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VII.1. Development Agreement – Doran 810 (The Moline); Elverum (CR2016-018) February 10, 2016 Council Report 2016-018 DEVELOPMENT AGREEMENT – DORAN 810 (THE MOLINE) Proposed Action Staff recommends adoption of the following motion: Move to adopt Resolution 2016-015, authorizing the execution of a development agreement by and among the City of Hopkins, the Housing and Redevelopment Authority In and For the City of Hopkins, Doran 810 Apartments, LLC, and Doran 810, LLC, and the issuance of Limited Revenue Tax Increment Notes as provided therein. With this motion, the agreement will be finalized and executed. Overview The redevelopment of the site at the intersection of 8 th Avenue and Excelsior Boulevard, formerly occupied by the Johnson Building, is a priority for the City of Hopkins to achieve the vision for connecting the Downtown Hopkins LRT station with Mainstreet. A redevelopment proposal was brought forward by Doran Development to construct a 241-unit luxury apartment development, including a 189-stall park-and-ride and enhanced bicycle facilities. To make the project financially feasible, given the high cost of redevelopment and the unique design of this project, the developer has requested financial assistance in the form of Tax Increment Financing (TIF). On February 2, 2016, TIF District 1-5 was established by the City Council. The proposed development agreement addresses many facets of this complex project inc luding:  The anticipated purchase of the parking structure by the City’s assignee after construction  The issuance of TIF notes in the principal amount of $5.2 million  The conditions and terms associated with the inability to move forward with the purchase of the parking structure, thereby requiring the City/HRA to finance the construction  Payment of park dedication and art dedication fees, as well as other obligations associated with the Artery construction A detailed summary of the major points was prepared by Ehlers & Associates and is attached to this report. Primary Issues to Consider The development agreement reflects the basic terms previously discussed with the City Council and has been approved by the City/HRA’s financial advisor and HRA Attorney. Supporting Information  Resolution 2016-015  Memo from Stacie Kvilvang, Ehlers  Development Agreement ___________________________ Kersten Elverum Director of Planning & Development CITY OF HOPKINS, MINNESOTA RESOLUTION NO. 2016-015 RESOLUTION AUTHORIZING THE EXECUTION OF A DEVELOPMENT AGREEMENT BY AND AMONG THE CITY OF HOPKINS, THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS, DORAN 810 APARTMENTS, LLC, AND DORAN 810, LLC, AND THE ISSUANCE OF LIMITED REVENUE TAX INCREMENT NOTES AS PROVIDED THEREIN. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HOPKINS (the "City") AS FOLLOWS: Section 1. Execution of Contract. 1.01. Authorization. The Housing and Redevelopment Authority In and For the City of Hopkins (the “Authority”) and the City have heretofore approved the establishment of Tax Increment Financing District No. 1-5 (The Moline) (the "District") within the Authority’s Redevelopment Project No. 1 (the "Project"), and has adopted a tax increment financing plan for the purpose of financing certain public costs of the Project. There has been presented to the City a Development Agreement (the “Contract”) between the Authority, the City, Doran 810 Apartments, LLC (the “Redeveloper”) and Doran 810, LLC, pursuant to which the Redeveloper would construct a residential rental development, including a public parking component, on certain real property located within the Project. The proposed Contract also provides that the City and the Authority would provide certain financial and other assistance in connection with the Redeveloper’s development. The City Council of the City has reviewed the proposed Contract and intends by this Resolution to authorize its execution and the performance of the City’s obligations contained therein. 1.02. Execution of Contract. The appropriate officers of the City are hereby authorized to execute the Contract in substantially the form presented to the City Council, subject to such non- material changes as may be approved by the City’s Manager and legal counsel. Adopted this 16th day of February, 2016. _____________________________________ Mayor Attest: _______________________________ Clerk Memo To: Mike Mornson – HRA Executive Director From: Stacie Kvilvang - Ehlers Date: February 16, 2016 Subject: Development Agreement – TIF District 1-5 (The Moline) Doran 810 Apartments LLC (the “Redeveloper”) will be constructing The Moline, which is a 241 market rate apartment complex with underground parking, and 189-stall grade-level garage for public parking. The project will be located on the former Johnson Building site and adjacent City Right-Of-Way that has been purchased by the Redeveloper. The total development costs (TDC) for the project is approximately $58.9 million, of which 18% of the cost ($10,558,500) is attributable to the grade-level garage and the remaining $48,341,500 is attributable to the apartments. On November 2, 2015, the HRA reviewed the term sheet for the development and authorized the HRA’s Attorney to draft the formal Development Agreement in accordance with the approved terms. Following is an executive summary of the Development Agreement: 1. Redeveloper and Land Owner A. Doran 810 Apartments LLC is the Redeveloper and owner of the apartments B. Doran 810 LLC is the owner of the land and grade-level garage (Land Owner) i. Both entities are parties to the Development Agreement 2. Redevelopment Property i. Redevelopment property is the former Johnson Building site and the City-owned parking lot, vacated 2nd street, and any right-of-way up to Excelsior Boulevard i. Entire property is currently owned by the Land Owner ii. City sold the City-owned lot and vacated 2nd Street to the developer for $1,000 (the sale price was determined by the County Assessor as the Fair Market Value in accordance with the City Code) i. In the event the Redeveloper fails to commence construction by December 31, 2016 (subject to extension of date by the HRA), the Redeveloper must convey the City Property to the City for $1,000 Mike Mornson – HRA Executive Director Development Agreement – TIF District 1-5 (The Moline) February 16, 2016 Page 2 ii. Redeveloper is responsible for replatting the Redevelopment property and will prepare and obtain City approvals of a site plan and Plat at its cost a. Redeveloper has received all approvals and the Land Owner will be platting the property into 2 parcels (one for the apartments and one for the grade- level garage) 3. Minimum Improvements A. Construction of: i. 241 market rate rental units and private underground parking ii. Pedestrian and bicycle lobby with 30 bicycle parking spaces, including but not limited to: a bike fix-it station water bottle filling station, dog watering station, bike part vending machine, seating and lobby area, places for trail maps, and charging station iii. 189 stall grade-level garage for public parking; and iv. Install a radio booster in the development for the purposes of amplifying radio signals for emergency responders B. Commence construction by December 31, 2016 and be completed by June 30, 2018 4. Artery Improvements A. Artery improvements means the reconstructed improvements of 8th Avenue between Excelsior Boulevard to Mainstreet that will include widened sidewalks, artistic infrastructure elements, a two-way protected bikeway, reduced on-street parking, and a reduction of the lanes to a one-way northbound north of First Street South B. City shall provide a copy of the final plans for the Artery by January 1, 2017 to the Redeveloper C. City will enter into a Construction Management Agreement with Doran Construction LLC. to coordinate the construction of the Artery i. Form and terms to be negotiated D. City will commence construction of the portion of the Artery located adjacent to the property by June 1, 2017 and complete by September 1, 2017 i. City will ensure that the remainder of the Artery construction will not interfere with the access to the front lobby of the apartments or access to the lower- level parking for the apartments Mike Mornson – HRA Executive Director Development Agreement – TIF District 1-5 (The Moline) February 16, 2016 Page 3 E. City will pay costs of constructing the Artery and the Redeveloper will reimburse the City for the actual costs of work completed within the Artery Easement i. Artery easement work consists of pavement, landscaping, lighting, etc. that will be constructed within the 10 foot easement along the east side of the building, plus the Bike Lobby Plaza within the triangle area to the south of the building (that is on the Redeveloper’s property) F. Redeveloper and City will mutually agree on location and design of public art to be installed near the project by the City i. Both to be determined by November 1, 2017 ii. Redeveloper shall pay up to $50,000 for the public art 5. City Fees A. City will waive half of the park dedication fees so total park dedication to be collected is $180,750 B. Redeveloper will be required to pay $25,000 public art dedication fee (this is in addition to the $50,000 cost outlined above) C. Redeveloper will pay 100% of HRA costs for consultants in connection with the redevelopment including but not limited to establishment of the TIF district, proforma analysis and development agreement. Redeveloper deposited $50,000 into an escrow account and will continue to make deposits as required over time D. Redeveloper is required to pay all building permit and any all City and Met Council SAC/WAC fees 6. Tax Increment A. City has created redevelopment TIF district 1-5 (The Moline) which has a 26-year term i. HRA will reimburse the developer for qualified costs which consist of land acquisition, below-grade parking, public improvements, utilities, geotechnical and correction costs, storm water management, site improvements, etc. B. HRA will retain 10% of the TIF generated C. City will issue a total of $5.2 million in two (2) separate pay-as-you-go (PAYGO) TIF notes for twelve (12) years at the lesser of 5% or actual financing rate (if no TIF bonds are issued, then the term extends to f ifteen (15) years). i. Notes are paid with 90% of the TIF ii. Land Owner Note will be for $2.1 million iii. Redeveloper Note will be for $3.1 million Mike Mornson – HRA Executive Director Development Agreement – TIF District 1-5 (The Moline) February 16, 2016 Page 4 iv. Accrued and current interest will be paid on both Notes based upon outstanding principal a. Then remaining TIF will go to pay principal on the Land Owner Note b. Once the Land Owner Note is paid in full remaining TIF goes to pay Redeveloper Note v. Developer has assumed 2% inflation on TIF generated and understands their risk that they may not be paid in full 7. Lookback A. Within 60 days of the earliest of (i) date of stabilization (95% occupancy) (ii) sale or transfer of the apartments (provided that the Redeveloper and HRA may agree that the calculation date will occur prior to the actual transfer), or (iii) two years after issuance of the Certificate of Occupancy (CO) the Redeveloper will deliver to the City evidence of its cash-on-cash return (COC) i. To the extent it exceeds 11%, the principal amount of the TIF Note s will be reduced to an amount that results in a stabilized COC return of 11% over the term of the Notes a. The Redeveloper’s Note will be reduced first and to the extent it is reduced to zero and they still achieve a 11% COC return, then the Land Owner Note will be reduced accordingly 8. Construction and Purchase of the Grade-Level Garage and Pedestrian and Bicycle Lobby A. The Redeveloper will initially finance and construct the grade-level garage and pedestrian and bicycle lobby B. Upon completion, the City (or Metro Transit as its assignee) will purch ase the facility from the Developer and the anticipated funding sources are as follows: CMAQ (Committed) $6,000,000 Hopkins (Committed) $1,500,000 Metro Transit (up to – Not Committed) $3,058,500 TOTAL $10,558,500 C. Purchase price by the City will be the actual documented costs incurred for acquiring, designing, developing and constructing the grade-level garage, but shall not include costs incurred in connection with the acquisition, design, development and construction of the pedestrian and bicycle lobby i. If purchase is assigned to Metro Transit, they will conduct an appraisal of the property and its improvements to determine the purchase price D. If funding of SWLRT does not happen, by July 1, 2017 the City will need to notify the Redeveloper in writing that it will not purchase or assign ownership of the grade-level garage and these elements will be owned by the Redeveloper Mike Mornson – HRA Executive Director Development Agreement – TIF District 1-5 (The Moline) February 16, 2016 Page 5 i. Upon completion of the grade-level garage and apartments, the City and HRA will be required to pay cash and issue general obligation TIF bonds in an amount sufficient to pay for the costs associated with the grade-level garage a. If the cost is less than $10,558,500, then the City is only obligated to pay for actual costs b. If it is more than $10,558,500, the City and HRA may either pay the additional amount in cash (or more bond proceeds) or increase the principal amount and appropriately lengthen the term of the TIF Note (s) ii. Bonds would be structured for interest only for 12 years and HRA would utilize its 10% administrative fee it receives to o ffset interest payments iii. In year 13 (or earlier if TIF Note is paid in full), 100% of the TIF would be made available for payment on the bonds a. If we assume no inflation in property valuation, the TIF will not be adequate to pay debt service and the City will need to levy a tax for payment on the bonds E. If the Redeveloper or Land Owner sell the grade-level garage within the 25-year period after the bond issuance, they must pay the City or HRA the net proceeds from the sale i. If the grade-level garage and the apartments are sold together the proceeds attributable to the grade-level garage will be based upon a valuation of the grade-level-garage using industry standard income approach 9. Maintenance of Grade-Level Garage and Artery Improvements A. Responsibility for on-going maintenance of the grade-level garage will be divided between the City (or Metro Transit as its assignee) and the Redeveloper in a Reciprocal Easement Agreement (or between the Redeveloper and Land Owner if City doesn’t purchase) B. Responsibility for on-going maintenance of Artery adjacent to the apartments will be outlined in the Access Easement Agreement 10. Use of Grade-Level Garage A. Use will be dictated by the Reciprocal Easement Agreement, whether owned by the City, its Assignees, Land Owner or Redeveloper B. All parking stalls shall be available to the general public at no charge C. If the City or its Assignee doesn’t acquire the grade-level garage, then the use will be determined by the Redeveloper with the following restrictions (which go on in perpetuity) i. Redeveloper may control access and hours of operation in its’ discretion Mike Mornson – HRA Executive Director Development Agreement – TIF District 1-5 (The Moline) February 16, 2016 Page 6 ii. All of the parking stalls shall be available at least between the hours of 6:00 a.m. and 10:00 p.m. daily subject to temporary closure for maintenance, repairs or other reasonable reasons 11. Property Taxes A. Redeveloper and Land Owner must pay their taxes and won’t cause willful destruction of the property and will reconstruct damaged or destroyed property B. Redeveloper or Land Owner must notify the City within 10 days of filing a tax petition i. HRA will withhold tax increment payments attributable to the portion of the tax payment that is subject to the tax petition and will pay any withheld amount, without interest, promptly after the tax petition is fully resolved 12. Miscellaneous A. Prior to issuance of the CO, Redeveloper cannot transfer the property or assign the Development Agreement without the HRA’s prior written consent, which consent will not be reasonably withheld i. Redeveloper may transfer the property to an affiliate of the Redeveloper that is owned by or under common ownership with the Redeveloper or t Doran Companies or any affiliate of Doran Companies without the consent of the HRA B. After completion of the project the Redeveloper can transfer the property to anyone , provided that they have the experience and financial ability to satisfy the obligations under the Development Agreement and related documents i. Redeveloper needs to notify the HRA and the HRA must consent, which consent will not be reasonably withheld Please contact me at 651-697-8506 with any questions. February 11, 2016 B&D Version DEVELOPMENT AGREEMENT By and Between CITY OF HOPKINS AND HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS AND DORAN 810 APARTMENTS, LLC AND DORAN 810, LLC Dated: February ___, 2016 This document was drafted by: BRADLEY & DEIKE, P. A. 4018 West 65th Street, Suite 100 Edina, MN 55435 Telephone: (952) 926-5337 TABLE OF CONTENTS Page PREAMBLE 1 ARTICLE I Definitions Section 1.1. Definitions 3 ARTICLE II Representations Section 2.1. Representations by the Authority 7 Section 2.2. Representations by the City 8 Section 2.3. Representations by the Redeveloper 8 Section 2.4. Representations by the Land Owner 9 ARTICLE III Conveyance of City Property Section 3.1. Status of Redevelopment Property 11 Section 3.2. Copies of reports 11 Section 3.2 Authority and City Costs 11 Section 3.3. Re-conveyance of City Property 12 ARTICLE IV Construction of Improvements Section 4.1. Construction of Minimum Improvements 13 Section 4.2. Development Plans 13 Section 4.3. Commencement and Completion of Construction 14 Section 4.4. Purchase of Grade-Level Garage 14 Section 4.5. Determination of Grade-Level Garage Purchase Price 15 (i) Section 4.6. Maintenance Obligations 15 Section 4.7. Use of Grade-Level Garage 16 ARTICLE V Insurance Section 5.1. Insurance 17 ARTICLE VI Tax Increment; Reimbursement of Qualified Costs Section 6.1. Creation of Tax Increment District 19 Section 6.2. Reimbursement of Qualified Costs 19 Section 6.3. Reimbursement of Grade-Level Garage Costs 20 Section 6.4. Conditions Precedent to Issuance of Note or Notes 21 Section 6.5. Potential Reduction of Assistance 21 Section 6.6. Redeveloper Representations as to Note or Notes 22 Section 6.7. Real Property Taxes 23 ARTICLE VII Financing Section 7.1. Financing 25 Section 7.2. Limitation on Encumbrance of Property 25 Section 7.3. Copy of Notice of Default to Lender 25 Section 7.4. Mortgagee’s Option to Cure Default 25 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement 26 Section 8.2. Release and Indemnification Covenants 26 Section 8.3. Transfers After Completion of Minimum Improvements 27 (ii) ARTICLE IX Events of Default Section 9.1. Events of Default Defined 28 Section 9.2. Remedies on Default 28 Section 9.3. No Remedy Exclusive 28 Section 9.4. No Additional Waiver Implied by One Waiver 28 Section 9.5. Effect of Termination of Agreement 28 Section 9.6. Costs of Enforcement 29 ARTICLE X Additional Provisions Section 10.1. Representatives Not Individually Liable 30 Section 10.2. Restrictions on Use 30 Section 10.3. Provisions Not Merged With Deed 30 Section 10.4. Titles of Articles and Sections 30 Section 10.5. Notices and Demands 30 Section 10.6. Disclaimer of Relationships 31 Section 10.7. Modifications 31 Section 10.8. Counterparts 31 Section 10.9. Judicial Interpretation 31 Section 10.10. No Business Subsidy 31 Section 10.11. Term of Agreement 31 SCHEDULE A Description of Redevelopment Property and Acquisition Property SCHEDULE B Additional Permitted Encumbrances SCHEDULE C-1 Form of Land Owner Note SCHEDULE C-2 Form of Redeveloper Note SCHEDULE D Access Easement Agreement SCHEDULE E Reciprocal Easement Agreement SCHEDULE F Site Plan SCHEDULE G Garage Option Agreement SCHEDULE H Intentionally Omitted SCHEDULE I Purchase Price / Reimbursement Amount Calculation SCHEDULE J Development Pro Forma (iii) DEVELOPMENT AGREEMENT THIS AGREEMENT, made on or as of the ____ day of February, 2016, by and between the Housing and Redevelopment Authority in and for the City of Hopkins, a public body corporate and politic (hereinafter referred to as the "Authority"), established pursuant to Minnesota Statutes, 469.001-469.047 (hereinafter referred to as the "Act"), the City of Hopkins, a Minnesota municipal corporation (hereinafter referred to as the “City”), each having its principal office at 1010 First Street South, Hopkins, Minnesota 55343, Doran 810, LLC, a Minnesota limited liability company (hereinafter referred to as the “Land Owner”), and Doran 810 Apartments LLC, a Minnesota limited liability company (hereinafter referred to as the "Redeveloper"), each having its principal office at 7803 Glenroy Road, Suite 200, Bloomington, Minnesota 55439. WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, sections 469.001- 469.047 (the “Act”) and was authorized to transact business and exercise its powers by a resolution of the City Council of the City pursuant to the Act; and WHEREAS, the Authority has established within the City its Redevelopment Project No. 1, a “redevelopment project” as defined in the Act, providing for the development and redevelopment of certain areas located within the City (which redevelopment project is hereinafter referred to as the "Project"); and WHEREAS, the Land Owner has acquired certain real property within the Project, which it has leased to the Redeveloper pursuant to that certain Ground Lease dated as of __________ ____, 2016, a copy of which has been provided to the Authority (which real property is referred to herein as the "Land Owner Property"); and WHEREAS, the City has previously conveyed to Land Owner certain parcels of real property within the Project (which real property is referred to herein as the “City Property”); and WHEREAS, the Redeveloper has presented to the Authority a proposal pursuant to which the Land Owner purchased the City Property and has combined or will combine t he City Property with the Land Owner Property (which combined City Property and Land Owner Property is referred to herein as the “Redevelopment Property”), and Redeveloper will redevelop the Redevelopment Property through the construction of a residential rental development on the Redevelopment Property; and WHEREAS, the Redeveloper has further proposed to construct on the Redevelopment Property a grade-level garage, which will either be purchased by the City, or another public entity as the City’s assignee of the City’s purchase rights, or the cost of which will be reimbursed to the Redeveloper and Land Owner as described in this Agreement; and 2 WHEREAS, as part of its proposal the Redeveloper has requested that the Authority create a tax increment financing district encompassing the Redevelopment Property and use a portion of the tax increment generated from the redeveloped Redevelopment Property to reimburse the Redeveloper and Land Owner for a portion of the Redeveloper’s and Land Owner’s redevelopment costs; and WHEREAS, the Redeveloper would not undertake the redevelopment of the Project without the tax increment financing assistance described in this Agreement; and WHEREAS, the Authority believes that the redevelopment of the Project pursuant to the Redeveloper's proposal and the 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 mutual covenants and obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 3 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.001-469.047, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. “Artery” means the reconstructed improvements of 8th Avenue between Excelsior Boulevard to Mainstreet that will include widened sidewalks, artistic infrastructure elements, a two-way protected bikeway, reduced on-street parking, and a reduction of the lanes to a one-way northbound north of First Street South. “Access Easement Agreement” means a permanent pedestrian walkway easement to be granted by the Redeveloper to the City for the purposes of the construction, maintenance and use of infrastructure associated with the Artery, the form of which Access Easement Agreement is set forth on Schedule D to this Agreement. "Authority" means the Housing and Redevelopment Authority In and For the City of Hopkins, or any successor or assign. “Available Tax Increment” means ninety percent (90%) of the Tax Increment that is received by the Authority in the six (6) month period immediately preceding a Scheduled Payment Date. “Bonds” means the bank-qualified tax increment general obligation bonds that may be issued by the City or the Authority to reimburse the Land Owner and Redeveloper for the cost of constructing the Grade-Level Garage as described in Section 6.3 of this Agreement. The term Bonds shall also mean any obligations issued to refinance the Bonds. "City" means the City of Hopkins. “City Property” means the real property legally described as such on the attached Schedule A. “Complete” or “Completion” means as to the construction of a facility, the earlier to occur of the issuance of a permanent certificate of occupancy for such facility, or the receipt of an architect’s certificate of completion for such facility. “Construction Management Agreement” means the construction management agreement to be entered into by the City and the Construction Manager pursuant to Section 4.3. 4 “Construction Manager” means Doran Construction Management, LLC. "County" means Hennepin County, Minnesota. “Development Plans” means those plans including site, grading, storm water management, utility, landscape, building floor plan and building exterior elevations for the Minimum Improvements that are required for municipal land use and watershed district approvals that may include conditional use permits, rezoning, platting, and variances, as amended from time to time. "Event of Default" means an action listed in Section 9.1 of this Agreement. “Grade-Level Garage Option Agreement” means that certain Reimbursement and Purchase Option Agreement between the City, Land Owner and Redeveloper with respect to the Grade - Level Garage, which is attached hereto as Schedule G and which may be assigned by the City to an assignee reasonably approved by Redeveloper, subject to such assignee’s written assumption of all obligations thereunder. “Grade-Level Garage” means the approximately 189 stalls of automobile parking, a building integrated transit shelter, and related driver rest area and restroom constructed as part of the Minimum Improvements. "Holder" means the owner of a Mortgage. “Land Owner” means Doran 810, LLC, a Minnesota limited liability company, and its successors and assigns. "Land Owner Property" means the real property described as such on Schedule A of this Agreement, which consists of the property on which is located the building commonly known as the “Johnson Building”. "Minimum Improvements" means the Multifamily Facility, the Pedestrian and Bicycle Lobby, and the Grade-Level Garage, all consistent with the Site Plan and the Development Plans, but excluding all improvements constructed or installed by the City or the Authority. "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, by the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. “Multifamily Facility” means a building with approximately 241 market rate rental housing units and the below-grade parking garage, all consistent with the Development Plans. "Note" or “Notes” means the Authority's limited revenue tax increment note or notes to be issued by the Authority to the Redeveloper pursuant to Article VI of this Agreement to reimburse the Redeveloper for its payment of the Qualified Costs. 5 “Pedestrian and Bicycle Lobby” means the public pedestrian and bicycle lobby with 30 bicycle parking spaces, including, but not limited to: a bike fix-it station, water bottle filling station, dog watering station, bike-part vending machine, seating and lobby area, places for trail maps, and charging station. “Pedestrian and Bicycle Lobby Work” means the construction, installation and equipping of the Pedestrian and Bicycle Lobby described in the attached Schedule H. “Permitted Encumbrances” means reservations of minerals or mineral rights to the State of Minnesota; public utility, roadway and other easements which will not adversely affect the development and use of the Redevelopment Property pursuant to the Redeveloper’s Development Plans; applicable building laws, regulations and ordinances; real estate taxes that Redeveloper agrees to pay or assume pursuant to this Agreement; restrictions, covenants and easements of record that do not adversely affect the development and use of the Minimum Improvements; encroachments of any buildings or improvements located on the Redevelopment Property that are to be demolished in order to construct the Minimum Improvements; exceptions to title to the Redevelopment Property which are not found objectionable by Land Owner upon examination of the abstract of title or the title insurance commitment delivered to the Land Owner pursuant to separate purchase agreement for the City Property; the re-conveyance obligations described in Section 3.3 of this Agreement; the use restrictions contained in Section 10.2 of this Agreement; the terms and provisions of this Agreement; and the encumbrances listed on Schedule B. "Project" means the Authority's Redevelopment Project No. 1. "Project Area" means the real property located within the boundaries of the Project. “Qualified Costs” means the Land Owner’s and Redeveloper’s costs of redeveloping the Minimum Improvements to be reimbursed by the Authority as described in Article VI of this Agreement. “Reciprocal Easement Agreement” means the reciprocal maintenance, use and easement agreement governing the use and maintenance of the Grade-Level Garage, the form of which is set forth on Schedule E to this Agreement. "Redeveloper" means Doran 810 Apartments LLC, a Minnesota limited liability company, its successors and assigns. "Redevelopment Property" means, collectively the City Property and the Land Owner Property. “Scheduled Payment” means a Scheduled Payment as defined in a Note. “Scheduled Payment Date” means a Scheduled Payment Date as defined in a Note. 6 “Site Plan” means the preliminary Site Plan which has been provided to the City and Authority, which shows the proposed nature and location of the Minimum Improvements, a copy of which is attached to his Agreement as Schedule F. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes paid with respect to the Redevelopment Property and Minimum Improvements which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means Minnesota Statutes, Section 469.174-469.1794, as the same may be amended from time to time. "Tax Increment District" means Tax Increment Financing District 1-5 (The Moline) created on February 2, 2016 by the City and the Authority as described in Section 6.1 of this Agreement. “Termination Date” means the earliest of: the date that the Note or Notes have been paid in full; the date that the Note or Notes have been terminated in accordance with their terms; or the date that this Agreement is terminated in accordance with the terms hereof. "Unavoidable Delays" means delays due to unforeseeable causes beyond the control of the party claiming the Unavoidable Delay (or an affiliate), including but not limited to acts of God, acts of terrorism, unforeseen adverse weather conditions, strikes, other labor troubles, fire or other casualty to the Minimum Improvements or Artery, epidemics, quarantines, unavailability of power, unavailability of materials, “economic recession” defined as two consecutive quarters in which there is a drop in the GDP, discovery of hazardous materials or other concealed site conditions or delays of contractors due to such discovery, 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 enforcing its rights under this Agreement) which directly result in delays. 7 ARTICLE II Representations Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a municipal housing and redevelopment authority organized and existing under the Act. Under the laws of the State, the Authority has the power to enter into this Agreement and to perform its obligations hereunder, and has duly authorized the execution, delivery and performance of this Agreement by action of its Board of Commissioners. (b) There is not pending, nor to the best of the Authority's knowledge is there threatened, any suit, action or proceeding against the Authority before any court, arbitrator, administrative agency or other governmental authority that materially and adversely affects the validity of any of the transactions contemplated hereby, the ability of the Authority to perform its obligations hereunder, or as contemplated hereby or thereby, or the validity or enforceability of this Agreement. (c) The Authority has taken all action necessary to create the Project Area and the Tax Increment District, and has adopted a tax increment financing plan to finance a portion of the Qualified Costs in accordance with the Tax Increment Act. (d) As of the date of execution of this Agreement, to the best of its knowledge, the Authority has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or Authority in the Project Area may be or will be in violation of any environmental law or regulation. As of the date of execution of this Agreement, the Authority is aware of no facts the existence of which would cause the Authority to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act against the Redeveloper, Authority or City should the parties commence to perform their respective obligations under this Agreement. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Authority is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) The Authority shall promptly advise the Redeveloper in writing of all filed and pending litigation or claims materially and adversely affecting the Authority’s ability to satisfy its obligations under this Agreement and all written complaints and charges made by any governmental authority that may materially delay or require material changes in construction of the Minimum Improvements. 8 Section 2.2. Representations by the City. The City makes the following representations as the basis for the undertaking on its part herein contained: (a) The City is a municipal corporation organized and existing under the laws of the State of Minnesota. Under the laws of the State, the City has the power to enter into this Agreement and to perform its obligations hereunder, and has duly authorized the execution, delivery and performance of this Agreement by action of its City Council. (b) There is not pending, nor to the best of the City's knowledge is there threatened, any suit, action or proceeding against the City before any court, arbitrator, administrative agency or other governmental City that materially and adversely affects the validity of any of the transactions contemplated hereby, the ability of the City to perform its obligations hereunder, or as contemplated hereby or thereby, or the validity or enforceability of this Agreement. (c) As of the date of execution of this Agreement, to the best of its knowledge, the City has received no notice or communication from any local, state or federal official that the activities of the Redeveloper, Authority or City in the Project Area may be or will be in violation of any environmental law or regulation. As of the date of execution of this Agreement, the City is aware of no facts the existence of which would cause the City to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act against the Redeveloper, Authority or City should the parties commence to perform their respective obligations under this Agreement. (d) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the City is now a party or by which it is bound, or constitutes a default under any of the foregoing. (e) The City shall promptly advise the Redeveloper in writing of all filed and pending litigation or claims materially and adversely affecting the City’s ability to satisfy its obligations under this Agreement and all written complaints and charges made by any governmental authority that may materially delay or require material changes in construction of the Minimum Improvements. Section 2.3. Representations by the Redeveloper. The Redeveloper represents that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of organization, member control agreement, or the laws of the State, has the power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. 9 (b) The Redeveloper will construct 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, engineering, zoning, building code and public health laws and regulations), except for variances necessary to construct the improvem ents contemplated in the Development Plans approved by the City. (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any 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. (d) 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. (e) The Redeveloper shall promptly advise the Authority in writing of all filed and pending litigation or claims materially and adversely affecting the Redeveloper’s ability to satisfy its obligations under this Agreement and all written complaints and charges made by any governmental authority that may materially delay or require material changes in construction of the Minimum Improvements. (f) The Redeveloper acknowledges that land use permits shall be governed by City land use ordinances and specific land use approvals separate from this Agreement. (g) The Redeveloper would not construct the Minimum Improvements on the Redevelopment Property but for the assistance being provided by the Authority hereunder. Section 2.4. Representations by the Land Owner. The Land Owner represents that: (a) The Land Owner is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of organization, member control agreement, or the laws of the State, has the 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) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Land Owner is now a party or by which it is bound, or constitutes a default under any of the foregoing. 10 (c) The Land Owner shall promptly advise the Authority in writing of all filed and pending litigation or claims materially and adversely affecting any part of the Minimum Improvements, the Land Owner, or the Land Owner’s ability to satisfy its obligations under this Agreement and all written complaints and charges made by any governmental authority materially and adversely affecting the Minimum Improvements or materially and adversel y affecting Land Owner or its business, which may delay or require changes in construction of the Minimum Improvements. (d) The Land Owner acknowledges that land use permits shall be governed by City land use ordinances and specific land use approvals separate from this Agreement. 11 ARTICLE III Conveyance of City Property Section 3.1. Status of Redevelopment Property. The Land Owner has acquired the Land Owner Property, for the purpose of constructing the Minimum Improvements. The City had acquired the City Property. The City previously conveyed the City Property to the Land Owner pursuant to a separate purchase agreement for the price of one thousand dollars ($1,000). Section 3.2. Copies of Reports. If the Redeveloper fails to commence and complete the construction of the Minimum Improvements when required by this Agreement, the Redeveloper shall furnish to the Authority upon request, at no cost to the Authority, copies of all reports, assessments, studies, surveys and other documentation prepared on behalf of the Redeveloper in connection with its acquisition of the City Property. Section 3.3. Authority and City Costs. In consideration for the Authority’s covenants and undertakings under this Agreement, the Redeveloper agrees that it will pay all reasonable out-of-pocket costs incurred by the Authority or City, including, without limitation, all fees owed to the Authority’s or City’s traffic, engineering, development, fiscal, environmental and other consultants, and all attorneys’ fees incurred by the Authority or City in connection with the creation of the Tax Increment District, the negotiation and preparation of this Agreement, any planning documents required by the City, and all related documents, or in enforcing the Redeveloper’s obligations to pay costs which it is obligated to pay under this Agreement. All of the Authority’s and City’s attorneys and consultants shall be under contract with the Authority or City, unless the Authority or City otherwise agree in writing. The Authority will provide to the Redeveloper requests for payment of the costs incurred by the Authority or the City from time to time accompanied by statements or invoices documenting such costs. Such costs shall be payable by the Redeveloper to the Authority within thirty (30) days after request by the Authority. The Redeveloper’s obligations under this Section shall survive termination of this Agreement to the extent costs were incurred prior to the date of termination or to the extent that costs are incurred to enforce the Redeveloper’s obligations under this Section. Prior to incurring costs subject to payment or reimbursement by the Redeveloper under this Section, the Authority will use its best efforts to obtain proposals from its consultants and attorneys describing the hourly rate or other basis on which the costs will be incurred and an estimate of the costs to be incurred. A failure to obtain such proposals or the exceeding of the cost estimates shall not relieve the Redeveloper of its obligation to pay the costs incurred. The Redeveloper has deposited $50,000.00 with the Authority as of the date of this Agreement. The Authority shall have the right to draw upon amounts on deposit with it to pay the fees and costs described in this Section. The Redeveloper agrees to maintain a deposit with the Authority in the amount of $25,000.00. If the amount on deposit becomes depleted below $5,000.00, the Authority shall have the right to request in writing, accompanied by itemized invoices which have been paid from the deposit, that the Redeveloper replenish such funds upon which the Redeveloper shall, within 15 days of request by the Authority, remit to the Authority additional funds to be held on deposit so that the amount on deposit will equal $25,000.00. If upon 12 termination of this Agreement, the amounts held by the Authority are insufficient to pay the Authority’s costs, the Redeveloper shall be liable for any deficiency. If this Agreement is terminated in accordance with the terms hereof, any sums remaining on deposit with the Authority, after the Authority pays or reimburses itself and the City for costs incurred to the date of termination, shall be returned to the Redeveloper. In addition, any sums remaining on deposit with the Authority six (6) months after Completion of the Minimum Improvements, after all documents and agreements necessary to implement the transactions contemplated by this Agreement have been prepared and executed and after the Authority pays or reimburses itself and the City for costs incurred to the date of termination shall be returned to the Redeveloper. Section 3.4. Re-conveyance of City Property. In the event that the Redeveloper fails to commence construction of the Minimum Improvements when required by this Agreement, subject to extension of such date by agreement of the Authority and the Redeveloper, the Redeveloper and Land Owner shall be obligated to, if requested by the Authority, convey the City Property to the City, except that once the Redeveloper has commenced construction of the Minimum Improvements, then there shall be no obligation to convey the City Property to the City. The purchase price to be paid by the City to reacquire the City Property shall be $1,000.00, less any costs incurred by the City or Authority in enforcing such re-conveyance obligation but only to the extent not otherwise reimbursed by Redeveloper per Section 3.3. The City Property shall be conveyed to the City pursuant to a limited warranty deed conveying marketable title to such property, subject only to such defects, liens, easements, encumbrances or other title matters to which the City Property was subject when the City deeded it to the Land Owner, and any other Permitted Encumbrances. The Redeveloper will cooperate with the City in such subdivision or re-platting of the Property as may be necessary to permit the re-conveyance of the City Property to the City. In the event that City incurs costs, including reasonable attorneys’ fees, enforcing the Redeveloper and Land Owner’s obligations under this Section, the Redeveloper shall be liable and shall pay to the City the amount of such costs within ten (10) days written demand by the City. 13 ARTICLE IV Construction of Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Development Plans. The City agrees that, at its cost, it will complete the Artery in accordance with the approved Development Plans; provided that the City will contract with the Construction Manager to act as the City’s construction manager for such work pursuant to the Construction Management Agreement. Additionally, the parties and their successors or assigns will at all times prior to the Termination Date maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, as required by the Reciprocal Easement Agreement. Section 4.2. Development Plans. (a) The City’s conveyance of the City Property to the Redeveloper was and is predicated upon and subject to the Redeveloper’s agreement that it will construct the Minimum Improvements consistent with the Site Plan and Development Plans, both of which have been approved by the City and the Authority. Attached to this Agreement is the Site Plan that has been approved by the City and the Authority showing the general nature and location of the Minimum Improvements. Also, the Redeveloper has submitted and the City has approved Development Plans for the Minimum Improvements. All further construction plans shall be prepared to be consistent with the approved Site Plan and Development Plans, subject to any changes approved by the Authority. (b) Nothing in this Agreement shall be deemed to relieve the Redeveloper of its obligation to comply with the requirements of the City’s normal land use approval process. The parties acknowledge that the Redeveloper has already complied with the requirements of this process. (c) If the Redeveloper desires to make any material change in any Development Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Development Plans, as modified by the proposed change, conform to the requirements of this Agreement and such changes do not materially alter the nature, quality or exterior appearance of the Minimum Improvements, the Authority shall approve the proposed change and notify the R edeveloper in writing of its approval. Any requested change in the Development 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 within ten (10) days after receipt of the notice of such change. (d) The Redeveloper and Land Owner will create separate tax parcels from the Redevelopment Property to separate the Grade-Level Garage and Pedestrian and Bicycle Lobby from the remainder of the Redevelopment Property in coordination with the City at the Redeveloper’s cost and subject to all City ordinances and procedures. The creation of separate tax parcels will result in one recordable legal description encompassing both the Grade-Level 14 Garage and Pedestrian and Bicycle Lobby. The Land Owner and Redeveloper will also plat the Redevelopment Property. (e) The Redeveloper will pay to the City a park dedication fee of $180,750 and donate to the City $25,000 for public art prior to the City’s issuance of the final certificate of occupancy for the Minimum Improvements. (f) The Redeveloper will install in the Minimum Improvements, in accordance with the City’s generally applicable requirements, a radio booster for the purposes of amplifying radio signals for emergency responders. Section 4.3. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper shall commence construction of the Minimum Improvements by December 31, 2016, and Complete construction of the Minimum Improvements by June 30, 2018. The Redeveloper agrees that it shall promptly begin and diligently prosecute to completion construction of the Minimum Improvements within the periods specified in this Agreement. Until construction of the Minimum Improvements has been completed, the Redeveloper shall make construction progress reports, at such times as may reasonably be requested by the Authority as to the actual progress of the Redeveloper with respect to such construction. (b) Subject to Unavoidable Delays, the City will complete final plans and specs for the Artery by January 1, 2017, and provide a copy thereof to the Redeveloper. Subject to Unavoidable Delays, the City will commence construction of the portion of the Artery located within the Access Easement Agreement area (the “Artery Easement Work”) by June 1, 2017 and complete such construction by September 1, 2017. In addition, the City will ensure that the remainder of its work with respect to the Artery will not interfere with access to the front lobby of the Multifamily Facility or the access to the lower-level parking portion of the Multifamily Facility. The City will pay the cost of constructing the Artery, provided that upon Completion of the Artery Easement Work, Redeveloper will pay the City the actual cost of the Artery Easement Work. After completion, the City shall provide evidence, reasonably acceptable to Redeveloper, of the actual cost. In order to better coordinate construction of the various aspects of the Artery, the City will contract with the Construction Manager to act as the City’s construction manager for such work. The Construction Manager and the City will enter into the Construction Management Agreement, the form of which will be negotiated by the City and the Construction Manager, prior to the commencement of the Artery Easement Work. The City shall not be in default of this Section 4.3(b) to the extent any delay results from a breach of the Construction Management Agreement by the Construction Manager. (c) The City will install public art, the location and design of which will be mu tually agreed upon by the City and the Redeveloper, near the Minimum Improvements on or before November 1, 2017. Redeveloper shall pay for up to $50,000 of the public art in addition to the donation it is making pursuant to Section 4.2(e). 15 Section 4.4. Purchase of Grade-Level Garage. Subject to Section 6.3 of this Agreement, after Completion, the Grade-Level Garage and the Pedestrian and Bicycle Lobby to be constructed as part of the Minimum Improvements will be purchased by the City, or its assignee, and owned by the City, or its assignee, all as set forth in the Grade-Level Garage Option Agreement. It is currently anticipated that the following funding sources may be used to pay the cost of purchasing the Grade-Level Garage from the Redeveloper: (a) $6,000,000 in federal Congestion Mitigation and Air Quality Improvement Funds. (b) Up to $3,450,000 in Metropolitan Council Southwest Light Rail Transit funding. (c) $1,500,000 in City/Authority local matching funds, which may include unidentified grant funds and/or sale proceeds from the City Property. The parties acknowledge that no additional restrictions or requirements will be imposed on the Redeveloper or Land Owner as a result of the possibility of any or all of the above funding sources being used to acquire the Grade-Level Garage, including but not limited to any requirements to use certain labor forces or any Davis Bacon requirements. The parties acknowledge that the City has the right to and intends to assign the Grade-Level Garage Option Agreement to another public entity that will own and operate the Grade-Level Garage. The parties further acknowledge that such public entity may request changes to the Reciprocal Easement Agreement. In order to facilitate the intentions of the parties the Redeveloper and the Land Owner agree that they will work in good faith to negotiate amendments to the Reciprocal Easement Agreement if requested by the City’s assignee. The purchase price to be paid by the City, or its assignee, to acquire the Grade-Level Garage and the Pedestrian and Bicycle Lobby will be determined in accordance with Section 4.5 of this Agreement, but is currently estimated that the cost will be $10,558,500. Such amount is currently a partial estimate only and the actual final cost of the Grade-Level Garage may be more or less than such amount. In the event that the purchase price, determined in accordance with Section 4.5, is greater than $10,558,500 (the “Additional Amount”), the City may either pay the Additional Amount in cash at closing, or the Authority will increase, by the Additional Amount, the principal amount and appropriately lengthen the term of the Note to be issued to the Redeveloper as described in Section 6.2 of this Agreement. If the purchase price is less than $10,558,500, the City will pay the lesser amount and the Note will be issued as described in Section 6.2. The parties understand that the amount of the public funding described above that will be available to finance the purchase of the Grade-Level Garage and the Pedestrian and Bicycle Lobby will be based in part on an appraisal of the Grade-Level Garage. If the amount of the appraisal results in the amounts of public funding being less than the purchase price then the shortfall will be made up either by the City making an additional cash payment at closing or by the Authority increasing the principal amount and appropriately lengthening the term of the Note to be issued to the Redeveloper as described in Section 6.2 of this Agreement. 16 The closing on the purchase of the Grade-Level Garage and the Pedestrian and Bicycle Lobby will occur within 120 days after the later of: (i) the date that the Grade-Level Garage and Pedestrian and Bicycle Lobby are Complete; (ii) the date the Minimum Improvements are Complete; or (iii) the date that Redeveloper submits to the City its determination pursuant to Section 4.5 of the amount of the purchase price to be paid to purchase the Grade-Level Garage and the Pedestrian and Bicycle Lobby. $400,000 of the purchase price shall be payable to Land Owner as partial payment for land acquisition costs and the remaining amount shall be payable to Redeveloper. Section 4.5. Determination of Grade-Level Garage Purchase Price. The purchase price for the Grade-Level Garage and Pedestrian and Bicycle Lobby will be the Land Owner’s and Redeveloper’s actual documented costs incurred in acquiring, designing, developing and constructing the Grade-Level Garage, all as more specifically described in the attached Schedule I. The purchase price will not include costs incurred in connection with the acquisition, design, development and construction of the Pedestrian and Bicycle Lobby. Section 4.6. Maintenance Obligations. The responsibility for ongoing maintenance of public improvements located in the area of the Minimum Improvements is divided between the City and Redeveloper as set forth in the Reciprocal Easement Agreement. Maintenance of the Access Easement Agreement area will be done in accordance with the terms of the Access Easement Agreement. The Reciprocal Easement Agreement and the Access Easement Agreement will be binding on the respective owners of the Minimum Improvements, Grade- Level Garage, Artery and other public improvements. Section 4.7. Use of Grade-Level Garage. The use of the Grade-Level Garage shall be dictated by the Reciprocal Easement Agreement and this Agreement. Whether the Grade-Level Garage is owned by the Redeveloper, the Land Owner, or their assigns, or by the City or its assigns, all of the Grade-Level Garage parking stalls shall be available to the general public and no person or entity may be charged parking fees for using those parking stalls. If the City, or its assignee, does not purchase the Grade-Level Garage, then the use of the Grade-Level Garage will be determined by the Redeveloper subject to the following restrictions: (a) With respect to all parking stalls, the Redeveloper may control access and control the hours of operation, in its discretion; and (b) All of the parking stalls shall be available at least between the hours of 6:00 a.m. and 10:00 p.m. every day subject to temporary closure for maintenance, repairs or other reasonable reasons. The restrictions contained in this Section shall continue through the term of the Tax Increment District and shall survive the Termination Date. 17 ARTICLE V Insurance Section 5.1. Insurance. (a) The Redeveloper will provide and maintain or cause its contractors and subcontractors and at all times during the process of constructing the Minimum Improvements and, from time to time at the reasonable request of the Authority, furnish the Authority with proof of insurance as follows: (i) Builder's risk insurance, written on the so-called "Builder's Risk – Replacement Cost Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of Completion, and with coverage available in nonreporting form on the so called "all risk" form of policy; and (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, Broadening Endorsement) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); (iii) Worker's compensation insurance, with statutory coverage and employer's liability protection. The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and content satisfactory to the Authority and shall be placed with financially sound and reputable insurers licensed to transact business in the State, the liability insurer to be rated A or better in Best's Insurance Guide. The policies of insurance delivered pursuant to clause (i) and (ii) above shall contain an agreement of the insurer to give not less than ten (10) days' advance written notice to the Authority in the event of cancellation of such policy or change affecting th e coverage thereunder. The Authority shall be named as an additional insured on the liability policy obtained pursuant to clause (ii) above. (b) Upon Completion of construction of the Minimum Improvements and prior to the Termination Date so long as the Redeveloper owns any portion of the Minimum Improvements, the Redeveloper shall maintain, at its cost and expense, and from time to time at the reasonable request of the Authority shall furnish proof of insurance to the extent required under the Reciprocal Easement Agreement. (c) 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 risk covered thereby. Upon request, the Redeveloper will deposit annually with the Authority binders evidencing all such insurance, or a certificate or certificates of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a 18 provision that the insurer shall not cancel or modify it without giving written notice to the Redeveloper and the Authority at least ten (10) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish the Authority evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V of this Agreement, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper agrees to notify the Authority immediately in the case of damage to or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In the event of any such damage or destruction, the Redeveloper will forthwith repair, reconstruct and restore those portions of the Minimum Improvements which it owns to substantially the same or an improved condition or value as 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 portions of the Minimum Improvements owned by the Redeveloper, 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 remitted to the Redeveloper. The obligation to repair, reconstruct and restore the Minimum Improvements shall continue during the term of the Tax Increment District and shall survive the termination date. 19 ARTICLE VI Tax Increment; Reimbursement of Qualified Costs Section 6.1. Creation of Tax Increment District. The City and the Authority approved the creation of the Tax Increment District, a redevelopment tax increment district, on February 2, 2016. The Tax Increment District encompasses the Redevelopment Property. Tax increment from the Tax Increment District will be used to pay costs as described in this Agreement. Section 6.2. Reimbursement for Qualified Costs. (a) The Authority will use a portion of the Tax Increment generated by the Tax Increment District to reimburse the Redeveloper for a portion of the Qualified Costs incurred and paid by the Redeveloper in connection with its construction of the Minimum Improvements. The Qualified Costs consist of the following: (i) Land Acquisition costs, (ii) Below-grade parking for the residential apartment units, (iii) Public improvements, including the Pedestrian and Bicycle Lobby (iv) Utilities, (v) Geotechnical investigation and correction costs, (vi) Stormwater management costs, (vii) Site improvements, and (viii) Any other Tax Increment eligible costs. The Authority shall have the right to designate which of the above Qualified Costs will be reimbursed so long as such designation does not result in reimbursed Qualified Costs below $5,200,000, and no such designation shall reduce the amount otherwise payable by the City for the purchase or reimbursement of the Grade-Level Garage and Pedestrian and Bicycle Lobby. (b) The Authority will issue to each of the Redeveloper and Land Owner a Note or Notes to reimburse them for Qualified Costs in a principal amount of $3,100,000 to the Redeveloper and $2,100,000 to the Land Owner, with an annual interest rate equal to the lesser of 5% or the actual rate of the Redeveloper’s or Land Owner’s permanent financing for the Notes. The term of the Note or Notes shall be 12 years and shall be paid with Available Tax Increment; provided, that if neither the City nor the Authority issues the Bonds as provided in 20 Section 6.3 then the term of the Note or Notes shall be 15 years, but the principal amount of the Note or Notes will not be increased (except to the extent provided in Section 4.4 or Section 6.3(c)). The Note or Notes will be in the form attached hereto as Schedule C, with all blanks appropriately completed, and will be issued when the conditions precedent set forth in Section 6.4 have been satisfied. The Note or Notes shall be payable solely with Available Tax Increment and the amount of Tax Increment deducted in calculating Available Tax Increment will be retained by the Authority. Available Tax Increment will be applied as follows on each Scheduled Payment Date: (a) First, on a pro-rata basis to pay all accrued, current and unpaid interest, based on the outstanding principal amount of each of the two Notes on such Scheduled Payment Date; (b) Second, to pay any outstanding principal on the Land Owner Note; (c) Third, once the Land Owner Note has been paid in full, to pay any outstanding principal on the Redeveloper Note. Section 6.3. Reimbursement for Grade Level Garage Costs. (a) If the City elects by written notice to Redeveloper by July 1, 2017 not to acquire the Grade-Level Garage, then the Redeveloper and Land Owner will continue to own the entire Grade-Level Garage and Pedestrian and Bicycle Lobby without sale to the City, and the cost of the land acquisition, design, construction and other costs of the Grade-Level Garage and the Pedestrian and Bicycle Lobby will be reimbursed by the City and Authority to the Land Owner and Redeveloper as provided in Section 6.3(c). (b) Upon Completion of construction of the Minimum Improvements the City or Authority will issue the Bonds for a term that is reasonably feasible considering then -existing market conditions and interest rates. The principal amount of the Bonds will be an amount such that the net proceeds of the Bonds, after payment of costs of issuance and the establishment of a capitalized interest account, when added to the City’s cash contribution, will be sufficient to reimburse the Redeveloper and Land Owner for their payment of the cost of the land acquisition, design, construction and other costs of the Grade-Level Garage. The Bonds will be structured as interest only for the term of the outstanding Note or Notes. The Bonds will be p aid with ten percent (10%) of the Tax Increment and any other City/Authority funds pledged to the Bonds, but in no event will any portion of the Available Tax Increment be used to pay the Bonds, during the term of the Note or Notes. After the term of the Note or Notes, the Bonds will be payable using one hundred percent (100%) of the Tax Increment generated from the Redevelopment Property and other City/Authority funds pledged to payment of the Bonds. (c) The amount to be reimbursed to the Redeveloper and Land Owner by the City or the Authority for the land acquisition, design, development, construction and other costs of the Grade-Level Garage shall be based on the Redeveloper’s actual documented cost as further provided in Section 4.5, which is currently estimated to be $10,558,500. Such amount is currently a partial estimate only and the actual final cost of the Grade-Level Garage may be more or less than such amount. In the event that the actual cost, determined in accordance with Section 4.5, is greater than $10,558,500 (the “Additional Amount”), the City or Authority may 21 either pay the Additional Amount in cash, or the Authority will increase, by the Additional Amount, the principal amount and appropriately lengthen the term of the Note or Notes to be issued to the Redeveloper under Section 6.2 of this Agreement. If the actual final cost is less than $10,558,500, the City will reimburse the lesser amount, and the Note or Notes will be issued as described in Section 6.2. The City and Authority will only reimburse the Redeveloper and Land Owner for the actual costs incurred for the Grade-Level Garage as further set forth in Section 4.5. (d) The payment under this Section 6.3 shall be made on or before the date for the closing on the purchase of the Grade-Level Garage under Section 4.4, with $400,000 payable to Land Owner as partial reimbursement for land acquisition costs and the remaining amount payable to Redeveloper. (e) If the Redeveloper and Land Owner have been reimbursed for the actual costs incurred for the Grade-Level Garage with the proceeds of tax-exempt bonds, then if the Redeveloper or Land Owner sell the Grade-Level Garage within the 25-year period after bond issuance, the Redeveloper and/or Land Owner, as applicable, must pay to the Authority the net proceeds from such sale. If the Grade-Level Garage is sold together with the Multifamily Facility during such period, then the amount to be paid to the Authority from such sale shall be the portion of the net proceeds allocated to the Grade-Level Garage based on a valuation of the Grade-Level Garage using the industry standard income approach based on then-current revenue and expenses of the Grade-Level Garage. Section 6.4. Conditions Precedent to Issuance of Note or Notes. Notwithstanding anything to the contrary contained herein, the Authority's obligation to issue the Note or Notes shall be subject to satisfaction, or waiver in writing by the Authority, of all of the following conditions precedent: (a) there shall be no uncured default by Land Owner or Redeveloper under the terms of this Agreement; (b) the Redeveloper shall have provided to the Authority documentation acceptable to the Authority showing that the Redeveloper and Land Owner have incurred and paid Qualified Costs in an amount at least equal to the principal amount of the Note or Notes; and (c) the Redeveloper shall have Completed construction of the Minimum Improvements. Section 6.5. Potential Reduction of Assistance. (a) On the Calculation Date, as defined below, the amount of the tax increment finance assistance provided pursuant to this Agreement will be subject to adjustment based on a target Cash on Cash Return, as defined below, of 11%. By the Calculation Date, the Redeveloper must deliver to the Authority’s municipal advisor evidence of its Cash on Cash Return, subject to a confidentiality agreement reasonably acceptable to Redeveloper and the Authority. The Cash on Cash Return shall be calculated by the Authority’s municipal advisor based on the Redeveloper’s pro forma financial statement 22 submitted to the Authority’s municipal advisor, a summary of which pro forma is attached to this Agreement as Schedule J (the “Pro Forma”). If the Cash on Cash Return exceeds 11%, then the principal amount of the Note or Notes issued to the Redeveloper will first be reduced to an amount that results in a stabilized Cash on Cash Return equal to 11% over the term of the Note or Notes, in which case the Redeveloper shall deliver the Note or Notes to the Authority in exchange for a new Note or Notes in the adjusted principal amount upon the Authority’s written request. If the Redeveloper’s Note or Notes is reduced to zero and the Cash on Cash return is still greater than 11% over the term of the Note or Notes, then the principal amount of the Landowner’s Note or Notes will be reduced to an amount that results in a stabilized Cash on Cash Return equal to 11% over the term of the Note or Notes, in which case Landowner shall deliver the Landowner Note to the Authority in exchange for a new Note in the adjusted principal amount upon the Authority’s written request. (b) For the purposes of this Section, the following terms have the following meanings: “Calculation Date” means 60 days after the earliest of (i) the date of Stabilization, as defined below, of the Minimum Improvements; (ii) the date of any transfer of the Multifamily Facility (provided that the Redeveloper and the Authority may agree that the Calculation Date will occur prior to the actual transfer); or (iii) two years after the date of completion of the Minimum Improvements, as evidenced by the City’s issuance of a final certificate of occupancy. “Cash Flow” means Net Operating Income less debt service with respect to the first mortgage loan. “Cash on Cash Return” means Cash Flow divided by the sum of Redeveloper’s and Land Owner’s actual equity, which excludes any grants or City, Authority, Federal or State funds received by the Redeveloper or the Land Owner, and the principal amount of the Note(s). “Net Operating Income” means total rent, and other project-derived revenue, including payments under the Note(s), less Operating Expenses in accordance with the Pro Forma. “Operating Expenses” means reasonable and customary expenses incurred in operating the Redevelopment Property in accordance with the Pro Forma, including deposits to capital replacement reserves. “Stabilization” is defined as the first date upon which both of the following have occurred: (1) the apartments within the Minimum Improvements have achieved 95% occupancy for three consecutive months; and (2) real estate taxes have been fully assessed on the completed Minimum Improvements. Section 6.6. Redeveloper’s and Land Owner’s Representations as to Note or Notes. Each of the Redeveloper and Land Owner makes the following representations to the Authority with respect to the issuance of any Note to the Redeveloper or Land Owner: 23 (a) Neither the Land Owner nor the Redeveloper has relied on any representations of the Authority, or any of its officers, agents, or employees, and has not relied on any opinion of any attorney of the Authority, as to the Federal or State income tax consequences relating to the purchase and ownership of the Note by the Redeveloper or the Land Owner. (b) Each of the Redeveloper and Land Owner is sufficiently knowledgeable and experienced in financial and business matters, including the purchase and ownership of obligations of a nature similar to the Note, to be able to evaluate the risks and merits of the purchase and ownership of the Note. Each of the Redeveloper and Land Owner has been made aware of the security for the Note and the proposed uses of the proceeds of the Note, and has received the cooperation of the Authority in undertaking any due diligence that the Redeveloper or the Land Owner has deemed necessary or appropriate. (c) Each of the Redeveloper and Land Owner understands that the Available Tax Increment is the sole source of money that is pledged and will be available for the payments due under the Note; that the Authority is not under any obligation to repurchase the Note from the Redeveloper or the Land Owner under any circumstances; that the Note is not a general obligation of the Authority or the City; and that, if the Available Tax Increment is not sufficient to make the payments due under the Note in full, no right will exist to have taxes levied by the Authority or City for the payment of the unpaid amounts due under the Note. (d) The Redeveloper and Land Owner understand that the Note is not registered or otherwise qualified for sale or transfer under the securities laws and regulations of the State or under the Federal securities laws or regulations, the Note is not listed on any stock or other securities exchange, and the Note will carry no rating from any rating service. (e) Each of the Redeveloper and Land Owner has conducted its own investigation regarding the projected Tax Increment from the Redeveloper’s development and acknowledges that any estimates of Tax Increment prepared by or on behalf of the Authority or City were intended for the Authority’s or City’s use only and have not been and will not be relied upon by the Redeveloper or the Land Owner. Section 6.7. Real Property Taxes. (a) The Redeveloper and Land Owner acknowledge that the Authority and City are providing substantial aid and assistance in furtherance of the development described in this Agreement and that such assistance will be financed using the Tax Increment generated from the Tax Increment District. Therefore, the Redeveloper and Land Owner agree for themselves, and their successors and assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and all improvements thereon. The Redeveloper and Land Owner acknowledge that this obligation creates a contractual right on behalf of the Authority and City through the term of the Tax Increment District to declare an Event of Default or sue the Redeveloper or Land Owner, or their 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 24 auditor. In any such suit, the Authority and City shall also be entitled to recover its costs, expenses and reasonable attorney fees. (b) The Redeveloper and Land Owner agree that during the term of the Tax Increment District, they 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 and Land Owner also agree that they will not, during the term of the Tax Increment District, 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. (c) Nothing in this Agreement is intended to hinder or impair the rights of the Redeveloper or Land Owner to seek reduction in market value or property taxes on any portion of the Redevelopment Property under any State law (referred to as a “Tax Petition”). T he Redeveloper or Land Owner, as applicable, shall notify the Authority within 10 days of filing any Tax Petition. If as of any Scheduled Payment Date under the Note(s), any Tax Petition is then pending, the Authority will withhold payments of Tax Increment attributable to the portion of the tax payment that is the subject of the Tax Petition. The Authority will pay any withheld amount to the extent not reduced as a result of the Tax Petition, without interest, promptly after the Tax Petition is fully resolved and the amount of Tax Increment attributable to the disputed tax payments is finalized. 25 ARTICLE VII Financing Section 7.1. Financing. Prior to the date of this Agreement, the Redeveloper shall submit to the Authority evidence, satisfactory to the Authority, that the Redeveloper has obtained financing or has available and committed funds (such as a bank financing term sheet) in an amount sufficient to pay the cost of constructing the Minimum Improvement. Section 7.2. Limitation Upon Encumbrance of Property. Prior to the Completion of the Minimum Improvements, as certified by the Authority, neither the Redeveloper nor any successor in interest to the Redevelopment Property, or any part thereof, shall engage in any financing or an y other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Redevelopment Property, except for th e purposes of obtaining funds only to the extent necessary for acquiring and constructing the Minimum Improvements and except for the Permitted Encumbrances, without the prior written approval of the Authority. Nothing in this Agreement shall be construed as a limitation upon Redeveloper’s ability to obtain financing, including loans from members or investors, that does not create an encumbrance or lien on the Redevelopment Property. Section 7.3. Copy of Notice of Default to Mortgagee. Whenever the Authority or the City will deliver any notice or demand to the Redeveloper or Land Owner with respect to any breach or default by the Redeveloper or Land Owner in its obligations or covenants under this Agreement, the City or Authority will at the same time forward a copy of such notice or demand to each Holder of any Mortgage at the last address of such Holder shown in the records of the Authority. Such notice to a Holder will be given in the manner set forth in Section 10.5. Failure to give such notice shall not affect the Authority’s or City’s rights to exercise remedies under this Agreement as a result of such breach or default. Section 7.4. Mortgagee’s Option to Cure Defaults. After any breach or default referred to in Section 7.3, each such Holder will have the right, at its option, to cure or remedy such breach or default within the time for cure set forth in Section 9.2 of this Agreement. 26 ARTICLE VIII Prohibitions Against Assignment and Transfer, Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement. Subject to Section 8.3 of this Agreement, the Redeveloper represents and agrees that during the term of the Tax Increment District, except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) 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 (other than leases to residential tenants, the ground lease between Land Owner and Redeveloper), 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 herein or therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority which shall not be unreasonably withheld or conditioned. Notwithstanding the foregoing, the Redeveloper may, without the Authority’s consent transfer the Redevelopment Property to an affiliate of the Redeveloper that is owned by or under common ownership with the Redeveloper, or to Doran Companies or any affiliate of Doran Companies, which entity will act as manager or operator of the Minimum Improvements; provided that any such transferee must enter into an agreement pursuant to which it assumes and agrees to perform the obligations of the Redeveloper under this Agreement. Nothing in this Article VIII shall limit Redeveloper’s ability to enter into management agreements with affiliates. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval thereof by the Authority shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement from any of its obligations hereunder. Nothing in this Agreement shall be construed to prohibit the foreclosure of a Mortgage (or deed in lieu of foreclosure) or subsequent sale, nor shall the Authority’s consent be required for any such transfer. Section 8.2. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants and agrees that the City, the Authority 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 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, except to the extent caused by the City’s or Authority’s negligence. (b) Except for any willful misrepresentation or any misconduct of the following named parties, the Redeveloper agrees to protect and defend the Authority and City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further 27 agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Redevelopment Property and Minimum Improvements, except with respect to any construction, installation, operation or maintenance of the Grade-Level Garage, Pedestrian and Bicycle Lobby, Artery or the Minimum Improvements, to the extent, in each case, such construction, installation, operation or maintenance is the responsibility of the Authority or the City. Section 8.3. Transfer After Completion of Minimum Improvements. After Completion of the Minimum Improvements, each of the Land Owner and Redeveloper may, upon notice to the Authority, sell, assign or transfer its interest in the Redevelopment Property and/or Minimum Improvements; provided that such transferee has the experience and financial ability to satisfy its obligations under this Agreement and related documents and enters into an agreement by which it assumes the obligations of the Land Owner or Redeveloper under this Agreement. The Authority’s approval of such a transferee shall not be unreasonably withheld or delayed. At such time, the Land Owner and/or Redeveloper, as applicable, shall be relieved of its obligations hereunder, which shall remain obligations of its or their successors in interest to the Redevelopment Property and/or Minimum Improvements, as applicable. The Redeveloper or Land Owner, as applicable, shall remain responsible for indemnification obligations under this Agreement with respect to matters becoming known after the date of such transfer the basis of which occurred prior to the date of such transfer. 28 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides); (i) any failure by the Redeveloper or Land Owner to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder or (ii) a material breach of any Redeveloper or Land Owner representation set forth herein. Section 9.2. Remedies on Default. Whenever any Event of Default occurs, the Authority and City may immediately suspend their performance under this Agreement and may take any one or more of the following actions after providing thirty (30) days written notice to the Redeveloper and Land Owner of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable within said thirty (30) days, the Redeveloper has not provided reasonable assurances to the Authority that the Event of Default will be cured and that it will be cured as soon as reasonably possible: (a) Other than termination of this Agreement or the Notes, take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.5. Effect of Termination of Agreement. In the event that this Agreement is terminated pursuant to Section 9.2, all provisions hereof shall terminate except that Sections 3.8, 9.6, and 8.2 shall survive such termination and any cause of action arising hereunder prior to such termination shall not be affected. Section 9.6. Costs of Enforcement. Whenever any Event of Default occurs and the Authority shall employ attorneys or incur other expenses for the collection of payments due or to 29 become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within ten (10) days of written demand by the Authority pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. 30 ARTICLE X Additional Provisions Section 10.1. Representatives Not Individually Liable. 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 or on any obligations under the terms of the Agreement. No member, affiliate, employee, or employee of an affiliate of the Redeveloper or Land Owner shall be personally liable to the City or the Authority, or any successor in interest, in the event of any default or breach or on any obligations under the terms of the Agreement. Section 10.2. Restrictions on Use. The Redeveloper agrees that neither the Redevelopment Property nor Minimum Improvements nor any portion thereof, shall be used for the any of the following uses: adult establishment, adult motion picture theater, adult novelty business or bookstore (provided that this limitation shall not prohibit bookstores or other businesses that include sales of adult material as an ancillary part of their sales), auto sales and\or lease, cabinet, electrical, heating, plumbing, air conditioning sales or service shop, open sales lot, pawn shop, drive-thru restaurant, auto repair, warehouse or taxi terminal. This restriction shall run with the title to and encumber the Redevelopment Property, for as long as the Minimum Improvements exist, for the benefit of the City and shall be enforceable by means of an injunction. If the above terms are defined in the City’s zoning ordinances, the terms shall have the meaning contained therein. Section 10.3. 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 10.4. 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 10.5. 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 certi fied mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper or Land Owner, is addressed to or delivered personally to the Redeveloper or Land Owner, as applicable, at 7803 Glenroy Road, Suite 200, Bloomington, MN 55439; and (b) in the case of the Authority or City, is addressed to or delivered personally to the Authority or City, as applicable, at 1010 First Street South, Hopkins , Minnesota 55343, 31 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. Mailed notice shall be deemed to have been delivered two (2) business days after being deposited with the U.S. Postal Service. Section 10.6. Disclaimer of Relationships. The Redeveloper acknowledges that nothing contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or construed by the Redeveloper or by any third person to create any relationship of third-party beneficiary, principal and agent, limited or general partner, or joint venture between the Authority and the Redeveloper and/or any third party. Section 10.7. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Redeveloper, Land Owner, Authority and City. Section 10.8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.9. Judicial Interpretation. Should any provision of this Agreement require judicial interpretation, the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent or attorney prepared the same, it being agreed that the agents and attorneys of both parties have participated in the preparation hereof. Section 10.10. No Business Subsidy. The assistance being provided by the Authority under this Agreement does not constitute a “business subsidy” under the Minnesota Business Subsidy Act, Minnesota Statutes, Sections 116J.993 to 116J.995, because the assistance is being provided for redevelopment purposes and the Redeveloper’s investment in the Redevelopment and site preparation will exceed 70% of the County’s Assessor’s current year’s estimated market value for the Redevelopment Property. Section 10.11. Term of Agreement. Except as specifically provided herein to the contrary, this Agreement shall expire as of the Termination Date. 32 IN WITNESS WHEREOF, the Authority and the City each has caused this Agreement to be duly executed in its name and behalf and the Land Owner and the Redeveloper each has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS By_________________________________ By_________________________________ CITY OF HOPKINS By_________________________________ By_________________________________ STATE OF MINNESOTA ) )SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of February, 2016, by _____________and ______________, the ________________ and ___________________ of the Housing and Redevelopment Authority In and For the City of Hopkins, a public body politic and corporate under the laws of the state of Minnesota. ______________________________ Notary Public STATE OF MINNESOTA ) )SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of February, 2016, by _____________and ______________, the ________________ and ___________________ of the City of Hopkins, a municipal corporation under the laws of the state of Minnesota. ______________________________ Notary Public 33 DORAN 810 APARTMENTS, LLC By_________________________________ Its_________________________________ DORAN 810, LLC By_________________________________ Its_________________________________ STATE OF MINNESOTA ) )SS. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this day of , 2016, by ____________________________, the _________ of Doran 810 Apartments, LLC, a Minnesota limited liability company. ______________________________ Notary Public STATE OF MINNESOTA ) )SS. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this day of , 2016, by ____________________________, the _________ of Doran 810, LLC, a Minnesota limited liability company. ______________________________ Notary Public SCHEDULE A Description and Depiction of Redevelopment Property Land Owner Property: City Property: SCHEDULE B Additional Permitted Encumbrances [INSERT KNOWN ENCUMBRANCES SUCH AS WATERSHED DISTRICT DECLARATION] US.103746801.11 SCHEDULE C-1 Form of Land Owner Note UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF HOPKINS LIMITED REVENUE TAX INCREMENT NOTE (DORAN 810 LLC NOTE) Series 201__A The Housing and Redevelopment Authority In and For the City of Hopkins, Minnesota (the “Authority”), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Doran 810, LLC, a Minnesota limited liability company, or its permitted assigns (the “Owner”), solely from the source, to the extent and in the manner hereinafter provided, the principal amount of this Note, being _________________ Dollars ($____________) (the “Principal Amount”), said amount, together with interest as hereinafter described, to be paid, without demand, commencing on August 1, 201__, and continuing on each February 1 and August 1, thereafter to and including February 1, 20__ (the “Scheduled Payment Dates”). This Note is the Note defined in that certain Development Agreement dated as of ________________, 2016, between the Authority, the City of Hopkins, Doran 810 Apartments, LLC and the Owner (the “Contract”). Interest at the rate of ______________ percent (________%) per annum (the “Rate”) shall accrue from the date of issuance of this Note and shall be added to the Principal Amount on each Scheduled Payment Date up to and including ____________ 1, 201__, From and after such date simple non-compounding interest at the Rate shall accrue with respect to the Principal Amount, as increased pursuant to the previous sentence, until the earlier of the date that this Note is paid in full or terminated or the date of termination of the Authority’s Tax Increment Financing District No. 1-5 (The Moline) (the “District). Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day months. The term of this Note shall continue until the entire Principal Amount of and interest on this Note has been paid, until this Note is terminated in accordance with the terms of the Contract, or until February 1, 20__, whichever is earliest. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a “project”, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1 (the “Project”). Absent issuance of this Note, the Owner would not have undertaken the Project and this Note is necessary to reimburse US.103746801.11 the Owner for the Qualified Costs as identified in the Contract. This Note is issued only after and to the extent the Authority has received reasonable evidence that the applicable Qualified Costs have been incurred by the Owner. THIS NOTE IS A LIMITED OBLIGATION OF THE AUTHORITY AND NOT A DEBT OF THE CITY OF HOPKINS OR THE STATE OF MINNESOTA (THE “STATE”), AND NEITHER THE CITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent of Available Tax Increment less amounts of Available Tax Increment owing with respect to the Authority’s Limited Revenue Tax Increment Note (Doran 810 Apartments LLC Note) Series 201__B as set forth in Section 6.2(b) of the Contract. Available Tax Increment consists of a portion of the real property taxes received as tax increment by the Authority with respect to the Authority’s Tax Increment Financing District No. 1-5 (The Moline). Available Tax Increment, with respect to each Scheduled Payment Date, shall have the meaning given to such term in the Contract. This Note is issued in one denomination. The Authority shall not be in default under this Note for failure to make a payment under this Note and no interest shall accrue with respect to such payment not made until a date ten (10) days after the Authority receives written demand for such payment from the Owner; provided, that the Authority shall endeavor to make all payments when due or as soon as po ssible after receipt of the Owner’s written demand. The Authority shall pay on each Scheduled Payment Date to the Owner the Available Tax Increment. Payment shall be first applied to accrued interest and then to the Principal Amount. No interest shall accrue with respect to unpaid interest on a Scheduled Payment Date. If not terminated sooner pursuant to the terms of this Note or the Contract, on February 1, 20___, the Authority’s payment obligations under this Note shall terminate and this Note shall no longer be an obligation of the Authority. The Authority’s obligations herein are subject to the terms and conditions of the Contract. Subject to Section 9.2 of the Contract, the Authority’s payment obligations hereunder shall be suspended and this Note may be terminated by the Authority upon the occurrence of an Event of Default as provided in Section 9.1 of the Contract, which Contract is incorporated herein and made a part hereof by reference. Upon such termination, the Authority’s obligations to make further payments hereunder shall be discharged. Such termination may be accomplished by the Authority’s giving of written notice to the then registered owner of this Note, as shown on the books of the Authority. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have US.103746801.11 obligated itself to pay hereon from any funds except the Available Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority, which consent shall not be unreasonably withheld or delayed. This Note is issued pursuant to Resolution No. ____ of the Authority and is entitled to the benefits thereof, which resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due from, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Housing and Redevelopment Authority In and For the City of Hopkins, by its Commissioners, has caused this Note to be executed by the manual signatures of the Chair and the Executive Director of the Authority and has caused this Note to be dated _____________, 201__. US.103746801.11 EXHIBIT A TO NOTE Description of Redevelopment Property US.103746801.11 SCHEDULE C-2 Form of Redeveloper Note UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF HOPKINS LIMITED REVENUE TAX INCREMENT NOTE (DORAN 810 APARTMENTS LLC NOTE) Series 201__B The Housing and Redevelopment Authority In and For the City of Hopkins, Minnesota (the “Authority”), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Doran 810 Apartments, LLC, a Minnesota limited liability company, or its permitted assigns (the “Owner”), solely from the source, to the extent and in the manner hereinafter provided, the principal amount of this Note, being _________________ Dollars ($____________) (the “Principal Amount”), said amount, together with interest as hereinafter described, to be paid, without demand, commencing on August 1, 201__, and continuing on each February 1 and August 1, thereafter to and including February 1, 20__ (the “Scheduled Payment Dates”). This Note is the Note defined in that certain Development Agreement dated as of ________________, 2016, between the Authority, the City of Hopkins, Doran 810, LLC and the Owner (the “Contract”). Interest at the rate of ______________ percent (________%) per annum (the “Rate”) shall accrue from the date of issuance of this Note and shall be added to the Principal Amount on each Scheduled Payment Date up to and including ____________ 1, 201__, From and after such date simple non-compounding interest at the Rate shall accrue with respect to the Principal Amount, as increased pursuant to the previous sentence, until the earlier of the date that this Note is paid in full or terminated or the date of termination of the Authority’s Tax Increment Financing District No. 1-5 (The Moline) (the “District). Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day months. The term of this Note shall continue until the entire Principal Amount of and interest on this Note has been paid, until this Note is terminated in accordance with the terms of the Contract, or until February 1, 20__, whichever is earliest. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a “project”, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1 (the “Project”). Absent issuance of this Note, the Owner would not have undertaken the Project and this Note is necessary to reimburse US.103746801.11 the Owner for the Qualified Costs as identified in the Contract. This Note is issued only after and to the extent the Authority has received reasonable evidence that the applicable Qualified Costs have been incurred by the Owner. THIS NOTE IS A LIMITED OBLIGATION OF THE AUTHORITY AND NOT A DEBT OF THE CITY OF HOPKINS OR THE STATE OF MINNESOTA (THE “STATE”), AND NEITHER THE CITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THIS NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THE AVAILABLE TAX INCREMENT, AS DEFINED BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent of Available Tax Increment less amounts of Available Tax Increment owing with respect to the Authority’s Limited Revenue Tax Increment Note (Doran 810 LLC Note) Series 201__A as set forth in Section 6.2(b) of the Contract. Available Tax Increment consists of a portion of the real property taxes received as tax increment by the Authority with respect to the Authority’s Tax Increment Financing District No. 1-5 (The Moline). Available Tax Increment, with respect to each Scheduled Paymen t Date, shall have the meaning given to such term in the Contract. This Note is issued in one denomination. The Authority shall not be in default under this Note for failure to make a payment under this Note and no interest shall accrue with respect to such payment not made until a date ten (10) days after the Authority receives written demand for such payment from the Owner; provided, that the Authority shall endeavor to make all payments when due or as soon as possible after receipt of the Owner’s written demand. The Authority shall pay on each Scheduled Payment Date to the Owner the Available Tax Increment. Payment shall be first applied to accrued interest and then to the Principal Amount. No interest shall accrue with respect to unpaid interest on a Scheduled Payment Date. If not terminated sooner pursuant to the terms of this Note or the Contract, on February 1, 20___, the Authority’s payment obligations under this Note shall terminate and this Note shall no longer be an obligation of the Authority. The Authority’s obligations herein are subject to the terms and conditions of the Contract. Subject to Section 9.2 of the Contract, the Authority’s payment obligations hereunder shall be suspended and this Note may be terminated by the Authority upon the occurrence of an Event of Default as provided in Section 9.1 of the Contract, which Contract is incorporated herein and made a part hereof by reference. Upon such termination, the Authority’s obligations to make further payments hereunder shall be discharged. Such termination may be accomplished by the Authority’s giving of written notice to the then registered owner of this Note, as shown on the books of the Authority. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have US.103746801.11 obligated itself to pay hereon from any funds except the Available Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority, which consent shall not be unreasonably withheld or delayed. This Note is issued pursuant to Resolution No. ____ of the Authority and is entitled to the benefits thereof, which resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due from, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Housing and Redevelopment Authority In and For the City of Hopkins, by its Commissioners, has caused this Note to be execute d by the manual signatures of the Chair and the Executive Director of the Authority and has caused this Note to be dated _____________, 201__. US.103746801.11 EXHIBIT A TO NOTE Description of Redevelopment Property US.103746801.11 SCHEDULE D Access Easement Agreement US.103746801.11 SCHEDULE E Reciprocal Easement Agreement US.103746801.11 SCHEDULE F Site Plan US.103746801.11 SCHEDULE G Garage Option Agreement US.103746801.11 SCHEDULE H (Intentionally Omitted) US.103746801.11 SCHEDULE I Purchase Price/Reimbursement Amount Calculation US.103746801.11 SCHEDULE J Development Pro Forma US.104339234.02 2/12/16 ACCESS EASEMENT AGREEMENT This Easement Agreement (“Agreement”) is entered into this ___ day of January, 2016, by and between Doran 810, LLC, a Minnesota limited liability company (“Grantor”) and the City of Hopkins, a municipal corporation under the laws of Minnesota (“Grantee”). RECITALS WHEREAS, Grantor is the owner of the real property located in Hennepin County, Minnesota and legally described on Exhibit A, attached (“Property”); and WHEREAS, Grantee desires to obtain from Grantor and Grantor desires to grant to Grantee a perpetual, non-exclusive surface easement over and across that part of the Property legally described and pictorially depicted on Exhibit B, attached (the “Easement Area”) for the purpose of pedestrian and bicycle ingress and egress over and across the Easement Area; WHEREAS, Grantee recognizes that the building (“Building”) to be constructed on the Property will contain multiple access points as depicted on Exhibit B, that certain of such access points will create an overhang with pillars within the Easement Area and may create other encroachments within the Easement area that may occur by reason of the construction or reconstruction of the Building or from sag or variance occurring after any such construction or reconstruction or by virtue of structures on any boundary common to the Building and Easement Area or for other similar reasons (“Encroachments”). NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Grant of Easements. Grantor hereby grants and conveys to Grantee, its heirs, successors, assigns and agents, the following easements: a. a temporary, non-exclusive easement in favor of Grantee over and across the Easement Area for the purpose of constructing the Surface Improvements (as defined below) to be constructed by Grantee pursuant to the Development Agreement dated February _____, 2016 between Grantor, Grantee, the Housing and Redevelopment Authority in and for the City of Hopkins, and Doran 801 Apartments LLC; and b. a perpetual, non-exclusive surface easement in favor of Grantee and appurtenant to the Property over and across the Easement Area for pedestrian and bicycle ingress and egress over and across the Easement Area (“Easement”). 2. Term. The Easement granted herein shall commence on the date a certificate of occupancy is issued by the City of Hopkins for the Building and shall extend in perpetuity. US.104339234.02 3. Reservation of Rights. Grantor retains the right to temporarily close the Easement Area if necessary for Building construction, maintenance or repair purposes, or in the event an unsafe condition exists within the Easement Area. 4. Grantee’s Maintenance, Repair and Replacement Obligation. Grantee shall be responsible for all maintenance, repair and replacement of the pedestrian and bicycle path and other surface improvements in the Easement Area (the “Surface Improvements”). Other than for routine cleaning and maintenance that will not materially impede traffic in the Easement Area, Grantee shall provide reasonable advance notice to Grantor of any maintenance, repair and replacement of the Surface Improvements; provided, however, that in the event an unsafe condition exists with respect to the Surface Improvements in the Easement Area, no such advance notice shall be required. In the event Grantor objects to Grantee’s proposed maintenance, repairs or replacement of the Surface Improvements in the Easement Area, the parties will work together in good faith to ensure that Grantee’s maintenance, repair or replacement activities do not unduly impede access to the Building from the Easement Area. Grantee agrees to maintain the Easement Area in a first class manner. If Grantee fails to comply with its maintenance, repair and replacement obligations herein, Grantor may provide Grantee with written notice of default under this Agreement. If Grantee fails to cure its default within twenty (20) days from the date such notice is delivered to Grantee (except in the case of force majeure, in which case the cure period shall be forty (40) days), Grantor may, at its option and subject to reimbursement by Grantee, conduct any necessary maintenance, repair or replacement. Notwithstanding the foregoing, in the event an unsafe condition exists in the Easement Area, Grantor, at its option and subject to reimbursement by Grantee, may enter the Easement Area to cure the unsafe condition without prior notice to Grantee. 5. Indemnification; Liens. Grantee agrees to indemnify and hold harmless Grantor, its employees, agents and assigns, including Grantor’s insurance providers, from any liabilities, loss, damage, or claim, including costs and expenses (including reasonable attorneys’ fees and cost of suit) resulting from any act, error, omission of, or use of the Easement Area by, Grantee or Grantee’s agents, employees, guests, or invitees. In the event any lien is filed against the Property as a result of any such act, error or omission of, or use of the Easement Area by, Grantee or Grantee’s agents, employees, guests, or invitees, Grantee agrees to cause such lien to be discharged or the Property to be released from such lien within thirty (30) days after such lien is filed and further agrees to indemnify and hold harmless Grantor, its employees, agents and assigns, and the Property against liabilities, losses, damages, costs or expenses (including reasonable attorneys’ fees and cost of suit) on account of such lien. Upon request of Grantor, Grantee agrees to promptly cause such lien to be released and discharged of record, either by paying the indebtedness which gave rise to such lien or by posting bond or other security as shall be required by law to obtain such release and discharge. Nothing herein shall be deemed to be a waiver by Grantee of any statutory immunity from or limits on liability under Minnesota law; provided, however, that Grantee shall nevertheless remain obligated to indemnify Grantor as described in this Section 5, even if Grantee would have statutory immunity if a claim were brought directly against Grantee. US.104339234.02 6. Grantor’s Construction, Maintenance and Repair Obligation. Grantor is responsible for the construction, maintenance, repair and replacement of the Encroachments. Grantor shall also be responsible for snow removal on the Easement Area and, if necessary, for hauling snow off site. 7. Miscellaneous. a. Recitals. The parties acknowledge and agree that the recitals contained in this Agreement are true and correct and are incorporated into this Agreement. b. Successors and Assigns. This Agreement shall run with the land and be binding upon and inure to the benefit of the parties and their respective successors, heirs, and assigns. c. Severability. The invalidity of any part of this Agreement shall not be deemed to impair or affect in any manner the validity, enforceability or effect of the remainder of this Agreement, and, in such event, all of the other provisions of this Agreement shall continue in full force and effect as if such invalid provisions had not been included herein. d. Complete Agreement. This Agreement, including all exhibits, constitutes the complete agreement between the parties with respect to the matters addressed herein. This Agreement shall be amended only in a writing duly executed by the parties to this Agreement. e. Failure to Enforce Not a Waiver. No provision contained in this Agreement shall be deemed to have been invalidated or waived by reason of any failure to enforce the same, irrespective of the number of violations or breaches which may occur. f. Captions. The captions herein are inserted only for reference, and in no way define, limit or describe the scope of this Agreement or the meaning of any provision hereof. g. Authority. Each of the undersigned parties represents and warrants that it has full authority to enter into this Agreement, and each individual signing this Agreement on behalf of a corporation or other entity hereby represents and warrants that he or she has full authority to sign on behalf of and to bind that party thereby. h. Governing Law. This Agreement shall be construed in accordance with and subject to the provisions of the law of the State of Minnesota. i. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement as of US.104339234.02 the date first above written. [Remainder of page intentionally left blank – signature pages follow] US.104339234.02 DORAN 810, LLC a Minnesota limited liability company By: Kelly J. Doran Its: Chief Manager CITY OF HOPKINS a municipal corporation By: Its: ________________________ STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ____________, 2016, by Kelly J. Doran, the Chief Manager of Doran 810, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of _____________, 2016, by _________________________, the ________________________, for the City of Hopkins, a municipal corporation, on behalf of the corporation. Notary Public This instrument was drafted by: Daniel N. West, #322581 Doran Companies 7803 Glenroy Rd. Suite 200 Bloomington, MN 55439 952-288-2000 US.104339234.02 Exhibit A Property Legal Description US.104339234.02 Exhibit B Easement Area Legal Description and Depiction