an application or other form (Including information from your driving records)
)> lnfonnation about your transactions with us, or others including those companies that wort< closely with us to provide you with diverse products and services
)> lnfonnation we may obtain from consumer purchasing and census data providers to develop competitive marketing programs for our customers
Use of Information
We request information from you for our own legitimate business purposes and not for the benefit of any nonaffiliated party. Therefore, we will not release your
information to nonaffiliated parties except:
1. as necessary for us to provide the product or service you have requested from us; or
2. as permitted by law.
We may, however, store such information Indefinitely, including the period after which any customer relationship has ceased. Such information may be used for any
internal purpose such as quality control efforts or customer analysis. We may also provide all of the types of nonpublic personal infonnation listed above to one or mor<
of our affiliated companies. Such affiliated companies Include financial service providers, such as title insurers, property and casualty Insurers, and trust and investmen
advisory companies, or companies involved in real estate services, such as appraisal companies, home warranty companies and escrow companies. Furthermore, we
may also provide all the information we collect, as described above, to companies that pertonn marketing services on our behalf, on behalf of our affiliated companies,
or to other financial institutions with whom we or our affiliated companies have joint mart Protect your policy numbers and information
)> Use caution when disclosing your policy numbers, social security numbers, etc., to other persons. If someone calls you and explains that the call is on our behalf
and asks for your policy number or social security number, you should beware. Our company staff will have access to your infonnation and will not need to ask fc
it.
)> Keep your information current. It Is Important that we have current information on how to reach you. If we detect potentially fraudulent or unauthorized activity, w
will attempt to contact you immediately. If your address or phone number changes, please let us know.
)> Let us know if you have questions. Please do not hesitate to call us. We are here to serve you.
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