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HRA Agenda 04-12-2006 . . . AGENDA MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, April 12, 2006 - 6:00 p.m. J\tlississiDoi Room - Community Center Commissioners: Chair Brad Barger, Vice Chair Steve Andrews, Darrin Lahr, Dan Frie, and Bill Fair. Council Liaison: \Vayne Mayer. Staff: Rick Wolfsteller. Ollie Koropchak, and Angela Shumann. I . Call to Order. 2. Public Hearing on the Business Subsidy Agreement and Land Sale. _ Consideration to adopt a resolution approving the Purchase and Redevelopment Contract between the HRA and SL Real Estate Holding's LLC including the business subsidy agreement and land sale. 3. Consideration to adopt a resolution authorizing Interfund Loan for advance of certain costs in connection with TIF District No. 1-37. 4. Consideration to reviev,I and accept the year-end financial reports for the HRA General Fund and TIF Fund as prepared by HRA Treasurer \Volfsteller. 5. Other. 6. l\'ext HRA meeting - \Vednesday, May 3, 2006. 7. Adjournment. . . . HRA Agenda - 04/12/06 2. Public Hearinl!: on the Business Subsidv Al!:reement and Public Hearinl!: on the Sale of Land. Consideration to adopt a resolution approvinl!: Purchase and Redevelopment Contract between the HRA in and for the City of Monticello and SL Real Estate Holdinl!:'s LLC. A. Reference and backl!:round: PUBLIC HEARING - BUSINESS SUBSIDY AGREEMENT As the assistance to the redeveloper "SL Real Estate Holdings LLC" exceeds $100,000, the HRA must hold a public hearing according to the Minnesota Statutes, Section 116J.993- 116J.995. The public hearing notice appeared in the local newspaper on March 30, 2006. The "Business Subsidy Agreement" can be found in Section 3.8 of the Purchase and Redevelopment Contract by and between the HRA and SI Real Estate Holdings LLC. The Agreement describes the purpose and job and wage-levels goals for the subsidy, remedies if goals are not met, and reporting requirements. The City Council on April 24, 2006, will adopt a resolution approving the Business Subsidy Agreement between the HRA and SL Real Estate Holdings LLC. OPEN THE PUBLIC HEARING FOR COMMENTS AND OUESTlONS - CLOSE THE PUBLIC HEARING ON THE BUSINESS SUBSIDY AGREEMENT. PUBLIC HEARING - SALE OF LAND The City of Monticello established the Housing and Redevelopment Authority (HR/\.) to carry out the goals and objectives within Redevelopment Plan of Central Monticello Redevelopment Project No. 01. The HRA can acquire and sale land for the purpose of economic, redevelopment, and/or housing development. However, unlike the City of Monticello, the HRA must hold a public hearing prior to sale of land according to Minnesota Statutes. Said public hearing notice appeared in the local newspaper on March 30, 2006. Some time ago, the City Council approved a motion to deed the 35 acres of Otter Creek Crossing to the HRA via a "quick claim deed". On April 10, 2006, the Council will authorize conveyance of the 3.75 acres to the HRA. At the closing for the 35-acre parcel between the City and John Chadwick in December 2004, the HRA and City each contributed $500,000. The remaining 85 acres is under a Contract for Deed with principal and interest payments I HRA Agenda - 04/12/06 . beginning December 2005 in the amount of approximately $200,000 annually over nine years with balloon payment in year ten. The rationale for the Council to deed the property to the HRA: The HRA collects and has the authority to spend tax increment. It simplifies and consolidates the land sale and negotiation process (land write-down) to one governmental entity for the benefit of the end-user. ARTICLE III of the Purchase and Redevelopment Contract outlines the conveyance, purchase price, and conditions for the conveyance of 3.75 acres to SL Real Estate Holdings LLC. AFTER COMMENTS AND OUESTIONS - CLOSE THE PUBLIC HEARING ON THE SALE OF LAND. PURCHASE AND REDEVELOPMENT CONTRACT The Purchase and Redevelopment Contract by and between the HRA and SL Real Estate Holdings LLC was prepared by HRA Attorney Steve Bubul, Kennedy & Graven. Unlike contracts of the past, this contract includes a quit claim deed for purpose of conveying property to SL Real Estate Holdings, an Interfund Loan for advancement of certain costs in connection with TIF District No. 1-37, and an Assessment Agreement. . The Executive Director reviewed the draft copy of the Purchase and Redevelopment Contract with suggested modifications made and thereafter the Contract was forwarded to the developer for review. The Contract followed the proposal made to Karlsburger Foods, Inc. based on the building size, market value, and job and wage-level criteria. However, consistent with the final plat, the number were adjusted. The company meets the criteria to purchase 2 acres at the price of $1.00 per sq ft with no assessments, no trunk fees, and includes general grading. The company will purchase an addition 0.124 acres of land at $2.65 per sq ft and at time of closing pay $1,635 for trunk fees associated with the 0.124 acres. However, the amount of acres conveyed to the company is 3.75 of which 1.621 acres is a ponding and drainage easement. The city is responsible for maintaining the easement. General grading cost for the 2.124 acres not to exceed $11,103. I. Motion to adopt a resolution approving the Purchase and Redevelopment Contract between the HRA in and for the City of Monticello and SL Real Estate Holdings LLC. . 2 HRA Agenda - 04/12/06 . 2. Motion to deny adoption of the resolution approving the Purchase and Redevelopment Contract between the HRA in and for the City of Monticello and SL Real Estate Holdings LLC. 3. A motion to table any action. C. Recommendation: The City Administrator and Executive Director recommend alternative no. I as the Contract is consistent with the preferred package criteria, economic development goals, and final plat for Otter Creek Crossing 2"d Addition. D. SUDDortinl! Data: Public hearing notices, resolution for adoption, and Purchase and Redevelopment Contract. . . 3 -~ - -~~_ u~ ~O.OF PUBLIC MeETING iv 1 pUblic hearing will be held by the City of ;0 n on April 4th, 2006 at 6 P.m., in the cons, er the fol/owing matter: Consideration of request for variance from the nance regulating wall and pylon signage and con- for rezoning from B-3 (Highway Business) to B-4 the proposed Warnert Retail plat. d plat of Warnert Retail,.Monticel!o 9 iegal deSCription avaliable at Monticelio City Hall. rchitects & Builders nony wjfj be accepted on abOve SUbjects, and al, eard On referenCed SUbjects will be heard at this 'e Planning Commission will be Subject to the City COuncii and will be Considered On Monday, :> at 7 p.m., at the Monticello City Hall. ty Development Director State of Minnesota seCReTARY OF STATe ceRTIFICATe OF ASSUMeo NAMe Minnesota Statutes Chapter 333 The filing of an assumed name does not provide a us.r with exclusive rights to that name. The filing is required for consumer Protection in Order to enable COnsumers to be able to identify the true oWner of a business. 1. State the eXact assumed name under which the business is Or will be Conducted (one business name per apPlication): OJ Heskin Electric. 2. State the address of the prlnclpai place of business. A cOmpiete street address or rural route and rural route box number is required; the address cannot be a PO. Box: 7598 County Rd. 39 NE, Monticello, MN 55362. 3. List the name and complete street address of all persons conducting business under the abOve Assumed Name or if the bUSiness is a c.orpora_ tion, Provide the le9al Corporate name and registered office address of the CorpOration. Attach additional sheet(s), if necessary. DaVid J. Heskin, 7598 County Rd. 39 NE, Monticello, MN 55362. DaVid J. Heskin, Jr., 1975 Hansack Ave. NE, St. MiChael, MN 55362. 4. I certify that I am authorized to sign this certfficate and I further Certify that i understand that by signing this certificate, I am subject to the penal- ties of perjury as set forth in Minnesota Statutes Section 609.48 as if i had signed this certificate under oath: Oate:2127106 -David J. Heskin, Partner (March 23, 30, 2006) :e OF PUBLIC MeETING 'at a pUblic hearing will be held by the City of iission on April 4th, 2006 at 6 P.m., in the der the follOWing matter: sideration of a request for Conditional Use ~e ;n a B-1 (NeighbOrhoOd BUSiness) District. 'Idway, Monticelfo '1/ avaHabfe at Monticello City Hall n wil! be accepted On above SUbjects, and alt on referenced SUbjects will be heard at this 'Inning Commission Will be Subject to the ~Ouncll and will be Considered on Monday, . p.m., at the Monticello City Hal 'veloPrtJent Director 'n Commons NOTice OF PUBLIC HEARING Notice is hereby given that a pUblic hearing will be held by the City of Monticel/o City COuncil on Monday, April 24, 2006 at 7 p. m.. in the Monticel/o City Hal/ to consider the fOllOWing Matter: ConSideration of adoption of an aSSessment roll 'on delin_ quent aCCOunts pursuant to Monticel/o Ordinance, Sections 7-2-21.7_3_3 (C) and 7-6-9 (B), and Minnesota Statute, Sections 429.101, 443.015 and 444.075. A copy of the assessment rol/ is on file at the Monticello City Hall and may be revieWed during normal bUSiness hours. Written and oral testimony will be accepted on the above Subject, and all persons deSiring to be heard on referenced subject will be heard at this meeting. -Rick WolfstelJer, City Administrator (March 30, April 6, 2006) J'IIO f ICI; UF PUtlLlc Ht:AHING . MONTICeLLO HOUSING AND ReDeveLOPMeNT AUTHORfTY CITY OF MONT/CeuO WRIGHT COUNTY STATe OF MINNeSOTA NOTICE IS HEREBY GIVEN that the Board of Commissioners of the Monticello Housing and Redevelopment Authority (the "HRA"), Wright County, State of Minnesota, will hold a pUblic hearing on Wednesday, April 12, 2006, at approximateiy 6 P.m. at the Monticello Community Center, 505 Walnut Street, Monticello, Minnesota, regarding two matters: * 1. Business SUbsidy. The HRA will consider a propOsed business SUbsidy to . be granted to KarlSburger FOOds, Inc. Or a related entity (the "Recipient") under Minnesota Statutes, Sections 116J.993 throUgh 116J.995. The pro- pOSed SUbsidy inVOlves tax increment financing assistance to facilitate development by the ReCipient of an approXimately 20,000 sq. n. manufac_ turing and warehOUse bUilding in the Otter Creek Crossing Industrial Park in the City of Monticello. information about the propOsed business sUbeidy, inclUding a summary of the terms of the SUbsidy and a COpy of thedran business subsidy agreement are availabie for inspection at City Hall during regular business hours. Any person With residence in the City, or the owner of taxable property in the City, may me a written COmpiaint with the HRA if the HRA falls to cOm- ply with the Business SubSidy Act, and no action may be filed against the HIlA for the failure to COmply unless a Written complaint is med. 2. land Sale. The HRA will also Conduct a public hearing to Consider the proposed sale of certain land in the Otter Creek CroSsing Industrial Park to the business SUbsidy ReCiPient deScribed abOve. The Subject land is eXPected to be platted as lot 1, Biock 1, Otter Creek Crossing 2nd Addition. The City is expected to Convey the land to the HIlA, for recon_ veyance to the Recipient in furtherance of the HIlA's goals for its Central Monticello Redevelopment Project NO.1. A copy of aJl dOcuments relating to the ProPOsed sale of land Will be on file and avaliable for inspection at City Hall during regular business hOllrs. All interested persons may apPear at the hearin9 and present their views on the matters to be Considered orally or prior to the meeting in writing. BY ORDER OF THE BOARD OF COMMISSiONERS OF THE MONTi_ CEllO HOUSING AND REDEvELOPMENT AUTHORITY, MiNNESOTA -Olive KoroPChak , ExeCutive Director (March 30. 2006) OF PUBLIC MeETING pUblic hearing will be held by the City of n .rif 4th, 2006 at 6 p.m., in the he 'ng matter: tio reque$t for an interim use permit In. Club Manor, Monticeflo be accepted On above SUbjects, and all 9ferenced SUbjects will be heard at this 19 Commission wilf be subject to the lcif and will be considered on Monday, ., at the Monticello City Hall. Dment Director 'UBlIc MeETING IlIc hearing wi/f be he'd by the City of 1 April 4th, 2006 at 6 p.m., in the ,If OWing matter: of an Amendment to Conditional Use led Unit Development for an expan_ ccept8lj on above SUbjects, and all nC8lj subjects will be heard at this ommiss;on will be Subject to the od Will be Considered on Monday, the Monticello City Hall. It Director . r ~S!'il 'pun illOd ):>xel he""l dUlS i IOd" !qll!l M. t.\u:>:>q ~ll.L" ! lqllUM. q p{lloljS : sUle:>lS ~:>~UOpq I p:>U!W iH~IlS:>AU! , kHr 10S ~ P"~IlOU in U! All:> . ':>jlIl ,\:j1:> ,H . b!sv ueus: 'lUelS!SSY , 'AlunoJ i .. U:>:>Ml:>q Ual 13 is:>lUOJ-UOU :>~U1S sJlooq ~lH l hUHd:>I~ ,l lj ~ Ip:>U1 Ie:>p- U. OIS , P:>~Hl SI:>U . 0" AlunoJ pIH n leljM S.)H~oS ' 'SPH:>lj:> i 13 ueql 'Am)u:>~ ,m q SHlj :>-" .'IM u:>:> MOH . <laA'd f U:>ljM S H U1 p:>y Igd 1l0lj u:L\l :>Ie : g!qe AlIH~. ~ns q S:>lllds!~oid l:>AO s:>u!j All:> 0) SlOq JUH! :>AHlj ust n . !HnSnUn I. . f )];n~OH NHO[ At[ mo~ . . . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO . RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT CONTRACT BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO AND SL REAL ESTATE HOLDINGS LLC. BE IT RESOLVED by the Board of Commissioners ("Board") of the Housing and Redevelopment Authority in and for the City of Monticello ("Authority") as follows: Section I. Recitals. 1.0 I. The Authority currently administers Central Monticello Redevelopment Project No. I (the "Project"); and on AprilS, 2006 approved (and recommends approval by the City of) the creation of Tax Increment Financing District No. 1-37 (the "TIF District") within the Project, all pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.179. 1.02. To facilitate redevelopment of certain property in the TIF District, the Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") between the Authority and SL Real Estate Holdings LLC (the "Redeveloper"), under which among other things the Authority will convey certain property described as Lot 1, Block I, Otter Creek Crossing 2nd Addition (the "Redevelopment Property") to Redeveloper. 1.03. The City currently owns the Redevelopment Property and on April 10, 2006 authorized the conveyance of that property to the Authority in order to promote the development of the Otter Creek Crossing industrial park. ] .04. The assistance Lmder the Contract constitutes a "business subsidy" exceeding $100,000 within the meaning of Minnesota Statutes, Section 1161.993 to I 16J.995 (the "Business Subsidy Act"). 1.05. The "business subsidy agreement" as required under the Business Subsidy Act is included as one section of the Contract, and the Authority has on this date conducted a duly noticed public hearing regarding both the sale of the Redevelopment Property to Redeveloper and the business subsidy agreement, at which all interested persons were give an opportunity to be heard. Section 2. Authority Approval; Further Proceedings. 2.01. The Board approves the Contract as presented to the Board, including the business subsidy agreement therein, subject to modifications that do not alter the substance of the transaction and that are approved by the Chair and Executive Director, provided that execution of the documents by the those oftlcials shall be conclusive evidence of their approval. 2&3425v21\'INr I'vfNJ90-123 . . . 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority's obligations under the Contract as a whole, including without limitation execution of any deed or other documents necessary to acquire the Redevelopment Property from the City and to convey such property to Redeveloper. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello this 12th day of April, 2006. ATTEST: Chair Executive Director 2X3425v2 MNl1'vlN190-12J 2 . . . Second draft: March 29, 2006 PURCHASE AND REDEVELOPMENT CONTRACT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA and SL Real Estate Holdings, LLC Dated as of: ,2006 This document was drafted by: KENNEDY & GRAVEN, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 Telephone: 337-9300 281415v2 MNI MN190~123 . . . TABLE OF CONTENTS Page PREAMBLE ................................................................................. ............................................ I Section 1.1. Section 2.1. Section 2.2. Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8 Section 3.9 Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 5.1. Section 5.2. 281415v2 I\1NI MN 190-123 ARTICLE I Definitions Definitions.......................................................................... .................................2 ARTICLE II Representations and Warranties Representations by the Authority........................................................................ 5 Representations and Warranties by the Redeveloper.......................................... 5 ARTICLE III Acquisition and Convevance of Pro pert v Conveyance of the Property ....... .......................................................... ...............7 Purchase Price; Provisions for Payment ............................................................. 7 Conditions of Conveyance.. ......... .......... .......... ......... ....... ........... ......... ...............7 Place of Document Execution, Delivery and Recording, Costs ......................... 8 Title..................................................................................................................... 8 Soil and Environmental Conditions.................................................................... 9 Advance of Land and Other Costs; Tax Increment Interfund Loan .................10 Business Subsidy Agreement............................................................................ 10 Payment of Administrative Costs .....................................................................12 ARTICLE IV Construction of Minimum Improvements Construction of Minimum Improvements ........................................................ 14 Construction Plans ...... ........ ......... .......... .......... ......... ..... ............. ......... ............. 14 Commencement and Completion of Construction............................................ 15 Certificate of Completion ................................................................................. 15 Drainage and Utility Easement .........................................................................16 ARTICLE V Insurance Insurance ...... ....... ........ ........ ......... .......... ........ ........... ....... .................... ......... .... 17 Subordination ...... ........ ........ ......... ........ ............ ......... ........ ................... ............. 18 1 . . . Section 6.1. Section 6.2. Section 6.3 Section 7.1. Section 7.2. Section 7.3. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 9.6. Section 10. I. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9 Section 10.10 281415\'2 l\t1NI MN190-123 ARTICLE VI Delinquent Taxes and Review of Taxes Right to Collect Delinquent Taxes........................................,...........................19 Review of Taxes ............................ ................ ..................... .., ................. .......... 19 Assessment Agreement .................. ......... ......... .......... ,.........., ........................... 19 ARTICLE VII Financing Financing.................................. ..................................,..........,........................... 20 Authority's Option to Cure Default on Mortgage............................................. 20 Subordination and Modification for the Benefit of Mortgagee ........................ 20 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment................................................................ 21 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ................................................................................ 21 Release and Indemnification Covenants........................................................... 22 ARTICLE IX Events of Default Events of Default Defined ................................................................................24 Remedies on Default.... ........... ....... ................ ............ ........ ............. ....... ...........24 Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper .............................................................................24 Resale of Reacquired Property; Disposition of Proceeds .................................26 No Remedy Exclusive.. ........... ......... ....... ......... .......... ........,. ........... ......... .........26 No Additional Waiver Implied by One Waiver................................................ 27 ARTICLE X Additional Provisions Conflict oflnterests; Authority Representatives Not Individually Liable........ 28 Equal Employment Opportunity........................................,.............................. 28 Restrictions on Use ..............................................................,............................28 Provisions Not Merged With Deed...................................................................28 Titles of Articles and Sections .......................................................................... 28 Notices and Demands ....................................................................................... 28 Counterparts...................................................................................................... 29 Recording................................. .............................................,........................... 29 Amendment.............................. ..................................,.............................,........ 29 Authority or City Approvals ............................................................................. 29 11 . . . Section 10.1 ] Section 10.12 Termination......... ................... ........... ....... .................. ...................... .................29 Choice of Law and Venue........ ............................ ....... ...................................... 29 TESTIMONIUM ............... ....... ........ ....... ..................... ......... ................ ................................. ... S-l SIGNATURES ............................ ...................................................................................... ....... S-l SCHEDULE A Redevelopment Property SCHEDULE B Form of Quit Claim Deed SCHEDULE C Plat of Redevelopment Property SCHEDULE D Resolution approving Interfund Loan SCHEDULE E Certificate of Completion SCHEDULE F Assessment Agreement SCHEDULE G Otter Creek Crossing Declaration (The remainder of this page is intentionally left blank.) 281415v2 MNI MN190-123 111 . . . PURCHASE AND REDEVELOPMENT CONTRACT THIS AGREEMENT, made on or as of the _ day of April, 2006, by and between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MONTICELLO, MINNESOTA, a public body corporate and politic established pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "Authority"), and SL REAL ESTATE HOLDINGS, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority has undertaken a program to promote economic development and job opportunities and to promote the redevelopment of land which is underutilized within the City, and in this connection created a redevelopment project known as the Central Monticello Redevelopment Project No. I (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, the Authority has acquired or will acquire certain property described in Schedule A (the "Redevelopment Property") within the Redevelopment Project, and intends to convey that property to the Redeveloper for development of certain improvements described herein; and WHEREAS, the Authority and City have approved a Tax Increment Financing Plan for Tax Increment Financing District No. 1-37 (the "TIF District") pursuant to Minnesota Statutes, Sections 469.174 to 469.179, made up of the Redevelopment Property; and WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: (The remainder of this page is intentionally left blank.) 281415v2 MNI MNI90-123 1 . . . ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Housing and Redevelopment Authority in and for the City of Monticello, or any successor or assign. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "Business Subsidy Act" means Minnesota Statutes, Section 1161.993 to 1161.995, as amended. "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Monticello, Minnesota. "Closing" has the meaning provided in Section 3.3(b). "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (I) site plan; (2) foundation plan; (3) Hoor plan for each Hoor; (4) elevations (all sides); (5) landscape plan; and (6) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of Wright, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "Holder" means the owner of a Mortgage. "HRA Act" means Minnesota Statutes, Sections 469.001 to 469.047, as amended. 281415v2 \iN! MN190-123 2 . . . "Interfund Loan" has the meaning provided in Section 3.7 and Schedule C. "Minimum Improvements" means the construction on the Redevelopment Property of an approximately 20,000 square foot production and warehouse facility, including office space necessary for and related to such activities. "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, with the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Otter Creek Crossing Declaration" means the Declaration of Protective Covenants, Conditions and Protections for Otter Creek Crossing filed February 17, 2005 in the Office of the County Recorder for Wright County, Minnesota as Document No. A 947485, attached as Schedule F. "Preliminary Agreement" means the Preliminary Development Agreement between the Authority and the Redeveloper dated as of February 28, 2006. "Redeveloper" means SL Real Estate Holdings, LLC or its permitted successors and assIgns. "Redevelopment Project" means the Authority's Central Minnesota Redevelopment Project No. I. "Redevelopment Property" means the real property described III Schedule A of this Agreement. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property and which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended. "Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing District No. 1-36. "Tax Increment Plan" or 'TIF Plan" means the Authority's Tax Increment Financing Plan for Tax Increment Financing District No. 1-37, as approved by the Authority on 281415v2 ~1N1 MN190-123 3 . . . , 2006 and by the City on , 2006, and as it may be amended from time to time. "Tax Official" means any County assessor; County auditor; County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. 'Termination Date" means the earlier of (a) date of the Authority's last receipt of Tax Increment from the TIF District in accordance with Section 469.176, subd. I b(3) of the TIF Act, or (b) the date the Interfund Loan has been paid in full, defeased, or terminated in accordance with the terms of the resolution set forth in Schedule C. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such approval and construction is required under Sections 4.2 and 4.3 of this Agreement. (The remainder ofthis page is intentionally left blank.) 281415\'2 1\:1NI MN190~123 4 . . . ARTICI;E II Representations and Warranties Section 2.1. Representations by the Authoritv. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a housing and redevelopment authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the Authority are undertaken to foster the redevelopment of certain real property which for a variety of reasons is presently underutilized, to prevent the emergence of blight, to create increased tax base and employment in the City, and to stimulate further development of the Otter Creek Crossing industrial park and the Redevelopment Project as a whole. (c) The Redevelopment Property is currently zoned II-A, and the Minimum Improvements conform with the permitted land uses allowed ,vithin this zoning classification. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of organization or the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. (b) If the Redeveloper acquires the Redevelopment Property in accordance with this Agreement, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (d) The Redeveloper will construct the Minimum Improvements in accordance with all local, state or federal energy-conservation laws or regulations. 281415v2 MNI MN190-123 5 . . . (e) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any partnership or company restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. (g) The proposed development by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (h) The Redeveloper is not currently in default under any business subsidy agreement with any grantor, as such terms are defined in the business Subsidy Act. (The remainder of this page is intentionally left blank.) 281415v2 MNI MN190-123 6 . . . ARTICLE III Acquisition and Convevance of Propertv Section 3.1. Convevance of the Propertv. As of the date of this Agreement, the City owns the Redevelopment Property and has agreed to transfer title to the Authority. The Authority will convey title to and possession of the Redevelopment Property to the Redeveloper, subject to all the terms and conditions of this Agreement. The parties agree and understand that this Agreement supersedes in all respects the Preliminary Agreement. Section 3.2. Purchase Price; Provisions for Pavment. (a) The purchase price to be paid to the Authority by the Redeveloper in exchange for the conveyance of the Redevelopment Property is $101,433.82. The parties agree and understand the purchase price represents 87,120 square feet (two acres) at a price of $1.00 per square foot, and 5401.44 square feet (.124 acres) at a price of $2.65 per square foot. An additional 70,610.76 square feet (1.621 acres) shall be conveyed to the Redeveloper for no additional consideration, but subject to an easement in favor of the City for drainage and utility purposes, as described in Section 4.5. The purchase price shall be payable by the Redeveloper as follows: (i) earnest money in the amount of $10,000, receipt of which the Authority acknowledges upon execution in full ofthis Agreement; and (ii) the balance payable in cash or certified check at Closing. Section 3.3. Conditions of Convevance. (a) The Authority shall convey title to and possession of the Redevelopment Property to the Redeveloper by a deed substantially in the form of the deed attached as Schedule B to this Agreement. The Authority's obligation to convey the Redevelopment Property to the Redeveloper is subject to satisfaction of the following tenns and conditions: (1) The Authority having approved Construction Plans for the Minimum Improvements in accordance with Section 4.2. (2) The Authority having approved financing for constmction of the Minimum Improvements in accordance with Article VII hereof, and the Redeveloper having closed on such permanent financing at or before Closing on transfer of title to the Redevelopment Property to the Redeveloper. (3) The Redeveloper having reviewed and approved (or waived objections to) title to the Redevelopment Property as set forth in Section 3.5. (4) The Redeveloper having reviewed and approved (or waived objections to) soil and environmental conditions as set forth in Section 3.6. (5) No uncured Event of Default under this Agreement. 2814] 5v2 i\1NI MN190-123 7 . Conditions (1), (2), and (5) are solely for the benefit of the Authority, and may be waived by the Authority. Conditions (3) and (4) are solely for the benefit of the Redeveloper, and may be waived by the Redeveloper. (b) The closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper shall occur upon satisfaction of the conditions specified in this Section, but no later than May 31, 2006 or at such earlier date as the parties hereto agree in writing ("Closing"). Section 3.4. Place of Document Execution, Delivery and Recording. Costs. (a) Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all deeds, documents and the payment of any purchase price shall be made at the offices of the title company selected by Redeveloper or such other location to which the parties may agree. (b) The deed shall be in recordable form and shall be promptly recorded in the proper office for the recordation of deeds and other instruments pertaining to the Redevelopment Property. At Closing, the Redeveloper shall pay: recording costs for the deed (excluding state deed tax), title insurance commitment fees and premiums, if any, and title company closing fees, if any; and a portion of City trunk fees in the amount of $1,635. The parties agree and understand that the Redevelopment Property is exempt from property taxes for taxes payable in 2006. . (c) At Closing the Authority shall payor cause to be paid the state deed tax, costs of recording any instruments used to clear title encumbrances, all outstanding special assessments against Redevelopment Property, and all City trunk fees in excess of the amount paid by Redeveloper under paragraph (b) above. The parties agree and understand that all such costs are included in the purchase price payable under Section 3.2, except to the extent otherwise described in Section 3.7. Section 3.5. Title. (a) As soon as practicable after the date of this Agreement. the Redeveloper shall obtain a commitment for the issuance of a policy of title for the Redevelopment Property. The Redeveloper shall have twenty (20) days from the date of its receipt of such commitment to review the state of title to the Development Property and to provide the Authority with a list of written objections to such title. Upon receipt of the Redeveloper's list of written objections, the Authority shall proceed in good faith and with all due diligence to attempt to cure the objections made by the Redeveloper. In the event that the Authority has failed to cure objections within sixty (60) days after its receipt of the Redeveloper's list of such objections, the Redeveloper may by the giving of written notice to the Authority (i) terminate this Agreement, upon the receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, or (ii) waive the objections and proceed to Closing. Upon termination, the Authority shall promptly return to the Redeveloper any earnest money. The Authority shall have no obligation to take any action to clear defects in the title to the Redevelopment Property, other than the good faith efforts described above. (b) The Authority shall take no actions to encumber title to the Redevelopment Property between the date of this Agreement and the time the deed is delivered to the Redeveloper. The . 281415v2 fvtNI MN190~123 8 . . . Authority expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to the Redevelopment Property prior to Closing. Upon Closing, the Authority is obligated to pay all costs to discharge any encumbrances to the Redevelopment Property attributable to actions of the Authority, its employees, officers, agents or consultants, including without limitation any architect, contractor and or engineer. (c) The Redeveloper shall take no actions to encumber title to the Redevelopment Property between the date of this Agreement and the time the deed is delivered to the Redeveloper. The Redeveloper expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to the Redevelopment Property prior to Closing. Notwithstanding termination of this Agreement prior to Closing, Redeveloper is obligated to pay all costs to discharge any encumbrances to the Redevelopment Property attributable to actions of Redeveloper, its employees, officers, agents or consultants, including without limitation any architect, contractor and or engineer. Section 3.6. Soils, Environmental Conditions, Grading. (a) Before closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper, the Redeveloper may enter the Redevelopment Property and conduct any other environmental or soils studies deemed necessary by the Redeveloper. If, at least 10 days before Closing the Redeveloper determines that hazardous waste or other pollutants as defined under federal and state law exist on the property, or that the soils are otherwise unsuitable for construction of the Minimum Improvements, the Redeveloper may at its option terminate this Agreement by giving wTitten notice to the Authority, upon receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, except the Authority shall promptly return to the Redeveloper any earnest money. (b) The Redeveloper will undertake (or cause to be undertaken) General Grading of the Redevelopment Property (with the exception of the 1.621-acre portion subject to a drainage easement, as shown on the plat attached as Schedule C) and the Authority will reimburse the Redeveloper for such grading at a rate of $. 1 2/square foot. For purposes of this Section, the term "General Grading" means: stripping top soil off the entire Redevelopment Property to a maximum depth of two feet; saving all such top soil on the Redevelopment Property; cutting existing high areas and filling low areas with existing suitable material; applying and grading so much of the saved top soil as to have an average thickness of four inches of top soil over the entire Redevelopment Property; all according to plans approved by the City's consulting engineer, WSB & Associates, Inc.. If the total cost incurred by the Redeveloper to undertake General Grading exceeds $.l2/square foot, such excess cost is the Redeveloper's sole responsibility. The Redeveloper must provide to the Authority invoices due or payable or other reasonable evidence of the IOtal General Grading cost. (c) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevelopment Property. 281415v2 tvll'''':11-1N190-123 9 . . . Section 3.7. Advance of Land and other Costs; Tax Increment Interfund Loan. (a) The Authority has determined that the fair market price of the Redevelopment Property is $245,181.82, or $2.65 per square foot. This price represents the total invested or to be invested by the Authority or City in making the Redevelopment Property available for commercial development, including the value of the raw land and all costs of special assessments for infrastructure, City trunk fees (except those paid by Redeveloper under Section 3.3), general grading, platting, administrative and holding costs. As described in Section 3.2 hereof, the purchase price for conveyance of the Redevelopment Property represents a reduction from the fair market price from $2.65 per square foot to $1.00 per square foot for a two-acre portion ofthe Redevelopment Property. Therefore, at Closing the Authority will forgo receipt of the full market price of the Redevelopment Property, which represents an advance of Authority funds in the amount of $143,748.00, less the amount paid by Redeveloper for City trunk fees in the amount of$I,635.00, for a net advance of$142,113.00. (b) The Authority will treat the advance described in paragraph (a) as an interfund loan (the "Interfund Loan") within the meaning of Section 469.178, Subdivision 7 of the TIF Act. The total original principal amount of the Interfund Loan is $142,113. The terms of the Interfund Loan are described in the resolution attached as Schedule C (the "Loan Resolution"). The Authority will pledge Available Tax Increment, as defined in the Loan Resolution, to payment of the lnterfund Loan. The Redeveloper has no rights or interest in any Tax Increment. Section 3.8. Business Subsidy Agreement. The provisions of this Section constitute the "business subsidy agreement" for the purposes of the Business Subsidy Act. (a) General Terms. The parties agree and represent to each other as follows: (1) The subsidy provided to the Redeveloper consists of the principal amount of the lnterfund Loan described in Section 3.7. The Interfund Loan is payable from a portion of the Tax Increments from the TIF District, an economic development tax increment financing district. (2) The public purposes of the subsidy are to facilitate development of the Authority's industrial park, increase net jobs in the City and the State, and increase the tax base of the City and the State. (3) The goals for the subsidy are: to secure development of the Minimum Improvements on the Redevelopment Property; to maintain such improvements as a distribution facility for the time period described in clause (6) below; and to create the jobs and wage levels in accordance with Section 3.8(b) hereof. (4) If the goals described in clause (3) are not met, the Redeveloper must make the payments to the Authority described in Section 3 .8( c). 2RI415v2 MNI l'v1N190-123 10 . (5) The subsidy is needed to induce Redeveloper to locate its business at this site, and to mitigate the cost of assessments for public infrastructure, all as determined by the Authority upon approval ofthe TIF Plan. (6) The Redeveloper must continue operation of the Minimum Improvements as a "Qualified Facility" for at least five years after the Benefit Date (defined hereinafter), subject to the continuing obligation described in Section 10J of this Agreement. For the purposes of this Section, the term Qualified Facility means a distribution, warehouse or manufacturing facility, including office space necessary for and related to those activities, all within the meaning of Section 469.176, subd. 4c of the TIF Act. The improvements will be a Qualified Facility as long as the Minimum Improvements are operated by Redeveloper or a tenant for the aforementioned qualified uses. During any period when the Minimum Improvements are vacant and not operated for the aforementioned qualified uses, the Minimum Improvements will not constitute a Qualified Facility. (7) The Redeveloper does not have a parent corporation. (8) The Redeveloper has not received, and does not expect to receive, financial assistance from any other "grantor" as defined in the Business Subsidy Act, in connection with the Development Property or the Minimum Improvements. . (b) Job and Wage Goals. The "Benefit Date" of the assistance provided in this Agreement is the earlier of the date of issuance of completion of the Minimum Improvements or the date the Minimum Improvements are occupied by Redeveloper or a tenant of Redeveloper. Within two years after the Benefit Date (the "Compliance Date"), the Redeveloper shall (i) retain at least 16 full-time permanent jobs permanent to the Redevelopment Property from another location outside the City, (ii) cause the average hourly wage of the 16 retained jobs to be at least $21.37 per hour, exclusive of benefits; (iii) cause to be created at least four new full-time permanent jobs on the Redevelopment Property (above and beyond the 16 retained jobs); and (iv) cause the average hourly wage of the four new jobs to be $18.00 per hour, exclusive of benefits. Jobs created by any tenants within the Minimum Improvements will count toward the requirements of this Section. Notwithstanding anything to the contrary herein, if thc wage and job goals described in this paragraph are met by the Compliance Date, those goals are deemed satisfied despite the Developer's continuing obligations under Sections 3.8(a)(6) and 3.8(d). The Authority may, after a public hearing, extend the Compliance Date by up to one year, provided that nothing in this section will be construed to limit the Authority's legislative discretion regarding this matter. (c) Remedies. If the Redeveloper fails to meet the goals described in Section 3.8(a)(3), the Redeveloper shall repay to the Authority upon written demand from the Authority a "pro rata share" of the outstanding principal amount of the Interfund Loan together with interest on that amount at the implicit price deflator as defmed in Minnesota Statutes, Section 275.50, subd. 2, accrued from the date of substantial completion of the Minimum Improvements to the date of payment. The term "pro rata share" means percentages calculated as follows: (i) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; . 281415v2 I\.:INll\:lN190-123 11 . (ii) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; (iii) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 3.8(a)(6), 60 less the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the Authority Representative, divided by 60; and (iv) if more than one of clauses (i) through (iii) apply, the sum of the applicable percentages, not to exceed 100%. Nothing in this Section shall be construed to limit the Authority's remedies under Article IX hereof. In addition to the remedy described in this Section and any other remedy available to the Authority for failure to meet the goals stated in Section 3.8(a)(3), the Redeveloper agrees and understands that it may not a receive a business subsidy from the Authority or any grantor (as defined in the Business Subsidy Act) for a period of five years from the date of the failure or until the Redeveloper satisfies its repayment obligation under this Section, whichever occurs first. . (d) Reports. The Redeveloper must submit to the Authority a written report regarding business subsidy goals and results by no later than February 1 of each year, commencing February 1,2007 and continuing until the later of (i) the date the goals stated Section 3.8(a)(3) are met; (ii) 30 days after expiration of the period described in Section 3.8(a)(6); or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 3.8(c). The report must comply with Section 1161.994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to the Redeveloper regarding the required forms. If the Redeveloper fails to timely file any report required under this Section, the Authority will mail the Redeveloper a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the Authority a penalty of $1 00 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section $1,000. Scction 3.9. Payment of Administrative Costs. The Authority acknowledges that upon execution of the Preliminary Agreement, Redeveloper has deposited with the Authority $10,000. The Authority will use such deposit to pay "Administrative Costs," which term means out of pocket costs incurred by the Authority and City together with staff costs of the Authority and City, all attributable to or incurred in connection with the negotiation and preparation of the Preliminary Agreement, this Agreement, the TIF Plan, and other documents and agreements in connection with the development of the Redevelopment Property. At Redeveloper's request, but no more often than monthly, the Authority will provide Redeveloper with a written report including invoices, time sheets or other comparable evidence of expenditures tor Administrative Costs and the outstanding balance of funds deposited. If at any time the Authority determines that the deposit is insufficient to pay Administrative Costs, the Redeveloper is obligated to pay such shortfall within 15 days after receipt of a written notice from the Authority containing evidence of the unpaid costs. If any balance of funds deposited remains upon issuance of the Certificate of Completion pursuant . 281415v2 MNI MNI90.123 12 . . . to Section 4.4 of this Agreement, the Authority shall promptly return such balance to Redeveloper; provided that Redeveloper remains obligated to pay subsequent Administrative Costs related to any amendments to this Agreement requested by Redeveloper. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under this section for Administrative Costs incurred through the effective date of termination. (The remainder of this page is intentionally left blank.) 281415v2 Ml'....l MN190-123 13 . . . ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimwn Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before closing on conveyance of the Redevelopment Property under Article III, the Redeveloper shall submit to the Authority completed Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with the Otter Creek Crossing Declaration, the Redevelopment Plan, the TIF Plan, this Agreement, and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Otter Creek Crossing Declaration and the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper for construction of the Minimum Improvements; and (vi) no Event of Default has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Redeveloper in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made within 30 days after the date of their receipt by the Authority. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within 30 days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably witWleld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. (b) If the Redeveloper desires to make any material change in the Construction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and 281415....21\:1:\[] MN190-123 14 . notify the Redeveloper in "Titing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by "Titten notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by no later than 30 days after Closing on conveyance of the Redevelopment Property. Subject to Unavoidable Delays, the Redeveloper must substantially complete construction of the Minimum Improvements by December 3 I, 2006. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority. . The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until construction of the Minimum Improvements has been completed, the Redeveloper shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of the Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion in substantially the form provided in Schedule D.. Such certification by the Authority shall be (and it shall be so provided in the deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the deed with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The certificate provided for in this Section 4.4 of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Redevelopment Property. If the Authority shall refuse or fail to provide any certification in accordance v.~th the provisions of this Section 4.4 of this Agreement, the Authority shall, within thirty (30) days after written request by the Redeveloper, provide the . 2&1415....2 t\tINJ MN190-123 15 . . . Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be commenced upon beginning of excavation for the building, and shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy issued by the City for the Minimum Improvements. Section 4.5. Drainage and Utilitv Easement. The Redeveloper acknowledges that the Redevelopment Property shall be conveyed to Redeveloper subject to an existing drainage and utility easement encumbering the property, as shown on the recorded Plat of the Redevelopment Property. The easement is donated and dedicated to the public for public use for drainage and utility purposes only. The City acknowledges that it shall be responsible for maintenance of the existing wetland. (The remainder of this page is intentionally left blank.) 281415\12 rvn\1 MN190-123 16 . . . ARTICLE V Insurance Section 5.1. Insurance. The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the follo'l'.ing: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) a policy or businesses. Insurance against loss and/or damage to the Minimum Improvements under policies covering such risks as are ordinarily insured against by similar (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $ 1,000,000, and shall be endorsed to show the City and Authority as additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers' compensation. 281415v2 fvNII\:1N 190.123 17 . . . (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper and the Authority at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper agrees to notifY the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthv"ith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Redeveloper. (e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this Section, the Redeveloper shall have the option of paying to the Authority an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay in full the outstanding principal and accrued interest on the Interfund Loan. (f) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this Agreement. (The remainder of this page is intentionally left blank.) 281415v2 MNll'vIN190-123 18 . . . ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes. Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority through the Termination Date to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit in which the Authority is the prevailing party, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date it will not cause a reduction in the real property taxes paid in respect of the Redevelopment Property through: (a) willful destruction of the Redevelopment Property or any part thereof; or (b) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement, except as otherwise provided in Section 5.1 (e). The Redeveloper also agrees that it will not, prior to the Termination Date, apply for a deferral of property tax on the Redevelopment Property pursuant to any law, or transfer or permit transfer of the Redevelopment Property to any entity whose o,vnership or operation of the property would result in the Redevelopment Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City or Authority in accordance with this Agreement). Section 6.3. Assessment Agreement. (a) Upon closing on conveyance of the Redevelopment Property to the Redeveloper under Article III hereof, the Redeveloper shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's minimum Market Value for the Redevelopment Property and Minimum Improvements constructed thereon. The amount of the minimum Market Value shall be $1,000,000 as of January 2, 2007 and each January 2 thereafter, notwithstanding the status of construction by such dates. (b) The Assessment Agreement shall be substantially in the form attached hereto as Schedule E. Nothing in the Assessment Agreement shall limit the discretion of the assessor to assign a market value to the property in excess of such assessor's minimum Market Value. The Assessment Agreement shall remain in force for the period specified in the Assessment Agreement. (The remainder of this page is intentionally left blank.) 281415v2 ~\1NI rvINI90-123 19 ARTICLE VII . Financinl! Section 7.1. Financing. (a) Before conveyance of the Redevelopment Property, the Redeveloper shall submit to the Authority evidence of one or more commitments for mortgage financing which, together with committed equity for such construction, is sufficient for the construction of the Minimum Improvements. Such commitments may be submitted as short term financing, long term mortgage financing, a bridge loan with a long-term take-out financing commitment, or any combination of the foregoing. Such commitment or commitments for short term or long term mortgage financing shall be subject only to such conditions as are normal and customary in the mortgage banking industry. (b) If the Authority finds that the financing is sufficiently committed and adequate in amount to provide for the construction of the Minimum Improvements, then the Authority shall notify the Redeveloper in '-'Titing of its approvaL Such approval shall not be unreasonably withheld and either approval or rejection shall be given within thirty (30) days from the date when the Authority is provided the evidence of financing. A failure by the Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority rejects the evidence of financing as inadequate, it shall do so in '-'Titing specifying the basis for the rejection. In any event the Redeveloper shall submit adequate evidence of financing within thirty (30) days after such rejection. Approval of any subordination agreement under Section 7.3 hereof will constitute approval of financing for the purposes ofthis Section. . Section 7.2. Authoritv's OPtion to Cure Default on Mortgage. In the event that there occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the Redeveloper shall cause the Authority to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the Mortgage documents. In the event there is an event of default under this Agreement, the Authority will transmit to the Holder of any Mortgage a copy of any notice of default given by the Authority pursuant to Article IX of this Agreement. Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In order to facilitate the Redeveloper obtaining financing for purchase of the Redevelopment Property and for construction according to the Construction Plans, the Authority agrees to subordinate its rights under this Agreement, including without limitation its rights of reversion under Sections 9.3 and 9.4 hereot: provided that (a) such subordination shall be subject to such reasonable terms and conditions as the Authority and Holder mutually agree in writing, (b) the Authority's obligation to subordinate is contingent on the Authority's approval of the financing in accordance with Section 7.1 hereof, and (c) in no event will the Authority subordinate its rights under the Assessment Agreement described in Section 6.3. . 281415',12 MNI MNI90-123 20 ARTICLE VIII . Prohibitions Al!:ainst Assil!:nment and Transfer; Indemnification Section 8.1. Reoresentation as to Redevelooment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property or portions thereof, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redevelooer's Transfer of Prooertv and Assignment of Agreement. The Redeveloper represents and agrees that until the Termination Date: . (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority unless the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the Authority's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. (b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment Property or any portion thereof, seeks to be released from its obligations under this Redevelopment Agreement as to the portions of the Redevelopment Property that is transferred or assigned, the Authority and City shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: 21 (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority and City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to the portion of the Redevelopment Property to be transferred. . (ii) Any proposed transferee, by instrument in wntmg satisfactory to the Authority and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority and City, have expressly assumed all of the obligations of the Redeveloper under this Agreement as to the portion of the Redevelopment Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in vvTiting by the Authority and the City) deprive the Authority and or City of any rights or remedies or 281415\'2.MN1 MN!90-123 . controls with respect to the Redevelopment Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority and the City to the contrary, no such transfer or approval by the Authority and the City thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority and the City. In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned or otherwise conveyed. . Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants and agrees that the Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the following named parties, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. (c) The Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person. . 28]415v2 MNI Mt-;190-123 22 . . . (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 2814]5\'2 MNI r.,:IN190-!23 23 ARTICLE IX . Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides): (a) any failure by any party to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement or under any other agreement entered into between the Redeveloper and the Authority or City in connection with development of the Redevelopment Property; and (b) any default by Redeveloper under a Mortgage, if any. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: . (a) Suspend its performance under the Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement. (b) Cancel and rescind or terminate the Agreement. (c) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agrcement, or covenant under this Agreement. (d) Notwithstanding anything to the contrary herein, in the case of defaults by Redeveloper described in Section 3.8, the Authority has the additional remedies specified therein, subject to the qualification described in Section 10.3. Section 9.3. Revesting Title in Authoritv Upon Happening of Event Subsequent to Convevance to Redeveloper, In the event that subsequent to conveyance of the Redevelopment Property to the Redeveloper and prior to receipt by the Redeveloper of the Certificate of Completion for the Minimum Improvements required to be constructed on that parcel: (a) the Redeveloper, subject to Unavoidable Delays, shall fail to begin construction of the Minimum Improvements in conformity with this Agreement and such failure to begin . 281415,,2 MNI MN190-123 24 . construction is not cured within 90 days after "'Titten notice from the Authority to the Redeveloper to do so; or (b) subject to Unavoidable Delays, the Redeveloper after commencement of the construction of the Minimum Improvements, fails to carry out its obligations with respect to the construction of such improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 90 days after "'Titten demand from the Authority to the Redeveloper to do so; or (c) the Redeveloper fails to pay real estate taxes or assessments on the parcel or any part thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the parcel (except to the extent permitted by this Agreement), or shall suffer any levy or attachment to be made, or any materialmen's or mechanics' lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision satisfactory to the Authority made for such payment, removal, or discharge, within thirty (30) days after =itten demand by the Authority to do so; provided, that if the Redeveloper first notifies the Authority of its intention to do so, it may in good faith contest any mechanics' or other lien filed or established and in such event the Authority shall permit such mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal and during the course of such contest the Redeveloper shall keep the Authority informed respecting the status of such defense; or . (d) there is, in violation of the Agreement, any transfer of the parcel or any part thereof, or any change in the ownership or distribution thereof of the Redeveloper, or with respect to the identity of the parties in control of the Redeveloper or the degree thereof, and such violation is not cured within sixty (60) days after "'Titten demand by the Authority to the Redeveloper, or if the event is by its nature incurable within 30 days, the Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (e) the Redeveloper fails to comply with any of its other covenants under this Agreement related to the subject component of the Minimum Improvements and fails to cure any such noncompliance or breach within thirty (30) days after written demand from the Authority to the Redeveloper to do so, or if the event is by its nature incurable within 30 days, the Redeveloper does not, within such 3D-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (f) the Holder of any Mortgage secured by the subject property exercises any remedy provided by the Mortgage documents or exercises any remedy provided by law or equity in the event of a default in any of the terms or conditions of the Mortgage, Then the Authority shall have the right to re-enter and take possession of the parcel and to terminate (and revest in the Authority) the estate conveyed by the deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the parcel to the Redeveloper shall be made upon, and that thc deed shall contain a condition . 2814]5\'2 i\:lNJ 1\:11\190-123 25 . . . subsequent to the effect that in the event of any default on the part of the Redeveloper and failure on the part of the Redeveloper to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Authority at its option may declare a termination in favor of the Authority of the title, and of all the rights and interests in and to the parcel conveyed to the Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to and in the parcel, shall revert to the Authority, but only if the events stated in Section 9.4(a)-(t) have not been cured within the time periods provided above. Section 9.4. Resale of Reacquired Propertv: Disposition of Proceeds. Upon the revesting in the Authority of title to and/or possession of the parcel or any part thereof as provided in Section 9.3, the Authority shall, pursuant to its responsibilities under law, use its best efforts to sell the parcel or part thereof as soon and in such manner as the Authority shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan and TIF Plan to a qualified and responsible party or parties (as determined by the Authority) who will assume the obligation of making or completing the Minimum Improvements or such other improvements in their stead as shall be satisfactory to the Authority in accordance with the uses specified for such parcel or part thereof in the Redevelopment Plan and TIF Plan. During any time while the Authority has title to and/or possession of a parcel obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering such parcel. Upon resale of the parcel, the proceeds thereof shall be applied: (a) First, to reimburse the Authority for all costs and expenses incurred by them, including but not limited to salaries of personnel, in connection with the recapture, management, and resale of the parcel (but less any income derived by the Authority from the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the parcel or part thereof (or, in the event the parcel is exempt from taxation or assessment or such charge during the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have been payable if the parcel were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the parcel or part thereof at the time of revesting of title thereto in the Authority or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Redeveloper, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the subject improvements or any part thereof on the parcel or part thereof; and any amounts otherwise owing the Authority by the Redeveloper and its successor or transferee; and (b) Second, to reimburse the Redeveloper, its successor or transferee, up to the amount equal to (I) the purchase price paid by Redeveloper under Section 3.2; plus (2) the amount actually invested by it in making any of the subject improvements on the parcel or part thereot~ less (2) any gains or income withdra\\ll or made by it from the Agreement or the parcel. Any balance remaining after such reimbursements shall be retained by the Authority as its property. Section 9.5. No Remedv Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other 281415v2 M\l1 \lN190-123 26 . . . remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.6. No Additional Waiver Imnlied bv One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. (The remainder of this page is intentionally left blank.) 281415\'2 MNI MN 190-123 27 . . . ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authoritv Representatives Not Individuallv Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or City or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Emplovment Opportunitv. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall use the Redevelopment Property and the Minimum Improvements thereon only as Qualified Facility (as defined in Section 3.8 hereof), provided that after expiration of the five-year period described in Section 3.8(c), the repayment remedy described in Section 3.8(d) may not be imposed on Redeveloper for default under this Section, and Authority is limited to any other remedies available under Article IX hereof. Further, until the Termination Date the Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Men!ed With Deed. None of the proVISIOns of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and 2814] 5v2 .\1NI MN190-l23 28 . . . (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at SL Real Estate Holdings LLC, 12450 Fernbrook Lane, Dayton, MN 55327, Attn: Michael H. Maher; and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at Housing and Redevelopment Authority in and for the City of Monticello, 505 Walnut Street, Suite I, Monticello, Minnesota 55337, Attn: Executive Director; or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 10.7. Counterparts. This Agreement may be executed III any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the County recorder. The Redeveloper shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Redeveloper. Section 10.10. Authority or Citv ApDrovals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. Section 10.11. Termination. This Agreement terminates on the Termination Date. Within 30 days after the Termination Date, the Authority will deliver to Redeveloper a written release in recordable form satisfactory to Redeveloper, evidencing termination ofthis Agreement. Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. (The remainder of this page is intentionally left blank.) 2S1415v2 MNI MN190-123 29 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused . this Agreement to be duly executed in its name and behalf on or as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF WRIGHT ) Notary Public . The foregoing instrument was acknowledged before me this _ day of 2006, by and , the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, a public body politic and corporate, on behalf of the Authority. . 28l415v2l\1Nl MN190-123 8-1 . . . SL Real Estate Holdings LLC By Its STATE OF ) ) SS. ) COUNTY OF The foregoing instrument was acknowledged before me this _ day of , 2006 by , the of SL Real Estate Holdings LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 281415v2 rvlNl MN190-123 8-2 . . . SCHEDULE A REDEVELOPMENT PROPERTY Lot I, Block I, Otter Creek Crossing 2nd Addition, according to the recorded plat thereof, Wright County, Minnesota 28141Sv2 MNl MN190-123 A-I . . . SCHEDULE B FORM OF QUIT CLAIM DEED THIS INDENTURE, between the Housing and Redevelopment Authority in and for the City of Monticello, Monticello, Minnesota, a public body corporate and politic (the "Grantor"), and SL Real Estate Holdings LLC, a Minnesota limited liability company, (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $ and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel ofland lying and being in the County of Wright and State of Minnesota described as follows, to-wit (such tract or parcel ofland is hereinafter referred to as the "Property"): Lot 1, Block I, Otter Creek Crossing 2nd Addition, according to the recorded plat thereof, Wright County, Minnesota To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on the day of April, 2006, identified as "Purchase and Redevelopment Contract" (hereafter referred to as the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Monticello, Minnesota, or for the refinancing of the same. It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with thc provisions of the Agreement, the Grantor \vill furnish the Grantee with an appropriate instrument so certifying. Such certitlcation by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. 281415v2 ;\'INI MN190-123 B-1 . . . All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Wright County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions ofthe Agreement and this Deed, the Grantor shall, within thirty (30) days after ",Titten request by the Grantee, provide the Grantee with a "'Titten statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimwn Improvements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Section 9.3 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to termination of such right upon issuance of a Certificate of Completion as defined in the Agreement. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with all provisions of the Agreement that relate to the Property or use thereof for the periods specified in the Agreement, including without limitation the covenant set forth in Section 10.3 thereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, It IS intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its m,vn right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. SECTION 4. This Deed is also given subject to: 281415v2 tvlNI MN190-123 B-2 . . . (a) Provision of the ordinances, building and zoning laws of the City of Monticello, and state and federal laws and regulations in so far as they affect this real estate. (b) Declaration of Protective Covenants, Conditions and Protections for Otter Creek Crossing filed February 17, 2005 in the Office of the County Recorder for Wright County, Minnesota as Document No. A 947485. (c) [Any other permitted encumbrances after Redeveloper's title review] Grantor certifies that it does not know of any wells on the Property. 2814] 5v2 IvINJ MN190.123 B-3 IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its Chair and Executive Director and has caused its corporate seal to be hereunto affixed . this day of , 2006. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF WRIGHT ) . On this _ day of , 2006, before me, a notary public within and for Wright County, personally appeared and to me personally known who by me duly sworn, did say that they are the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, Monticello, Minnesota (the "Authority") named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said instnunent was signed and sealed on behalf of said Authority pursuant to a resolution of its governing body; and said and acknowledged said instrument to be the free act and deed of said Authority. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered 470 US Bank Plaza Minneapolis, Minnesota 55402 . 281415v2 j\'fNI MN190-123 B-4 . . . SCHEDULE D HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO. AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-37 BE IT RESOLVED By the Board Of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority") as follows: Section 1. Background. 1.01. The Authority has established tax increment financing district no. 1-37 (the "TIF District") within the Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") and Sections 469.001 to 469.047 (the "HRA Act"). 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The Authority owns or will acquire certain property (the "Redevelopment Property") and has incurred or will incur certain costs to prepare such property for redevelopment. The Authority has determined that the market price of the improved Redevelopment Property is at least $245,181.82.00, or $2.65 per square foot. 1.05. The Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") with SL Real Estate Holdings LLC (the "Redeveloper"), under which the Authority will (among other things) convey the Redevelopment Property to the Redeveloper for a purchase price of $101,433.82, subject to Redeveloper's obligation to pay a portion of City trunk fees in the amount of$I,635. 1.06. By conveying the Redevelopment Property under the Contract, at Closing the Authority will forgo receipt the full market price of the Redevelopment Property. Such forbearance represents an advance of Authority funds in the amount of $142,] 13.00 (the write- down in purchase price net of Redeveloper' s trunk fee payment). ] .07. The Authority intends to designate such advances as an interfund loan III 281415v2 \tINI MN190-123 D-l accordance with the terms of this resolution and the TIF Act. . Section 2. Repayment of Interfund Loan. 2.0 I. The Authority will reimburse itself for the land advance in the principal amount of $142,113 together with interest at the rate of 6% per annum (the "Interfund Loan"). Interest accrues on the principal amount from the date of Closing on conveyance of the Redevelopment Property to the Redeveloper under the Development Agreement (hereafter, the "Closing Date"). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2006. The interest rate will, without further action by the Authority, be adjusted on January I of each year to reflect the greater of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar year. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the City Administrator, through the date of last receipt of tax increment from the TlF District. . 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TIF District received by the Authority from Wright County in the six-month period before any Payment Date, less any amounts determined by the Authority to be applied toward administrative expenses in accordance with the TIF Act. Payments shall be appl ied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing Date will be compounded semiannually on February 1 and August 1 of each year and added to principal until the first Payment Date, unless otherwise specified by the City Administrator. 2.04. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance \vith Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State of Milmesota or any political subdivision thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. D-2 2.06. The Authority may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. . 2.07. The Authority may from time to time amend the terms of this Resolution to the extent permitted by law, including without limitation amendment to the payment schedule and the interest rate; provided that the interest rate may not be increased above the maximum 281415,,2 :\1NI MN190-123 . . . specified in Section 469.178. subd. 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon execution in full of the Contract. Adopted this _ day of April, 2006 Chair ATTEST: Executive Director 281415v21\fNI MN190-123 D-3 . . . SCHEDULE E CERTIFICATE OF COMPLETION WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to (the "Grantee"), the following described land in County of Wright and State of Minnesota, to-wit: and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections I and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IV of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Article IV of the, but the covenants created by Sections 3 and 4 of said Deed shall remain in full force and effect. Dated: ,20_ HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA By Authority Representative 281415v2 MNI !\,fN190.123 E-l . . . SCHEDULE F ASSESSMENT AGREEMENT and ASSESSOR'S CERTIFICATION By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO and SL REAL ESTATE HOLDINGS LLC This Document was drafted by: KENNEDY & GRAVEN, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 281415v2 i\:1NI MN 190.123 F-l ASSESSMENT AGREEMENT . THIS AGREEMENT, made on or as of the _ day of , 2006, and between the Housing and Redevelopment Authority in and for the City of Monticello, a public body corporate and politic (the "Authority") and SL Real Estate Holdings LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH, that WHEREAS, on or before the date hereof the Authority and the Redeveloper have entered into a Purchase and Redevelopment Agreement dated , 2006 (the "Redevelopment Contract"), pursuant to which the Authority is to facilitate development of certain property in the City of Monticello hereinafter referred to as the "Property" and legally described in Exhibit A hereto; and WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to construct certain improvements upon the Property (the "Minimum Improvements"); and d the Redeveloper desire to establish a minimum market value onstructed thereon, pursuant to Minnesota Statutes, Section WHEREAS, the Authority and the Assessor for the County (the "Assessor") have reviewed . the preliminary plans and specifications for tl(f"ownl16ifseS'~ have inspected such improvements; NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. The minimum market value which shall be assessed for the Property described in Exhibit A, together with the Minimum Improvements thereon, for ad valorem tax purposes, shall be $1,000,000 as of January 2, 2007 and each January 2 thereafter notwithstanding the progress of construction of such Minimum Improvements by such dates. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on the earlier of the following: (a) The date of receipt by the Authority of the final payment from the County of Tax Increments from TIF District No. 1-37; or (b) The date when the Interfund Loan (as defined in the Redevelopment Contract) has been paid in full, defeased or terminated in accordance "ith the resolution set forth in Schedule C of the Redevelopment Contract. The event referred to in Sections 2(b) of this Agreement shall be evidenced by a certificate or affidavit executed by the Authority. 3. This Agreement shall be promptly recorded by the Authority. The Redeveloper shall pay all costs of recording. . 4. Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifying the terms of the Redevelopment Contract between the Authority 281415\12 rvlNI MN190-t23 F-2 . . . and the Redeveloper. 5. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 6. Each of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 7. In the event any provision of this Agreement shall be held invalid and unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8. The parties hereto agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and modifications hereto, and such further instruments as may reasonably be required for correcting any inadequate, or incorrect, or amended description of the Property or the townhouse thereon, or for carrying out the expressed intention of this Agreement, including, without limitation, any further instruments required to delete from the description of the Property such part or parts as may be included within a separate assessment agreement. 9. Except as provided in Section 8 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 10. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. II. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 281415v2 JVlNI MNl90-123 F-3 . . . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chair By Its Executive Director STATEOFMINNESOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 2006 by and , the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, on behalf of the Authority. Notary Public 281415v2 ~:1NI MN190-123 F-4 . . . STATE OF MINNESOTA COUNTY OF SL REAL ESTATE HOLDINGS LLC By Its ) ) SS. ) The foregoing instrument was acknowledged before me this _ day of 2006 by , the of SL Real Estate Holdings LLC, a Minnesota limited liability company, on behalf ofthe limited liability company. 281415v2 MNI MN190-123 Notary Public F-b . . . CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the values assigned to the land and improvements are reasonable. County Assessor for the County of Wright STATE OF MINNESOTA ) ) ss COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of 2006 by , the County Assessor of the County of Wright. Notary Public 281415v2 t\:1;.J1 MN190-123 F-6 . . . EXHIBIT A of ASSESSMENT AGREEMENT Legal Description of Property Lot I, Block I, Otter Creek Crossing 2nd Addition, according to the recorded plat thereof, Wright County, Minnesota 28]415\'2 I\1N1 MN190-123 F-7 SCHEDULE G . Doc. No. A 947485 OA'lCE OF THE COUNTY RECORDER WRIGHT COUN'TY, MINNESOTA Cedilied Filed andl... Raccrdecf on 02-17-2005 at 01;09 C/led(1I: Fee; $19.50 F\oylnllM l;ode 04 AddL Fee llltTy A. Unser, Coun\y Recorder (ftcu/Jr.'C:,Ifi;t- ~JiYlgll!ji)t'11ffflfQi1J DECLARATION OF PROTECTIVE COVENANTS, CONntTIONS, AND PROTECTIONS FOR OTTER CREEK CROSSING THIS DECLARATION is made by lhe CITY OF MONTICELLO, a Minnesota municipalcorporalien ("Decla/ant"), . WHEREAS, Declarant is the fee owner of real propeny in the City ofMonticelle, Wtight County, Minnesota, legally described.s Lot I, Block 2, Otter Cteek Crossing ("the Property"); eM WHEREAS, Declarant has granted tbe Housing and Redevolopment Authority (hereinafter referred to "HRA") the authority to administer these protective covenants; and WHEREAS, Declarant desires to establish covenants, conditions, end protections which will benefit the Property for the pW'pooe of facilitating development ofilie Property and fer the pllrpOSC of protecting and preserving 1be value and desirability of the Property; and WHEREAS, all Property Owners arc advised that1bey will be expected to abide by 1be protective covenants hereby established by Declarant. These $tandarcls are intended to assure the integrity of Otter Creel< Crossing and protect property values and adjoining property use.. THEREFORE, BE IT RESOLVED TEAT, the DecIaram declares that the Property, shall be used, occupied, and conveyed subject to tbe covenant;, conditiotls, and protections sel for1b in this ~laration, aU ofwhictJ shall be binding on a11perscns 116m U:rtlllll TO: ern OF lI'llN'l'ICllU,O I 50S IIALlWl: S'!1lllEt # 1 llON'l'IC!:LLU ll..~ SS 3 62 . 281415v2 !\.1N1MNI90-123 G-l JA-l-- . . . owning Or acquiring any right, title or illteteSt in the Property and their heirs, por&<>nal represenla:l:ives, successors and assigns. SECTION 1 1. DEFINITIONS: 1.1 "Declarant" shall mean the City ofMonticeJJo. 1.2 <<Improvemellts" sllall mean all structures and olhet COnstluction on a lot or parcel for use permitted by the zoning ordinances oflhe City of Monticello. inCluding, but not limited to, buildIngs, outbuildings. parking areas. loading areas, outside platforms and docks, driveways, walkways, reuces, lawns, landscaping, signs, relain \valls, decks, railroad tracks, poles, berms and swales, and exterior lighting. 1.3 ~Lot" shall meao a portion (lithe Property identified lIS a lot on " subdivision pial prepared in accofdance with Minnesota Statutes, Chap"'r 505, and filed for record in the WriglltCoUllty Recorder's Office. 1.4 ~OCClljlant" shall mean llt)y person, other than an owner, in possession of a 101 or parcel. 1.$ "Owner" for purposes of this Declaration shall be the Declarant and its successors as recorded fee simpJeowner of any part oflhe Property. For purposes hereof, if any part of the Property is sold under a conlroct for deed or leased under a ground lease, the contact for d.cd purchaser ("Vendee") andlor ground lessee shall be dee:tned the Owner in lieu of the record fee simple owner, providcd how_. that for purposes of amending or modifying this Declaration. Ihe tee simple title owner and the Vendee andior ground lessee, as the case may be, shall jointly all be deemed lhe Owner. 1.6 "Person" shall mean a natural individual. cOlporatlons, limited liability "o""peny, partoershlp, trustee, 0, other lepl entity capable ofhoJding title to real property. 1.7 "Proper!)''' shall mean all of the real property submitted to the provisions of this Declaration.. including all iroprovements located on the real property now or in the future. The Property !lSofthe date of this Declaration is tega!)y deseribed as Lot I, Block:?, Otter Creek Crossing, Wright County, Minnesota. IJ6553 1 2814]5\'2 MNI MN190-123 G-2 . . . 2. SECTION 2 STAl\'DARDS FOR CONSTRUCTION AND MAINTENANCE 2.1 MilIlmllffi Standards The minimum slJIDdards for the cOllStruction, alteratiOl:l, and maintenance of improvements on lhe Property shall be '!hose set forth by the City of Monticello and any other governmental agency whiclJ rnsy have juriSdiction over the Property. All improvements on the Property shall conform to the then existing buildln g codes in effect for the City of Monticelio and shall be in compliance with all1aws, rules and regulations of any governmental body that may be applicable, including, without limitation, environmental Jm\.'S and regulatiollS. Where the following restrictive covenants are nlOt'<: stringent than the zoning ordinances, other laws and regulations of the City of Monticello or any other applicable govemm=nt agency. the re$lrictive QOvellllnts COIltained in this Declaration shall govern and become minimum standards by which the improvements and maintenance of them shall be controlled. 2.2 Use No outdoor storage is allowed. On aU lots, no owncr or occupant shall store materials, equipment, or items outside of any building" 'The following exceptions are DOl to he considered storage, and may be located outside in compJiance with other applicable regulations; a. Passenger vehicles and light trucks parked in complian~ with the City of Monticello zoning regulations. b. Parking of company vehicles, inCluding trucks, vans, and oilier similar vehicles, except that semi-ttactors and trailers may only be parked in the side and rear yards. c. Semi.trailers locltted in designated loeding doc4 d. Trash handling equiplltent. 2.3 Building Quality aIld Materials No building shall utilize metal or steel sidewall building materials with the exception of arclJJtecwral jl1lllJlls that do not exceed ten percent (10%) of the sidewall surface area. 110m 3 281415\'2 IvlNl M;-..J190~123 0-3 . . . 1.4 Landscaping Irrigation System 00 slllots on which II building is proposed 10 be constrUcted, the owner shall. prior to occupancy of the building, install in-ground landscaping in! gation between the front building line and the public street. This requirement shall also apply to the side lot areas of comer lots whicb face a different street. in lhe case of rear lot areas that fronl on Ii public Street, lhe owner shall install landscaping irrigation for alllaodscaped areas wilhin fifty (50) feet of the public street. The Irrigation system shall provide adequate water 10 all landscaped areas, inclUding lawns, shrubs, trees, flower beds, or other similar features. This requirement also applies to the "boulevard" portion of the public right of way betwean the owner's property line and the curb line of the public street. 1,5 General Exterior Maintenance Each owner and occupant of a lot shall fully and properly maintain and repair the exterior of any StrUcture loeated on such lot io such a manner as to enhance the overall appearance ofthe :Property, The exteriors of all buildings and lhe parking, driving, and loadiog areas shall be kept and maintained in a good state of repair at all times Md be adequately maintained. All lots shall be kept free of debris of allY Kind and all landscaping must be kept in good repair. All landscaped areas shall be graded to provide proper site dramage. Landscaped areas snaIl be maintained in neat condition, lawns mowed, and adequately watered in summer, hedges trimmed, and leaves rakes. 2.6 Construction ConStrUction or alteratiOllof any Improvement on a lot shall be diligently pursued and sball not rernsio :in a partly finished condition any longer than is reasonably necessary [(If completion of thc C{)l1strl1ction or alteration. The owner and occupant of any lot upon which improvements are consmlcted shall, at aU times. keap the lot and streets being utilized by such owner in connection with sudl constructton, free from dirt, mud, garbage, trash, or other debris whidl might be occasioned by such constrUction or alteration. 2.7 N 0:.:1065 Aetlvlties No trades, services, activities, operations, or usage shan be permitted or . " 1 I 11 .1 . 1 , .f , 1".1 ..~... 1.... .0<" ,n .... 1........_. . 281415v21vtNI MN190-123 0-4 . . . b. The emission of fumes, odors, glare, vibration, gases, radiation, dust. liquid wastes, smoke or noise or a l1ll11n'e and quantity prol\i!>ited by applieable laws. 2.8 Temporary Strueture Trailers, temporary construction buildings, and the like, shall be permitted only for construction purposes during the period of construction or alteration of a permanent ouilding. Such structures shall be placed as inconspicuously as practical and shall be mnoved not later than thirty (30) days after the date of tho suhstllDtial completion oithe building. 2.9 lMldillg Docks No loading dock shall face School Boulevard or Chelsea Road. sECTION 3 3. GENERAL TERMS 3.1 Nlltllre Bnd Term The protective covenants hereinafter set forth shall be considered as covenants running with the land, to be binding on all persoos claiming under them and nm for a period of thirty (3G) years from the date of tiling with the Wright COUllty Recorder's Office at which time the protective covenants shllll be automaticlllly renewed for successive periods often (10) years unless., prior to the ren"""al date. the ownars of eighty percent (80%) or more of the lots agree in writing thatlhe covenants shall tcrminate at tlte end of that period. 3.2 Amcndments This Declaration may be amended, modified., or terminated by an instrument in writing, executed by the Owners of eighty percent (80%) of the lots. Eaeh lot shall be considered to have one vote. An instrument executed in llCcordance with this section shal] be effective when filed for recording with the Wright County Recorder's Office. 3.3 Severability If any lenn, covenant or provision of this instrument, or an exhJbit attached to it is held to be invalid or unenforceable for any reesoD whatsoever, such determination shall nol be deemed to alter, affect, or impair, in any manner whatsoever, MY other portion of tbis document or exhibits. 116m S 281415v2 i\fNI MN 190-[23 G-5 IIM33 6 947485 . SECTION 4 4. COVENANT ADMINISTRATION 4.1 Enton:emeat The Declarant. HRA and the owner of any Jot shall each, either acting separately or In common. have the authority to bring action for specific performance or injunctive relief(o enforce any protective cove:nant contained herein. 4.2 Adoption These Protective Covenants become effective upon their execution and recording by the Declarant. . STATE OF MINNESOTA ) )ss, COUNTY OF WRIGHT ) The foregoing irortl'ument ",a" ",koowledged before me this 14th day of February . 1.005, by Clint Herbs! and Rick Wolfsleller. the MaYQr and City Administra!Ol'. respectively. of the City of Monticello, a Minnesota municipal corporotion, on behalf of the corporatiollllnd pllr$UilIlI to UlO authority granted by ils City CounciL ~'" \Y\. ___~:;,~~ NotillY Public . THIS INSTRUMENt DRAITED By; CAMPBELL KNUTSON, P-A Professional Association 317 Eagandale Office Center 13 E 0 Corporate Canter Curve Eagan, Minnesota 55121 TMS/cjh . OAWH M, GROSSINGER NO'1'AlII'Puauc.~. Mr-~"",31.;llID . 281415v2l\.1N1 MN190-123 G-6 . . . HRA Agenda - 04/12/06 3. Consideration to adont a resolution authorizinl!: Interfund Loan for advance of certain costs in connection with TIF District No. 1-37. A. Reference and backl!:round: This resolution actually authorizes the advancement of funds (Interfund Loan) for expenditures eligible to be paid by tax increment. The expenditures being the write-down in purchase price net of redeveloper's trunk fee payment. The HRA will reimburse itself for the land advance in the principal amount together with interest at the rate of 6%. Interest will start to accrue at date of Closing. B. Alternative Action: 1. A motion to adopt a resolution authorizing Interfund Loan for advance of certain costs in connection with TIF District No. 1-37. 2. A motion to deny adoption of a resolution authorizing Interfund Loan for advance of certain costs in connection with TlF District No. 1-37. 3. A motion to table any action. c. Recommendation: Recommendation is alternative no. 1. This is actually a housekeeping follow-up to the previous agenda item. D. SUDDortinl!: Data: Resolution for adoption. 1 . . . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO. AUTHORIZING INTERFUND LOAN FOR ADV ANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-37 BE IT RESOLVED By the Board Of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority") as follows: Section 1. Background. 1.01. The Authority has established tax increment financing district no. 1-37 (the "TIF District") within the Central Monticello Redevelopment Project No. I (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") and Sections 469.001 to 469.047 (the "HRA Act"). 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The Authority owns or will acquire certain property (the "Redevelopment Property") and has incurred or will incur certain costs to prepare such property for redevelopment. The Authority has determined that the market price of the improved Redevelopment Property is at least $245,181.82, or $2.65 per square foot. 1.05. The Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") with SL Real Estate Holdings LLC (the "Redeveloper"), under which the Authority will (among other things) convey the Redevelopment Property to the Redeveloper for a purchase price of $101.433.82, subject to Redeveloper's obligation to pay a portion of City trunk fees in the amount of $1 ,635. 1.06. By conveying the Redevelopment Property under the Contract, at Closing the Authority will forgo receipt the full market price of the Redevelopment Property. Such forbearance represents an advance of Authority funds in the amount of $142,113 (the write-down in purchase price net of Redeveloper's trunk fee payment). Section 2. Repayment of Interfund Loan. . 1. 07. The Authority intends to designate such advances as an interfund loan in accordance with the terms ofthis resolution and the TlF Act. 2.01. The Authority will reimburse itself for the land advance in the principal amount of $142,113 together with interest at the rate of 6% per annum (the "Interfund Loan"). Interest accrues on the principal amount from the date of Closing on conveyance of the Redevelopment Property to the Redeveloper under the Development Agreement (hereafter, the "Closing Date"). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2006. The interest rate will, without further action by the Authority, be adjusted on January I of each year to reflect the greater of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar year. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on each August I and February I (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the City Administrator, through the date of last receipt of tax increment from the TIF District. . 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TlF District received by the Authority from Wright County in the six-month period before any Payment Date, less any amounts determined by the Authority to be applied toward administrative expenses in accordance with the TIF Act. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing Date will be compounded semiannually on February I and August I of each year and added to principal until the first Payment Date, unless otherwise specified by the City Administrator. 2.04. The principal sum and all accrued interest payable under this resolution is pre-payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may at any time make a determination to forgive the . - . . . outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 2.07. The Authority may from time to time amend the terms of this Resolution to the extent permitted by law, including without limitation amendment to the payment schedule and the interest rate; provided that the interest rate may not be increased above the maximum specified in Section 469.178. subd. 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon execution in full of the Contract. Adopted this 12th day of April, 2006 Chair ATTEST: Executive Director - . . . HRA Agenda - 04lL2/06 4. Consideration to review and accept the vear-end financial reports for the HRA General Fund and TIF Fund as prepared bv HRA Treasurer Wolfsteller. The 2005 HRA General Fund and TIF Fund Reports are attached or will be submitted at the HRA meeting. After review of the report, it is recommended the commissioners make a motion to accept the 2005 financial reports.