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Contract 2085
,~~ 2085 ~: ~` _~` EYTi !`TTTT(1N !~'(lPV 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: June 24, 2008 This document was drafted by: KENNEDY & GRAVEN, Chartered (MTN) 470 US Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Telephone: (612) 337-9242 327813v6 MTN CL205-44 TABLE OF CONTENTS PREAMBLE ............................................................................................................................1 ARTICLE I Definitions Section 1.1. Definitions ..........................................................................................................2 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority and the City ................................................ ..5 Section 2.2. Representations and Warranties by the Redeveloper ....................................... ..5 ARTICLE III Property Conditions, Acquisition, Conveyance and Financing Section 3.1. Condition, Acquisition and Conveyance of the City Parcels; the Redevelopment Property .................................................................................. ..7 Section 3.2. Conditions of Conveyance; Purchase Price ..................................................... ..7 Section 3.3. Place of Document Execution, Delivery and Recording ................................. ..7 Section 3.4. ................ Title .................................................................................................. .. Section 3.5. Soil Conditions; Other Representations ........................................................... ..7 Section 3.6. Envirorunental Conditions ..............................................................................10 Section 3.7. Public Redevelopment Costs; Grants; Disbursements ..................................... 10 Section 3.8. No Business Subsidy ........................................................................................ 12 Section 3.9. Payment of Administrative Costs .................................................................... 13 Section 3.10. Records ............................................................................................................ 13 Section 3.11. Relocation .............................................................................. 13 ARTICLE IV Construction of Minimum Improvements and Public Improvements Section 4.1. Construction of Minimum Improvements ....................................................... 14 Section 4.2. Construction Plans ........................................................................................... 14 Section 4.3. Completion of Constluction ............................................................................. 15 Section 4.4. Credits .............................................................................................................. 15 Section 4.5 Certificate of Completion ................................................................................ 15 ARTICLE V Insurance Section 5.1. Insurance ..........................................................................................................17 Section 5.2. Subordination ...................................................................................................18 Section 5.3. Qualifications ...................................................................................................18 327813v6 MTN CL205-44 11 ARTICLE VI Taxes .......................1 Section 6.1. Right to Collect Delinquent Taxes ............................................ Section 6.2. Review of Taxes ..............................................................................................19 ARTICLE VII Financing Section 7.1. Mortgage Financing .........................................................................................20 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Redevelopment ...............................................................21 Section 8.2. Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ...............................................................................21 Section 8.3. Release and Indemnification Covenants ..........................................................22 ARTICLE IX Events of Default Section 9.1. Events of Default Defined ...............................................................................24 Section 9.2. Remedies on Default ........................................................................................24 Section 9.3. Revesting Title in Authority Upon Happening of Event Subsequent To Conveyance to Redeveloper .......................................................................24 Section 9.4. Resale of Reacquired Property; Disposition of Proceeds ................................26 Section 9.5. No Remedy Exclusive ......................................................................................27 Section 9.6 No Additional Waiver Implied by One Waiver ...............................................27 Section 9.7 Attorney Fees ...................................................................................................27 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; City or Authority Representatives Not ....................................... Individually Liable ................................................~u Section 10.2. .... Equal Employment Opportunity ...................... ................................................28 Section 10.3. Restrictions on Use .......................................... ................................................28 Section 10.4. Provisions Not Merged With Deed .................. ................................................28 Section 10.5. Titles of Articles and Sections ......................... ................................................28 Section 10.6. Notices and Demands ...................................... ................................................28 Section 10.7. Counterparts ..................................................... ................................................29 Section 10.8. Recording ......................................................... ................................................29 Section 10.9. Amendment ...................................................... ................................................29 327813v6 MTN CL205-44 iii Section 10.10. Authority or City Approvals ................................ Section 10.11. Termination .......................................................... SCHEDULE A Description of Redevelopment Property SCHEDULE B Form of Quit Claim Deed SCHEDULE C Certification of Completion SCHEDULED Loan Agreement ...................................29 ...................................29 327813v6 MTN CL205-44 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 OF COLUMBIA HEIGHTS, MINNESOTA, a municipal corporation under the laws of Minnesota, and 37TH AND CENTRAL LLC, a Minnesota limited liability company (the "Redeveloper"). WITNES SETH: 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 Minnesota 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 accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 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 parry 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 Mirulesota Statues, Sections 116J.993 to 116J.995, as amended. "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Columbia Heights, Minnesota. 327873v6 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 Developer for the purchase of 3710 Central Avenue as described in Section 3.2. "Minimum Improvements" means the construction of a building containing at least 9,000 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 37th and Central LLC or its permitted successors and assigns. "Redevelopment Property" means the property 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 com-t 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 ul 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 327813v6 MTN CL205-44 such as floods, toniadoes, 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. 327813v6 MTN CL205-44 ~} ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority and the City. 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 City is a municipal corporation duly organized and existing under the laws of the State. The City has the power to enter into this Agreement and carry out its obligations hereunder. (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 cominunications 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. 327813v6 MT'N 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 teens, 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 of the 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. 327813v6 MTN CL205-44 ARTICLE III Property Conditions, Acquisition, Conveyance and Financing Section 3.1. Condition Acquisition and Conveyance of the Citv 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 are 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. (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. Section 3.2. Conditions of Conveyance• 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 teens 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; (iii) the Redeveloper having reviewed and approved title to the City Parcels as set forth in Section 3.4; 327813v6 MTN CL205-44 '] (iv) the Redeveloper not being in default under this Agreement; (v) the City having approved and granted all Redeveloper required land use and plat approvals (the "Land Use Approvals"). (vi) 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 of 3710 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 City Parcels within the Redevelopment Property from the Authority to the Redeveloper shall occur on or before July 31, 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: Purchase Price Fair Market Value 3710 Central- $43,600 $78,600 3718 Central- $1.00 $49,100 3 722 Central- $1.00 $49,100 The respective purchase prices represent awrite-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 pertaining 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. 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. 327813v6 MTN CL205-44 $ 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 propei-ry. 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 Paxcels 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 indermiify 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. (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 327813v6 MTTI CL205-44 9 responsibility by the Authority or the City for any contaniination 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 provided all envirommental 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 a grant of 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 for turn lane construction; (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 $369,998. 327813v6 MTN CL205-44 1 ~ (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 the Redeveloper, from the grant and cash sources 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) Redeveloper has acquired fee title to the City Parcels, or has received a right of access to the City Parcels from the Authority to accomplish an item of Public Redevelopment Costs. (iv) 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 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. (f) 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 327813v6 MTN CL205-44 1 I 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 from 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 Subsidy. 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 from 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 and interest and land write-downs total $369,998. The amount of the subsidy of $369,998 does not constitute a business subsidy because the Redeveloper's investment in site acquisition aild 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. Section 3.9. Payment 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 the Preliminary Development Agreement. The Authority will utilize such funds to pay or reimburse itself for Administrative Costs. If at any one or more times during the term of this Agreement, the Authority determines that Administrative Costs will exceed $3,000 and that additional sec>,uity is required, the 327813v6 M1'N CL205-44 12 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. Such amounts are reimbursable as Public Redevelopment Costs under this Agreement, limited to those costs approved by the relocation consultant. (b) The Redeveloper shall provide to the Authority written agreements, in a form approved by the Authority, 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 furnish to the Authority a written certification from its attorney that waivers of relocation benefits contained in such agreements were explained to each owner and occupant in accordance with the terms of the agreement. (c) Without limiting the Redeveloper's obligations under Section 8.3 hereof, the Redeveloper will indemnify, defend and hold harmless the Authority, the City, and their governing 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. 327813v6 M"I'N CL205-44 13 ARTICLE IV Construction of Minimum Improvements and Public Improvements Section 4.1. Construction of Minimum Improvements. (a) The Redeveloper agrees that, upon acquisition of the parcels comprising the Redevelopment Properly, 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 deternlirled 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 requirement 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 327813v6 MT'N CL205-44 14 Representative's approval shall not be unreasonably withheld, delayed or conditioned. Said approval shall constitute a conclusive detern~ination 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 receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by May 1, 2009, and must substantially complete construction of the Minimum Improvements by January 1, 2010. 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 thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Milulnum 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 hmprovements 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 327813v6 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 Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The Certificate 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 of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be 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. 327813v6 MT'N CL205-44 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, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements 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 Mortgagee 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 uisurers 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. 327813v6 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 the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, 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 remaui 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. 327813v6 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). 327813v6 MTN CL205-44 19 ARTICLE VII Financing Section 7.1. Mort~a~e Financing. (a) Before the Redeveloper's Closing Date, the Redeveloper shall submit to the City evidence of one or more commitments for fmancing 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-terns financing, long-term mortgage financing, a bridge loan with along-term take-out financing commitment, or any combination of the foregoing. (b) If the financing is sufficiently commmitted 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 fmancing. A failure by the Authority staff to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority staff rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Redeveloper shall submit adequate evidence of financing within ten (10) days after such rejection. (c) In the event that there occurs a default under any Mortgage authorized pursuant to Section 7.1 of this Agreement, the Redeveloper shall cause the Authority to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the Mortgage documents. In the event there is an event of default under this Agreement, the Authority will transmit to the Holder of any Mortgage a copy of any notice of default given by the Authority pursuant to Article IX of this Agreement. (d) In order to facilitate the securing of other fnancing, 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. 327813v6 MTN CL205-44 20 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Re resentation as to Redevelo went. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper's Transfer of Property 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 fmancing 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 Redeveloper 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 327813v6 MT"N 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 thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the Redevelopment Property, from any of its obligations with respect thereto; and (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. (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 lildemnification 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 from any claim, demand, suit, action or other proceeding 327813v6 MTN CL205-44 22 whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements and Public Improvements. (c) Except for any negligence of the Indelrmified Parties (as defined in clause (b) above), and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Minimum Improvements or 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 or employee of the Authority in the individual capacity thereof. 327813v6 MTN CL205-44 23 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or more of the following events, after the non-defaulting party provides 30 days written notice to the defaulting party of the event, but only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting party does not, within such 30-day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Redeveloper or the Authority to observe or 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 pay or escrow for the Authority's Adnunistrative 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. 327813v6 MTN CL205-44 24 Section 9.3. Reverting Title in Authority Upon Happening of Event Subseauent to ConveXance 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 Cary 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 material men'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 perniit 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, 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 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 327813v6 MTN CL205-44 25 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 Pro~erty• Disposition of Proceeds. Upon the reverting in the Authority of title to and/or possession 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 reverting 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. Any balance remaining after such reimbursements shall be retained by the Authority as its property. 327813v6 M"I'N CL205-44 2C 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 u~ 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 by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.7. Attorney 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. 327813v6 MT'N CL205-44 27 ARTICLE X Additional Provisions Section 10.1. Conflict of Interest• City or Authority Representatives Not Individually Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the City or the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the City or the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or City or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to, the operation of the Minimum Improvements for uses described in the definition of such term in this Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 522 Lomianki Lane, Minneapolis, MN, 55421; and 327813v6 MTN CL205-44 28 (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 590 - 40t~' 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 u1 any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recordin>;. The Authority may record this Agreement and any amendments thereto with the Anoka County recorder. The Redeveloper shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Redeveloper. Section 10.10. Authority or City Approvals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. Section 10.11. Termination. This Agreement terminates on the 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. 327813v6 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. STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHO `RITY l ~ _„ B:y;,,.:t~~ ~ ,.. Its Presiden Gary L. Peterson By ,~ Its Executive Director-Walter R.Fehst The foregoing instrument was acknowledged before me this ~ day of r ~ , 2008, by ~ ~. Q , ~.~. and ~ ~ ~~k ~r R r-~4..t~, the President and Execu ve Director of the Columb Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. ~~:.;9Y=~ _ C~~: to i~t6i ~ ~:i ~ ~ i v i ~a`'i~ 327813v4 M'I'N CI,205-44 Notary Public 30 CITY OF COLUMBIA STATE OF MINNESOTA ) SS. COUNTY OF ANOKA ) By ~: ~~~/ ~~~ c~ J~ , ~~ U Its M vor-Gar~'L. Peterson u~~~ By ~~ Its City Manager-Walter R. Fehst 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. otary Public ~ 'S ,.<<fd Cf v. ~1 L ~C iC ((G -~pp ~l'~U .: h '~~~ 327813v4 MT'N CL205-44 31 37TH AND CENTRAL LLC STATE OF MINNESOTA ) ss. COUNTY OF ~ Ao~~l ) By Chnstop er Little Its ~f SCE ~~~DE~t19- The foregoing instrument was acknowledged b(~ fore ~ e this ~~" day of ~" , 2008 by Christopher Little, the V i ~e 1'reS~ ~ of 37th and Central LLC, a M• esota limited liability company, on behalf of the company. cr~rm~ ania~ro NOUIRY PUBl1C • MINNESOD~ Nry COMMISSION E~IRES•1/Sl/4014 C's2~ ~ ~~G-"'~ Notary Public 327813v6 M"I'N CL205-44 32 SCHEDULE A REDEVELOPMENT PROPERTY City Parcels Address 3710 Central 3718 Central 3722 Central Redeveloper Parcels Address PIN 35-30-24-44-0119 35-30-24-44-0118 35-30-24-44-0117 PIN Former Use Beecroft building (demolished) Non-conforming single-family home (demolished) Non-conforming single-family home (demolished) 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 3700 Central 3706 Central Former Use 35-30-24-44-0121 Chutney restaurant 35-30-24-44-0120 Chutney parking lot 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 THAT PRT OF LOT 18 SD BLK LYG N OF S 50 FT THEREOF, SUBJ TO EASE OF REC 327813v6 MT'N CL205-44 A_ 1 Quit Claim Deed STATE DEED TAX DUE HEREON: $1.70 Consideration for this transaction is less than $500.00. Date: ~U ~ ~~Z00$ FOR VALUABLE CONSIDERATION, City of Columbia Heights, a municipal corporation under the laws of the State of Minnesota, Grantor, hereby conveys and quitclaims to Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of Minnesota., Grantee, real property in Anoka County, Minnesota, described as follows: Lots 14, 15 and 16, Block 87, Columbia Heights Annex, Anoka County, Minnesota. (if more space is needed, continue on back) together with all hereditaments and appurtenances. The Seller certifies that the seller does not know of any wells on the described real property. CITY OF COLUMBIA HEIGHTS By Its Vice,.Ma~yor Tammera Die By ~4% Its City Manager Walter R. Fehst 335843v1 CBR CL205-44 STATE OF MINNESOTA 55.: COUNTY OF ANOKA The foregoing was acknowledged before me this ~t day of ~_, 2008, by Tammera Diehm and Walter Fehst the Vice Mayor and City Manager of City of Columbia Heights, a municipal corporation organized under the laws of the State of Minnesota, on behalf of the municipal corporation, Grantor. NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RAK) NOWiY PUBUC dM0~f0 MIC~OAAMp810Nf7~11~~ ~! SIGNATURE PERSON TAKING ACKNOWLEDGMENT Check here if part or all of the land is Registered (Torrens) ^ Tax Statements for the real property described in this instrument should be sent to (include name and address of Grantee): Economic Development Authority of the City of Columbia Heights 590 40th Avenue NE Columbia Heights, MN 55421 This instrument drafted by: Kennedy & Graven, Chartered 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 335843v1 CBRCL205-44 QUIT CLAIM DEED State Deed Tax Due Hereon: $ THIS INDENTURE, between the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of the State of Mimnesota (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 of land is hereinafter referred to as the "Property"): To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on the day of 2008, recorded 2008 as Document No. 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 certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Columbia Heights, Minnesota, or for the refinancing of the salve. 335842v1 CBR CL205-44 I It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum hmprovements thereon, as provided in the Agreement. Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the begimling and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum Improvements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Anoka County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and 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 certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Section 9.3 of the Agreement relating to the Grantor's right to re-enter and revert in Grantor title to the Property under conditions specified therein, including but not limited to termination of such right upon issuance of a Certificate of Completion as defined in the Agreement. SECTION 3. The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with all provisions of the Agreement that relate to the Property or use thereof for the periods specified in the Agreement. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants 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 335842v1 CBR CL205-44 2 otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its 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, acid 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 ~ C 2 President and Executive Director and has caused its corporate seal to be hereunto affixed this ~ day of _;;~~4 , 2008. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY r By i Q. Its Vi e Presid nt Marla e Szurek By Its Executive Director Water R. Fehst 335842v1 CBRCL205-44 3 STATE OF MINNESOTA ) ss COUNTY OF ANOKA ) The foregoing was acknowledged before me this ~ day of ~, 2008, by Maclaine Szurek and Walter R. Fehst, the Vice President and Executive Director, respectively, of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the public body corporate and politic. CHERYL A BAIQ~N ~ LG~~~~ NOii41~~'~''~'r"'""E~"' Notar ublic MV COMMISSION EXPIRE&113112012 y This instrument was drafted by: Keimedy & 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 335842v1 CBRCL205-44 4 EXHIBIT A Lots 14, 15 and 16, Block 87, Columbia Heights Aurlex, Anoka County, Minnesota. 335842v1 CBR CL205-44 EXHIBIT B 1. Real estate taxes and special assessments not yet due, if any. 2. Matters as shown on survey by 327813v6 MT'N CL205-44 B_6 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.mn.us SCHEDULE C CERTIFICATE OF COMPLETION WHEREAS, the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Anoka and State of Minnesota, as Deed Document Number(s) and ,respectively, has conveyed to , a Minnesota (the "Grantee"), the following described land in County of Anoka and State of Minnesota, to-wit: (the "Property") and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions with respect to the Property insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee on the Property have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IX ,Section 9.3 of the 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 IX, Section 9.3 of the Agreement with respect to the Property, Dated: , 20_. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director 327813v6 MTN CL205-44 C_ 1 THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) On this _ day of , 20_, before lne, a Notary Public within and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that (s)he is the President of the Authority named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said 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 flee act and deed of said Authority. Notary Public 327813v6 MTN CL205-44 C_2 . ,. LOAN AGREEMENT Execution Copy THIS AGREEMENT is made as of this ? day of2008 by and between 37th And Central LLC, a Minnesota limited liability company ("Borrower") and the Columbia Heights Economic Development Authority, a municipal corporation under the laws of the state of Minnesota ("Lender"). RECITALS A. 37~' And Central LLC, a limited liability company under the laws of the state of Minnesota ("Developer") has requested that the Columbia Heights Economic Development Authority ("Authority") enter into certain agreements, including but not limited to a Contract for Private Redevelopment with Developer dated as of ~j ~~~ 2y 2008 (the "Contract"), and that the Authority ("Lender") enter into certain agreements with 37~' And Central LLC, a Minnesota limited liability company ("Borrower"), all with regard to the construction of a building containing at least 9,000 square feet of commercial redevelopment and related improvements (the "Minimum Improvements" and the "Project") to be located on certain property in the City legally described on Exhibit A attached hereto (the "Property"). B. In order to provide additional financing for the Project and thereby improve and retain commercial development in the City, Lender agrees to loan to Borrower the sum of Forty three thousand six hundred and no/100ths Dollars ($43,600) from Lender funds for Borrower's purchase of 3710 Central Avenue, a portion of the Project. ACCORDINGLY, to induce Lender to make the Loan to Borrower, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The Loan Amount. Subject to and upon the terms and conditions of this Agreement, Lender agrees to loan to Borrower the sum of Forty three thousand six hundred and no/100ths Dollars ($43,600), or so much thereof as is disbursed to Borrower in accordance with this Agreement (the "Loan"). The Loan shall be evidenced by a promissory note ("Note") payable by Borrower to Lender substantially in the form of Exhibit B attached to this Agreement, which shall be dated as of the date of this Agreement. Proceeds of the Loan shall be disbursed in accordance with Section 3 hereof. 2. Repayment of Loan The entire unpaid balance of the Loan shall be due and payable in full on the earlier of the following: (i) thirty (30) days after written notification by Lender to Borrower of the occurrence of an Event of Default as defined in Section 5 hereof and demand of payment according to Section 6; or (ii) on the first day of the one hundred twentieth (120') month following the Closing Date; or (iii) on or before thirty (30) days after the sale or refinancing of any portion of the Property or the Minimum Improvements constructed thereon. 3. Disbursement of Loan Proceeds. (a) On such date as requested by Borrower (the "Closing Date"), Loan proceeds shall be paid to Borrower or a trustee or escrow agent designated by Borrower. Borrower warrants that it shall use Loan proceeds only for purposes and activities related to the Project and permitted by the Loan. (b) The following events shall be conditions precedent to the payment of the Loan proceeds to Borrower on the Closing Date: (i) Borrower having executed and delivered to Lender prior to the Closing Date, without expense to Lender, executed copies of this Agreement and the Note; (ii) Borrower having provided evidence satisfactory to Lender that Borrower has established a separate accounting system for the Project, for the purpose of recording the receipt and expenditure of the Loan proceeds; (iii) Borrower having paid all attorney fees, costs, and expenses incurred by Lender in connection with this Agreement and the Note; (iv) Borrower having delivered to Lender prior to the Closing Date, the Contract, fully approved and executed by all parties thereto, and not being in default there under; and (v) Borrower having provided Lender with evidence satisfactory to Lender that Borrower has adequate funds to complete the Project. 4. Representations and Warranties. Borrower represents and warrants to Lender that: (a) Borrower is a limited liability company duly organized and existing in good standing under the laws of the State of Minnesota. (b) Borrower is duly authorized and empowered to execute, deliver, and perform this Agreement and the Note, and to borrow money from Lender. (c) The execution and delivery of this Agreement, and the performance by Borrower of its obligations hereunder, do not and will not violate or conflict with any provision of law or the partnership agreement of Borrower 2 and do not and will not violate or conflict with, or cause any default or event of default to occur under, any agreement binding upon Borrower. (d) The execution and delivery of this Agreement has been duly approved by all necessary action of Borrower, and this Agreement has in fact been duly executed and delivered by Borrower and constitutes its lawful and binding obligation, legally enforceable against it. (e) Borrower warrants that it shall keep and maintain books, records, and other documents relating directly to the receipt and disbursements of Loan proceeds and that any duly authorized representative of Lender shall, at all reasonable times, have access to and the right to inspect, copy, audit, and examine all such books, records, and other documents of Borrower respecting the Loan until the completion of all closeout procedures and the final settlement and conclusion of all issues arising out of this Loan. (f) Borrower warrants that it has fully complied with all applicable state and federal laws pertaining to its business and will continue said compliance throughout the terms of this Agreement. If at any time Borrower receives notice of noncompliance from any governmental entity, Borrower agrees to take any necessary action to comply with the State or Federal law in question. (g) Borrower warrants that it will use the proceeds of the Loan made by Lender solely for the purposes described in Section 3 hereof. (h) Borrower warrants that it will comply with all federal, state, and local laws, rules, and regulations applicable to construction and operation of the Project, including but not limited to those pertaining to occupational health and safety, stormwater discharge, and nondiscrimination. (i) Borrower warrants that it will provide Lender with all documentation and materials necessary for Lender to comply with Lender's accounting, audit and report requirements under Section III of the Grant. 3 5. Event of Default by Borrower. The following shall be Events of Default under this Agreement: (a) any breach or failure of Borrower to perform any term or condition of this Agreement or the Note or the Contract with respect to the Project under the Contract (as defined in Recital A hereof) and such failure continues for thirty (30) days after Lender has given written notice to Borrower specifying such default or breach unless Lender agrees in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, Lender will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Borrower within the applicable period and is being diligently pursued until the Default is corrected, but no such extension shall be given for a Default that can be cured by the payment of money; (b) any representation or warranty made by Borrower herein or in any document, instrument, or certificate given in connection with this Agreement is false when made; or (c) Borrower is dissolved, liquidated, or wound up, or fails to maintain its existence as a going concern in good standing (excepting reorganizations, consolidations, and mergers into or with affiliates owned by, owning, or under common control of or with such entity or into the parent of such entity, provided the succeeding organization assumes and accepts such entity's obligations hereunder). 6. Lender's Remedies upon Borrower's Default. Upon an Event of Default by Borrower and after receipt of written notice from Lender, Lender shall have the right to exercise any or all of the following remedies (and any other rights and remedies available to it): (a) declare the Loan to be immediately due and payable upon providing written notice to Borrower; (b) suspend its performance under this Loan Agreement; and (c) take any action provided for at law to enforce compliance by Borrower with the terms of this Loan Agreement or the Note. 7. Lender's Costs of Enforcement of Agreement. If an Event of Default has occurred as provided herein, then upon demand by Lender, Borrower will pay or reimburse Lender for all expenses, including all fees and disbursements of legal counsel, incurred by Lender in connection with the enforcement of this Agreement, or in connection with the protection or enforcement of the interests of Lender in any litigation or bankruptcy or insolvency proceeding or in any action or proceeding relating in any way to the transactions contemplated by this Agreement. 4 8. Miscellaneous. (a) Waiver. The performance or observance of any promise or condition set forth in this Agreement may be waived only in writing. No delay in the exercise of any power, right or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other power, right or remedy. (b) Assi ntg_ Went. This Agreement shall be binding upon Borrower and its successors and assigns and shall inure to the benefit of Lender and its successors and assigns. All rights and powers specifically conferred upon Lender may be transferred or delegated by Lender to any of its successors and assigns. Borrower's rights and obligations under this Agreement may be assigned only when such assignment is approved in writing by Lender. (c) Law Governing; Other Matters. This Agreement shall be governed and construed in accordance with the laws of the State of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement or in any other agreement between Borrower and Lender shall survive the execution, delivery and performance of this Agreement and the creation and payment of any indebtedness to Lender. Borrower waives notice of the acceptance of this Agreement by Lender. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. (d) Titles. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. (e) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument (f) Notice. All notices required hereunder shall be given by depositing in the U.S. mail, postage prepaid, certified mail, return receipt requested, to the following addresses (or such other addresses as either party may notify the other): 5 To Lender: The Authority 90 - 40th Avenue NE, Columbia Heights, MN 55421 Attn: Executive Director To Borrower: 37th And Central LLC 522 Lomianki Lane Minneapolis, MN, 55421 9. Indemnification. Borrower shall and does hereby agree to indemnify against and to hold Lender, and its officers, agents, and employees, harmless of and from any and all liability, loss, or damage which Lender may or might incur by reason of or arising from any and all claims and demands whatsoever which may be asserted against it by reason of any alleged obligations or undertakings on Lender's part to perform or discharge any of the terms, covenants or agreements contained herein or pursuant to the Grant (except those obligations under the Grant that are within the sole control of Lender). Should Lender, or its officers, agents, or employees incur any such liability or be required to defend against any such claims or demands, or should a judgment be entered against Lender, the amount thereof, including costs, expenses, and attorneys fees, shall bear interest thereon at the rate then in effect on the Note, shall be added to the Loan, and Borrower shall reimburse Lender for the same immediately upon demand, and upon the failure of Borrower so to do, Lender may declare the Loan immediately due and payable. Nothing in this Agreement shall be deemed to waive or limit any immunity from or limitation on liability to which Lender is entitled, under Minnesota Statutes, Chapter 466 or otherwise. 10. Assumability. Any person taking fee title to the Property may assume Borrower's rights and obligations hereunder by delivering to Lender, in a form reasonably satisfactory to Lender, documentation agreeing to so assume Borrower's rights and obligations under this Agreement. IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the proper officers thereunto duly authorized on the day and year first written above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY c By Its Vice resident Marlaine zurek B G~ Y Its Executive Director Walt r R. Fehst STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this ~ day of 2008, by Maclaine Szurek and Walt Fehst the Vice President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. ~~~ CHERYL A BAq(EN ~ NOTARY PUBLIC • MINNESOTA MY COMMISSION EXPIRES-1/31/2012 37TH AND CENTRAL LLC By C topher Little Its (~`C~~i~SlD~~~G- STATE OF MINNESOTA ) ss. COUNTY OF I-Ic ) The foregoing instrument was acknowledged before me this day of ~,„ lL , 2008 by Christopher Little, the ~ L~ c.~ '~ ~ ~ ~---~' of 37th and Central L C, a Minnesota limited liability company, on behalf of the company. `~ JANE M. MILLER NOTARY PUBLIGMINNESOTA .~;~,~,,,, My Commission f=xpires Jan. 31, 2010 Notar ublic This instrument drafted by: Kennedy & Graven, Chartered 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 7 EXHIBIT A TO LOAN AGREEMENT LEGAL DESCRIPTION PROPERTY City Parcels Address PIN Former Use Property Description 3710 Central 35-30-24-44-0119 Beecroft building (demolished) 3718 Central 35-30-24-44-0118 Non-conforming single-family home (demolished) 3722 Central 35-30-24-44-0117 Non-conforming single-family home (demolished) Redeveloper Parcels Address PIN Former Use 3700 Central 35-30-24-44-0121 Chutney restaurant 3706 Central 35-30-24-44-0120 Chutney parking lot 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 THAT PRT OF LOT 18 SD BLK LYG N OF S 50 FT THEREOF, SUBJ 8 PROMISSORY NOTE -$43,600- J ~~ , 2008 37th And Central LLC, a Minnesota limited liability company (the "Maker"), for value received, hereby promises to pay to Columbia Heights EDA (the "City") or its assigns (the City and any assigns are hereinafter referred to as the "Holder"), at its designated principal office or such other place as the Holder may designate in writing, the principal sum of Forty three thousand six hundred and no/100ths Dollars ($43,600) or so much thereof as may be advanced under this Note, without interest thereon, in any coin or currency which at the time or times of payment is legal tender for the payment of private debts in the United States of America. The principal of this Note is payable as follows: 1. The Loan shall not bear interest. 2. The entire unpaid balance of the Loan shall be due and payable in full on the earlier of the following: (i) thirty (30) days after written notification by Lender to Borrower of the occurrence of an Event of Default as defined in Section 5 hereof and demand of payment according to Section 6; or (ii) on the first day of the one hundred twentieth (120th) month following the Closing Date; or (iii) on or before thirty (30) days after the sale or refinancing of any portion of the Property or the Minimum Improvements constructed thereon. 3. The Maker shall have the right to prepay the principal of this Note at any time, in whole or in part, without prepayment penalty. 4. This Note is given pursuant to the Loan Agreement. In the event the Loan Agreement is found to be invalid for whatever reason, such invalidity shall constitute an event of default hereunder. All of the agreements, conditions, covenants, provisions, and stipulations contained in the Loan Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Note. If a default occurs under the Loan Agreement, or any instrument securing this Note, then the Holder of this Note may at its right and option, without notice, declare immediately due and payable the principal balance of this Note, together with any costs of collection including attorney fees incurred by the Holder of this Note in collecting or enforcing payment hereof, whether suit be brought or riot, and all other sums due hereunder, or under any instrument securing this Note. The Maker agrees that the Holder of this Note may, without notice to the Maker of this Note and without affecting the liability of the Maker of this Note, accept additional or substitute security for this Note, or release any security or any party liable for this Note or extend or renew this Note. 5. The remedies of the Holder of this Note as provided herein, and in the Loan Agreement, shall be cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the Holder of this Note, may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder of this Note and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modifications, or change is sought. 6. If any term of this Note, or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of such term to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest extent permitted by law. 7. It is intended that this Note is made with reference to and shall be construed as a Minnesota contract and governed by the laws thereof without regard to the state's conflict of laws provisions. 8. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. 9. Neither the Borrower, nor any general or limited partner, employee, or agent of the Borrower shall have any personal liability of the Borrower's obligations hereunder, it being recognized by the Lender that the obligations of the Borrower hereunder are nonrecourse obligations and that the remedies of the Holder are limited to the security provided as set forth herein. IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed as of the,~~ay of ,, ~y , 2008. 37TH AND C NTRAL L By Christopher Little Its ~1 c~ ~~~~~JT 1` SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this 2nd day of July, 2008, between FIRST COMMERCIAL BANK, a Minnesota corporation (the "Lender"), whose address is at 8500 Normandale Lake Blvd., Suite 110, Bloomington, MN 55437, and the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF COLUMBIA HEIGHTS, a public body corporate and politic (the "Authority"). RECITALS A. 37~' and Central LLC, a Minnesota limited liability company ("Developer"), is the owner of certain real property situated in Anoka County, Minnesota and legally described in Exhibit A attached hereto and incorporated herein (the "Property). B. Lender has made a loan to Developer in the original principal amount of $575,000 (the "Loan"). The Loan is evidenced and secured by the following documents: (i) a certain Mortgage (the "Mortgage") made by Developer dated July 2, 2008, filed 2008, as Anoka County Recorder/Registrar of Titles Doc. No. encumbering the Property; and (ii) a certain Promissory Note (the "Note") made by Developer dated July, 2008, in the amount of $575,000.00; and (iii) a certain Assignment of Rents (the "Assignment") ") made by Developer dated July 2, 2008, filed , 2008, as Anoka County Recorder/Registrar of Titles Doc. No. encumbering the Property; and (iv) a certain Mortgage (the "Mortgage") ") made by Developer ("The Village at Battle Creek, LLC") dated July2, 2008; and (v) a certain Assignment of Rents (the "Assignment") made by Developer ("The Village at Battle Creek, LLC") dated July2, 2008; and 335979v6 MTN CL205-44 1 The Note, the Mortgages, the Assignments of Rents, and all other documents and instruments evidencing, securing and executed in connection with the Loan, are hereinafter collectively referred to as the "Loan Documents." C. The Authority is the owner and holder of certain rights under a certain unrecorded Contract for Private Development (the "Contract") by and between Developer and Authority dated July 1, 2008. D. Developer is entitled under the Contract to receive a loan to finance the purchase of the three parcels comprising the Property from the Authority in the principal amount of $46,300 (the "EDA Loan"). The EDA Loan is evidenced by that certain Loan Agreement dated July 2, 2008, and Promissory Note dated July 2, 2008 (the "EDA Loan Agreement" and "EDA Note"). The Contract further provides for a reverter in favor of the Authority in the deed transferring the Property to the Developer, in the event of a default by the Developer described in Article IX of the Contract (the "Reverter"). NOW, THEREFORE, in consideration of the foregoing and as an inducement to Lender to make the Loan, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto represent, warrant and agree as follows: 1. Consent. The Authority acknowledges that the Lender is making the Loan to the Developer and consents to the same. The Authority also consents to and approves the collateral assignment of the Contract, the EDA Loan and EDA Note, by the Developer to the Lender as collateral for the Loan, if required by the Lender; provided, however, that this consent shall not deprive the Authority of or otherwise limit any of the Authority's rights or remedies under the Contract, the EDA Loan, the EDA Note and the Reverter, and shall not relieve the Developer of any of its obligations under the Contract, the EDA Loan, the EDA Note and the Reverter; provided further, however, the limitations to the Authority's consent contained in this Paragraph 1 are subject to the provisions of Paragraph 2 below. 2. Subordination. The Authority hereby agrees that the rights of the Authority with respect to the Contract, the EDA Loan and the EDA Note are and shall remain subordinate and subject to liens, rights and security interests created by the Loan Documents and to any and all amendments, modifications, extensions, replacements or renewals of the Loan Documents; provided, however, that nothing herein shall be construed as subordinating the Authority's rights under the Reverter in the deed transferring the Property to the Developer contained in Section 9.3 of the Contract, or as subordinating the requirement contained in the Contract that the Property be used in accordance with the provisions of Section 10.3 thereof. 335979v6 MTN CL205-44 2 ~, 3. Notice to Authority. Lender agrees to use commercially reasonable efforts to notify the Authority of the occurrence of any Event of Default given to Developer under the Loan Documents, in accordance with Section 7.1 of the Contract. The Lender shall not be bound by the other requirements in Section 7.1 of the Contract. 4. Statutory Exception. Nothing in this Agreement shall alter, remove or affect Lender's obligation under Minnesota Statutes, § 469.029 to use the Property in conformance with Section 10.3 of the Contract. 5. No Assumption. The Authority acknowledges that the Lender is not a party to the Contract and by executing this Agreement does not become a party to the Contract, and specifically does not assume and shall not be bound by any obligations of the Developer to the Authority under the Contract, and that the Lender shall incur no obligations whatsoever to the Authority except as expressly provided herein. 6. Notice from Authority. So long as the Contract remains in effect, the Authority agrees to give to the Lender copies of notices of any Event of Default given to Developer under the Contract. 7. Governing Law. This Agreement is made in and shall be construed in accordance with the laws of the State of Minnesota. 8. Successors. This Agreement and each and every covenant, agreement and other provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, including any person who acquires title to the Property through the Lender of a foreclosure of the Contract. 9. Severability. The unenforceability or invalidity of any provision hereof shall not render any other provision or provisions herein contained unenforceable or invalid. 10. Notice. Any notices and other communications permitted or required by the provisions of this Agreement shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Service, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage, or delivery by reputable private carrier and addresses as set forth above. 11. Transfer of Title to Lender. The Authority agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale, acquires title to the Property pursuant to a foreclosure, or a deed in lieu thereof, the Lender, transferee, or purchaser shall not be bound by the terms and conditions of the Contract except as expressly herein provided. Further the Authority agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale acquires title to the Property pursuant to a foreclosure sale or a deed in lieu thereof, then the Lender, transferee, or purchaser shall be entitled to all rights conferred upon the Developer under the Contract, provided that no condition of default exists and remains uncured beyond applicable cure periods in the obligations of the Developer under the Contract. 335979v6 MTN CL205-44 12. Estoppel. The Authority hereby represents and warrants to Lender, for the purpose of inducing Lender to make advances to Developer under the Loan Documents that: (a) No default or event of default by Developer exists under the terms of the Contract on the date hereof; (b) The Contract has not been amended or modified in any respect, nor has any material provision thereof been waived by either the Authority or the Developer, and the Contract is in full force and effect; (c) Such other reasonable certifications as the Lender may request. 13. Amendments. The Authority hereby represents and warrants to Lender for the purpose of inducing Lender to make advances to Developer under the Loan Documents that Authority will not agree to any amendment or modification to the Contract or any TIF Note issued under the Contract that materially affects the collection of Available Tax Increment (as defined in the Contract) in any way affects the Property without the Lender's written consent. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day and year first written above. 335979v6 MTN CL205-44 4 THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA 4 By .. Its Vice President Marla• e Szurek By Its Executive Director Walter R Fehst STATE OF MINNESOTA ) ss. COUNTY OF ANOKA ) The fore oing instrument was acknowledged before me this ~s~day of ~' , 2008 by ~csr~a,~~~e -~z~re~Cand Wo.~~u^ ~. ~'e.~s'~' ,the Vice Presid nt and Executive Director of the Economic Development Authority of the City of Columbia Heights, Minnesota, on behalf of the Authority. No~+r c aaw°M°~r~or- Mroo~a~amaoN o~ap~gOt! ~~~ Notary Public 335979v3 MTT] CL205-44 [~. FIRST COMMERCIAL BANK By: Brian agner Its: Vice President-Business Development STATE OF MINNESOTA ) ~~~'""'~.,,, ERIC JAMES HOEFT ~~ ~'~ NOTARY PUaLIC ss. ~ M-NNESOTA COUNTY OF ANOKA ) ~, ~ *,., My Commleilon Expires Jen. 31, 2012 The foregoing instrument was acknowledged before me thistRday of July 2008 by Brian R. Wagner, the Vice President-Business Development, on behalf of First Commercial Bank] ~ ~i wr..ei~ o ~- ~u'~r lS" ~--~ ~- `p ~-(."~ C~SV ~J w c~.~~~L N tary Publ' 335979v4 MTN CL205-44 1 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Lots 14, 15 and 16, Block 87, Columbia Heights Annex, Anoka County, Minnesota. 335979v6 MTN CL205-44 7 M.S.BA. Real Property Form No. 22 (2005) Methan~phetamine Disclosure Statement METI=IAMPHETANIINE DISCLOSURE STATEMENT © Copyright 2005 by Minnesota State Bar Association, Mnmeapolis, Minenesota. No copyright is claimed for statutory text. The material terms for this DISCLOSiJI2E are contained within the states reprinted below. This document, dated ~`u ~ y ~ , 2008"', concerns the real property located at: 3722, 3718, and 3710 Central Avenue N ,Columbia Heights, MN and legally described as Lots 14, 15 and 16, Block 87, Columbia Heights Annex, Anoka County, Minnesota [the "Property"]. Seller's Disclosure: [Check only one box, either A., or B.J ^D A. To the best of Seller's knowledge, methamphetamine production has not occurred on the property. [If Box A., is checked, stogy here. The rest of the form should not be completed) ^ B. To the best of Seller's knowledge, methamphetamine production has occurred on the property and Seller makes the following disclosure: A county or local health department or sheriff [strike one) has /has not ordered that the property or some portion of the property is prohibited from being occupied or used until it has been assessed and remediated as provided in the Department of Health's Clandestine Drug Labs General Clean-up Guidelines. If such order or orders have been issued complete the following statement: The above orders issued against the property [strike one) have /have not been vacated If such order has not been issued, state the status of removal and remediation on the property: [Use additional sheets, if necessary.) Seller(s) ECONOMIC DEVELOPMETN AUTHORITY OF THE CITY OF L IA IG TS By Its Executive Direc or ~ Buyer received this Disclosure on [date): July .L 2008 Buyer(s) signatures: 37TH AND CENTRAL LLC By Chr>stopher ittle Its ~/t L~ ~RE510f~IlT 335854v1 CBRCL205-44 STATE OF MINNESOTA } }SS COUNTY OF ANOKA } AFFIDAVIT REGARDING CORPORATION Walt Fehst, being first duly sworn, on oath says that: He is the City Manager of the City of Columbia Heights, a Minnesota municipal corporation, the corporation named as in the document dated ,and filed for record as Document No. , in the Office of the County Recorder of Anoka County, Minnesota. 2. Said corporation's principal place of business is at 590 40th Avenue NE, Columbia Heights, MN 55421 and said corporation's principal place of business during the past ten years has been at that address. 3. There have been no: a) Bankruptcy or dissolution proceedings involving said corporation during the time said corporation has had any interest in the premises described in Exhibit A attached hereto ("Premises"); b) Unsatisfied judgments of record against said corporation nor any actions pending in any courts, which affect the Premises; c) Tax liens against said corporation; except as herein stated: None. 4. Any bankruptcy or dissolution proceedings of record against corporations with the same or similar names, during the time period in which the above named corporation had any interest in the Premises, are not against the above named corporation. 5. Any judgments or tax liens of record against parties with the same or similar names are not against the above named corporation. 6. There has been no labor or materials furnished to the Premises for which payment has not been 335855v1 CBR CL205-44 made. 7. There are no unrecorded contracts, leases, easements, or other agreements or interests relating to the Premises except as stated herein: None. 8. There are no persons in possession of any portion of the Premises other than pursuant to a recorded document except as stated herein: None. 9. There are no encroachments or boundary line questions affecting the Premises of which Affiant has knowledge. Affiant(s) know(s) the matters herein stated are true and make(s) this Affidavit for the purpose of inducing the passing of title to the Premises. Subscribed and sworn to before me this ~ day of ~~ , 2008. ~ ~~ ~%~~-+~- Walter R. Feh otary Public NOTARIAL STAMP OR SEAL CHERYLA 8~7 NOTARY PUBLlC -MINNESOTA MY COMMISSION EXPIRES-1/3T/Z012 THIS INSTRUMENT WAS DRAFTED BY: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612)337-9300 335855v1 CBRCL205-44 Exhibit A Lots 14, 15 and 16, Block 87, Columbia Heights Annex, Anoka County, Minnesota. 335855v] CBR CL205-44 Transferor's Certification of Non-Foreign Status --Entity Transferor Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section 1445), the owner of a disregarded entity (which has legal title to a U.S. real properly interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Columbia Heights Economic Development Authority, the undersigned hereby certifies the following on behalf of Columbia Heights Economic Development Authority: 1. Columbia Heights Economic Development Authority is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. Columbia Heights Economic Development Authority's U.S. employer identification number is 41-6005069; 3. Columbia Heights Economic Development Authority's office address is 590 40'x' Avenue NE, Columbia Heights, HN 55421; and 4. Columbia Heights Economic Development Authority is not a "disregarded entity" as defined in IIZS Regulation 1.1445-2(b)(iii). Economic Development Authority of the City of Crystal understands that this Certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Economic Development Authority of the City of Crystal. Date: ~ c/ ~ , 2008. Columbia Heights Economic Development Authority By: ~~ ~ WalerR. Fe st ~ 335858v1 CBR CL205-44 Date: Satisfaction Of Mortgage THAT CERTAIN MORTGAGE, executed by 37t1i and Central, LLC, as Mortgagors, to Columbia Heights Economic Development Authority, as Mortgagee, dated July 2, 2008, filed July 7, 2008, as Document No. 2001611.005, in the office of the County Recorder, Anoka County, Minnesota, is with the indebtedness thereby secured, fully paid and satisfied. Columbia Hei• is Econom Devel h pment Authority ; fr, I Its Presto ent By Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The following instrument was acknowledged before me this `( day of January, 2012 by �: Y. L , -F f s and 9 It x . , the President and Executive Director of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of the State of Minnesota, mortgagee. NOTARIAL STAMP OR PATRICIAV.MOSCOW/ SIGNATURE OF PERSON TAKING ACID WLEDGMENT NOTOPUBUC-M 4NESOTA t#NN:PN cowry Caw Evires01-31-2015 THIS DOCUMENT DRAFTED BY: Kennedy& Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 396453v1 CBR CL205-44 Date: i ` 1.1 ` 2_ Satisfaction Of Mortgage THAT CERTAIN MORTGAGE, executed by 37th and Central, LLC, as Mortgagors, to Columbia Heights Economic Development Authority, as Mortgagee, dated July 2, 2008, filed July 7, 2008, as Document No. 2001611.005, in the office of the County Recorder, Anoka County, Minnesota, is with the indebtedness thereby secured, fully paid and satisfied. Columbia Heir, is Econom. Development Authority ., t w,. Of id Its Presi sent , By i J^ :, , . Its Executive Director ' STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The following instrument was acknowledged before me this `141- day of January, 2012 by (...1 -t r L ;�— and o t.41-, , y< L s+ , the President and Executive Director of the Columbia Heights Economic Development Authority, a public body corporate and politic under the laws of the State of Minnesota, mortgagee. NOTARIAL STAMP OR A-- ' —J; � ,K - -4: PATRICIA V.MUSCOVITZ SIGNATURE OF PERSON TAKING ACK1,tsWLEDGMENT NOIAPY PUBUC.MMNdESOTA w: n ,, IN:NteN000NtY ' Comm Expires 01-31-2015 THIS DOCUMENT DRAFTED BY: Kennedy& Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 396453v1 CBR CL205-44