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Home My WebLink AboutContract 1745Execution Copy CONTRACT FOR PRIVATE REDEVELOPMENT By and Betwveen COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA and NEW HEIGHTS DEVELOPMENT, LLC Dated as of: September 22, 2003 This document was drafted by: KENNEDY & GRAVEN, Chartered 470 Pillsbury Center Minneapolis, Minnesota 55402 Telephone: (612) 337-9300 SJB-235566v6 CL205-20 PREAMBLE 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 3.10. Section 4.1. Section 4.2. Section 4.3. Secti3n 4.4. Section 5.1. Section 5.2. Section 5.3. TABLE OF CONTENTS ARTICLE I Definitions Definitions .......................................................................................................... 2 ARTICLE II Representations and Warranties Representations by the Authority ..... : ................................................................. 6 Representations and Warranties by the Redeveloper ......................................... 6 ARTICLE III Property Acquisition, Conveyance and Financing Status of the Property ......................................................................................... 8 Environmental Conditions ................................................................................. 8 Public Redevelopment Costs ............................................................................. 9 Issuance of Housing Note ........ : ......................................................................... 9 Tax Increment Assistance for Commercial Improvements ............................. 10 Issuance of Commercial Note .......................................................................... 11 Future Commercial Property ............................................................................ 11 Relocation ........................................................................................................ 12 Payment of Administrative Costs .................................................................... 12 Records ............................................................................................................ 13 ARTICLE IV Construction of Minimum Improvements and Public Improvements Construction of Minimmn Improvements and Public Improvements ............. 14 Construction Plans ........................................................................................... 14 Completion of Construction ............................................................................. 15 Certificate of Completion ................................................................................ 16 ARTICLE V Insurance Insurance .......................................................................................................... 17 Subordination ................................................................................................... 18 Qualifications ................................................................................................... 18 SJB-235566v6 i CL205-20 Section 6.1. Section 6.2. Section 6.3. Section 7.1. 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 10.1. 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. Section 10.11. ARTICLE VI Tax Increment; Taxes Right to Collect Delinquent Taxes ................................................................... 19 Review of Taxes .............................................................................................. 19 Qualifications ................................................................................................... 19 ARTICLE VII Financing Mortgage Financing ......................................................................................... 20 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment ............................................................... 21 Prohibition Against Redeveloper's Transfer of Property and Assigmnent of Agreement ............................................................................... 21 Release and Indemnification Covenants .......................................................... 23 ARTICLE IX Events of Default Events of Default Defined ............................................................................... 24 Remedies on Default ........................................................................................ 24 No Remedy Exclusive ...................................................................................... 25 No Additional Waiver Implied by One Waiver ............................................... 25 Attorney Fees ................................................................................................... 25 ARTICLE X Additional Provisions Conflict of Interests; Authority Representatives Not Individually Liable ....... 26 Equal Employment Opportunity ...................................................................... 26 Restrictions on Use .......................................................................................... 26 Provisions Not Merged With Deed .................................................................. 26 Titles of Articles and Sections ......................................................................... 26 Notices and Demands ...................................................................................... 26 Counterparts ..................................................................................................... 27 Recording ......................................................................................................... 27 Amendment .............................................................................................. 27 Authority or City Approvals ............................................................................ 27 Termination ...................................................................................................... 27 SJB-235566v6 ii CL205-20 SCHEDULE A SCHEDULE B SCHEDULE C Description of Redevelopment Property Authorizing Resolution Certification of Completion SJB-235566v6 iii CL205-20 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the 22nd day of September 2003, by and between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS, MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the "Act"), and NEW HEIGHTS DEVELOPMENT, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of 'the City Council of the City of Columbia Heights ("City"); and WHEREAS, the City and the Authority (as successor to the Housing and Redevelopment Authority in and for the City of Columbia Heights) have undertaken a program to promote redevelopment of land which that is characterized by blight and blighting factors within the City, and in this connection the Authority administers a redevelopment project known as the Downto~vn CDB Redevelopment Project ("Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the Act and the HRA Act, the Authority is attthorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, within the Project, the City and Authority have created the Kmart/Central Avenue Tax Increment Financing District ("TIF District") in order to facilitate redevelopment of certain property in the Project; and WHEREAS, the Authority and Redeveloper have previously entered into a Preliminary Development Agreement dated as of June 17, 2~003 regarding proposed redevelopment of the property described in Schedule A hereto, desigl~ated as the Redevelopment Property and the Future Commercial Property; and '~" WHEREAS, this Agreement is intended to supersede and replace the Preliminary Agreement in all respects; 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: SJB-235566v6 CL205-20 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears fi:om the context: "Act" means the Economic Development Authority Act, Minnesota Statutes, Sections 469.090 to 469.108, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Columbia Heights Economic Development Authority, 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. "Available Tax Increment" means 90 percent of the Tax Increment attributable to the Redevelopment Property (or relevant portion thereof, as the context requires), received by the Authority in the six-month period before any schedule payment date on any Note. "Business Day" means any day except a Saturday, Sunday, legal holiday, a day on which the City is closed for business, or a day on wlzich banking institutions in the City are authorized by law or executive order to close. "Business Subsidy Act" means Minnesota Statues, Sections 116J.993 to 116J.995, as amended. "Certificate of Completion" means the certification provided to the Redeveloper, or the pttrchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Columbia Heights, Minnesota. "Cormnercial Improvements" means the construction on the Commercial Property of at least 10,000 square feet of retail, office or service facilities that are permitted or conditional uses for such site under the City zoning ordinance. "Commercial Note" means the Tax Increment Revenue Note substantially in the form contained in the Second Authorizing Resolution, issued in accordance with Section 3.6 hereof. SJB-235566v6 2 CL205-20 "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: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) 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 Anoka, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "Future Commercial Improvements" has the meaning provided in Section 3.7 hereof. "Future Commercial Property" means the property so described in Schedule A. "Holder" means the owner of a Mortgage. "Housing Improvements means the construction by the Redeveloper on the Housing Property of at least 218 units of market-rate owner-occupied housing. "Housing Note" means the Tax Increment Revenue Note substantially in the form contained in the Initial Author/zing Resolution, issued in accordance with Section 3.4 hereof. "Initial Authorizing Resolution" means the resolution of the Authority, substantially in the form of attached Schedule B to authorize the issuance of the Housing Note. "Minimum Improvements" means the Housing Improvements and the Commercial Improvements. .. , "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. "Note" means either the Housing Note or the Commercial Note, or both, as the context requires. "Planning Contract" has the meaning provided in Section 3.1 (b) hereof. "Preliminary Development Agreement" means the Preliminary Development Agreement between the Authority and the Redeveloper dated as of June 17, 2003. "Public Improvements" has the meaning provided in Section 4.1 (b) hereof. SJB-235566v6 3 CL205~20 "Public Redevelopment Costs" has the meaning provided in Section 3.3 hereof. "Redeveloper" means New Heights Development, LLC or its permitted successors and assigns. "Redevelopment Project" means the Authority's Downtown CDB Redevelopment Project. "Redevelopment Property" means the property so described on Schedule A, and after replatting means the Housing Property and the Commercial Property. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended. "Second Authorizing Resolution" means the resolution of the Authority, substantially in the form of attached Schedule B to authorize the issuance of the Commercial Note. "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 m~d which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State auditor under Section 469.177, subd. 11 of 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 Kmart/Central Avenue Tax Increment Financing District. "Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan for the TIF District, as approved by the Authority on September 16, 2003 and by the City on September 22, 2003, and as it may be amended tkoiZn'time to time. "Tax Official" means any Cotmty assessor; County auditor; County or State board of equa!jzation, the commissioner of revenue of the State, or any State or federal district court, the tax cou/-t' bf'the State, or the State Supreme Court. "Termination Date" means the date the Authority receives the last installment of Tax Increment from the County. "Transfer" has the meaning set forth in Section 8.2(a) hereof. "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 SJB-235566v6 4 CL205-20 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 construction is required under Section 4.3 of this Agreement. SJB-235566v6 5 CL205-20 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is an economic development authority duly organized and existing under the laws of the Sta~e. 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 eliminate current blighting factors and prevent the emergence of further blight at a critical location in the City, to create increased tax base in the City, to increase housing opportunities for various income levels in the City, and to stimulate further development of the Tff~ District and Redevelopment Project as a whole. 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 of Minnesota, is not in violation of any provisions of its article 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) Upon acquisition of the Redevelopment Property, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building adde 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. (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 SJB-235566v6 6 CL205-20 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 consmnmation 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) Whenever any Event of Default occurs and if the Authority or the City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, and the Authority or the City or prevails in such action, the Redeveloper agrees that it shall, within ten days of written demand by the City, pay to the City the reasonable fees of such attorneys and such other expenses so incurred by the City. (h) The Redeveloper shall promptly advise City in writing of all litigation or claims affecting any part of the Minimum Improvements and all written complaints and charges made by any govermnental authority materially affecting the Minimum Improvements or materially affecting Redeveloper or its business which may delay or require changes in construction of the Minimum Improvements. (i) The proposed redevelopment by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (.j) 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. SJB-235566v6 7 CL205-20 ARTICLE III Proper ,ty Acquisition~ Conveyance and Financin~ Section 3.1. Status of the Property. (a) As of the date of this Agreement, the Redeveloper has entered into a purchase agreement to acquire the Redevelopment Property. The Redeveloper will acquire the Redevelopment Property in accordance with the purchase agreement. The Future Commercial Property is owned by various tlfird parties. The Authority has no obligation to acquire the Redevelopment Property Or the Future Commercial Property. (b) By no later than December 31, 2003, the Redeveloper, at its cost, will prepare and obtain City approval of (i) a replat of the Redevelopment Property to create one or more parcels for development of the Housing Improvements (the "Housing Property") and one or more parcels for development of the Commercial Improvements (the "Commercial Property"); and (ii) a planned unit development ("PUD") of the Redevelopment Property. Redeveloper must comply with all City ordinances and procedures in connection with the replat and PUD. In connection with the plat and PUD, the parties agree and understand that the Redeveloper and City will enter into a development agreement (the "Planning Contract") that addresses planning and land use requirements, including usual and customary security for Redeveloper's obligations, and is consistent with the covenants regarding the Minimmn Improvements and Public Improvements described in Article IV hereof. The parties agree and understand that Redeveloper will construct, at its cost, all Public Improvements described in Section 4.1 (b), and that the Planning Contract will specify the construction schedule for such improvements consistent with the required build-out schedule for MinimUm Improvements under Article IV, and will also specify which Public Improvements must be dedicated to the City and the terms and conditions for acceptance of such improvements. (c) The Redeveloper will use its best efforts to acquire the Future Commercial Property in accordance with Section 3.7 hereof. Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Redevelopment Property or the Future Commercial Property or the fitness of such property for construction of the Minimum hnprovements or any Future Commercial Improvements or any other purpose for which the Redeveloper may make use of such property, and that the assistance provided to the Redeveloper unde~t-this Agreement neither implies any responsibility by the Authority or the City for any contamination of the Redevelopment Property or the Future Commercial Property nor imposes any obligation on such parties to participate in any cleanup of such property. (b) Without limiting its obligations under Article VIII of this Agreement 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 existing on or in the Redevelopment Property, unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnitees. Nothing in this section will be construed to limit or affect any SJB-235566v6 8 CL205-20 limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.3. Pubhc Redevelopment Costs. The Redeveloper shall demohsh all existing buildings on the Redevelopment Property and undertake all soil corrections, utihty relocation, and grading and excavation needed to construct the Minimum Improvements (such activities are collectively referred to as the "Public Redevelopment Costs"). The term Public Redevelopment Costs also includes Authority costs paid by the Redeveloper under Section 3.9 hereof, and relocation costs, if any, paid by Redeveloper under Section 3.8 hereof. Section 3.4. Issuance of Housing Note. (a) Terms. In order to reimburse the Redeveloper for a portion of the Public Redevelopment Costs incurred by Redeveloper in connection with the Housing Improvements, the Authority shall issue and the Redeve'loper shall purchase the Housing Note in the maximum aggregate principal amo.unt of $700,000. The Housing Note will be payable solely from the Available Housing Tax Increment attributable to the Housing Improvements and the Housing Property. The terms of the Housing Note, including maturity, payment dates and interest rate, will be substantially those set forth in the form of the Housing Note shown in Schedule B. The Housing Note will be dated as of the date of delivery; and interest will accrue from such date. Notwithstanding anything to the contrary herein, no payments will be made on the Housing Note prior to issuance of the Certificate of Completion for the Commercial Improvements. (b) Issuance. Before issuance and delivery of the Housing Note, Redeveloper must submit to the Authority one or more certificates signed by the Redeveloper's duly authorized representative, containing the following: (i) a statement that each cost identified in the certificate is a Public Redevelopment Cost incurred on or in connection with the Housing Property and that no part of such cost has been included in any previous certification (ii) evidence that each identified Public Redevelopment Cost has been paid or incurred by or on behalf of the Redeveloper, and (iii) a statement that no uncttred Event of Default by the Redeveloper has occurred and is continuing under the Agreement. The Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why the it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require. The Authority will deliver the Housing Note upon receipt and approval'o'f certificates evidencing Public Redevelopment Costs in at least the principal amount of the Housing Note; provided that in no event will the Authority deliver the Housing Note prior to filing of the TIF District for certification with the County. ' ~' (c) Termination of right to Housing Note. Notwithstanding anything to the contrary in this Agreement, if the conditions for delivery of the Housing Note are not met by one year after the date of required completion of the Housing Improvements under Section 4.3, the Authority may terminate the Housing Note by ten days written notice to the Redeveloper. Thereafter neither party shall have any obligations or liability to the other hereunder, except that any obligations of the Redeveloper under Sections 3.2, 3.6 and 8.3 survive such termination. (d) Qualifications. The Redeveloper understands and acknowledges that the Authority makes no representations or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the Initial Note will be sufficient to pay the principal and interest on the Housing Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors SJB-235566v6 9 CL205-20 in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. If the Public Redevelopment Costs exceed the principal amount of the Housing Note, such excess is the sole responsibiliy of Redeveloper. (e) Prepayment from Gross Profit. Witlfin 60 days after closing on Redeveloper's sale to third parties of the final unit of completed Housing Improvements (the "Final Closing Date"), the Redeveloper must deliver to the Authority evidence of its Gross Profit on construction and sale of the Housing Improvements under this Agreement. For the purposes of this Agreement, the term "Gross Profit" is a percentage calculated as the aggregate proceeds from sales of each unit sold to third parties ("Sale Proceeds"), less the total Development Cost, divided by total Sale Proceeds. The term Development Cost means the sum of the following costs incurred by the Redeveloper in connection with the Minimum Improvements: (1) the total purchase price paid or payable by the Redeveloper for acquisition of the Redevelopment Property (without regard to reimbursement thereof under the Note), including closing coSts paid by the Redeveloper; (2) the cost of constructing the Housing Improvements, including without limitation engineering, architect fees, surveying, legal and similar soft costs; (3) costs of construction financing for the Housing Improvements, including loan fees, interest paid during construction, attorney fees, and any costs paid by Redeveloper under Section 3.9 of this Agreement; and (4) closing costs on sale of lots to third parties, including broker fees and commissions paid to third parties or to Redeveloper's sales associates, all to the extent paid by the Redeveloper. The Authority or its agents shall be entitled to review and audit the calculation of Gross Profit. The amount by which Gross Profit exceeds fifteen percent is a percentage referred as "Excess Profit." The Excess Profit, multiplied by the total Sale Proceeds, is the Excess Amount. One half of the Excess Amount will be applied as prepayment of the outstanding principal .amount of the Note in accordance with the terms of Section 5(b) of the Note. Such event must be evidenced by delivery by the Authority to the Redeveloper of a written notice stating the Excess Amount. The one-half share of Excess Amount will be deemed prepaid as of the Final Closing Date. Section 3.5. Tax Increment Assistance for Commercial Improvements. (a) Before commencement of construction of the Commercial Improvements, the Authority and the Redeveloper will negotiate in good faith regarding the amount, if any, of tax increment assistance needed-to make development of the Commercial Improvements economically feasible. The negotiation will commence upon presentation by the Redeveloper to the Authority of a development proforma for those improvements and other documentation reasonably required by the Authority to justify the need for public assistance. In determining the amount, if any, of tax increment assistance to be provided, the parties agree that the following principles will apply: (i) the amount of assistance will depend upon the final determination as to the type and square footage of Commercial Improvements to be constructed, and upon analysis of the Redeveloper's pro forma and related documentation for that development plan; SJB-235566v6 1 0 CL205-20 (ii) the pro forma must show that the tax increment assistance is solely in the amount necessary to permit Redeveloper to develop the Commercial Property, or convey to third parties for such development, at prevailing market prices for vacant urban property; and (iii) any assistance will be provided solely from Available Tax Increment attributable to the Commercial Improvements and the Commercial Property, unless the Authority determines in its sole discretion to make an additional pledge of Available Tax Increment from the Housing Property (subordinate to the Housing Note). (b) Failure of the parties to agree on the terms of tax increment assistance for the Commercial Improvements will not relieve Redeveloper's obligation to construct such improvements under Article IV hereof. Section 3.6. Issuance of Commercial Note. (a) If the parties negotiate an amount of tax increment assistance under Section 3.5, the Authority will approve the Second Authorizing Resolution to authorize issuance of the Commercial Note, contingent upon (i) the Authority having determined that issuance of the Commercial Note does not constitute a "business subsidy" within the meaning of the Business Subsidy Act, or (ii) the parties having negotiated the terms of a business subsidy agreement and the Authority and City having approved such agreement after public hearing in accordance with the Business Subsidy Act. (b) The Commercial Note will be in a form substantially similar to that set forth in the Initial Authorizing Resolution attached as Schedule B, provided that the Commercial Note will be payable solely from the Available Tax Increment attributable to the Commercial Improvements and the Commercial Property (subject to the optional additional pledge described in Section 3.5(a)(iii) hereof). The Authority and the Redeveloper agree that the consideration from the Redeveloper for the purchase of the Commercial Note shall consist of the Redeveloper's payment of Public Redevelopment Costs in connection with development of the Commercial Improvements. All other terms of Section 3.4 apply to the Commercial Note by substituting the word "Commercial" for "Housing" where it appears in that Section. (c) The Authority's obligation to approve the Second Authorizing ResolUtion and issue the Commercial Note are subject to the Authority's legal authority to take such actions under the laws existing at the time of such actions. Section 3.7. Future Commercial Property. (a) For a period of twelve months after the date of this Agreement (the "Negotiation Period"), the Redeveloper and Authority will negotiate in good faith regarding development of the Future Commercial Property for uses and under terms that are mutually satisfactory to the parties. The Authority and City agree that during the Negotiation Period, so long as there is no uncured Event of Default by Redeveloper under this Agreement, they will not negotiate or contract with any party other than Redeveloper concerning the development of the Future Commercial Property. (b) During the Negotiation Period, the Redeveloper will (i) use its best efforts to acquire all parcels of the Future Commercial Property, (ii) negotiate a letter of intent with a substantial SJB-235566v6 1 1 CL205~20 commercial user (an "Anchor Redeveloper") for all or part of the Future Commercial Property and submit such letter to the Authority, and (iii) submit to the Authohty a concept plan for redevelopment of that property for Future Commercial Improvements. The parties will negotiate in good faith regarding the need for tax increment financing assistance in connection with the Furore Commercial Improvements, based on the principles described in Section 3.5. If the parties agree that assistance is required, they will enter into an amendment to this Agreement providing for the terms of the assistance including, if required under the Business Subsidy Act, the terms of any business subsidy agreement. (c) If the Redeveloper and Authority have not entered into a written agreement regarding the Future Commercial Improvements by the end of the Negotiation Period, this Section 3.7 will be deemed terminated and thereafter neither party shall have liability to the other under this Section. However, the expiration of the Negotiation Period will have no affect on any other rights or obligations of the parties under the remainder of this Agreement. Section 3.8. Relocation. (a) The Redeveloper shall be responsible for the relocation of all tenants of the Redevelopment Property and the Future Commemial Property, including the provision of any relocation benefits and payments. The Redeveloper shall consult with a relocation consultant, approved by the Authority, regarding the relocation benefits and payments to be provided to them in exchange for their relocation fi.om the Redevelopment Property. Such amounts are reimbursable as Public Redevelopment Costs under this Agreement, limited to those costs approved by the relocation consultant. (b) The Redeveloper shall provide to the Authority written agreements, in a form approved by the Authority, fi.om each owner and occupant of the Redevelopment Property, under which such owners and occupants agree to be relocated from the Redevelopment Property or the Future Commercial Property on terms contained in the agreements. In addition, the Redeveloper shall furnish to the Authority a written certification fi:om its attorney that waivers of relocation benefits contained in such agreements were explained to each owner and occupant in accordance with the terms of the agreement. (c) Without limiting the Redeveloper'~ obligations under Section 8.3 hereof, the Redeveloper will indemnify, defend and hold harmldss the Authority, the City, and their governing body members, employees, agents and contractors from any and all claims for benefits or pay~nents arising out of the relocation or displacement of any person from the Redevelopment Property or the Future Commercial Property as a result of the implementation of this Agreement. Section 3.9. Payment of Administrative Costs. (a) The parties acknowledge that, pursuant to the Preliminary Development Agreement, Redeveloper paid the Authority $17,500 as reimbursement for (1) the cost of a planning study by Dahlgren, Shardlow and Uban ($12,500), and (2) a portion of the cost of a sanitary sewer study ($5,000). By no later than December 31, 2003, Redeveloper must pay to the Authority an additional $42,500 to reimburse the Authority for the balance of the costs of the planning study ($37,500) and the sewer study ($5,000). Upon termination of this Agreement, the Authority shall have no obligation to return to Redeveloper any portion of the amounts paid byRedeveloper under this paragraph. (b) The Redeveloper is responsible for "Administrative Costs," which means out-of-pocket SJB-235566v6 12 CL205-20 costs incurred by the Authority attributable to or incurred in connection with the negotiation and preparation of this Agreement, the Preliminary Development Agreement, and other documents and agreements in connection with the Redevelopment Property and the Future Commercial Property, including without limitation the cost of any traffic studies. Administrative Costs are in addition to the reimbursement for costs of the planning and sewer study referenced in paragraph (a) above. In order to secure payment of the Administrative Costs, the Redeveloper delivered to the Authority cash or a certified check in the mount of $10,000 upon execution of the Preliminary Development Agreement. The Authority will utihze such funds to pay or reimburse itself for Administrative Costs. If at any one or more times during the term of this Agreement, the Authority determines that Administrative Costs will exceed $10,000 and that additional security is required, the Authority shall notify the Redeveloper of the amount of such additional security. Within ten calendar days of receipt of such notice, the Redeveloper shall deliver to the Authority the required additional security. Section 3.10. Records..The Authority or its representatives shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of Redeveloper relating to the Minimum Improvements. SJB-235566v6 1 3 CL205-20 ARTICLE IV Construction of Minimum Improvements and Public Improvements Section 4.1. Construction of Minimum Improvements and Public Improvements. (a) The Redeveloper agrees that, upon acquisition of the Redevelopment Property, it will construct or cause construction of the Minimum Improvements on the Redevelopment Property, in accordance with approved Construction Plans and at all times while Redeveloper owns the Redevelopment Property, will operate and maintain, preserve and keep the respective components of the Minimum Improvements or cause such components be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. (b) The Redeveloper must prepare plans and specifications for and construct all streets and associated traffic improvements, sewer, water, storm sewer improvements, sidewalks, landscaping, open space and related amenities located within or serving the Redevelopment Property, including without limitation any oversizing of sanitary sewer mains necessary to provide adequate capacity for the redevelopment described in this Agreement (collectively, the "Public Improvements"), all in accordance with the Planning Contract. Before commencing such construction, the Redeveloper must submit plans and specifications regarding the Public Improvements for approval by the City substantially in accordance with procedures for Construction Plans described in Section 4.2. All work on the Public Improvements shall be in accordance with the approved construction plans and shall comply with all City requirements regarding such improvements. The parties agree and understand that the City will accept the improvements in accordance with City procedures and the Planning Contract. (c) The Authority and Redeveloper will cooperate and use their best efforts to obtain a grant froli1 the Metropolitan Council to finance a portion of the Public Improvements, including without limitation the cost of increasing sanitary sewer capacity to serve the redevelopment described in this Agreement. Absent such grant, Redeveloper remains responsible to pay all costs of Public Improvements. Section 4.2. Construction Plans. (a) Before commencement of construction of the Minimum Improvements, the Redeveloper shall submit to the Authority Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conf6'~ity with the TIF Plan, Redevelopment Plan, this Agreement, the Planning Contract and all applicable State and local laws and regulations. The Authority Representative 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 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 from all sources (including Redeveloper's equity) for construction of the Minimum Improvements; and (vi) no Event of Default has occurred. Approval may be based upon a review by the City's Building Official of the Construction Plans. No approval by the Authority Representative shall relieve the Redeveloper of SJB-235566v6 14 CL205-20 the obligation to comply with the terms of this Agreement or of the Development 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 Representative 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 tmless rejected in writing by the Authority Representative, in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made within 10 days after the date of their receipt by the Authority. If the Authority Representative rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within 10 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 Representative's approval shall not be unreasonably withheld, delayed or conditioned. 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 Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing 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 written 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. Completion of Construction. Subject to Unavoidable Delays, the Redeveloper must commence construction of the Housing Improvements by December 31, 2003, and must substantially complete construction of the Housing _Improvements by December 31, 2007. Subject to Unavoidable Delays, the Redeveloper must' commence construction of the Commercial Improvements by July 1, 2005, and must substantially complete construction of the Commercial Improvements by July 1, 2006. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority, and with he Planning Contract. If the Redeveloper is making substantial progress with respect to the redevelopment project, and is unable to meet one or more of the above-referenced deadlines, the Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the time in which necessary action(s) must be taken or occur, the lapse of which time would otherwise constitute a default under this Agreement. 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 Minimtun Improvements thereon, and that SJB-235566v6 1 5 CL205-20 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 .(and each component thereof) 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 completion thereof), the Authority will furnish the relevant Redeveloper with a Certificate of Completion in substantially the form attached as Schedule C. 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 relevant component of the Minimum Improvements and the dates for the 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 h2provements, or any part thereof. (b) Upon Redeveloper's request, the Authority shall furnish to the Redeveloper a Certificate of Completion for each housing unit upon substantial completion of such unit, as evidenced by issuance of a certificate of occupancy therefor by the' responsible inspecting authority. (c) Each Certificate of Completion 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 with 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 Redeveloper with a wri¢.en 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 obta. i,n. such certification. (d) The construction of the Minimum Improvements shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy from the City for all housing units (with respect to the Housing Improvements) and all commercial facilities (with respect to the Commercial Improvements), and all site improvements have been substantially completed as reasonably determined by the Authority Representative. SJB-235566v6 16 CL205-20 ARTICLE V Insurance Section 5.1. Insurance. (a) 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 following: (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 Et 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 conta'actual liability insurance) together with an Owner's Contractor'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) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which 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 thirty (30) days before the cancellation or modification becomes effective. In lieu of sep,.arate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combiriation 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. (c) 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 forthwith 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 dan~age and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net SJB-235566v6 17 CL205-20 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, whether or not 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. (d) 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 fights 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. Section 5.3. Qualifications. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that: (a) The provisions of Section 5.1 hereof shall not apply to a housing unit from and after the date that such unit is substantially completed and sold to an owner-occupant. (b) Upon transfer of the Redevelopment Property or portion thereof to another person or entity except for sales to owner-occupant, the Redeveloper will remain obligated under Section 5.1 hereof relating to such portion transferred, unless the Redeveloper is released from such obligations in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof. SJB-235566v6 1 8 CL205-20 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the Authority is providing substantial aid and assistance in furtherance of the redevelopment described in this Agreement, in part through issuance of the Note. The Redeveloper understands that the Tax Increments pledged to payment of the Note are derived from real estate taxes on the Minimum Improvements, which taxes must be promptly and timely paid. To that end, the 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 Propbrty and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual fight 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, the Authority shall also be entitled to recover its costs, expenses and reasonable attorneyfees. 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. 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 ownership 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. Qualifications. Notwithstandin. g anything herein to the contrary, the parties aclcnowledge and agree that: (a) The provisions of Sections 6.1 and 6.2 hereof shall not apply to a housing unit from and. a..fte.r the date that such unit is substantially completed and sold to an owner-occupant. (b) Upon transfer of the Redevelopment Property or portion thereof to another person or entity except for sales to owner-occupants, the Redeveloper will remain obligated under Sections 6.1 and 6.2 hereof relating to such portion transferred, unless the Redeveloper is released from such obligations in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof. SJB-235566v6 19 CL205-20 ARTICLE VII Financing Section 7.1. Mortgage Financing. (a) Before the Redeveloper's Closing Date, the Redeveloper shall submit to the City evidence of one or more commitments for financing which, together with committed equity for such construction, is sufficient for payment 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. (b) If the Authority finds that the financing is sufficiently committed and adequate in amount to pay the costs specified in paragraph (a) then the Authority shall notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within twenty (20) 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 writing specifying the basis for the rejection. In any event the Redeveloper shall submit adequate evidence of financing within ten (10) days after such rejection. (c) In the event that there occurs a default under any Mortgage authorized pursuant to Section 7.1 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. (d) In order to facilitate the secm-ing.-.of other financing, the Authority agrees to subordinate its rights under this Agreement provided that such subordination shall be subject to such reasonable terms and conditions as the Authority and Holder mutually agree in writing. Notwithstanding anything to the contrary herein, any subordination agreement must include the provi,sion described in Section 7.1 (c). SJB-235566v6 20 CL205-20 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to the Agreement, are, and ~vill be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper"s Transfer of Property and Assigmnent of A~eement. The Redeveloper represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (a) Except as specifically described in 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 this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Authority's board of commissioners. The term "Transfer" does not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or penuanent financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property or to construct the Minimum Improvements or component thereof, or (ii) any lease, license, easement or similar mTangement entered into h~ the ordinary course of business related to operation of the Minimum Improvements. Notwithstanding the prohibitions against transfer contained in this section, the Redeveloper shall have the right to transfer, (partial or full) ownership interests in the Redeveloper, this Agreement, or any parcel of the Redevelopment Property to any entity or entities in which the Redeveloper or the member of the Redeveloper (Brace A. Nedegaard) has at least a fifty percent (50%) interest. (b) If the Redeveloper seeks to effect a Transfer prior to issuance of the Certificate of Compfietion, the Authority shall be entitled to require as conditions to such Transfer that: (1) any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, 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; and (2) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable in the public land records of Anoka County, Minnesota, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, 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; SJB-235566v6 2 1 CL205-20 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 writing by the Authority) deprive the Authority of any fights or remedies or controls with respect to the Redevelopment Property, the Minimum Improvements 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 maturer 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 c~ntrols provided in or resulting from this Agreement with respect to the Redevelopment Property that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority 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 Redevelopment Property, fi:om any of its obligations with respect thereto. (3) Any and all instnunents 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. (c) If the conditions described in paragraph (b) are satisfied then the Transfer will be approved and the Redeveloper shall be released fi:om its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (c) apply to all subsequent transferors, assuming compliance with the terms of this Article. (d) Upon issuance of the Certificate o.f-.Completion, the Redeveloper may transfer or assign the Minimum Improvements an&/or the Redeveloper's rights and obligations under this Agreement with respect to such property without the pfior written consent of the Authority; provided that: (i) until the Termination Date the transferee or assignee is bound by all the Redeveloper's obligations hereunder with respect to the property and fights transferred. The Redeveloper shall submit to the Authority written evidence of any such transfer or assignment, including the transferee or assignee's express assumption of the Redeveloper's obligations under this Agreement. If the Redeveloper fails to provide such evidence of transfer and assumption, the Redeveloper shall remain bound by all obligations with respect to the subject property under this Agreement; and (ii) upon compliance with clause (d)(i) above (whether the transfer occurred before or after issuance of the Certificate of Completion), the Redeveloper shall be released fi:om its obligations under this Agreement with respect to the property transferred. SJB-235566v6 22 CL205-20 The provisions of this paragraph (d) apply to all subsequent transferors, assuming compliance with the terms of this Article. (e) Nothing in this Article VIII will be construed to require, as a condition for release of the Redeveloper hereunder or otherwise, that purchasers of any unit assume any obligations of the Redeveloper. Upon sale of any residential unit to an initial owner-occupant, the Authority will provide to Redeveloper or the buyer a certificate in recordable form releasing the unit from all encumbrances of this Agreement. 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 akainst 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 or the Public Improvements. (b) Except for any willful or negligent misrepresentation or any willful or wanton misconduct or negligence 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 (the "Indemnified Parties"), now or forever, and further agrees to h01d the Indemnified Parties 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 Minimtun Improvements and Public Improvements. (c) Except for any negligence of the Indemnified Parties (as defined in clause (b) above), and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties 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 MinimUm Improvements or Publid-Improvements due to any act of negligence of any person. (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. SJB-235566v6 23 CL205-20 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, any one or more of the following events, after the non-defaulting party provides 30 days written notice to the defaulting party of the event, but only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting party does not, within such 30-day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Redeveloper or the Authority to observe or perfmTn any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement or the Planning Contract; (b) The Redeveloper: (i) files any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law; (ii) makes an assignment for benefit of its creditors; (iii) admits in writing its inability to pay its debts generally as they become due; or (iv) is adjudicated a bankrupt or insolvent. Section 9.2. Remedies on Default. (a) Wh. enever 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 Defat~t. lt is by its nature incurable within thirty days, the defaulting party does not provide assdrandes reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: (b) Upon an Event of Default by the Redeveloper, the Authority may withhold payments under any Note in accordance with its terms, which witlzheld amount is payable, without interest thereon, on the first payment date after the default is cured. (c) If ma Event of Default continues for more than three years after the date of receipt by the Redeveloper of the default notice, the Authority may terminate the Note. SJB-235566v6 24 CL205-20 (d) If the Event of Default constitutes breach of restrictions on Transfer of the Redevelopment Property under Section 8.2 hereof, the Authority may terminate the Note if the default is not cured within the periods provided in Section 9.1. (e) 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, agreement, or covenant under this Agreement. Section 9.3. No Remedy 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 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 fight 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 9.4. No Additional Waiver Implied by 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. Section 9.5. Attorney Fees. Whenever any Event of Default occurs and if the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within l0 days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. SJB-235566v6 25 CL205-20 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authority Representatives Not Individually 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 brbach by the Authority or County 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 Emplownent Oppommity. 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 devote the Redevelopment Property to, the operation of the Minimum Improvements for uses described in the definition of such term in this Agreement, and 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 Merged 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 net 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 Sec!ipns 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 (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at ; and SJB*235566v6 26 CL205-20 (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 100 Civic Center Parkway, Columbia Heights, Mirmesota 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 in 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 Anoka 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 City Approvals. 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 Ten2ination Date, except that termination of the Agreement does not terminate, limit or affect the fights of any party that arise before the Termination Date. SJB-235566v6 27 CL205-20 . IN WITNESS WHEREOF, the Authority has caused this A~eement 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. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Its BYlts Executive Director / STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) ? · . . ..--, .4.._6! ..... ~t The foregoing instrument was acknowledged before me thxs ,(.-- day of ,¢~-~-t~..~ , 20¢ by i.'5. '3'. ~ ~r~ ~i~- and k,3 ~ ~k. F~L~_, the President and Executive Direct& of the Columbia Heights E4c6nomic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public SJB-235566v6 28 CL205-20 STATE OF MINNESOTA ) ) SS. COUNTY OF ~o¢.c~ ) The foregoing instrument was acknowledged before me this ;g, day of ~:e~Brccc~-c[ , 2003 by ~m.~.e. ~, V~o,~o~, the ?~-e_~'~cD:x-~ of New Heights Development, LLC, a Minnesota limited lia'lSility company, on behalfbfthe company. Notary Public° SJB-235566v6 29 CL205-20 SCHEDULE A Redevelopment Property TOTAL AREA = 15.229 ACRES+- PROPERTY DESCRIPTION That port of the West nine hundred (W. 900) feet of the Northwest Quarter of the Sou'thwest Quarter (NW 1/4 of the SW 1/4) of Section Twenty-five (25), Township. Thirty (30), Range Twenty-four (24), Anoka County, Idinneset. a lying Southerly of the Southerly R/W llne' of 49th Avenue Northeast, except Ihe South twenty-four (5.24) feet thereof and except that part lying Westerly and Northerly of the following described Dine: Commencing of: the Sou[hwest corner of said Northwest Quoter of Southwest Quarter (NW 1/4 of SW 1/4); thence on on assumed bearing of North zero degrees, zero-zero minutes (0'00') along the West tine of said Northwest Quurter of Southwest Quarter (NW 1/4 of SW 1/4) o distance of four hundred seventy-six and one hundredths (476.01) feet for actual point of beginning of line to be described; thence North eighty-nine degrees, fifty-eight minutes, fifteen seconds (89'58' t5") East, o dlstonce of two hundred ninety-seven and ninety-five hundredths'(297.95) teat; thence North forty degrees; zero six minutes, fifteen seconds (40'06' 15") East, o distance of eighty-seven and fifty-three hundredths (87.55) feet; thence North o dis[once of three hundred [went.y-five end seventy-five hundredths (325.75) feet; thence East o distance of one hundred ninety-five end sixty-seven hur]dredths (195.67) feet; thence North zero degrees, zero zero minutes (0'00') to it's intersection with o line bearing East ninety degrees (90') from o point on the West line of sold Northwest Quarter of Southwest Quarter (NW 1/4 of SW 1/4), said point being three hundred eighty-three and zero tenths (.383.0) feet Southerly from the Northwest corner of said Northwest Quarter of Southwest Quarter (NW 1/4 of SW 1/4); thence North parallel with end five hundred fifty (550) feet Easterly from sold West line to the intersection of said Southerly R/W I£ne of 49th Avenue Northeast end there terminating. Also except, that port plotted as Cheery Heights. SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD.'' ' Future Commercial Property Property PIN # Address Savers / Hollywood Video 25-30-2432-0003 4849 Central Avenue BW3 Restaurant 25-30-2432-0002 4811 Central Avenue Welle Auto 25-3 0-2432-0001 4801 Central Avenue E1 Bustan / TCBY Treats / Subway 25-30-2432-0004 4757 Central Avenue SJB-235566v6 A- 1 CL205-20 Kmart Redevelopment Contract Summary ,"4 FUTURE COMMERCIAL PROPER'PC Future Improvements -- >Substantial Commerciai User / Anchor -- >Developer has an exclusive for 12 months to prepare a development plan. >Public Assistance to be negotiated, 50th Ave. Lincoln Terrace REDEVELOPMENT PROPERTY .n. r-'l COMMERCIAL PROPERTY Commercial Improvements >Minimum 10,000 s.f, commercial >Buildout must commence no iater than 7/1/05 and be complete no later than 7/1/06 >Public Assitance to be negotiated HOUSING PROPERTY Housing Improvements >218 For-Sale Units 198 Urban Flats 20 Urban Townhomes Sale Pdces $175 -$330 >Build out 12/31/03- 12/31/07 46th Ave. >Public Assistance pay-as-you-go note up to $700,000 for demolition of building and other site-clearing costs. SCHEDULE B AUTHORIZING RESOLUTION Authorizing Resolution COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $700,000 TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2003A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmart/Central Avenue Tax Increment Financing District (the "TIF District") the Downtown CBD Redevelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIF District, the Authority and City have approved a Contract for Private Redevelopment between the Authority and New Heights Development, LLC (the "Agreement"). Pursuant to Minnesota Statutes, Section 469.178, the Authority is attthorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell 'itt Taxable Tax Increment Revemte Note in the maximum principal amount of $700,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. '" 1'.03. Issuance, Sale, and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to New Heights Development, LLC ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 1,2011 and shall bear interest at the rate of 6.0 % per annum from the date of original issue of the Note. The Note is issued in consideration of payment by Owner of certain Public Redevelopment Costs in at least the principal mnount of the Note, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: SJB-235566v6 B- 1 CL205-20 UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $700,000 TAXABLE TAX INCREMENT REVENUE NOTE SERI]ES 20 Date Rate of Ori~nal Issue 6.0 % ., 2003 The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to New Heights Development, LLC or registered assig-ns (the "Owner"), the principal sum of $700,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of ., 2003 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on ., 2003. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Payments. Principal and interest ("Payments") shall be paid on August 1, 2006 and each February 1 and August 1 thereafter to and including February 1,2011 ("Payment Dates") in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payhl~'le'in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest accruing from the date of original issue through and including February 1, 2006 will be compounded semiannually on February 1 and August 1 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely fi-om and in the amount of the "Available Tax Increment," which means, on each Payment Date, 95 percent of the Tax Increment attributable to the [Housing] [Commercial] SJB-235566v6 B-2 CL205-20 Property as defined in the Agreement that is paid to the Authority by g2~oka County in the six months preceding the Payment Date. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1,2011. 4. Default. Upon'an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein 'by reference. 5. Optional Prepayment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3.4(e) of the Agreement, one-half of such Excess Amount will be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Final Closing Date as defined in Section 3.4(e) of the Agreement, and will be recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under tl'fis paragraph. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $700,000 issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, in'cfuding Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney SJB-235566v6 B-3 CL205-20 duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal a2~d applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Mi~mesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director President REGISTRATION PROVISIONS The ownership of the unpaid balance of the'within Note is re~stered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Dat~' of Registration Registered Owner__ New Heights Development, LLC Federal Tax I.D. No. Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Note shall numbered R- 1. be issued as Signature of City Chief Financial Officer a single typewritten note SJB-235566v6 B-4 CL205-20 The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Pawnent Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its'office a bond register in which the Registrar shall provide for the registration, of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer.' When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its jud~nent, deems improper or una~{l~orized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid.. SJB-235566v6 B-5 CL205-20 (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other govenm~ental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing' with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indenmity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive DirectOr to the Owner thereof in accordance with the Ageement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note all Housing/Retail Available Tax Increment under the terms and as defined in the Note. Housing/Retail Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the_fonu of Note set forth in Section 2 of this resolution. ' ~ 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. If the Authority issues any bonds or notes secured by Available Tax Increment, such additional bonds or notes are subordinate to the Note in all respects. SJB~235566v6 B-6 CL205-20 Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this __ day of. ,20__. President Executive Director SJB-235566v6 B-7 CL205-20 SCHEDULE C CERTIFICATE OF COMPLETION WHEREAS, the Columbia Heights Economic Development Authority, Columbia Heights, 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 Anoka and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to , a Minnesota (the "Grantee"), the following described land in County of Anoka and State of Minnesota, to-wit: (the "Property") and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions with respect to the Property 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 on the Property have been completed and the above covenants and conditions in said Deed arid' the agreements and covenants in Article IV of the Agreement (as described in said Deed) with respect to the Property have been performed by the Grantee therein, and the Cotmty Recorder or the Registrar of Titles in and for the County of Anoka and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this insmhnent, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Article IV of the Agreement with respect to the Property, Dated: ,20__. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President SJB-235566v6 C-1 CL205-20 By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) On this __ day of ., 20__, before me, a Notary Public within and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the President of the Authority named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said insmunent was signed and sealed in behalf of said Authority by authority of its governing body; and said acknowledged said instrument to be the free act and deed of said Authority. Notary Public STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) On this __ day of ., 20__, before me, a Notary Public within and for said Cotmty, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the Executive Director of the Authority named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said instrument was signed and sealed in behalf of said Authority by authority of its governing body; and said acknowledged said instrument to be the free act and deed of said Authority. Notary Public SJB-235566v6 C-.2 CL205-20