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HomeMy WebLinkAboutEDA AGN 04-01-08 CITY OF COLUMBIA HEIGHTS 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website at: www.ci.columbia-heights.mll.us AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Tuesday, April 1 , 2008 SPECIAL MEETING 6:00 p.m., City Hall, Conference Room 1 1, Call to Order/Roll Call 2. Pledge of Allegiance 3. Oath of Office- Gerry Herringer 4. Discuss Development Agreement for 37th & Central 5. Update of On-going Projects (If time permits) 6. Adjournment THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER OATH OF COMMISSIONER OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA I, Gerry HetTinger, do solemnly swear that I will support the Constitution of the United States and ofthe State of Minnesota and will faithfully discharge the duties ofthe office of Commissioner of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota, according to the law and to the best of my judgment and ability, so help me God. I do further swear that I am, and was at the time of my appointment, a resident of Columbia Heights, Minnesota. (s) Subscribed and sworn to before me this day of 2008. (s) Notary Public My commission expires: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meetina of April 1, 2008 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: EXECUTIVE NO: 4 Community Development DIRECTOR APPROVAL ITEM: Adopt Resolution 2008-03, Approving a Contract for BY: Kirsten Partenheimer BY: Private Redevelopment. DATE: March 28, 2008 Background The Columbia Heights Economic Development Authority (EDA) is being asked to consider a development agreement between the Authority and the 37'h and Central LLC to construct approximately 10,000 square feet of commercial space on the northwest corner of 37'h and Central Avenues. The City Council designated the Beecroft Redevelopment Site near the intersection of 37'h and Central Avenues, and a gateway to the city, as a priority when it drafted redevelopment goals for the city in 2002. In 2003, the City acquired the Beecroft building and used Community Development Block Grant (CDBG) money to acquire two neighboring non-conforming single-family homes. The remaining two properties in the redevelopment area, 3700 and 3706 Central Avenue, were used for retail food operations and parking. A developer, Chris Little, of 37'h and Central LLC, proposes to build a 1 O,OOO-square-foot commercial building with five retail units on the .65-acre redevelopment area. The EDA executed a predevelopment agreement with 371h and Central LLC on October 23,2007. The developer will be at the April 1 ,2008 EDA meeting to discuss developments in leasing the space. Development Agreement The developer, Mr. Little, is prepared to sign a development agreement with the EDA for the redevelopment of the 37'h and Central Redevelopment Area. Public participation is recommended for this project and the details are included in the development agreement. The need for these subsidies arises from the high cost of redevelopment of the site. Mr. Little has been charged an exorbitant amount by the owner of the Chutney Restaurant and adjacent parking lot for the .27-acre property. With the tool of eminent domain stripped from use by cities, the City of Columbia was unable to intervene and Mr. Little was forced to offer more than the fair market value for the property. It would not be economically feasible for Mr. Little to redevelop only the Beecroft and former single-family home properties. The assistance recommended includes: . $75,000 from Anoka County Community Development Block Grant to be used for land write- down . $100,000 from the Anoka County Economic Development Authority levy . $30,000 in state aid for a turn lane . Up to $30,000 in surplus Anoka County Community Development Block Grant money to demolish the Chutney building . Loan of $43,600 for the Beecroft property, to be repaid by the developer at the time of the sale or refinancing of the project, not to exceed ten years Mark Ruff from Ehlers & Associates, the City's financial consultant, has reviewed the Sources and Uses statement submitted by Mr. Little and finds it consistent with industry standards. The purpose of this review is to check that associated costs Mr. Little projected for the project, such as rent ratios, are reasonable. Recommendation Staffs recommends the board adopt Resolution 2008-03, approving the Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and 37'h and Central LLC. Recommended Motion Move to Adopt Resolution 2008-03, a Resolution approving a Contract for Private Redevelopment between the Coiumbia Heights Economic Development Authority, the City of Columbia Heights and 37'h and Central LLC; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. EDA ACTION: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2008-03 RESOLUTION APPROVING A CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND 37'1'11 AND CENTRAL LLC BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Sectioll 1. Recitals. 1.01. The Authority had determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statues, Scctions. 469.090 to 469.108. 1.02. The Authority, the City of Columbia Heights and 3ih and Central LLC (the "Redevelopcr") have proposed to enter into a Contract for Private Redevelopment, (the "Contract") setting forth the terms and conditions of the sale and subsequent redevelopment of certain property owned by the Authority, gencrally located on the southwest comer of37'h and Central Avcnue. 1.03. The Authority believes that the building located on the Redevelopment Property is obsolete, with the result that the developer will incur significant costs to address these substandard conditions in order to redevelop the property. 1.04. In order to assist the Redeveloper in making redevelopment of the property economically feasible, the Authority will convey title to and possession of the Redevelopment Property to the Redeveloper, and provide financing and grant funds for acquisition and demolition, subject to all the terms and conditions of the Contract. 1.05. The Board has reviewed the Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authority Approval: Further Proceedings. 2.01. The Contract as presented to thc Board is hereby in all respects approved, subject to modifications that do not alter the substance of thc transaction and that are approved by the President and Executive Director, provided that execution of the documents by snch officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are herby authorized to execute on behalf of the Authority the Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners of the Columbia Heights economic Development Authority this 1" day of April 2008. President - Gary L. Peterson ATTEST: Secretary/CAP - Cheryl Bakken EXRCUTION COPY CONTRACT FOR PRIVATE REDEVELOPMENT By and Between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY COLUMBIA HEIGHTS, MINNESOTA and THE CITY OF COLUMBIA HEIGHTS, MINNESOTA and 37th AND CENTRAL LLC Dated as of: Aprill, 2008 This document was drafted by: KENNEDY & ORA VEN, Chartered (MTN) 470 US Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Telephone: (612) 337-9242 327813v4 MTN CL205-44 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 3.11. Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5 Section 5.1. Section 5.2. Section 5.3. 327813v4 MTN CL205-44 TABLE OF CONTENTS ............................................................................................................................1 ARTICLE I Definitions Definitions....................... ...................................................................................2 ARTICLE II Representations and Wananties Representations by the Authority and the City..................................................5 Representations and Warranties by the Redeveloper.........................................5 ARTICLE III Property Conditions, Acquisition, Conveyance and Financing Condition, Acquisition and Conveyance of the City Parcels; the Redevelopment Property.................................................................................... 7 Conditions of Conveyance; Purchase Price .......................................................7 Place of Document Execution, Delivery and Recording ...................................7 Title....................................................................................................................7 Soil Conditions; Other Representations............................................................. 7 Environmental Conditions.............................................................................. 10 Public Redevelopment Costs; Grants; Disbursements.....................................IO No Business Subsidy....................................................................................... .12 Payment of Administrative Costs ....................................................................13 Records........................................................................................................... .13 Relocation.......................................................................... .13 ARTICLE IV Construction of Minimum Improvements and Public Improvements Construction of Minimum Improvements .......................................................14 Construction Plans.......................................................................................... .14 Completion of Construction............................................................................ .15 Credits ............................................................................................................ ..15 Certificate of Completion............................................................................... .15 ARTICLE V Insurance Insurance........................................................................................................ ..17 Subordination.................................................................................................. .18 Qualifications.................................................................................................. .18 ii Section 6.1. Section 6.2. 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 9.6 Section 9.7 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. 327813v4 MTN CL205.44 ARTICLE VI Taxes Right to Collect Delinquent Taxes................................................................... 19 Review of Taxes............................................................................................. .19 ARTICLE Vll Financing Mortgage Financing ........................................................................................ .20 ARTICLE VllI Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment ...............................................................21 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement.............................................................................. .21 Release and Indemnification Covenants ..........................................................22 ARTICLE IX Events of Default Events of Default Defined............................................................................. ..24 Remedies on Default....................................................................................... .24 Revesting Title in Authority Upon Happening of Event Subsequent To Conveyance to Redeveloper .......................................................................24 Resale of Reacquired Property; Disposition of Proceeds ................................26 No Remedy Exclusive..................................................................................... .27 No Additional Waiver Implied by One Waiver ...............................................27 Attorney Fees................................................................................................. ..27 ARTICLE X Additional Provisions Conflict ofInterests; City or Authority Representatives Not Individually Liable............... ....... ........ .... ........... .......................... ............ ....... .28 Equal Employment Opportunity..................................................................... .28 Restrictions on Use........................................................................................ ..28 Provisions Not Merged With Deed..................................................................28 Titles of Articles and Sections .........................................................................28 Notices and Demands.................................................................................... ..28 Counterparts.................................................................................................... .29 Recording ... .......................... ............... ............... .......................... ........ .... ....... .29 Amendment... ......................................... ............... .......................................... .29 iii Section 10.10. Section 10.11. SCHEDULE A SCHEDULE B SCHEDULE C SCHEDULE D 3278 J3v4 MTN CL205-44 Authority or City Approvals ............................................................................29 Termination............... ......... ... ........ .... ................. ............ ... ......... ... ............ ...... .29 Description of Redevelopment Property Form of Quit Claim Deed Certification of Completion Loan Agreement IV CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the _ day of 2008, 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"), the CITY 01' COLUMBIA HEIGHTS, MINNESOTA, a municipal corporation under the laws of Minnesota, and 37TH AND CENTRAL 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 pursuant to MirUlesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, the Authority and Redeveloper have previously entered into a Preliminary Development Agreement dated as of October 23.2007 regarding proposed redevelopment of the property described in Exhibit A hereto, designated as the Redevelopment Property; and WHEREAS, this Agreement is intended to supersede and replace the Preliminary Agreement in all respects; and WHEREAS, the Authority and the City believe 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 aceord 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: ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Economic Development Authority Act, Minnesota Statutes, Sections 469.090 to 469.108, as amended. "Affiliate" means with respect to entity (a) any corporation, partnership, limited liability company or other business entity or person controlling, controlled by or under common control with the entity, and (b) any successor to such party by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such party (or such Affiliate). For the purpose hereof the words "controlling", "controlled by" and "under common control with" shall mean, with respect to any corporation, partnership, limited liability company or other business entity, the ownership of fifty percent or more of the voting interests in such entity or possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether through ownership of voting securities or by contract or otherwise. "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. "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 which 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. "Celtificate of Completion" means the celtification provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Columbia Heights, Minnesota. 327813v4 MTN CL205.44 2 "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. "Holder" means the owner of a Mortgage. "Loan" means the interest-free loan from the Authority to the Dcveloper for the purchase of3710 Central Avenue as described in Section 3.2. "Minimum Improvements" means the construction of a building containing at least 10,000 square feet of commercial redevelopment and related 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. "Preliminary Development Agreement" means the Preliminary Development Agreement between the Authority and the Redeveloper dated as of October 23,2007. "Public Redevelopment Costs" has the meaning provided in Section 3.7 hereof. "Redeveloper" means 3ih and Central, LLC or its permitted successors and assigns. "Redevelopment Property" means the propelty so described on Exhibit A. "State" means the State of Minnesota. "Tax Official" means any County assessor; County auditor; County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Termination Date" means the date the Authority issues the Certificate of Completion. "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, significant weather conditions 327H13v4 MTN CL205-44 3 such as floods, tornadoes, or the like, terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or govermnental approvals necessary to enable construction of the Minimum Improvements by the dates such construction is requircd under Section 4.3 of this Agreement. 327813v4 MTN CL205.44 4 ARTICLE II RCI)J"esentations and Wan'antics Section 2.1. Rcpresentations bv the Authoritv and the Citv. The Authority and City make 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 State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) the State. hereunder. The City is a municipal corporation duly organized and existing under the laws of The City has the power to enter into this Agreement and carry out its obligations (c) The activities of the Authority and City 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 stimulate further development in the City 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 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 and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority 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. 327813v4 MTN CL205-44 5 (e) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate 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 ofthe foregoing. (g) 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 governmental 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. (h) The proposed redevelopment by the Redeveloper hereunder would not occur but for the public assistance in the form of a land value write-down and site preparation grants being provided by the Authority hereunder. 327813v4 MTN CL205-44 6 ARTICLE III Property Conditions, Acquisition, Convevance and Financinl!: Section 3.1. Condition. Acquisition and Conveyance of the City Parcels; the Redevelopment Property. (a) As of the date of this Agreement, the City owns three (3) parcels of land comprising a part of the Redevelopment Property (the "City Parcels"). The City will convey the City Parcels by quit claim deed to the Authority for later conveyance to the Redeveloper. The Redeveloper owns the two (2) remaining parcels on the Redevelopment Property (the "Redeveloper Parcels"). The Authority believes that the building located on the Redeveloper Parcels is functionally obsolete, and the City Parcels arc vacant. The Redeveloper will incur significant costs to address these substandard conditions in order to redevelop the property. In order to assist the Redeveloper in making development of the Minimum Improvements economically feasible, the Authority will convey title to and possession of the City Parcels to the Redeveloper at a reduced cost, and provide grant funds to address conditions on the Redevelopment Property subject to the conditions of this Agreement. (b) The Authority and City obligate themselves to undertake and complete by Closing the following actions: (i) Upon receipt from the City, convey 3710, 3718 and 3722 Central Avenue to the Redeveloper, as provided hereafter; (ii) Complete any remaining activities for the application to the County for up to 75,000 in community development block grant (CDBG) funds to be provided to the Redeveloper as provided hereafter, subject to final county board approval. ( c) The Redeveloper obligates itself to undertake and complete by Closing the following actions: (i) Acquire 3700 and 3706 Central Avenue at its sole cost and expense. (d) The Redeveloper shall be responsible for all associated closing costs for both the City and the Economic Development Authority. Section 3.2. Conditions of Convevance; Purchase Price. (a) The Authority shall convey title to and possession of the City Parcels to the Redeveloper by a quit claim deed in the form contained in Exhibit B. The Authority's obligation to convey the City Parcels to the Redeveloper is subject to satisfaction of the following terms and conditions: (i) the Redeveloper having submitted and the Authority having approved evidence of financing as required under Article VII; (ii) the Redeveloper having submitted and the Authority having approved Construction Plans for the Minimum Improvements as required by Article IV; 327813v4 MTN CL205-44 7 (iii) the Redeveloper having reviewed and approved title to the City Parcels as set forth in Section 3.4; (iv) the Redeveloper not being in default under this Agreement; 00 the City having approved and granted all Redeveloper required land use and plat approvals (the "Land Use Approvals"). !W the Redeveloper paying the purchase price for the City Parcels as provided in subsection 3.2. (c). (vii) the Redeveloper having executed the Loan Agreement (the "Loan") substantially in the form shown at Schedule D for the loan of funds from the Authority relating to Redeveloper's purchase of3710 Central Avenue. The Loan shall be for a period not to exceed ten (10) years, or the period ending with the sale or refinancing of any portion of the Minimum Improvements and/or Redevelopment Property, which ever is earlier. (b) The closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper shall occur on or before August 1, 2008 (the "Closing"), or such other date as the Authority and Redeveloper agree in writing. (c) The purchase price of the City Parcels shall be as follows: 3710 3718 3722 Purchase Price Central- $43,600 Central- $1.00 Central- $1.00 Fair Market Value $78,600 $49,100 $49,100 The respective purchase prices represent a write-down of the their fair market value in recognition of the Redeveloper's costs of assembly of the Redevelopment Property and Public Redevelopment Costs as described in Section 3.7. Section 3.3. Place of Document Execution, Delivery and Recording. (a) Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all deeds, documents and the payment of any purchase price shall be made at the offices of the Authority. (b) The Deeds shall be in recordable form and shall be promptly recorded in the proper office for the recordation of deeds and other instruments pel1aining to the Authority Parcel. At closing, the Redeveloper shall pay: all recording costs, excluding state deed tax, in connection with the conveyance of the City Parcels; costs of recording any instruments used to clear title encumbrances and title insurance commitment; one-half of any title company closing fees, the cost of a title insurance policy or policies for the City Parcels; any costs relating to title and closing on the Redeveloper Parcels. 321813v4 MTN CL20S-44 8 The Authority shall pay any outstanding levied or pending special assessments levied against the City Parcels or other charges for public improvements however characterized installed or authorized prior to Closing. The parties agree and understand that the City Parcels are exempt from real property taxes payable in 2008. Section 3.4. Title. (a) Redeveloper shall at its cost and expense obtain a commitment for the issuance of a policy or policies of title insurance for the City Parcels and deliver the same to the Authority. The Redeveloper shall review the state of title to the City Parcels and provide the Authority with a list of written objections to such title. The Authority shall proceed in good faith and with all due diligence to attempt to cure the objections made by the Redeveloper. In the event the Redeveloper shall have provided the Authority with a list of written objections, within ten (10) days after the date that all such objections have been cured to the reasonable satisfaction of the Redeveloper, the Authority and Redeveloper shall proceed with the conveyance of the City Parcels pursuant to Sections 3.1, 3.2 and 3.3 of this Agreement. In the event that the Authority has failed to cure objections within sixty (60) days after its receipt of the Redeveloper's list of such objections, either the Redeveloper or the Authority may by the giving of written notice to the other, terminate this Agreement, upon the receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder. The Authority shall have no obligation to take any action to clear defects in the title to the City Parcels, other than the good faith efforts described above. (b) The Authority shall take no actions to encumber title to the City Parcels between the date of this Agreement and the time which the Deed is delivered to the Redeveloper. Section 3.5. Soil Conditions; Other Representations. (a) The Redeveloper acknowledges that the Authority and City make no representations or warranties as to the condition of the soils on the City Parcels or the Redeveloper Parcels, or the fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property. The Redeveloper acquires the City Parcels "as is." Neither the City nor the Authority has any obligation to acquire the Redeveloper Parcels. (b) Any time and from time to time prior to the date of closing, Redeveloper, and person or persons selected by Redeveloper shall be permitted access to the City Parcels for the purpose of conducting such studies and investigations of the City Parcels as Redeveloper deems appropriate, which studies and investigations shall be conducted at Redeveloper's sole expense and pursuant to any other terms and conditions of this Agreement. Redeveloper agrees to indemnify the Authority against any liability, cost or expense incurred by the Authority as a result of Redeveloper's actions, including but not limited to fines, court costs, reasonable attorneys' fees and remedial costs. Such studies may include without limitation, physically inspecting the City Parcels and reviewing the Authority's records concerning the City Parcels which records shall be made reasonably available to Redeveloper. (c) The Authority discloses that there is not an individual sewage treatment system on or serving the City Parcels. 327813v4 MTN CL205-44 9 (d) The Authority does not know of any wells on the City Parcels, and will so certify in the deeds conveying the City Parcels to the Redeveloper. Section 3.6. Environmental Conditions. (a) The Redeveloper further acknowledges that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contamination of the City Parcels or Redeveloper Parcels, nor imposes any obligation on such parties to participate in any cleanup of such property, if required, by state or federal agencies. The Authority has providcd all environmental reports (the "Environmental Reports") in its possession concerning the City Parcels to the Redeveloper, if any, and represents that that it knows of no other environmental conditions relating to the City Parcels, except as disclosed in the Environmental Reports. (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 (collectively, the "Indemnitees"), from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the City Parcels, or the Redeveloper Parcels, 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 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 3.7. Public Redevelopment Costs: Grants: Disbursement. (a) The Redeveloper shall acquire all parcels comprising the Redevelopment Property, demolish all existing buildings on the Redevelopment Property and undertake all soil corrections, utility relocation, and grading and excavation needed to construct the Minimum Improvements (such activities are collectively referred to as the "Public Redevelopment Costs") , consistent with applicable State and Federal requirements, and deliver proof of approval of compliance with such requirements. 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 3.11 hereof. (b) In order to assist the Redeveloper with acquisition of the Redevelopment Property and construction of the Minimum Improvements, the Authority will provide the following assistance: (i) $100,000 from the Anoka County Economic Development Authority levy for land acquisition costs; (ii) $75,000 from community development block grant (CDBG) funds from Anoka County (Grantor Agency) for land acquisition costs; (iii) $30,000 from CDBG funds for demolition activities on the Redevelopment Property; (iv) $30,000 not to exceed, of State Aid Road funds foe turn lane construction; 3278 13v4 MTN CL20S-44 10 (v) $133,198 in land value write-downs; (vi) $21,800 in interest write-down for the Loan. Total grant and in-kind assistance is $389,998. (c) The Authority will pay, reimburse or provide in-kind assistance to the Redeveloper for Public Redevelopment Costs, from and to the extent of the proceeds from the Grantor Agency, the Authority and the City. Notwithstanding anything to the contrary herein, if Public Redevelopment Costs exceed the amount to be reimbursed under this Section, such excess costs shall be the sole responsibility of the Redeveloper. (d) Upon request of Redeveloper from time to time, the Authority will disburse to or on behalf of thc Redeveloper, from the grant and cash:sourccs described in Section 3. 7(b), up to $205,000, the maximum amount of the cash assistance from the grants from the County, and Authority, and provide the in-kind contribution for the turn lane and the land acquisition and interest write-downs, for payment of the Public Redevelopment Costs, subject to the condition precedent that on the date of such disbursement: (i) No Event of Default under this Agreement or event which would constitute such an Event of Default but for the requirement that notice be given or that a period of grace or time elapse, shall have occurred and be continuing; (ii) The Authority has received a written statement from the Redeveloper's authorized representative certifying with respect to each payment: (A) that none of the items for which the payment is proposed to be made has formed the basis for any payment theretofore made under this section; (B) that each item for which the payment is proposed is an item of Public Redevelopment Costs and (C) the Redeveloper reasonably anticipates completion of the Minimum Improvements in accordance with the terms of this Agreement. (iii) No license or permit necessary for undertaking the Environmental Remediation or constructing the Minimum Improvements shall have been revoked or the issuance thereof subjected to challenge before any court or other governmental authority having or asserting jurisdiction there over. (iv) Redeveloper has acquired fee title to the City Parcels, or has received a right of acccss to the City Parcels from the Authority to accomplish an item of Public Redevelopment Costs. (v) Redeveloper has submitted, and the Authority has approved, Construction Plans for the Minimum Improvements in accordance with Article IV hereof, and financing commitment in accordance with Article VII hereof. (e) Whenever the Redeveloper desires a disbursement to be made hereunder, which shall be no more often than monthly, the Redeveloper shall submit to the Authority a letter duly executed on behalf of the Redeveloper accompanied by paid invoices or other comparable 327Bl3v4 MTN CL205-44 11 evidence that the cost has been incurred and invoices paid by Redeveloper. Each request shall constitute a representation and warranty by the Redeveloper that all representations and warranties set forth in this Agreement are true and correct as of the date of such draw request. (i) If the Redeveloper has performed all of its agreements and complied with all requirements theretofore to be performed or complied with hereunder, including satisfaction of all applicable conditions precedent contained in Article III hereof, and upon receipt of requested funds, the Authority shall make a disbursement to the Redeveloper in the amount of the requested disbursement. Each disbursement shall be paid as follows: Within thirty (30) business days of receipt of a request for disbursement, the Authority shall disburse the approved amount of the requested disbursement to the Redeveloper. (g) The making of the final disbursement by the Authority under this Section shall be subject to the condition precedent that the Redeveloper shall be in compliance with all conditions set forth in this Section, and further, that the Authority shall have received a lien waiver from each contractor for all work done and for all materials furnished by it for the Public Redevelopment Costs. (h) The Authority may, in its sole discretion, without notice to or consent ii'om any other party, waive any or all conditions for disbursement set forth in this Article. However, the making of any disbursement prior to fulfillment of any condition therefor shall not be construed as a waiver of such condition, and the Authority shall have the right to require fulfillment of any and all such conditions prior to authorizing any subsequent disbursement. (i) Notwithstanding anything to the contrary in this Agreement, if Redeveloper should default by failing to complete the Minimum Improvements by the dates specified in Section 4.3(a), the Redeveloper shall promptly repay to the Authority the amount disbursed to Redeveloper under clauses (d)-(g). Section 3.8. No Business Subsidv. The parties understand that the Authority is transferring the City Parcels to the Redeveloper by means of a write-down of the fair-market value of the City Parcels from $176,800 to $43,602, a total write-down of $133,198. The Authority in addition will provide $100,000 from the Anoka County Economic Development Authority levy, and $75,000 ii'om a CDBG Grant to the Authority, to the Redeveloper for acquisition and Public Redevelopment Costs related to the Redevelopment Property. The Authority in addition will provide a grant, in an amount not to exceed $30,000 for demolition activities on the Redevelopment Property. The City, in addition, will finance the construction of a 100 -foot turn lane into the Redevelopment Property in an amount not to exceed $30,000. In addition, the value of the interest-free Loan for acquisition costs relating to 3710 Central Avenue represents a grant in an amount up to $21,800 based on a ten-year term for the Loan at 5% interest. These grants, interest and land write-downs total $389,998. The amount of the subsidy of $389,998 does not constitute a business subsidy because the Redeveloper's investment in site acquisition and preparation is at least $701,602, which is 70 percent or more of the assessor's current year's estimated market value of $572,800 for the Redevelopment Property. Therefore, no business subsidy is being provided to the Redeveloper pursuant to Minnesota Statutes, Section 116J.993 to 116J.995, as amended. 327813v4 MTN CJ.205-44 12 Section 3.9. Pavment of Administrative Costs. The Redeveloper is responsible for the Authority's "Administrative Costs," which means out-of-pocket 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 City Parcels. In order to secure partial payment of the Administrative Costs, the Redeveloper delivered to the Authority $3,000 upon execution of thc Preliminary Development Agreement. The Authority will utilize such funds to payor reimburse itself for Administrative Costs. If at anyone or more times during the term of this Agreement, the Authority determines that Administrative Costs will exceed $3,000 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. Failure of the Redeveloper to deliver the requested additional security will result in the Authority suspending its obligations under this Agreement until the security is provided. 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. Section 3.11. Relocation. (a) The Redeveloper shall be responsible for the relocation of all tenants of the Redevelopment Property, if any, 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 from the Redevelopment Property. (b) The Redeveloper shall provide to the Authority written agreements, in a form approved by the Authority, from each owner and occupant of the Redevelopment Property, under which such owners and occupants agree to be relocated from the Redevelopment Property on terms contained in the agreements. In addition, the Redeveloper shall fU\'llish to the Authority a written certification from its atto\'lley 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's obligations under Section 8.3 hereof, the Redeveloper will indemnify, defend and hold harmless the Authority, the City, and their gove\'lling body members, employees, agents and contractors from any and all claims for benefits or payments arising out of the relocation or displacement of any person from the Redevelopment Property as a result of the implementation of this Agreement. 327813v4 MTN CL205-44 13 ARTICLE IV Construction of Minimum ImUl'ovemcnts and Public Imurovemcnts Section 4.1. Construction of Minimum Improvements. (a) The Redeveloper agrees that, upon acquisition of the parcels comprising the Redevelopment Property, it will construct or cause construction of the Minimum Improvements on the Redevelopment Property, in substantial compliance with approved Construction Plans and at all times while Redeveloper owns the Redevelopment Property, all as determined by the City Engineer in his reasonable discretion, 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) All plans and specifications shall in addition comply with all conditions imposed on Redeveloper by the City or its Planning Commission in approving the requested zoning approvals, including the reqnirement that all parcels comprising the Redevelopment Property be platted into one parcel with its legal description (the "Land Use Approvals") for the Redevelopment Property. 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 conformity with this Agreement 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 Engineer and Building Official of the Construction Plans. No approval by the Authority Representative shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority 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 unless 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 15 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 15 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 327813v4 MTN CL205-44 14 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 to be 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 15 days after rcceipt 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. (a) Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by September 1, 2008, and must substantially complete construction of the Minimum Improvements by May 1, 2009. 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 the City. 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. (b) The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereot: that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed subject to Unavoidable Delay within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the City Parcels, 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. Credits. The Redeveloper shall receive four (4) SAC credits. Redeveloper shall be responsible for all other charges and fees imposed by the City. Section 4.5. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates 327813v4 MTN CL205.44 15 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 Rcdeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The Certificate 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 written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions ofthe Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy from the City, and all site improvements have been substantially completed as reasonably determined by the Authority Representative. 327813v4 MTN CL20S.44 16 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, fU1'l1ish 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 at the date of completion, and with coverage available in non-reporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's 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); (iii) Automobile liability insurance to cover claims for damages because of bodily injury or death of any person or property damage arising out of the ownership, maintenance or use of any motor vehicle of not less than $1,000,000; and (iv) 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, and shall name the Authority, the City and any MOl1gagee as an additional named insured thereunder. 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 separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. 327813v4 MTN CL205-44 17 (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 thc same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the nct proceeds of any insurance relating to such damage received by the Redevelopcr 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, the issuance by the City of a Certificate of Completion for the Minimum Improvements. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this Agreement. Section 5.3. Qualifications. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that: (a) Upon transfer of the City Parcels or portion thereof to another person or entity, 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), (c), or 8.3 hereof. 327813v4 MTN CL205-44 18 ARTICLE VI 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 payment of the Public Redevelopment Costs. The Redeveloper understands that the real estate taxes on the Minimum Improvements 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 Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right prior to the issuance of a Certificate of Completion on behalf of the Authority 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 attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the issuance of the Certificate of Completion, 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 issuance of the Certificate of Completion, 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). 327813v4 MTN CL205-44 19 ARTICLE VII Financinl!: 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 Construction Costs for the Minimum Improvements. Such commitments may be submitted as short ;term financing, long ;term mortgage financing, a bridge loan with a long ;term takc-out financing commitment, or any combination of the forcgoing. (b) If the financing is sufficiently committed and adequate in amount to pay the costs specified in paragraph (a) then the Authority staff 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 ten (10) days from the date when the Authority is provided the evidence of financing. A failure by the Authority stafY to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority stafY rej ects 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 thc event that there occurs a default under any Mortgagc authorized pursuant to Section 7.1 ofthis 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 securing 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 provision described in Section 10.3. 327813v4 MTN CL205.44 20 ARTICLE VIII Prohibitions A2ainst Assi2nment and Transfer; Indemnification Section 8.1. Representation as to Redevelopmcnt. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to the Agreemcnt, are, and will be used, for the purpose of redevelopment of the Rcdevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper's Transfer of Proper tv and Assignment of Agreement. 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 permanent financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property or to construct the Minimum Improvements, (ii) any lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements, (iii) any sale, conveyance, or transfer in any form to any Affiliate, or (iv) any change in ownership of the Redeveloper so long as the identity of the parties in control of Redeveloper do not change. Any such transfer shall be subject to the provisions of this Agreement. (b) If the Redevcloper seeks to effect a Transfer prior to issuance of the Certificate of Completion, the Authority shall be entitled to require as conditions to such Transfer that: (i) 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 (ii) 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; 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 327813v4 MTN CL205-44 21 (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 rights 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 manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the 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 thcreof 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, from any of its obligations with respect thereto; and (iii) Any and all instruments and other lcgal 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 from 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 of Completion, the Redeveloper may transfer or assign the Minimum Improvements and/or the Redeveloper's rights and obligations under this Agreement with respect to such property without the prior written consent of the Authority. Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants and agrees that the Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements or the Public Improvements, except for any such damages or injuries directly related to the gross negligence of the Authority or the City. (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 hold the Indemnified Parties harmless fi'om any claim, demand, suit, action or other proceeding 327813v4 MTN CL205-44 22 whatsoever by any person 01' entity whatsoever ansmg 01' purportedly ansmg from this Agreement, 01' the transactions contemplated hereby 01' the acqnisition, construction, installation, ownership, and operation of the Minimum 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 01' injury to the persons 01' property of the Redeveloper 01' its officers, agents, servants 01' employees 01' any other person who may be about the Minimum Improvements 01' Public 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 01' employee ofthe Authority in the individual capacity thereof. 327813v4 MTN Cl,205.44 23 ARTICLE IX Evcnts of Dcfault 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, anyone 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 patty does not, within such 3D-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 perform any material covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement; (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; (iv) is adjudicated a bankrupt or insolvent; or (v) fails to payor escrow for the Authority's Administrative Costs. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) 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. 327813v4 MTN CL20S-44 24 Section 9.3. Revesting Title in Authoritv Upon Happening of Event Subsequent to Conveyance to Redeveloper. In the event that subsequent to conveyance of the City Parcels to the Redeveloper and prior to receipt by the Redeveloper of the Certificate of Completion for the Minimum Improvements required to be constructed on that parcel: (a) the Redeveloper, subject to Unavoidable Delays, shall fail to begin construction of the Minimum Improvements in conformity with this Agreement and such failure to begin construction is not cured within 90 days after written notice from the Authority to the Redeveloper to do so; or (b) subject to Unavoidable Delays, the Redeveloper after commencement of the construction of the Minimum Improvements, fails to carry out its obligations with respect to the construction of such improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 90 days after written demand from the Authority to the Redeveloper to do so; or ( c) the Redeveloper fails to pay real estate taxes or assessments on the parcel or any part thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the parcel (except to the extent permitted by this Agreement), or shall suffer any levy or attachment to be made, or any materialmen's or mechanics' lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision satisfactory to the Authority made for such payment, removal, or discharge, within thirty (30) days after written demand by the Authority to do so; provided, that if the Redeveloper first notifies the Authority of its intention to do so, it may in good faith contest any mechanics' or other lien filed or established and in such event the Authority shall permit such mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal and during the course of such contest the Redeveloper shall keep the Authority informed respecting the status of such defense; or (d) there is, in violation of the Agreement, any transfer of the parcel or any part thereof, and such violation is not cured within sixty (60) days after written demand by the Authority to the Redeveloper, or if the event is by its nature not reasonably susceptible of being cured within 60 days, the Redeveloper does not, within such 60-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or ( e) the Redeveloper fails to comply with any of its other covenants under this Agreement, including failure to complete Environmental Remediation as provided in Section 3.8 related to the Minimum Improvements and fails to cure any such noncompliance or breach within thirty (30) days after written demand from the Authority to the Redeveloper to do so, or if the event is by its nature incurable within 30 days, the Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or 327813v4 MTN CL205-44 25 Then the Authority shall have the right to re-enter and take possession of the City Parcels and to terminate (and revest in the Authority) the estate conveyed by the Deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the parcel to the Redeveloper shall be made upon, and that the Deed shall contain a condition subsequent to the effect that in the event of any default on the part of the Redeveloper described in this Section 9.3 and failure on the part of the Redeveloper to remedy, end, or abrogate such default within the period and in the manner stated in such Section, the Authority at its option may declare a termination in favor of the Authority of the title, and of all the rights and interests in and to the parcel conveyed to the Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to and in the parcel, shall revert to the Authority, but only if the events stated in Section 9.3(a)-(e) have not been cured within the time periods provided above. Section 9.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Authority of title to and/or posscssion of the City Parcels or any part thereof as provided in Section 9.3, the Authority shall, pursuant to its responsibilities under law, use its best efforts to sell the Redevelopment Property or part thereof as soon and in such manner as the Authority shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan to a qualified and responsible party or parties (as determined by the Authority) who will assume the obligation of making or completing the Minimum Improvements or such other improvements in their stead as shall be satisfactory to the Authority in accordance with the uses specified for such Redevelopment Property or part thereof in the Redevelopment Plan. Upon resale of the parcel, the proceeds thereof shall be applied: (a) First, to reimburse the Authority for all costs and expenses incurred by them, including but not limited to salaries of personnel, in connection with the recapture, management, and resale of the parcel (but less any income derived by the Authority from the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the parcel or part thereof (or, in the event the parcel is exempt from taxation or assessment or such charge during the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have been payable if the parcel were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the parcel or part thereof at the time of revesting of title thereto in the Authority or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Redeveloper, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the subject improvements or any part thereof on the parcel or part thereof; and any amounts otherwise owing the Authority by the Redeveloper and its successor or transferee; and (b) Second, to reimburse the Redeveloper, its successor or transferee, up to the amount equal to (1) the purchase price paid by Redeveloper under Section 3.2; plus (2) the amount actually invested by it in making any of the subject improvements on the parcel or part thereof. 327813v4 MTN CL205-44 26 Any balance remaining after such reimbursements shall be retained by the Authority as its property. Section 9.5. 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 right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.6. No Additional Waiver Implied bv One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.7. Attornev Fees. Whenever any Event of Default occurs and if the Authority or Redeveloper 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 or Authority under this Agreement, the non-prevailing party in any such action agrees that it shall, within 10 days of written demand by the prevailing party, pay to the prevailing party the reasonable fees of such attorneys and such other reasonable expenses so incurred. 327813v4 MTN CL205.44 27 ARTICLE X Additional P,'ovisions Section 10.1. Conflict of Interest: Citv or Authoritv Representatives Not Individually Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, ofIicial, 01' employee of the City 01' the Authority shall have any personal interest, direct 01' indirect, in the Agreement, nor shall any such member, official, 01' employee participate in any decision relating to the Agreement which affects his personal interests 01' the interests of any corporation, partnership, 01' association in which he is, directly or indirectly, interested. No member, official, 01' employee of the City 01' the Authority shall be personally liable to the Redeveloper, 01' any successor in interest, in the event of any default 01' breach by the Authority or City 01' for any amount which may become due to the Redeveloper 01' successor 01' on any obligations under the terms of the Agreement. Section 10.2. Equal Emplovment Opportunitv. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to, the opcration 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 01' national origin in the sale, lease, 01' 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 01' shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect 01' impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing 01' 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 01' delivered if it is dispatched by registered 01' certified mail, postage prepaid, retul'll receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to 01' delivered personally to the Redeveloper at 522 Lomianki Lane, Mimleapolis, MN, 55421; and 327813v4 MTN CL205-44 28 (b) in the case of the Authority, is addressed to or dclivered personally to the Authority at 590 - 40th Avenue NE, Columbia Heights, Minnesota 55421, Attn: Executive Director; or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 10.7. Counterparts. This Agreement may be executed III any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the 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. Seetion 10.10. Authoritv 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 date the City issues the Certificate of Completion, except that termination of the Agreement does not terminate, limit or affect the rights of any party that arises before the date the City issues the Certificate of Completion, or as otherwise provided herein. 327813v4 MTN CL205.44 29 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Gary 1. Peterson By Its Executive Director-Walter R.Fehst STATE OF MINNESOTA) ) ss. COUNTYOFANOKA ) The foregoing instrument was acknowledged before me this _ day of 2008, by and , the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf ofthe Authority. Notary Public 327813v4 MTN CL205-44 30 CITY OF COLUMBIA HEIGHTS By Its Mayor-Gary L. Peterson By Its City Manager-Walter R. Fehst STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 2008, by Gary Peterson and Walter R. Fehst, the Mayor and City Manager of the City of Columbia Heights, a Minnesota municipal corporation, on behalf of the City. Notary Public 327813v4 MTN CL205-44 31 37TH AND CENTRAL LLC By Christopher Little Its STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me , 2008 by Christopher Little, the LLC, a Minnesota limited liability company, on behalf of the company. this _ day of of 37th and Central Notary Public 327813v4 MTN CL205.44 32 City Parcels Address 3710 Central 3718 Central 3722 Central Address 3700 Central 3706 Central 327813v4 MTN CL205-44 SCHEDULE A REDEVELOPMENT PROPERTY PIN 35-30-24-44-0119 35-30-24-44-0118 35-30-24-44-0117 PIN 35-30-24-44-0121 35-30-24-44-0120 Former Use Beecroft building (demolished) Non-conforming single- family home (demolished) Non-conforming single- family home (demolished) Redeveloper Parcels Former Use Chutney restaurant Chutney parking lot A-I Property Description COLUMBIA HEIGHTS ANNEX TO MINNEAPOLIS, ANOKA COUNTY, MINNESOTA LOT 16 BLK 87 COL HTS ANNEX COLUMBIA HEIGHTS ANNEX TO MINNEAPOLIS, ANOKA COUNTY, MINNESOTA LOT 15 BLK 87 COL HTS ANNEX COLUMBIA HEIGHTS ANNEX TO MINNEAPOLIS, ANOKA COUNTY, MINNESOTA LOT 14 BLK 87 COL HTS ANNEX Property Description THE S 50 FT OF LOT 18 BLK 87 COLUMBIA HEIGHTS ANNEX, SUBJ TO EASE OF REC LOT 17 BLK 87 COLUMBIA HEIGHTS ANNEX, TOG/W TI-IA T PRT OF LOT 18 SD BLK L YG N OF S 50 FT THEREOF, SUBJ TO EASE OF REC SCHEDULE B FORM OF QUIT CLAIM DEED State Deed Tax Due Hereon: $ QUIT CLAIM DEED THIS INDENTURE, between the Columbia Heights Economic Development Authority, a public body corporate and politic (the "Grantor"), and 37th and Central LLC, a Minnesota limited liability company (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $1.00 and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Anoka and State of Minnesota described on "Exhibit A" attached hereto, to-wit (such tract or parcel ofland is hereinafter referred to as the "Propeliy"): To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging, subject to: See attached "Exhibit B" SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on the day of , 2008, identified as "Contract for Private Redevelopment," as it may be amended (hereafter referred to as the "Agreement"), that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a celiificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Propeliy hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions ofthe zoning ordinance of the City of Columbia Heights, Minnesota, or for the refinancing of the same. 327813v4 MTN CL205-44 B-1 It is specitieally agreed that the Grantee shall promptly begin and diligently proseeute to eompletion the redevelopment of the Property through the eonstruetion of the Minimum Improvements thereon, as provided in the Agreement. Promptly after eompletion of the Minimum Improvements in aeeordanee with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so eertifying. Sueh eertitieation by the Grantor shall be (and it shall be so provided in the eertitieation itself) a eonelusive determination of satisfaetion and termination of the agreements and eovenants of the Agreement and of this Deed with respeet to the obligation of the Grantee, and its sueeessors and assigns, to eonstruet the Minimum Improvements and the dates for the beginning and completion thereof. Sueh certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to tinance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All eertitications provided for herein shall be in such form as will enable them to be recorded with the County Reeorder, or Registrar of Titles, Anoka County, Minnesota. If the Grantor shall refuse or fail to provide any such certitication in aecordance with the provisions of the Agreement ffild this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee 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 Grantor, for the Grantee to take or perform in order to obtain such certitieation. SECTION 2. The Grantee's rights and interest in the Property are subjeet to the terms and conditions of Section 9.3 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specitied therein, ineluding but not limited to termination of such right upon issnance of a Certiticate of Completion as detined in the Agreement. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and sueh suceessors and assigns shall eomply with all provisions of the Agreement that relate to the Property or use thereof for the periods specitied in the Agreement. It is intended and agreed that the above and foregoing agreements and covenants shall be eovenants running with the land for the term of the Agreement, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specitically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benetit and in favor of, and enforceable by, the Grantor against the Grantee, its 327813v4 MTN CL205-44 B-2 successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction ot: the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. SECTION 4. This Deed is also given subject to provision of the ordinances, building and zoning laws of the City of Columbia Heights, and state and federal laws and regulations in so far as they affect this real estate. Grantor certifies that it does not know of any wells on the Property. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Executive Director and has caused its corporate seal to be hereunto affixed this day of ,2008. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Gary 1. Peterson By Its Executive Director-Walter R. Fehst 327813v4 MTN CL205-44 B-3 STATE OF MINNESOTA ) ) ss COUNTYOFANOKA ) The foregoing was acknowledged before me this _ day of , 2008, by Gary L. Peterson and Walter R. Fehst, the President and Executive Director, respectively, of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws ofthe State of Minnesota, on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, Minnesota 55402 Tax Statements should be sent to: 37th and Central LLC 552 Lomianki Lane Minneapolis, MN 55421 327813v4 MTN CL205.44 B-4 EXHIBIT A Lel!al descrintion 327813v4 MTN CL205-44 B-5 EXHIBIT B 1. Real estate taxes and special assessments not yet due, if any. 2. Matters as shown on survey by 327813v4 MTN CL205-44 B-6 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 Oftice 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 I 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 cel1ify that all building construction and other physical improvcments specified to be done and made by the Grantee on the Property have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IV ofthe Agreement (as described in said Deed) with respect to the Property have been performed by the Grantee therein, and the County 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 instrument, 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-Gary L. Peterson By Its Executive Director-Walter R. Fehst 327813v4 MTN CL205-44 C-l 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 atlixed 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 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 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 327813v4 MTN CJ.205-44 C-2 SCHEDULE D LOAN AGREEMENT (TO BE PROVIDED) 327813v4 MTN CL20S-44 C-3