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Agenda - HRA JANUARY FEBRUARY S M T W T F S S M T W T F S MAXWELL � 1 2 3 4 5 1 2 BRAUSEN 6 7 8� 9 10 11 12 3 4 5 6 7 8 9 HALVERSON 13 14 15 16 17 18 19 10 11 12 13 14 15 16 RowAN 20 21 22 23 24 25 26 17 18 19 20 21 22 23 YOUAKIM 27 28 29 30 31 24 25 26 27 28 29 GETSCHOW ELVERUM HOPKINS HRA REGULAR MEETING January 2, 2008 7 p.m. I. CALL TO ORDER II. OPEN AGENDA - PUBLIC CONID�NTS (Public must fill out�a Speaker Request form. There is a three- minute limit for each person.) � • III. CONSENT AGENDA � l. Approve minutes of the December.4, 2007, regular meeting 2. Approve disbursements through December 31, 2007 3. ITEM 2008-01 Approve HRA calendar for 2008 Recommendation: Approve consent agenda. Board Action: IV. NEW BUSINESS l. ITEM 2008-02 Amended development agreement, Block 64 Recommendation: approve amended development agreement Board Action: V . ADJOURNMENT • Board Action: UNOFFICIAL � MINUTES OF REGULAR HOPKINS HRA MEETING ' December 4, 2007 A regular meeting of the Hopkins Housing and Redevelopment Authority was held December 4, 2007, at Hopkins City Hall. Present were Chairman Eugene Maxwell, Commissioners Kristi Halverson, Rick Brausen, and Bruce Rowan. Cheryl Youakim was absent. Also present were Executive Director Rick Getschow, Assistant Executive Director Kersten Elverum, and City Attorney Jerry Steiner. I. CALL TO ORDER � The meeting was called to order at 7:26 p.m. II. CONSENT AGENDA � l. Approve minutes of the November 7, 2007, regular meeting 2. Approve disbursements through November 30, 2007 • Commissioner Halverson moved, Commissioner Rowan seconded, to approve the consent agenda. The motion was approved unanimously. III. ADJOURNMENT Commissioner Halverson moved, Commissioner Brausen seconded, to adjourn the meeting. The motion was approved unanimously. The meeting adjourned at 7:27 p.m. . . Eugene J. Maxwell, Chairman Richard B. Getschow, Executive Director �i � � 12/21/2007 3:00 PM A/ P CHECK REGISTER PAGE: 1 PACKET:. OQ530 HRA 12-21-07 VENDOR SET: O1 � � BANK . HRA HRA WELLS FARGO . CHECK CHECK CHECK CHECK �NDOR NAME / I.D. DESC TYPE DATE DISCOUNT AMOUNT NO# AMOUNT 03165 CENTERPOfNT ENERGY R 12/21/2007 011087 95.78 <• . 03316 CITY OF HOPKINS R 12/21/2007 011068 17,017.21 27279 CITY OF HOPKINS R 12/21/2007 011089 2,277.53 03585 COSTCO MEMBERSHIP R 12/21/2007 011090 50.00 07661 W, W. GRAINGER, INC R 12/21/2007 011091 231.96 07711 GREAT'GLACIER INC R 12/21/2007 011092 13.42 08009 HANCE HARDWARE, INC R 12/21/2007 011093 178.25 08565 HOPKINS ACTIVITY CENTER R 12/21/2007 011099 148.75 12166 LEAGUE OF MN CITIES INS TRUST R 12/21/2007 011095 20,333.00 12331 LITTLE BLIND SPOT R 12/21/2007 011096 108.00 13172 METRO ELEVATOR, INC R 12/21/2007 011097 320.00 �336 MIDWEST MAINTENANCE & MECHANICAL INC R 12/21/2007 � 011098 80.00 19040 C. NABER & ASSOCIATES R 12/21/2007 011099 190.00 19160 NEXTEL COP9fUNICATIONS R 12/21/2007 011100 55.38 17606 QWEST R 12/21/2007 011101 221.47 18569 ROOT-O-MATIC R 12/21/2007 011102 861.95 27901 DALE SORENSEN COMPANY R 12/21/2007 011103 964.00 19797 STRATEGIC EQUIPMENT R 12/21/2007 011104 316.31 19723 STUDIO FIVE ARCHITECTS R 12/21/2007 011105 5,600.00 22000 VAIL PLACE R 12/21/2007 011106 5,281.94 23006 WASTE MANAGEMENT - SAVAGE R 12/21/2007 011107 517.62 � 12/21/2007 3:00 PM � A/ P CHECK REGISTER PAGE: 2 PACKET: 00530 HRA 12-21-07 `� � VENDOR SET: O1 � � ' BANK . HRA HRA WELLS FARGO � CHECK CHECK � CHECK . CHECK VENDOR NAME / I.D. DESC TYPE DATE DISCOUNT AMOUNT NO# AMOONT 25080 XCEL ENERGY R 12/21/2007� 011108 2,102.06 ** T 0 T A L S ** - NO# DISCOUNTS CHECK AMT TOTAL APPLIED I R R CHEG EGOLA KS: 22 0.00 56 939.63 56 439.63 , � l ! HANDWRITTEN CHECKS: 0 0.00 0.00 0.00 � i PRE-WRITE CHECKS: 0 0.00 0.00 0.00 � DRAFTS: 0 0.00 0.00 0.00 � VOID CHECKS: 0 0.00 0.00 0.00 � NON CHECKS: 0. 0.00 0.00 0.00 CORRECTIONS: 0 0.00 0.00 0.00 REGISTER TOTALS: 22 0.00 56,939.63 56,934.63 TOTAL ERRORS: 0 � 12/21/2007 3:00 PM A/ P CHECK REGISTER pAGE: 3 PACKEr: , r HRA 12-21-0"1 VENDOR SET: O1 BANK . HRA �HRA WELLS FARGO � . � . � CHECK CHECK CHECK CHECK I VENDOR NAME / I.D. DESC TYPE DATE DISCOUNT AMOUNT NOH AMOUNT I � � I i � ** POSTING PERIOD RECAP ** � `� � � � FUND PERIOD AMOUNT ------------------------------------------- , 001 12/2007 56,934.63CR ALL 56,934.63CR � . i l ' i � I �! - � - t - - _ _ _ . . I I i GITY p HOPKINS � December 27, 2007 HRA Report 2008-01 ` HRA 2008 MEETING CALENDAR Proaosed Action Staff recommends approval of the following motion: adopt the Ho�kins City Council 2008 Meeting Calendar as a�roved bv the Hot�kins Citv Council on Januarv 2, 2008, as the HRA Meeting Calendar for 2008. Overview The City Council, at their January 2 meeting, will be approying a meeting calendar for the upcoming year. The purpose of this calendar is to make adjustments based on known conflicts. The calendar also identifies specific meeting dates for the HRA. The board is now being requested to take official action adopting this calendar. Supaorting Document � + Hopkins City Counci12008 Meeting Calendar ersten lverum Pl . g & Development birector ' � : � January O 1- December 31, 2008 Planner ,. January 1 New Year's Day 2 7:00 PM HRA Meeting 7:30 PM City Council Meeting $ 6:30 PM City Council Worksession 15 7.30 PM City Council Meeting 21 Martin Luther King, Jr: 22 6:30 PM City Council Worksession February 5 7:00 PM Precinct Caucuses 6 7:00 PM HRA Meeting 7:30 PM City Council Meeting 12 6:30 PM City Council Worksession ig PresidenPs Day � 19 7:30 PM City Council Meeting 2( 6:30 PM City Councii Worksession March 4 7:00 PM HRA Meeting 7:30 PM City Council Meeting 11 6:30 PM City Council Worksession j$ 7:30 PM City Council Meeting 25 6:30 PM City Council Worksession April . 1 7:00 PM HRA Meeting 7:30 PM City Council Meeting $ 6:30 PM City Council Worksession 15 ��30 PM City Council Meeting 22 6:30 PM City Council Worksession � May ( 7:00 PM HRA Meeting 7:30 PM City Council Meeting � 13 6:30 PM City Council Worksession , Printed by Calendar Creator Plus on 12/28/2007 _ -- Januar O1 - December 31, 2008 F�� Y Planner .- May � � 20 7:30 PM City Council Meeting I ! J � �� Memorial Day � i ! 27 6:30 PM City Council Worksession June 3 7:00 PM HRA Meeting 7:30 PM City Council Meeting jQ 6:30 PM City Council Worksession j'] 7:30 PM City Council Meeting 2¢ 6:30 PM City Council Worksession July j 7:00 PM HRA Meeting ' 7:30 PM City Council Meeting i 4 Independence Day � � $ 6:30 PM City Council Worksession ��:�:�� 15 ��30 PM City Council Meeting ' 22 6:30 PM City Council Worksession . August 4 7:00 PM HRA Meeting , 7:30 PM City Council Meeting i� � I 5 National Night Out ` ! 12 6:30 PM City Council Worksession ; 19 ��30 PM City Council Meeting i 2( 6:30 PM City Council Worksession September 1 I.abor Day 2 7:00 PM HRA Meeting 7:30 PM City Council Meeting 9 7:00 AM - 8:00 PM Primary Election i � 16 7,30 PM City Council Meeting � � 30 6:30 PM City Council Worksession � Printed by Calendar Creator Pius on 12/28/2007 i -; - _ I i _ _ - • January 01 - December 31, 2008 Planner October � � 7:00 PM HRA Meeting 7:30 PM City �ouncil Meeting i4 6:30 PM City Council Worksession 2i 7:30 PM City Council Meeting 2$ 6:30 PM City Council Worksession November 3 7:00 PM HRA Meeting 7:30 PM City Council Meeting Q, 7:00 AM - 8:00 PM General Election 11 Veterans Day j$ 7:30 PM City Council Meeting 25 6:30 PM City Council Worksession 2'� Thanksgiving � 28 Thanksgiving Friday December _ 2 7:00 PM HRA Meeting 7:30 PM City Council Meeting 9 6:30 PM City Councii Worksession 16 7:30 PM City Council Meeting 25 Christmas • Printed by Calendar Creator Plus on 12/28/2007 �-,1TY QF December 20, 2007 HRA Report 2008-02 HOPKINS � AMENDED CONTRACT FOR PRIVATE REI�EVELOPMENT - BLOCK 64 Pronosed Action . Staff recommends approval of the following motion: a�prove th�e amended coritract for rivate redevelonment between the Hopkins HRA and Doran-Pratt Develo�pment LLC for the Block 64 redevelopment �roject. With this motion, the agreement will be executed. It is understood that the HRA gives staff the authority to make minor modifications to the agreement, if necessary, that do not cliange the intent of the agreement. Overview The Hopkins Housing and Redevelopment Authority (HRA) had been working with GPS Development -on a redeveiopment project on Mainstreet between Fifth Avenue and Sixth Avenue. In early August the HRA was notified that GPS would not be able to complete the project as proposed. They authorized the HRA to begin discussions with other development groups. � �• Those talks resnited in a proposed project by Kelly Doran and Len Pratt. The project as currently` , envisioned is approximately 250 units of l�ury apartments that would be built as eventual conversions to condominiums and 13,Ob0 square feet of retaiL The HRA would be providing tax increment , financing as well as additional assistance in the form of a la.nd write-down. The contract for private redevelopment gives the development group exclusive rights while they refine the project and obtain land use approvals. The HRA also will have responsibilitie; under the agreement, which include providing the financial assistance and acquisition of some of the required property. Primarv Issues to Consider A sununary of the amended agreement was prepared by Bob Deike, HRA attorney, and is attached to this report. Staff is confident that the proposed public assistance is necessary for a redevelopment project to be accomplished on this block, and that tfie type and scope of the proposed project is the most feasible at this time. Suuuortins Information '• Contract for Private Redevelopment Summary • Third Amended and Restated Contract for Private Redevelopment r�' - ersten lverum Pl ' g & Development Director • SUMMARY OF THIRD AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN HOPKINS HOUSING AND REDEVELQPMENT AUTHORITY �' AND DORAN-PRATT DEVELOPMENT, LLC The following is a brief summary of the major terms of the above referenced amended and restated development agreement: 1. Redeveloner. The Redeveloper is Doran-Pratt Development, LLC, a Minnesota limited liability company. The Redeveloper is the assignee of all rights of GPS Development, LLC, under a previous development agreement with the HRA. 2. Minimum Imnrovements. The Redeveloper proposes to construct approximately 250 residential rental units and approximately 13,000 square feet of retail/commercial space. The development will be constructed in one phase. All improvements constructed must conform to construction plans to be submitted to and approved by the Authority. 3. Ac,guisition Propertv. The agreement recites that the Authority has entered into a purchase agreement to acquire the Hopkins Park Plaza properties. The time for closing on the � purchase of those properties has passed. The Redeveloper and the Authority will attempt by February 1, 2008 to negotiate an extension agreement with the Park Pla�a owner that (among other things): 1) extends the date by which the Authority must make a commitment on whether it will buy the property to April 1, 2008, 2) extends the closing date on the purchase to June 30, 2008, and 3) reduces the purchase price to $6,000,000. If such an agreement can not be negotiated by February 1, 2008, the Redeveloper's development agreement is terminable by either party. The maximum amount payable by the Redeveloper in connectior� with the purchase of the Park Plaza Property is $4,000,000. The remaining $2,000,000 is payable using funds of the Authority. 4. 525 Main Prouertv. The Redeveloper has secured control of all of the Block 64 properties except for the Park Plaza property and the 525 Main Property. The Redeveloper will attempt to negotiate a purchase agreement on the 525 Main Property. If it is unable to do so at a reasonable price, it will inform the Authority and the Authority will hold a public hearing to determine whether it will commence an eminent domain action to acquire the property. If the Authority does proceed to acquire the 525 Main Property through eminent domain, the Redeveloper will pay all costs associated with the acquisition. 5. Relocation. The Redeveloper will be responsible for the payment of all relocation costs and benefits legally owed to persons displaced from the properties as a result of the project. • 6. Public Redeveloument Costs. The Redeveloper is responsible for all aspects of constructing the project and for the initial payment of all costs of construction. However, because of the extraordinary costs of acquisition and site preparation, taac increment financing �'� � assistance is necessary to defray a portion of those costs. The Authority agrees to reimburse the ��' I � Redeveloper for a portion of those costs through the issuance and payment of a t� increment � revenue note. � 7. Issuance of Note. At the time that the Redeveloper closes on its purchase of the ' Park Plaza Property and provides the Authority with documentation of tax increment qualified � costs the Authority will issue a Note to the Redeveloper. It is currently anticipated that the principal amount of the Note will be $4,600,000. The Note will accrue interest at the same rate of interest as is payable on the Redeveloper's construction financing. The Note will be payable ' solely from the greater of 95% of the tax increment generated from the Redeveloper's � development or the tax increment generated from the Redeveloper's project after deducting the ' Authority's actual administrative costs. The Authority will have no obligation to pay the Note from any other source. The Authority agrees that it will issue refunding a note to refinance the Note on terms available in the public marketplace. If the refunding note does not generated net proceeds �equal to the principal amounts of the Note, the Authority will issue an excess costs note in the amount of the difference. The contract contains certain limitations on the level of profit that the Redeveloper can derive from the overall development. If after review of the Redeveloper's final project costs the Authority's financial consultant determines that the level of profit exceeds the allowable level, then either the principal amount of the refunding note will be reduced or the Redeveloper will be required to repay to the Authority the excess return. � � �'� I i - , - , - -- i i _ -,- - : � December 28, 21707 THIRD AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY " IN AND FO�t THE CITY OF HOPKIN5 � and DORAN-PRATT DEVELOPMENT, LLC Dated• , 2008 This document was drafted by: BRADLEY & DEIKE, P. A. 4018 West 65�' Street, Suite 100 Edina, MN 55435 Telephone: (952) 926-5337 � - I � I - i TABLE OF CONTENTS � Pa�e PREAMBLE .......................................::...............................................................................1 ARTICLE I Definitions Section1.1. Definitions ......................................................................................................2 � ARTICLE II � Representations � ( � Section 2.1. Re resentations b the Authori i Section 2.2. Representations by the Redevel per ..............................................................� 'I ARTICLE III Development Proposal• Public Redevelopment Costs S ection 3.1. Development Proposal ................... .................................:........................8 ,��, ...... Section 3.2. Redeveloper Contingencies; Development Actions ......................................9 � Section 3.3: Acquisition of Acquisition Froperty ..............................................................� Section 3.4. Conditions Precedent to Authority's Sale of Acquisition Property ...............12 Section 3.5. Public Redevelopment Costs .........................................................................13 Section 3.6. Issuance of Note .............................................................................................13 Section 3.7. Conditions Precedent to Issuance of the Note, Refunding Note and Excess Note ..........................................................................................16 Section 3.8. Payment of Authority's Costs ........................................................................16 Section 3.9. Business Subsidy Agreement .........................................................................17 ' Section 3.10. Adjustment of Financial Assistance ...............................................................17 �' Section l: Rent ..........:.....................................................................................................18 I I Section3.12. Condemnation ................................................................................................18 ; ; �. Section 3.13. Authority Right to Acquire Redeveloper Property 2p � ........................................ I ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction and Operation of Minimum Improvements ..............................20 Section 4.2. Construction Plans; P1aruling Approvals .......................................................20 Section 4.3. Commencement and Completion of Construction .........................................21 . � I i � ;- - i i _ _ _ _ - _ � ARTICLE V Insurance Section Insurance .................................................�......................................................22 ARTICLE VI Taxes; Tax Increment Section 6.1. Real Property Taxes .......................................................................................24 Section 6.2. Creation of Tax Increment District ...............................................................24 Section 6.3. Tax Increment ................................................................................................25 ARTICLE VII Financin� Section7.1. Financing ........................................................................................................25 Section 7.2. Limitation on Encumbrance of Property ........................................................26 ARTICLE VIII Prohibitions A�ainst Assignment and Transfer; Indemnification • Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement ....26 Section 8.2 Release and Indemnification Covenants .......................................................:28 Section 8.3. Indemnification for Relocation Claims ..........................................................28 ARTICLE IX Events of Default Section 9.1. Events of Default Defined .............................................................................29 Section 9.2. Authority's Remedies on Default .................................................:.................29 Section 9.3. Intentionally Omitted .....................................................................................29 Section 9.4. No Remedy Exclusive ....................................................................................29 Section 9.5. No Additional Waiver Implied by one Waiver ..............................................30 Section 9.6. Attorneys' Fees to Prevailing Party ...............................................................30 • ii I ARTICLE X ,+�� Additional Provisions � Section 10.1. Representatives Not Individually Liable . ...................................................30 � Section 10.2. Equal Employment Opportunity ....................................................................30 ;. j Section 10.3. Restrictions on Use ........................................................................................30 � Section 10.4. Titles of Articles and Sections .......................................................................30 i Section 10.5. Notices and Demands ....................................................................................31 Section 10.6. Disclaimer of Relationships ...........................................................................31 I Section 10.7. Modifications .................................................................................................31 ' Section 10.8. Counterparts ...................................:...............................................................31 Section 10.9. Judicial Interpretation ....................................................................................31 Section 10.10. Effect of Termination .....................................................................................32 Section 10.11. Applicable Law .............................................................................................32 SCHEDULE A Description of Redevelopment Property SCHEDULE B Note SCHEDULE C Description of Public Redevelopment Costs SCHEDULE D Schedule of Fees SCHEDULE E Acquisition Property Purchase Agreement � I � I � . � I ; � iii i -- � -- I - I - ____ � THi�'tD AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on �nr as of the day of , 2008, 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, sections 469.001-469.047 (hereinafter referred to as the "Act"), and having its principal office at 1010 First Street South, Hopkins, Minnesota 55343, and Doran-Pratt Development, LLC, a Minnesota limited liability company (assignee and successor in interest to GPS Development, LLC, a Minnesota limited liability company) (hereinafter referred to as the "Redeveloper"), having its principal office at 7803 Glenroy Road, Suite 200, Bloomington, Minnesota 55439. WITNESSETH: WHEREAS, the Authority was created pursuant to the Act and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Hopkins (the "City") pursuant to Section 469.003 of the Act; and WHEREAS, in furtherance of the objectives of the Act, the Authority has undertaken a program for the clearance and reconstruction or rehabilitation of blighted, deteriorated, deteriorating, vacant, unused, under used or inappropriately used, areas of the City, and in this � connection is engaged in carrying out a redevelopment project known as the Hopkins Redevelopment Project No. 1(hereinafter referred to as the "Project") in an area (hereinafter referred to as the "Project Area") located in the City; and WHEREAS, as of the date of this Agreement there has been prepared and approved by the Authority and the City Council of the City a redevelopment plan for the`Project (which Plan is hereinafter referred to as the "Redevelopment Plan"); and WHEREAS, the Redeveloper has presented to the Authority a proposal for the redevelopment of certain real property located within the Project Area (which real property is referred to herein as the "Redevelopment Property") through the construction of a mixed use commercial/residential development, which proposal involves the Authority's use of tax increment and other funds pursuant to this Agreement to reimburse the Redeveloper for a portion of the cost of acquiring the Redevelopment Property, preparing it for development and constructing site improvements to serve the new development; and WHEREAS, the Redeveloper has requested that the Authority assist its development by paying certain public redevelopment costs that will be incurred to prepare the Redevelopment Property for construction of the Minimum Improvements; and WHEREAS, the Authority has approved within the Project Area its Tax Increment Financing District No. 1-3 (the "Tax Increment District") pursuant to Minnesota Statutes, � 1 I I _ - � Sections 469.174-.179, in order to create a funding source to finance the public redevelopment ��" ' costs of the Project; and � i WHEREAS, the Authority believes that the de�elopment of the Project Area pursuant to the Redeveloper's proposal and the ful�illment 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, and is, therefor, willing to provide the financial assistance outlined herein; and WHEREAS, the Authority and GPS Development, LLC ("GPS") entered into that certain "Contract for Private Redevelopment" dated July 27, 2005 (the "Original Contract") to effectuate the redevelopment of the Redevelopment Property, which Original Contract provided for certain target dates for delivery and/or completion of various tasks by GPS relating to the Redevelopment Property; and WHEREAS, the Authority and the GPS entered into an "Amended and Restated Contract for Private Redevelopment" dabed February 7, 2006 (the "First Restated Contract") which amended and restated the Original Contract in its entirety and which extended the dates by which GPS was required to complete various tasks relating to the redevelopment of the I Redevelopment Property; and I ; WHEREAS, the Authority and GPS entered into a"Second Amended and Restated ��•�� Amendment for Private Redevelopment" dated November 7, 2006 (the "Second Restated � Contract"), which amended and restated the First Restated Contract in its entirety; and i i ; WHEREAS, GPS on , 2008, duly assigned and transferred its interest � under the Original Contract, the First Restated Contract and tfie Second Restated Contract, and � all claims arising thereunder, to Doran-Pratt Development, LLC, a Minnesota limited liability I company, the "Redeveloper" hereunder. All references herein to the Redeveloper will mean, and include only Doran-Pratt Development, LLC; and WHEREAS, the Authority and Redeveloper have agreed to modify several of the terms of the Second Restated Contract and desire by this Agreement to document such agreements. NOW, THEREFORE, in consideration of the remises and the mutual obli ations of the P g parties hereto, each of them does hereby covenant and agree with the other that tfie Original Contract, the First Restated Contract and the Second Restated Contract are hereby amended and completely restated as follows: � �I � � 2 � - -- � - ---- � - �-- - _ � _ -- _ _ _ ARTICLE I � Definitions Section l.l. Definitions. In thi� Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.001-469.047, as amended. "Acquisition Property" means that portion of the Redevelopment Property described as such on the attached Schedule A which is proposed to be acquired pursuant to Article III of this Agreement. "Acquisition Property Purchase Agreement' means that certain purchase agreement between the Authority and Hopkins Park Plaza, LLC, a copy of which is attached hereto as 5chedule E. "Agreement" means this Agreement, as the same may be from time to time modified, amended, ar supplemented. "Authority" means the Housing and Redevelopment Authority In and For the City of Hopkins, or any successor or assign. � "Authority Assistance" means the $2,000,000 to be provided by the Authority to write down the Redeveloper's cost of acquiring the Acquisition Property, all as is described in Section 3.3 of this Agreement. "Available Tax Increment" means ninety-five percent (95%) of the Tax Increment that is received by the Authority in the six (6} month period immediately preceding a Scheduled Payment Date. "City" means the City of Hopkins. "Completion of Construction" means the completion of the Minimum Improvements by the Redeveloper on the Redevelopment Property in accordance with the Construction Plans, to the point that the City is obligated to issue Certificate(s) of Occupancy. "Construction Plans" means the plans, specifications, drawings and related docuxnents described in Section 4.2(b) of this Agreement. "County" means Hennepin County, Minnesota. "Deed" means, if the Authority acquires the Acquisition Property or the 525 Main Property and conveys it to the Redeveloper, the deed(s} to be used to convey the Acquisition Property or the 525 Main Property to the Redeveloper; which deed shall be a standard form � Minnesota quit-claim deed, and without any reverter provisions. 3 , ,,::,�� "Design Standards" means the City's design standards for the overlay district. I "Eligible Costs" means costs of acquisition, r�location, demolition, environmental and site improvements on or adjacent to the �Redevelopment Property, eligible for reimbursement by i the Authority with Tax Increment under the Tax Increment Act. I � "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. `Bxcess Costs Note". means the tax increment revenue note that may be issued by the Authority as described in Section 3.6(e) of this Agreement. "Extension AgreemenY' means a writCen agreement, in form and substance acceptable to both the Authority, the owner of the Acquisition Property, and the Redeveloper pursuant to which the Acquisition Property Purchase Agreement is amended to�, among other things, extend the due diligence period thereunder until April 1, 2008, and to extend the Closing Date to a date not later than June 30, 2008. "525 Main Property" means that portion of the Redeveloper Property that consists of the real property and any improvements situated thereon located at 525 Main, Hopkins, Minnesota, as legally described on Schedule A to this Agreement. "GPS" means, collectively, GPS Development, LLC, Steve Flanagan, and related entities � who are parties to the GPS Purchase Agreement. I � "GPS Purchase Agreement" means that certain dated as of , '� , 2007, between the Redeveloper and GPS. � � "Holder" means the owner of a Mortgage. "Maturity Date" means the date that the Note terminates or is paid in full, whichever occurs earlier. "Minimum Improvements" means , the construction by the Redeveloper of all of the im rovements to the Redevelo ment P p p roperty contemplated by tlus Agreement, mcludmg approximately 250 residential units and approximately 13,000 square feet of retail/commercial space and related improvements, all in accordance with the Construction Plans. "Mortgage" means any mortgage obtained by the Redeveloper which is secured, in whole or in part, by the Redevelopment Property and which is a pertnitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Net Proceeds" means any proceeds paid by an insurer to the Redeveloper under a policy or policies of insurance required to be provided and maintained by the Redeveloper pursuant to � 'i 4 _ __ _ _ - _ � - � -- - �- � i - _ � Article V of this Agreement and remaining after deducting all expenses (including fees and disbursements of counsel) incurred in the collection of such proceeds. "Net Refunding Note Proceeds" means the princ�}�al amount of any Refunding Note minus capitalized interest and all costs of issuance of the Refunding Note approved by the Authority, in its reasonable discretion. � "Note" means the t�able tax increment revenue note to be issued by the Authority to the Redeveloper pursuant to Article III of this Agreement to reimburse the Redeveloper for its payment of the Public Redevelopment Costs. "Permitted Encumbrances" means the following encumbrances on the title to the Acquisition Property: (i) such encumbrances as are agreed to by the Authority and the Redeveloper; (ii) covenants, conditions, restrictions, declarations and easements of record, if any; (iii) governmental regulations, if any, affecting the use and occupancy of the Property and Improvements; (iv) zoning laws of the City, County and State; (v) reservations to the State, in trust for the taxing districts concerned, of minerals and mineral rights in those portions of the Acquisition Property, the title to which may have at any time heretofore been forfeited to the State for nonpayment of real estate taxes. "Project" means the Authority's Redevelopment Project No. 1. � "Project Area" means the real property located within the boundaries of the Project. "Public Redevelopment Costs" means those Eligible Costs to be incurred by the Redeveloper in connection with the acquisition and redevelopment of the Redevelopment Property to be paid by the Redeveloper and reimbursed by the Authority with Available Tax Increment pursuant to this Agreement, which costs are described on Schedule C to this Agreement. ' "Redeveloper" means Doran-Pratt Development, LLC, a Minnesota limited liability company, or its successors and assigns, or any future owners of the Redevelopment Property. "Redeveloper Property" means that portion of the Redevelopment Property described as such on the attached Schedule A. "Redevelopment Property" means the real property described in Schedule A of this Agreement, consisting of the Redeveloper Property and the Acquisition Property. ' "Redevelopment Plan" means the Authority's Redevelopment Plan for the Project; as amended as of the date of this Agreement. "Refunding Note" means the tax increment revenue note that may be issued by the Authority to refund the Note as described in Section 3.6(d) of this Agreemen�. � "Scheduled Payment" means a Scheduled Payment as defined in the Note. 5 « » � Scheduled Payment Date means a Scheduled Payment Date as defined m the Note. "State" means the State of Minnesota. "T� Increment" means that portion of the real property taxes paid with respect to the Redevelopment Property and Minimum Improvements which is paid by the County to the Authority, minus amounts required by law to be deducted by or paid to other governmental entities. "Tax Increment Act" means Minnesota Statutes, Section 469.174-469.179, as the same may be amended from time to time. "Tax Increment District" means the Authority's Tax Increment District No. 1-3. "Tax Official" means any City or Gounty assessor; County auditor; City, County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the result of acts of God, adverse weather conditions, � strikes, other labor troubles, delays in obtaining construction materials, machinery andlor equipment, fire or other casualty to the Minimum Improvements, litigation commenced by third � parties which, by injunction or other similar judicial action, 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 result in delays, and delays caused by any required condemnation actions. � Delays in obtaining financing and delays caused by general market conditions shall not constitute Unavoidable Delays, except for delays in obtaining financing due to environmental issues affecting the Project Area � which shall constitute Unavoidable ` Delays. Upon the occurrence of an Unavoidable Delay, the party seeking to be excused as a result.thereof shall be excused for the period of the delay if such party gives the other party written notice of the cause of the delay or interruption within #hirty (30) days after its occurrence. ARTICLE II !, RearesentaHons i � Section 2.1. Representations by'the Authoritv. The Authority makes the following � representations as the basis for the undertaking on its part herein contained: (a) The Authority is a public body corporate and politic with all the powers of a housing and redevelopment authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority believes that it has the power to enter into this Agreement and carry out its obligations hereunder, and has duly authorized the execution, delivery and performance of this Agreement by action of its Board of .�;:-.�, Commissioners. ' �r [ i E 6 - - i - ; __ _ � � � _ � (b) The activities of the Authority are undertaken pursuant to the Act and are undertaken in accordance with the Redevelopment Plan in furtherance of the objectives of the Project and the Redevelopment Plan v�rhich include, but are not limited to, the purposes of clearing blighted, deteriorated, deteriorating, under used and inappropriately used axeas of the City, increasing the property tax base in the City; promoting the development of underutilized land eliminating and removing buildings that are economically or functionally obsolete, providing maximum opportunity, consistent with the sound needs of the City as a whole for redevelopment by private enterprise; and providing general design guidance in conjunction with suitable development controls in order to enhance the physical environment of the area. (c) To the best of the Authority's knowledge and belief, the Project is a "redevelopment project" within the meaning of the Act and was created, adopted and approved in accordance with the terms of the Act. (d) The Authority will, at no cost to the Authority, cooperate with the Redeveloper with respect to any litigation commenced with respect to the Plan, Project, or Minimum Improvements. (e) The Authority will, at no cost to the Authority, cqoperate with and assist the Redeveloper in obtaining governmental approvals, permits and authorizations � necessary to construct the Minimum Improvements. (� There are no pending or threatened legal proceedings of which the Authority is aware which if successful would threaten the economic viability of the Authority or the validity or enforceability of this Agreement or which would restrain or enjoin the transactions contemplated by this Agreement; except that there has been • initiated a legal action in Hennepin County District Court by the owrier of the Acquisition Property under which the owner is contesting the validity of the Tax Increment District. Pursuant to the terms of the Acquisition Property Purchase Agreement, such litigation will be dismissed if and when the Acquisition Property is purchased and acquired by the Authority, or its assignee. The Redeveloper will not incur any liability, costs or expenses in connection with such litigation. (g) Neither the execution and delivery of this Agreement, the consununation 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. Section 2.2. Representations by the Redeveloper. The Redeveloper represents • that: 7 ,. .. ' (a) The Redeveloper is a limited liability company duly organized and � i authorized to transact business in the State, is not in violation of any provisions of its ! articles of organization, member control agreement, bylaws or the laws of the State, has � power to enter into this Agreement and has du�y authorized the execution, delivery and performance of this Agreement tiy proper action of its members. i (b) If the Redeveloper acquires the Redevelopment Property pursuant to the terms of this A reement, the Redevelo er will construct the Minimum Im rovements in g P P accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health 1!aws and regulations), subject to variances necessary to construct the improvements contemplated in the Construction Plans approved by the Authority. (c) Except for facts disclosed in any environmental assessment or report prepared on behalf of the Authori�ty or the Redeveloper, the Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation, and the Redeveloper, to the best of its knowledge, is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure. � (d) The Redeveloper will cooperate with the Authority witli respect to any ,�'�� litigation commenced with respect to the Redevelopment Plan, Project, or Minimum � � Improvements. � . (e) The Redeveloper would not be able to construct the Minimum Improvements but for the execution of this Agreement and the tax increment assistance to be provided hereunder. ARTICLE III Develonment Pronosal; Site Improvements; Authoritv Loan Section 3.1. Development Proposal. The Redevelopment Property consists of several parcels of property with multiple owners. The Redeveloper has entered into the GPS Purchase Agreement under which the Redeveloper is entitled to acquire those parcels of the , Redevelopment Property that are owned by GPS and GPS' interest in various purchase !, agreements, options and other instruments entitling GPS to acquire other parcels of the �� Redevelopment Property, all of which parcels of the Redevelopment Property are described on � Schedule A to this Agreement and are referred to herein as the "Redeveloper Property". The remaining parcels of the Redevelopment Property are referred to herein and on Schedule A as the � "Acquisition Property" and are owned by a single owner. The Authority has entered into a j purchase agreement (the "Acquisition P,roperty Purchase Agreement") with the owner of the Acquisition Property under which the Authority is entitled to purchase the Acquisition Property. ,,:;, The Authority has determined that the R'Redeveloper's proposal for the redevelopment of the � 8 � � - _ � ; _ _ � i _ _ __ � Redeveloper Property and the Acquisition Property (collectively, the "Redevelopment Property") is in the best interests of the Authority, the City and the City's residents and will assist the Authority and City in attaining their goals for the Project. Due to the high cost of acquiring and redeveloping the Redevelopment Property, the Autl�ority has determined that the Minimum Improvements would not be construct�d without the financial participation of the Authority as proposed by the Redeveloper. Therefore, the Authority has agreed, subject to satisfaction of the provisions of this Agreement, to assist the Redeveloper's proposed development by either acquiring the Acquisition Property and conveying it to the Redeveloper or assigning its rights to acquire the Acquisition Property to the Redeveloper, providing the Authority Assistance to the Redeveloper to write down the cost of acquiring the Acquisition Property, and reimbursing the Redeveloper for a portion of its costs of redevelopment through the issuance and payment of the Note. Section 3.2. Redeveloper Contingencies; Development Actions. The Redeveloper's obligation to proceed with the transaction contemplated by this Agreement is contingent upon the Redeveloper closing under the GPS Purchase Agreement with GPS, the Redeveloper's acquisition of the Redeveloper Property, and the Authority's closing under the Acquisition Property Purchase Agreement. The Redeveloper agrees to undertake the following actions to proceed with the development of the Minimum Improvements: (a) Within thirty (30) days after the date of this Agreement, the Redeveloper shall provide to the Authority and City a detailed description of the Redeveloper's plans � for the construction of the Minimum Improvements, including a site plan showing the parking, landscaping and other improvements to be constructed, and shall provide information necessary to apply for rezoning and platting of the Redevelopment Property. (b) Within thirty (30) days after the Redeveloper has obtained site plan and rezoning approval from the City, the City and the Redeveloper will negotiate the terms of a site plan development agreement relating to the site plan review process. Section 3.3. Acquisition of Acquisition Propert,y. (a) The Acquisition Property is owned by a third party. The Authority has entered into the Acquisition Property Purchase Agreement under which the Authority is.entitled to purchase the Acquisition Property. The date by which the Authority was required to purchase the Acquisition Property under the Acquisxtion Property Purchase Agreement has passed but the owner of the Acquisition Property has not taken action to cancel the Acquisition Property Purchase Agreement. The Authority and Redeveloper agree to use their reasonable good faith efforts to attempt to negotiate, agree upon and enter into the Extension Agreement with the owner of the Acquisition Property no later than February 1, 2008. Subject to the Acquisition Property's owner's entering into the Extension Agreement and also to the satisfaction of the conditions contained in this Agreement, the Authority intends to make a decision by April 1, 2008, on whether it will commit to purchase the Acquisition Properly on the terms contained in the Acquisition Property Purchase Agreement and to schedule a closing on the acquisition no later than ninety (90) days thereafter. Subject to the Redeveloper's compliance with the terms of this Agreement, the Authority agrees that it will � proceed to take all actions necessary under the Acquisition Property Purchase Agreement to proceed to close on the acquisition of the Acquisition Property. At the closing on the acquisition 9 of the Acquisition Property under the Acquisition Property Purchase Agreement, which may be ��. �� scheduled by Redeveloper at any time u�pon five (5) business days written notice but only if Redeveloper has satisfied all conditions set forth in this Agreement, the Authority will acquire the Acquisition Property and convey the Acquisition Property to the Redeveloper for a purchase price equal to the price paid by the Authority to acquire the Acquisition Property, including all costs associated with the acquisition after the date hereof (but not more than $6,000,000), less the ` Authority Assistanee. Regardless of the actual price payable by the Authority to the owner of the Acquisition Property, and regardless 'of the total costs incurred by the Authority, the total price paid by the Redeveloper for the Acq�uisition Property will never exceed an amount equal to the difference between $6,000,000 and the Authority Assistance. The conveyance of the Acquisition Property to the Redeveloper will occur simultaneously with the Authority's purchase of such property. At the Authority's option, the Authority may assign its interest in the Acquisition Property Purchase Agreement to the Redeveloper and the Redeveloper will acquire � the Acquisition Property directly, with t�he Authority paying the Authority Assistance to the Redeveloper at the closing to pay a portion of the cost of the acquisition. The total price paid by the Redeveloper for the Acquisition Property will never exceed an amount equal to the difference between $6,000,000 and the Authority Assistance; any excess will be paid by the Authority. The Authority shall not be obligated to enter into the Extension Agreement unless it contains terms limiting the purchase price and costs to be incurred in connection with the acquisition of the Acquisition Property to an amount not more than the Redeveloper is obligated to pay plus the Authority Assistance. If the Authority and the owner of the Acquisition Property have not negotiated, agreed � ! upon and entered into the Extension Agreement, in form and substance acceptable to the Redeveloper on or prior to February 1, 2008, then either the Authority or Redeveloper may cancel or terniinate this Agreement by written notice to the other party, and upon such cancellation and termination both the Authorit and Redevel , y oper will be released and relieved from all further liabilit or obli i y gat ons hereunder, and Redevelo er will not be obli ated to , P g reimburse any costs to the Authorit . � Y ' '' (b) Under the Acquisition Property Purchase Agreement, the Authority has (and I � pursuant to the Extension Agreement will continue to have) certain rights to undertake � inspections and environmental testing on the Acquisition Property until April 1, 2008. The Authority agrees that it will allow the Redeveloper to undertake such inspections and testing � allowed by the Acquisition Property Purchase Agreement, as amended by the Extension Agreement. The Redeveloper agrees that it will undertake such inspections and testing within ' the time period allowed, and that it will comply with the restrictions on the Authority's right to conduct the inspections and testing contained in the Acquisition Property Purchase Agreement, including, without limitation, the covenants relating to confidentiality of materials provided to � the Authority. i (c) Under the Acquisition Property Purchase Agreement, the Authority has the right to review and object to title to the Acquisition Property. At the time that the Authority receives the documents to be provided for title review by the Authority, the Authority will furnish such documents to the Redeveloper. Redeveloper shall make any objections to title within sufficient � 10 � i _ _ -- � - � _ - _ __ __ � time to allow the Authority to make such objections to title under the Acquisition Property Purchase Agreement. (d) The Redeveloper's development of the 1�Iinimum Improvements may result in the displacement of a number of owners�' and occupants of the Redevelopment Property. The Redeveloper agrees that it is responsible for the provision of all relocation benefits and assistance to which displaced persons and entities are entitled by law. At the request of the Authority the Redeveloper will retain a relocation consultant acceptable to the Authority to assist the Redeveloper in calculating and providing relocation benefits and assistance and to provide certifications to the Authority that relocation benefits and assistance are being provided as required by law. Pursuant to Section 8.3 the Redeveloper will indemnify the Authority against claims for relocation benefits and assistance. The Redeveloper shall provide to the Authority prior to the Authority's commitment to acquire the Acquisition Property as security for the Redeveloper's indemnification obligations either an irrevocable bank letter of credit in a form and from a provider acceptable to the Authority or joint and several personal guaranties in a form acceptable to the Authority executed by Kelly Doran and Len Pratt. The amount of the letter of credit shall be agreed upon by the Redeveloper and the Authority based on relocation estimates prepared by an independent relocation consultant acceptable to the parties. (e) Redeveloper shall cause to be prepared an environmental remediation plan for the remediation of environmental conditions on the Redevelopment Property and shall enter into an arrangement acceptable to the Authority by which the Redeveloper irrevocably commits to � completing the environmental remediation of the Acquisition Property as detailed in the Redeveloper's environmental remediation plan. The Authority and City have secured environmental remediation grants from other governmental agencies (Hennepin County and the Metropolitan Council) to remediate environmental conditions existing on the Redevelopment Property. The Authority agrees to use its best efforts to have those grants assigned to and available for use by the Redeveloper in connection with its proposed development at the time Redeveloper acquires the Acquisition Property. In addition, the Authori`ty agrees to use its reasonable good faith efforts to assist the Redeveloper so that the Redeveloper's demolition costs will be covered by and paid for by the grants. In addition, the Authority or the City are the recipients of a$400,000 transit ori�nted development grant, which the Authority and the City agree to use their best efforts to have assigned to and made available to Redeveloper to pay Eligible Costs. Such grant was awarded in connection with both the GPS project and another redevelopment project in the City's downtown and receipt of the entire grant is conditioned on both projects going forward. (� The Authority's obligation to commit to the owner of the Acquisition Property that it will acquire the Acquisition Property is subject to satisfaction of all of the following conditions precedent: (i) The Redeveloper having provided to the Authority a commitment for financing acceptable to the Authority in an amount sufficient to pay the � costs of acquiring the Redevelopment Property and constructing the Minimum Improvements; 11 ; _ ; � � � , � (ii) The Redeveloper having secured purchase agreements, options or other instruments under which the Redeveloper is entitled to acquire all of the . Redeveloper Property, or the p�ovisions of Section 3.12 will have been ; implemented; � ( (iii) The Redeveloper having obtained all governmental approvals necessary to � permit the Redevel'oper to construct the Miriimum Improvements; and ' , (iv) The Redeveloper not being in default under this Agreement. � , If the Redeveloper has not satisfied all of the above conditions precedent by April 1, 2007, the � Authority shall have the right to terminate this Agreement by giving written notice of termination to the Redeveloper, upon which this Agreement shall terminate, subject to section 10.9. (g) The Authority's obligation to acquire the Acquisition Property is subject to satisfaction of all of the following conditions precedent: (i) The Redeveloper having simultaneously closed on financing acceptable to the Authority in an amount sufficient to pay the costs of acquiring the Redevelopment Property and constructing the Minimum Improvements; (ii) The Redeveloper having simultaneously acquired all of the Redeveloper � Property; and (iii) The Redeveloper not being in default under this Agreement. If the Redeveloper has not satisfied the above conditions precedent by June 30, 2008, the Authority shall have the right to terminate this Agreement by giving written notice of termination to the Redeveloper, upon which this Agreement shall terminate, subject to section 10.9. Section 3.4. Conditions Precedent to Authority's Sale of Acquisition PropertX. The Authority's obligation to sell the Acqui�sition Property to Redeveloper shall be subject to the satisfaction, or waiver in writing by the Authority, of all of the following conditions precedent: (a) The Redeveloper riot being in default under the terms of this Agreement; (b) The Redeveloper having completed to the satisfaction of the Authority all of the activities detailed in section 3.2 of this Agreement; (c) The Redeveloper ',having closed on financing, and having satisfied all conditions to disbursement of funds, reasonably acceptable to the Authority, in an amount sufficient to pay all costs of acquiring the Redevelopment Property and constructing the Minimum Improvements and all related costs; and I � 12 _ - _ � _ _ _ _ __- 4 _ _ • (d) The Authority and its consultants having undertaken a final feasibility analysis of the Redeveloper's proposed development and determined, to the Authority's satisfaction, that the development is financially feasible, which analysis will be for the benefit of the Authority only and neither the R-edeveloper nor any third party shall be entitled to rely thereon; � If all of the above conditions have not been satisfied or waived, then either party to this Agreement may terminate this Agreement by giving written notice of termination to the other party, upon which this Agreement shall terminate, subject to section 10.9. Section 3.5. Public Redevelopment Costs. (a) The Authority agrees that it will reimburse the Redeveloper for the payment of certain costs in connection with the acquisition and redevelopment of the Redevelopment Property (the "Public Redevelopment Costs"). The Public Redevelopment Costs are described on the attached Schedule C. The Authority agrees that it will reimburse the Redeveloper for the Public Redevelopment Costs, using Available Tax Increment on a pay-as-you-go basis, through the issuance and payment of the Note as provided in this Agreement. . (b) The Redeveloper shall be solely responsible for all aspects of constructing the Minimum Improvements. The Authority's reimbursement of the Redeveloper for the Public Redevelopment Costs shall be accomplished through the Authority's issuance and delivery of the Note to the Redeveloper. It is anticipated that the Authority will issue a Note for the Minimum � Improvements to reimburse the Redeveloper for the Public Redevelopment Costs associ�ted with the Minimum Improvements. The Note will be issued upon at the time that the Redeveloper closes on its financing for the acquisition of the Redevelopment Property and construction of the Minimum Improvements; provided that the Redeveloper has provided to the Authority documentation showing that the Redeveloper has incurred Public Redevelopment Costs in an amount at least equal to the principal amount of the Note. The principal amounts of the Note has been determined, based on financial information submitted to the Authority b�y the Redeveloper, as the amounts necessary to make the development of the Minimum Improvements financially feasible. Based on such financial information, the parties estimate that the principal amount of the Note will be $4,600,000. Section 3.6. Issuance of the Note (a) The Authority's reimbursement of the Redeveloper for the Public Redevelopment Costs shall be through the issuance of the Note which shall occur at the time stated in Section 3.5 of this Agreement. The Note shall be substantially in the form of the Note attached to this Agreement as Schedule B, with all blanks properly filled in. The Note shall be dated as of the date of issuance and shall be payable together with simple non-compounding interest at the same rate of interest as the rate of interest on the Redeveloper's construction financing for the construction of the Minimum Improvements. Interest shall aGcrue from the date of the issuance of the Note until the Note is paid in full or terminated. Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day months. The Note is payable solely from Available Tax � Increment, which is ninety five percent (95%) of the Tax Increment generated from the Redevelopment Property and Minimum Improvements. The five percent (5%) of Tax Increment 13 i I � withheld in calculating Available Tax Increment is intended to be used by the Authority to pay � its administrative costs in connection with the Tax Increment District. The Authority agrees that � it will use such five percent (5%) to pay its actual administrative costs and to the extent that during each year prior to the end of the Tax Increment District the Authority's actual annual administrative costs are less than the fiv�'percent (5%) amount withheld, then any excess amount will be paid to the holder of the Note within thirty (30) days after of the following year, and applied to outstanding amounts due under the Note. If in any year the Authority's actual administrative costs exceed five percent (5%), such excess costs will be deducted in calculating Available Tax Increment in subsequent years, provided that in no year will the Authority retain more than five percent (5%) to pay or reimburse itself for its administrative costs. The Authority's actual administrative costs are those that the Authority is allowed by law to pay using Tax Increment which relate directly and only to the administration of the Tax Increment payments in the year'in question, and include, but are not limited to, staff time, overhead, and out of pocket costs for consultants and attorneys. (b) The Redeveloper makes the following representations to the Authority with respect to the issuance of the Note to the Redeveloper: I � ' (i) The Redeveloper has � not 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. , � (ii) The Redeveloper 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 pur,chase and ownership of the Note. The Redeveloper has been made aware' of the security for the Note and t�ie proposed uses of the proceeds of the Note, and has received the cooperation of the Authority in undertaking any due diligence that the Redeveloper has deemed necessary or appropriate. . (iii) The Redeveloper 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 I, repurchase the Note from the Redeveloper under any circumstances; that I the Note is not general obligations of the Authority or the City; and that, if the Available Tax Increment is not sufficient to make the payments due I 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. � I (iv) The Redeveloper understands that the Available T� Increment necessary to pay the Note has been estimated assuming that the market value of � ' will be at least $ as of January 2, 14 i i - -. - - � � � _ - • . In the event, among other things, that the Redeveloper fails to complete the Minimum Improvements in a timely manner the Available Tax Increment may be inadequate to pay total principal of and interest on the Note. (v) The Redeveloper understands 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. (c) The Redeveloper shall not be entitled to sell, transfer or assign the Note to a party, other than an affiliate of the Redeveloper, without the Authority's prior written consent, which � will not be unreasonably withheld. The Authority understands, however, that the Redeveloper intends to pledge and assign the Note to its lender of financing for construction of the Minimum Improvements and will permit such pledge and assignment if the Redeveloper's lender executes and delivers to the Authority a certification in a form acceptable to the' Authority containing the representations concerning the limited nature of the source of payment of the Note set forth in subsection (b) above and such other representations as the Authority may reasonably require. (d) The Authority agrees � that after completion of, and upon request by the Redeveloper the Authority will refinance the Note issued by issuing a Refunding Note. The � Refunding Note will be placed with investors through an underwriter and will be issued on terms and conditions then available in the public marketplace. The Authority agrees that it will issue a Refunding Note in a principal amount that will generate Net Refunding Note Proceeds in an amount necessary to allow the Redeveloper to derive a return equal to the return allowable under Section 3.10 of this Agreement. The sole source of payment for the Refunding Note shall in all cases be limited to Available Tax Increment. If it is not possible to sell in the public marketplace the Refunding Note for a principal amount that will generate Net Refunding Note Proceeds in an amount that will allow the Redeveloper to derive the return allowed by Section 3.10 of this Agreement, the difference between the Net Refunding Note Proceeds and such specified amounts will be paid to the Redeveloper through the Authority's issuance and payment of the Excess Costs Note pursuant to subsection (e) of this Section. (e) The Authority and the Redeveloper anticipate that it is likely that, due to the ' limitations on the source of payment of the Refunding Note and for other reasons, it will not be possible to issue the Refunding Note in principal amounts that will generate Net Refunding Note Proceeds in amounts that will allow the Redeveloper to derive the return allowed by Section ` 3.10. In such case the Authority agrees that it will issue an Excess Costs Note to the Redeveloper. The principal amount of the Excess Costs Note shall equal the amount by which the Net Refunding Note Proceeds are less than the amount specified in subsection (d). The Excess Costs Note shall be 'in a form agreed upon by the Authority and the Redeveloper. The Excess Costs Note shall accrue simple non-compounding interest on the principal amount from the date of issuance of the Excess Costs Note until the entire principal amount and all accrued interest is paid at the same rate of interest as is payable on the principal amount of the Refunding � Note. Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day months. 15 i i � i � � The Excess Costs Note shall be payable solely from Available Tax Increment remaining after � deducting the amounts necessary to pay debt service on any outstanding Refunding Note. ( fl If requested by the Redeveloper, the Authority will explore whether the Note, the Refunding Note, or the Excess Costs Ndte can be issued on a tax exempt basis. Whether or not to issue such note on a tax exempt basis shall be in the sole discretion of the Authority and will be affected by such considerations as whether such tax exempt obligations can legally be issued and the impact on the City's and Authority's ability to issue other tax exempt obligations qualified under Section 265(b)(3)(B) of the United States Internal Revenue Code of 1996, as amended. ' Section 3.7. Conditions Precedent to the Issuance of the Note, Refunding Note and Excess Costs Note. (a) The Authority's obligation to issue the Note to the Redeveloper shall be subject to the satisfaction, or waiver by the Authority in writing, of all of the following conditions precedent: (i) the Redeveloper shall not be in default under any term of this Agreement; (ii) the Redeveloper shall have simultaneously acquired the Redevelopment Property; and (iii) the Redeveloper shall have simultaneously furnished the Authority with invoices and documentation, in a form acceptable to the Authority, demonstrating that the :� Public Redevelopment Costs for which the Note is being issued have been paid. Section 3.8. Payment of AuthoritX's Costs. The Redeveloper has paid and shall continue to pay all of the Authority's and City's out-of-pocket costs incurred after the date of this instrument ( , 2008), but not prior, with third party vendors and consultants in connection with the implementation of the Redeveloper's proposed development. Such costs shall include, but not be limited to, alli out-of-pockEt costs, incurred after the date of this Agreement, incurred by the Authority or City with respect to the proposed development, including, without limitation, all of the following incurred after , 2008, for fees owed to the Authority's or City's traffic, development, fiscal, environmental, communications and other consultants, and all attorneys' fees or other costs incurred by the Authority or City in connection with the negotiation and preparation of this Agreement, the creation of the Tax Increment District, defending any legal actions brought against the Authority or City challenging the legality of any of their actions taken relative to this Agreement or the Redeveloper's development of the Minimum Improvements, and the acquisition of the Acquisition Property, and all related ' documents or transactions, or in enforcing the Redeveloper's obligations to pay costs wliich it is obligated to pay under this Agreement. From and after the date hereof the Authority will provide monthly statements to the Redeveloper requesting reimbursement for costs incurred by the Authority and/or City in connection with the Redeveloper's development and Redeveloper shall make such reiinbursements to the Authority within thirty (30) days after each request. The Redeveloper's obligation to reimburse the Authority for such costs shall survive t;ermination of this Agreement with respect to costs � �� I 16 ' i I I I _ - , � j I i _ _ _ _ • incurred prior to such termination and with respect to costs incurred by the Authority in enforcing its rights under this Agreement. Section 3.9. Business Subsid,�greement. Wathin sixty (60) days after the date hereof the Authority will hold a public hearing on the granting of a business subsidy to the Redeveloper as required pursuant to Minnesota Statutes, section 116J.994, subd. 5. Following such public hearing the Authority may determine that wage and job goals are not among the goals the Authority is seeking to achieve. In that event the Authority and the Redeveloper shall enter into a Business Subsidy Agreement to satisfy the other requirements of the Minnesota Business Subsidy Law. If the Authority determines that wage and job goals should be met by the Redeveloper and the Redeveloper agrees to such goals, this Agreement will be amended to reflect such goals. If the Developer does not agree to meet such goals, this Agreement shall terminate and the parties shall execute an instrument in recordable form evidencing such termination. The obligations of Section 3.8 shall survive such termination. Section 3.10. Adjustment of Financial Assistance. The Authority's determination to provide the Authority Assistance and to reimburse the Redeveloper for a portion of the Public Redevelopment Costs is based in part on the Authority's analysis of the Redeveloper's total costs to be incurred in connection with the redevelopment of the Redevelopment Property. The amount of the financial assistance to be provided by the Authority was determined based on a preliminary sources and uses statement provided by the Redeveloper to the Authority's financial advisor. The sources and uses statement is on file in the offices of the Authority's financial advisor and will be maintained confidential to the extent legally possible. As the Redeveloper � further refines its plans for the Minimum Improvements the preliminary sources and uses statement may change and, as a result, the amount of the financial assistance to be provided may change. The preliminary sources and uses statement projects the percentage of the total costs incurred by the Redeveloper in acquiring, constructing and marketing the residential portion of the Minimum Improvements that the Redeveloper will derive as a return. At such time as the Redeveloper has achieved ninety percent (90%) occupancy in the residential portion of the Minimum Improvements, the Redeveloper will provide to the Authority a final sources and uses statement showing all costs incurred in developing the residential portion of the Minimum Improvements plus the amount of financial assistance being provided to the Redeveloper under this Agreement, in a manner consistent with the previously provided sources and uses statements. The final sources and uses statement shall be accompanied by a letter from an independent certified public accountant confirming that such accountant, without an audit of Redeveloper's books, has reviewed the statement and that the statement accurately represents the costs incurred by the Redeveloper in connection with the development of the residential units in � the Minimum Improvements. The Redeveloper shall provide such other documentation as the Authority may request supporting the sources and uses statement. The Redeveloper shall be allowed to deriye a return from the development of the residential units of the Minimum Improvements of fifteen percent (15%) of the costs of such development. If the Authority determines that the return on cost to be derived by the Redeveloper for the Minimum Improvements will exceed such allowable amount of return, at the Authority's option, either the principal amount of the Refunding Note will be reduced by the amount of the excess return or � the Redeveloper shall be required to repay an amount of the Authority Assistance equal to the excess return. 17 , . � Section 3.11. Rent. Subject at all times to market conditions beyond the Redeveloper's control, the Redeveloper agrees that the projected r�nts set fortli on the Sources and Uses Statement on file in the offices of the 'Authority's financial advisor have been estimated reasonably and in good faith by the Redev,eloper, and that the Redeveloper intends to lease the residential units in the residential portion di the Minimum Improvements for the rents specified therein. Section 3.12. Condemnation (a) The 525 Main Pro;perty comprises a portion of the Redevelopment Property. It is currently owned by third parties, but is subject to a purchase agreement previously in favor of GPS, as buyer, and assigned by GPS to Redeveloper. The Redeveloper and the Authority acknowledge that due to delays by GPS and the non- satisfaction of certain contingencies, the seller under the 525 Main Property purchase agreement may raise objections, and the 525 Main Property purchase agreement may not be legally enforceable. Moreover, the Redeveloper and the Authority acknowledge that the purchase price specified in the', 525 Main purchase agreement significantly exceeds the actual fair market value of the 525 Main Property. (b) The Redeveloper is negotiating with the owner of the 525 Main Property concerning a purchase of such property. The Redeveloper agrees to continue such � negotiations in good faith and to periodically inform the Authority of the status of the negotiations. In the event that the Redeveloper is unable to enter into a new or revised purchase agreement to acquire the 525 Main Property for a reasonable price by March 1, 2008, the Redeveloper will inform the Authority that it has been unable to acquire the 525 Main Property for a reasonable price and request the Authority to acquire the 525 Main Property by eminent domaiin. The Authority will within'r a reasonable time � following receipt of such request ''from the Redeveloper hold a public hearing on the i question of whether the Authority should institute a proceeding to acquire the 525 Main i Property using its powers of eminent domain as provided in this section, which decision i shall be in the Authority's discretion. T'he Redeveloper's notification to the Authority of � its inability to enter into a purchase agreement to acquire the 525 Main Property fpr a reasonable price shall be accompanied by such documentation as the Authority may require detailing the Redeveloper's efforts to acquire the 525 Main Property for a reasonable price. (c) Within a reasonable 'time after the Redeveloper notifies the Authority that it has been unable to acquire the 525 Main Property and after such public hearing and adoption by the Board of Commissioner of the Authority of a resolution authorizing and directing the use of eminent domai'�n proceedings to acquire the 525 Main Property, the Authority will prepare and serve on the owner of the 525 Main Property and other necessaxy parties a petition to acquire the 525 Main Property through use of eminent domain and the quick take procedure of Minnesota Statutes, section 117.042. The „�: ;,,, Authority will diligently prosecute the eminent domain action to completion. The � � 18 I � _ i , - - � � - ; , • Authorify believes that it has the legal authority to acquire the 525 Main Property but makes no warranties or guaranties to the Redeveloper that it will be able to do so. The Redeveloper acknowledges that the Authority does not warrant the successful conclusion of any eminent domain action or vacation prpcedures or the accomplishment of any particular result or timetable beeause of the many variables inherent in any litigation or legal proceeding. The Authority shall not be liable to any party for any consequential or other damages that may arise out of any delays due to eminent domain actions, vacation procedures, environmental conditions, court challenges or elements outside the control of the Authority. Once the eminent domain action has been initiated, the Authority agrees to diligently pursue the same to completion. The Authority agrees to use its best efforts to obtain the 525 Main Property for its market value in accordance with Minnesota law. The Authority agrees that it will not settle the eminent domain action without obtaining the prior written approval of the Redeveloper, which written approval will not be unreasonably withheld or delayed. (d) The Authority's obligation to initiate an eminent domain action to acquire the 525 Main Property is subject to the condition precedent that the Redeveloper and the Authority shall have entered into an Escrow Agreement in acceptable form, pursuant to which the Redeveloper will provide escrow deposits, security, collateral or third party guaranties as reasonably agreed upon. The security deposited pursuant to the Escrow Agreement may be used by the Authority to make the deposit with the court required by Minnesota Statutes, section 117.042, and to pay any damages in excess of the Authority's � appraised value of the 525 Main Property that are finally determined to be owed to the 525 Main Property's owner and any other obligations of the Redeveloper to the Authority under this Agreement. To the extent that the final award of damages for the taking of the 525 Main Property exceeds the amount deposited, the Redeveloper shall be liable to the Authority for the amount of such excess. (e) All costs incurred by the Authority in attempting to a�quire the 525 Main Properiy shall be paid by the Redeveloper. Prior to the Authority's commencement of an eminent domain action to acquire the 525 Main Property the Redeveloper shall deposit with the Authority the sum of $ to be applied by the Authority to its legal costs associated with the action. Such amount has been estimated assuming that the owner of the 525 Main Property does. not challenge the Authority's legal authority to acquire the 525 Main Property by eminent domain. If at any time the Authority determines that the amount on deposit with it will be insufficient to pay its legal costs, the Authority shall have the right to require the Redeveloper to deposit additional amounts with the Authority to pay such costs and within ten (10) days after notification by the Authority the Redeveloper shall deposit such additional amounts with the Authority. (� If the Authority acquires the 525 Main Property within ten (10) days after such acquisition, the Authority will convey such property to the Developer, subject to the terms and conditions of this Agreement, pursuant to a Deed. � (g) In consideration of the Redeveloper's payment of the costs of acquiring the 525 Main Property, no additional payment will be required of the Redeveloper to 19 � acquire the 525 Main Property. �� Section 3.13. Authority Right to Acquire Redeveloper Property. In the event, for whatever reason, the Redeveloper does 'not proceed � with the development of the Minimum Improvements, the Authority shall hav� the right to acquire all right, title, and interest owned by the Redeveloper in the Redeveloper Property, including any interest held by the Redeveloper by virtue of the GPS Purchase Agreement. 'The price to be paid by the Authority to acquire such j interest shall be equal to the amounts actually paid by the Redeveloper to acquire any parcel of '; the Redeveloper Property and any amounts paid under the GPS Purchase Agreement. If � requested by the Authority, the Authority and Redeveloper will enter into a separate recordable � instrument documenting the agreement contained in this section. ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction and Operation of Minimum Improvements. The Redeveloper agrees that it will construct the Minim'wm Improvements on the Redevelopment Property in accordance with the approved Construction Plans, together with any changes approved by the Authority and any changes not requiring, the Authority's approval, and at all times prior to the Maturity Date will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be �maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. ,� ;� � Section 4:2. Construction Plans; Planning Approvals. (a) The Authority's wi�llingness to assist the Redeveloper in its redevelopment of the Redevelopment Property ,is predicated upon and subject to the Redeveloper's agreement that it will construct ' the Minimum Improvements in 'accordance with the schedule described in Section 4.3 and that the Minimum Improvements will be of such quality and nature as will satisfy 'the Authority's and City's goals for the redevelopment of the Redevelopment Property. Within thirty (30) days after the date of this Agreement the Redeveloper shall submit to the City completed applications for approval of Redeveloper's site plan, rezoning, preliminary/final plat, and any other actions ' determined to be necessary or desirable to permit the development of the Minimum ', Improvements. All of such applications and documentation together with the resolution ', of the City Council of the City and related documents granting such approvals are I referred to herein as the "Construction Plans". All additional building plans shall be 'i prepared consistent with the Construction Plans, except as may be permitted by this i section. Nothing in this section shall be deemed to relieve the Redeveloper of its obligations to comply with the requirements of the City's normal construction permitting process or to restrict the City in',the exercise of its discretion in granting any approval related to the Redeveloper's deuelopment. However, the Authority agrees that the Authority's �and the City's fee and permitting structure will comply with the items and costs as listed on Schedule D attached with respect to building permit fees, park fees, ,;;,;� platting fees, sewer and water charges, and other items listed on Schedule D. Except as � � 2o i � I , - ;--- - � i __ _ , _ _ ___: � listed on Schedule , the Authority agrees that neither the Authority nor the City � will charge any costs or fees for the approval of the Construction Plans for the completion of the Minimum Improvements which are not listed on Schedule (b) If the Redeveloper desires to make any change in any Construction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, are acceptable to the Authority, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. The Authority shall not unreasonably withhold or delay approval of any requested change in the Construction Plans and any requested change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days, or such longer period as may be agreed to by the parties, after receipt of the notice of such change or shall be deemed to be approved. The Authority shall have no obligation to approve a change that materially alters the nature, quality, construction schedule or value of the Minimum Improvements or that deviates from the site plan or elevations submitted to and approved by the Authority. Nor shall the Authority have an obligation to approve any change that requires approval by the City Council. (c) Nothing in this Agreement shall be deemed to modify the City's normal � construction permitting process as it applies to the Redeveloper's plans for development and the Redeveloper shall in all respects be required to comply with such process, except as noted above. (d) During the process of constructing the Minimum Improvements the Redeveloper will allow a tester to enter into the various buildings comprising the Minimum Improvements to test the strength of the City's police 'clepartment's digital radio system. If it is determined to be necessary to boost the radio signals, the Redeveloper will install signal amplifiers in the buildings as required by the City. (e) The Redeveloper agrees that it will design and construct the residential portion of the Minimum Improvements in such a manner as will reasonably perm'it the future conversion of the residential units of the Minimum Improvements to individually owned condominium units. Section 4.3. Commencement and Completion of Construction Subject to Unavoidable Delays, the Redeveloper shall commence construction within months after the date of this Agreement, and the Completion of Construction will occur, subject to Unavoidable Delays, by March 1, 2010. All work with respect to the Minimum Improvements and other improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans, together with any changes approved by the Authority � 21 . _ and any changes not requiring the Authority's approval, as submitted by the Redeveloper and ,� approved by the Authority. `'�►'� I �I The Redeveloper agrees for itself, its succes�ors and assigns, and every successor in j interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and its ' successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the periods specified in this Section 4.3 of this Agreement and subject to Unavoidable Delays and/or mutual agreement of the parties hereto. Until construction of the Minimum Improvements has been complleted, the Redeveloper shall make construction progress reports, at such times as may reasonably be requested by the Authority, but not more than once a month, as to the actual progress of the Redeveloper with respect to such construction. Upon substantial completion of the Minimum Improvements and upon request by tne Redeveloper, the Authority shall provide to the Redeveloper a certificate in recordable form stating that the obligations of the Redeveloper with respect to the construction of the Minimum Improvements under this Agreement have been satisfied. The Minimum Improvements sha11 be deemed to be ; completed when a certificate of occupancy has been issued by the City and the Redeveloper has i provided security or other assurances reasonably satisfactory to the Authority assuring that any ; remaining items, including without limita�tion, landscaping, will be completed. � ARTICLE V Insurance � Section 5.1. Insurance. (a) The Redeveloper or its contractors will provide and maintain at all times � during the process of constructing the Minimum Improvements and,' from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: ', I I (i) Builder's risk insurance, written on the so-called `Builder's Risk — � Completed Value Basis," in an amount equal to one hundred percent (100%) of � • the replacement value of t�he Minimum Improvements at the date of completion, and with coverage available in nonreporting fortn on the so called "all risk" form of policy; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, Broadening Endorsement including contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000.00 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and E � � � 22 � -- E - - I � , _ � (iii) Worker's compensation insurance, with statutory coverage and employer's liability protection. The policies of insurance required pursuant to cla�ases (i) and (ii) above shall be in form and content reasonably 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; provided, that the Redeveloper shall have the right to self-insure to satisfy said requirements with the written approval of the Authority. The policy of insurance delivered pursuant to clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days' advance written notice to the Authority in the event of cancellation of such policy or change affecting the coverage thereunder. � (b) Upon completion of construction of the Minimum Improvements and prior to the Maturity Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on; insurance as follows: (i) Insurance against loss andlor damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, all risk vandalism and malicious mischief, � boiler explosion, water damage, demolition cost, debris removal, and colla�se in an amount not less than the full insurable replacement value of the Minimum Improvements, but any such policy may have a deductible amount of not more thari $50,000.00. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by the Authority. The term "full insurable replacement value" shall mean the actual replacement cost of the Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsur-able items) and equipment, and shall be determined from time to time at tke request of the Authority, but not more frequently than once every three years, by an insurance consultant or insurer, selected and paid for by the Redeveloper and approved by the Authority. (ii) Comprehensive general public liability insurance, includirig personal injury liability (with employee exclusion deleted), and automobile insurance, including owned, non-owned and hired automobiles, against liability � for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $2,000,000.00. (iii) Such other insurance, including wor.ker's compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily � carried by like organizations engaged in like activities of comparable size and 23 � liability exposure; provided that the Redeveloper may be self-insured with respect � to all or any part of its liabi�lity for worker's compensation. (c) All insurance required in Articl� V of this Agreement shall be taken out and maintained in responsible i°nsurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. I i � (d) The Redeveloper agrees to notify the Authority immediately in the case of � damage exceeding $25,000 in amount to, or destruction of, the Minimum Improvements � or any portion thereof resulting from fire or other casualty. In the event of any such damage, the Redeveloper will fo'rthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as existed �i 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 U on recei t of co p p nsent from its lender, the Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, to the extent the Net Proceeds of insurance receivecl 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. �° �� In the event of substantial or total destruction of the Minimum Improvements, the Redeveloper may elect to not repair or reconstruct the Minimum Improvements, in which case the Authority may, as its sole remedy, terminate its obligations under the Note. (e) The Authority agrees that its rights under this Section relative to the application of Net Proceeds of ins,urance provided under Section 5. �(a)(i) .and (b)(i) and as provided in Section 5.1(d) shall' be subordinate to the rights of a Holder of a Morkgage approved by the Authority; provided, that the Authority's right to terminate the Note for a violation of the Redeveloper's obligations under this Section shall not be subordinated to the rights of a Holder. � ARTICLE VI � �'�� I Tazes: Taz Increment I I, Section 6.1. Real Property Taxes: The Redeveloper shall pay or cause to be paid when � due and prior to the imposition of penal�ty all real property taxes and installments of special ; assessments payable with respect to the Redevelopment Property. ! Section 6.2. Creation of Tax Increment District. The Authority and the City have created the Tax Increment District as a"redevelopment district" as defined in Minnesota Statutes, section 469.174, subd. 10. - � 24 E _ . .. .. _ . _ . . I _ _ _ __ _.. _` _- . _ ... ._ .___ _ ______ _ _ __ _ _ _ __ __ _ __ I _ _.__ __ ___.__._ _._ . _ _ .... . _ I ___ __ _ ._... . . ____....._ . . .. .. . . . . . • Section 6.3. Tax Increment. (a) Subject to the limitations contained in the Note, the Authority pledges to the payment of the Note the Available Tax Increrr�ent. The Redeveloper acknowledges that the Authority has made no w�iranties or representations to the Redeveloper as to the amounts of Tax Increment that will be generated or that amounts pledged pursuant to this Section 6.3 will be sufficient to pay the Note in whole or in part. Nor is the Authority warranting that it will have throughout the term of this Agreement and the Note the continuing legal ability under State law to apply Tax Increment to the payment of the Note, which continued legal ability is a condition precedent to the Authority's obligations under the Note. Tax Increment received by the Authority that is in excess of Available Tax Increment shall be the property of the Authority and the Authority shall be free to use such excess Tax Increment for any purpose for which such Tax Increment may used under the Tax Increment Act. (b) The Authority believes that the Tax Increment District has been created in accordance with State law and that, after modifying the Tax Increment Plan for the Tax Increment District, it will have the legal authority to spend the Tax Increment in accordance with this Agreement. However, it does not warrant the same to the Redeveloper. The Redeveloper has caused to be undertaken on its behalf a review of all actions taken by the City and the Authority in creating the Ta�c Increment District and in approving this Agreement and has detertnined to its satisfaction that the Authority's . actions under this Agreement are authorized by law. The Redeveloper is aware that the owner of the Acquisition Property has commenced an action in Hennepin County District Court challenging the City's and the Authority's creation of the Tax Increment District. Pursuant to the Acquisition Property Purchase Agreement such litigation will be dismissed if and when the Authority, or its assignee, purchases the Acquisition Property. The Authority will indemnify, defend and hold the Redeveloper harmless from and against any and all claims, liability, damages, costs, expenses, including reasonable attorneys fees, suffered or incurred by the Redeveloper with respect to such litigatio�, but. excluding consequential or other damages incurred as a result of such litigation. ARTICLE VII Financin� Section 7.1. Financin�. Within the deadlines provided herein, the Redeveloper shall submit to the Authority evidence that the Redeveloper has financing sufficient for acquisition of the Redevelopment Property, the construction of the Minimum Improvements and the performance of the Redeveloper's obligations under this Agreement: If the Authority finds that the financing is sufficiently committed, adequate in amount to provide for the acquisition of the Redevelopment Property and construction of the Minimum Improvements, and subject only to such conditions as the Authority may approve then the Authority shall notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or • rejection shall be given within ten (10) days from the date when the Authority is provided the � evidence of financing, or the financing shall be deemed approved. If the Authority rej ects the 25 i , evidence of financing as inadequate, it shall do so in writing specifying the basis for the �� rejection. In any event the Redeveloper shall submit adequate evidence of financing within sixty (60) days after such rejection. Section 7.2. Limitation Upon E�ncumbrance of PropertX. 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 any 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 encumbrances or lien to be made on or attach to the Redevelopment Property, except: (a) for the purposes of obtaining funds only to the extent necessary for constructing the Minimum Improvements (including, but not limited to, land and building acquisition, demolition costs, including the purchase price paid, labor and materials, professional fees, real estate taxes, construction interest, organizational and all other soft and indirect costs of development, costs of constructing the Minimum Improvements, marketing and holding costs and an allowance for contingencies); and (b) only upon the prior written approval of the Authority, which approval ' shall not be unreasonably withheld or delayed. Far the purposes of such mortgage financing as I � may be made pursuant to the Agreement,',the Redevelopment Property may, at the option of the � Redeveloper (or successor in interest), be clivided into several parts or parcels, provided that such subdivision, in the reasonable opinion of ithe Authority, is not inconsistent with the purposes of this Agreement and is approved in writing'�by the Authority. Notwithstanding anything to the contrary herein contained, Redeveloper will have the � right to contest by appropriate legal ,proceedings diligently prosecuted any mechanics', materialmen's or other liens or claims for lie� upon the Redevelopment Property, and no such liens will constitute an Event of Default he,reunder, if, but only if: , a. Redeveloper will forthwith give notice of any such lien to the Authority at � the time the same will be asserted. ° � b. Redeveloper will d'�iligently prosecute the contest of any such lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Redevelopment Property. � � c. Redeveloper will pay such lien if and to the extent that any proceeding to adjudicate such lien is finally determined adverse to the Redeveloper. ARTICLE VIII Prohibitions A�ainst Assi�nment and Transfer, Indemnification Section 8.1. Prohibition A�ainst Transfer of Property and Assignment of Agreement Except as noted below, the Redeveloper represents and agrees that prior to the completion of the j financial review required by Section 3.10, the Redeveloper will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease, or any trust or „,� power, or transfer in any other mode or form of or with respect to this Agreement or the 26 i , - - -- - -- - i -- -- - - � - i - --- - :: • Redevelopment Property or any part tfiereof 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 approval shall not be unreasonably withheld or delayed. Provided, however, that the foregoing restriction will not apply to any one or more of the foll�wing: (a) Granting a mortgage, security interest or other lien upon the Redevelopment Property for purposes of obtaining financing as contemplated herein including, without limitation, the financing anticipated under Article VII of this Agreement. (b) A lease of apartment units, or parking spaces, to tenants or a sale of any town house units to individual purchasers. (c) A sale or lease of all or any portion of the approximately 13,000 square feet of commercial space to retail or commercial tenants or users in the ordinary course of business after the completion of the. Minimum Improvements. (d) Any issuance, transfer, assignment or sale of any Membership Units or Membership Interests in the Redeveloper; so long as Kelly J. Doran and Len Pratt retain actual control of the Redeveloper. The Redeveloper agrees that there sha11 be no other transfer or change in control over the affairs of the . Redeveloper without the prior written approval of the Authority prior to the completion of the financial review required by Section 3.10. The Authority's approval shall not be withheld if, in the reasonable judgmenf of the Authority, the persoris or entities to which control is proposed to be transferred possess financial qualifications and development experience equal to or greater than those from which con�rol is proposed to be transferred. The Authority's approval of a transfer of ownership of the Redeveloper shall not be required if the persons or entities that now control the Redeveloper continue to control the Redeveloper's affairs after such transfer. There sha11 be no limitation upon involuntary transfers of ownership resulting from the death or disability of any owner. 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 or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto, nor shall Redeveloper or any other party bound by this Agreement be released from any obligations hereunder without the written release by the Authority. All of the restrictions of Section 8.3 will lapse and terminate effective as of the date of the completion of the financial review required by Section 3.10. If requested, the Authority agrees to execute a written release of such restrictions in form and substance reasonably acceptable to Redeveloper and the Authority, in recordable form. � 27 Section 8.2. Release and Indemnification Covenants. ,��, � (a) The Redeveloper 'releases from and covenants and agrees that 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, other than caused by the willful misconduct or gross negligence of the Authority or its governing body members, officers, agents, servants and employees. (b) Except for any 'willful misrepresentation, any willful or wanton misconduct, or any grossly negligent actions of the following named parties, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements, but only if incurred or arising after the date hereof ( , 2008). The indemnification obligations of the, Redeveloper pursuant to this subsection shall include, but not be limited to, in any event, any pecuniary loss or penalty (including interest thereon from the date that the loss is incurred or penalty paid by the Authority at the rate � of interest in the Note) arising qut of the Authority's creation of the Tax Increment District or the issuance and payment of the Note, but only if incurred or arising after the date hereof ( , 2008). (c) The Authority and the governirig body members; officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person other than the Authority or its governing body members, officers, agents, servants and employees. j � (d) All covenants, stipulations, promises, agreements and obligations of the �' Authority contained herein shall be deemed to be the covenants, stipulations, promises, �� agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. � � � Section 8.3. Indemnification for Relocation Claims. Without limiting any other � provision of this Agreement, the Redeveloper hereby agrees to protect and defend the Authority and the City and the governing body mernbers, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any clairn, demand, suit, action or other proceeding whatsoever by'any person or entity whatsoever for relocation benefits or assistance under State or federal law as a result of the Redeveloper's or the Authority's � 2s � F . . _ _ . _ _ _ _ _ __ __ ________ 4 __._.__ __ ._ _.__ __.___ _. . _ . ___..___ __ _ .. .__ _ __ . __ . . i . _ . _ _ . _ _ __ __ __.__._ . _.__.____ __ __ _ _ . . _... .. ._. . .. ... . � activities under this Agreement, but only if incurred or arising after the date hereof ( , 2008). ARTICLE I� 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), subject to Unavoidable Delays, any failure by Redeveloper to substantially observe or perform any material covenant, condition, obligation or agreement on its part to be observed or performed hereunder, under the Escrow Agreement, or under the Authority Loan Documents. Section 9.2. Authority's Remedies on Default. Whenever any Event of Default by Redeveloper referred to in Section 9.1 of this Agreement occurs, the Authority may immediately suspend its performance under the Agreement and the Note until it receives assurances from the Redeveloper, deemed reasonably adequate by the Authority, that the Redeveloper will cure its default and continue its performance under the Agreement and may take any one or more of the following actions after providing thirty (30) days written notice to the Redeveloper 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 incapable of being cured within said thirty (30) days and the Redeveloper has not provided to the Authority evidence reasonably satisfactory to the Authority � that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Terminate this Agreement and/or the Note, Excess Costs Note or Refunding Note. (b) Exercise any remedies available to the Authority under the Deed. (c) Require repayment of the Authority Assistance by the Redeveloper. (d) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. Section 93. Intentionally Omitted. Section 9.4. 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 sha11 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 • 29 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. i Section 9.5. 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 9.6. Attorneys Fees to Prevailing PartX. In the event of any litigation between : the parties under any of the, provisions of this instrument, the non-prevailing party to such litigation agrees to pay to the prevailing party all costs and expenses (including , without limitation, expert fees, costs of investigation, deposition costs, travel costs and reasonable attorneys fees) incurred by the prevailing party in such litigation. The determination of whether a party is a"prevailing party," and the reasonable amount of attorneys fees and other costs recoverable, will all be reserved to and decided by the Judge presiding over such litigation. The � parties agree that the amount of attorneys fees and other costs which may be awarded must bear a reasonable relationship to, and must be limited by the Judge to a reasonable amount in view of, the amount recovered or the relief obtained by the prevailing party. , i ARTICLE X �'� , � ; , � Additional Provisions ' ; ,,._. ; Section 10.1. Representatives Not Individuallv Liable. No mernber, official, or employee � i of the Authority or the Redeveloper shall be personally liable in the event of any default or breach or for any amount which may become due of any obligations under the terms of the Agreement. Section 10.2. Equal Emplovment O�portunit� The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements � provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use: The Redeveloper agrees for itself, and its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, I that the Redeveloper, and such successors and assigns, shall until the Maturity Date devote the ! Redevelopment Property to; and only to and the uses specified in accordance with this f 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 10.4. Notices and Demands. Except as otherwise expressly provided in this : Agreement, a notice, demand, or other communication under the Agreement by either party to ;;,� � 30 ` i ;. i - ; - - i - -� � __ - _ • the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, ris addressed to or delivered personally to the Redeveloper at 7803 Glenrdy Road, Suite 200, Bloomington, Minnesota 55439, with copy to David Kirkman, Ravich Meyer Kirkman, McGrath & Nauman, 4545 IDS Center, 80 South 8 Street, Minneapolis, MN 55402; and to Len Pratt, , with a copy to Paul • Anderson, Messerli & Kramer, P.A., 150 South Fifth Street, Suite 1800, Minneapolis, Minnesota 55402-4218; and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 1010 First Street South, Hopkins, Minnesota 55343, with copy to Robert J. Deike, Bradley & Deike, P.A., 4018 West 65�' Street, Suite 100, Edina, MN 55436,or at such other address with respect to either such party as that party may, from time to time; designate in writing and forward to the other as provided in this Section. Section 10.5. 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 10.6. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. � Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument, and that a facsimile copy of any signature, or an electronic pdi transmission of any signature, of any party, will be deemed as enforceable and effective as an original signature. All such counterparts together will constitute one and the same instrument. Section 10.8. 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 10.9. Effect of Termination. In the event that this Agreement is terminated pursuant to any provision hereof, including, without limitation, Sections 3.3, 3.4, 3.9 or 9.2, or by court order, but excluding Section 3.3(a), then a11 provisions hereof shall terminate except that the Redeveloper's representations and agreements under Sections 2.2, Section 3.8 (with respect to costs incurred after the date hereof and prior to such termination) and Section 8.2 and the • Authority's representations under Section 2.1 shall survive such termination and any cause of action arising hereunder prior to such termination shall not be affected. 31 i ; � - :,� Section 10.10. Applicable Law. This Agreement shall be interpreted under the laws of the State of Minnesota. IN WITNESS WHEREOF, 'the, Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. [SEPARATE SIGNATURE PAGE ATTACHED] � ' � i I i i � i I I 32 - � . i . ; - - i � - � ._ _ • SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CONTRACT FOR PRIVATE I�DEVELOPMENT HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS By By STATE OF MINNESOTA ) ' ) SS. . COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of , 2008, 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 • 33 �i . � � . SIGNATURE PAGE � TO THIRD AMENDED AND RESTATED CONTRACT FOR P!�tIVATE I7�DEVELOPMENT DORAN-PRATT DEVELOPMENT, LLC, A Minnesota limited liability company By: ; Kelly J. Doran ; Its: Chief Manager i � B Len Pratt • Its: Manager STATE OF MINNESOTA ) j SS. � COUNTY OF The foregoing instrument was acknowledged before me this day of , 2008, by Kelly J. Doran, the Chief Manager of Doran-Pratt Development, LLC, a Minnesota , limited liability company, on behalf of the company. �, , i Notary Public � � i � STATE OF MINNESOTA ) ) SS. COUNTY OF ), I The foregoing instrument was acknowledged before me this day of , 2008, by Len Pratt, the Manager of Doran-Pratt Development, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public . � � � 34 � I i ---�- - - -- _ i _ - --; - . • SIGNATURE PAGE TO THIRD AMENDED ANH RESTATED CONTRACT F�R PRIVATE REDEVELOPMENT GUARANTOit' S JOINDER The undersigned hereby agree to the provisions of Section 3.3(d). Kelly J. Doran, individually Len Pratt, individually • • 35 I � i � � - SCHEDULE A �� °�� Description of Redevelopment Property Redeveloper Property: � 525 Main Property: - , � I I i Acquisition Property: � I I � I � � : _ - , -- , - i - _ � _ _ - • SCHEDULE B $ ' 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-PRATT DEVELOPMENT PROJECI� 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-Pratt Development, 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"), together with interest thereon at the rate of percent �%) per annum (the "Rate") said amount to be paid commencing on 1, , and continuing on each 1 and 1, thereafter to and including 1, .(the "Scheduled Payment Dates"). The term of this Note shall continue until the entire Principal Amount of and interest under this Note have been paid or • until , whichever is earlier. Interest shall be computed on the basis of a 360- day year of twelve (12) 30-day months. 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 thc 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"). THIS NOTE IS NOT A DEBT OF THE CITY OF HOPKINS OR THE STATE OF NIINNESOTA (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, which 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. 1-3. Available Tax Increment, with respect to each � Scheduled Payment Date, shall have the 'meaning given to such term in that certain Contract for Private Redevelopment between the Authority and the Owner dated as of , 2005 (the "Contract"). � This Note is one of a series of notes issued or to be issued pursuant to the Contract. Available Tax Increment shall on each Scheduled Payment Date be paid on a pro-rata basis on each note issued under the Contract based upon the relative outstanding principal amount of such notes. 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 thirty (30) 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 � i Amount. If not terminated sooner pursuant to the terms of this Note or the Contract, on � , 20_, the Authority's pay�ment obligations under this Note shall terminate and this Note shall no longer be an obligation o',f 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 Authorit 's a ment obli ations hereunder shall be � Y PY g '' sus ended and this Note ma be terminated b the Au h' t orit u on the occurrence of an Event of P Y Y Y p 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 ', furtker payments hereunder sha11 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 I books of the Authority. i 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 i 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 liereof or otherwise. � This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior writteri consent of the Authority, which consent shall not be unreasonably withheld or delayed. ;-;, � i I , � ---- -- - _ i - , -- - - - i � -- - _ . i _ • This Note is issued pursuant to Resolution of the Authority and is entitled to the benefits thereof, which resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECII�ED 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 form, 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 and the of the Authority and has caused this Note to be dated , 200_. • • . SCHEDULE C � �� Description of Public Redevelopment Costs � The following are the Public Redevelopment Costs: Land acquisition Demolition Relocation Site Preparation Such other costs as the Authority determines may legally be paid using tax increment � i � � � � . � � , � ; - - - - , � i _ - _ , . SCHiEDULE E , :;, � Acquisition Pro�erty Purchas� Agreement i I i i I � i , � � I ; I � . , ; ; i _� _ .