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2002-04-23
6:30 1. 2. 3. 4. • AGENDA ~le C~~`I MOUND HOUSING AND REDEVELOPMENT AUTHORITY APRIL 23, 2002 6;30 P.M. OPEN MEETING ACTION APPROVING AGENDA, WITH ANY AMENDMENTS ACTION APPROVING 112QVUTES: MARCH 26, 20U2 METROFLAINS DEVELOMENT. INC A. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS, AND DIRECTIONS FOR THE ISSUANCE QF TAXABLE TAX INCREMENT REVENUE NOTES (METROPLAINS REDEVELOPMENT PROJECT); APPROVING FIRST AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT B. FIRST AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT 1-2 3-12 13-44 C. RESOLUTION AWARDING THE SALE OF, AND PROVIDING FOR 45-52 THE FORM, TERMS, COVENANTS, AND DIRECTIONS FOR THE ' ISSUANCE OF TAXABLE TAX 1NCREMENT SUBORDINANTE REVENUE NOTE (METROPLAINS REDEVELOPMENT PROJECT) SERIES 2002B ("pay as you go note") D. DISBURSING AGREEMENT BETWEEN HRA AND CHICAGO 53-64 TITLE COMPANY (related to proceeds of the Taxable Notes) E. CAPITALIZED INTEREST ESCROW AND PAYING AGENT 65-71 AGREEMENT' F. ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT 72-95 AGREEMENT (3 separate agreements) G. CONSIDERATION/ACTION ON OTHER APPROVALS OR RELATED AiGREEMENT`S 5. ADJOURN • • CITY of Mt3WNQ FIOtJ~1~JG A-N© [REDEVEL©FMENT AIJTfW4RITY MAF~CM 26, 2fl©Z The Housing and Ledevelopment Authority of and for the City of Mound, Minnesota, met in regular session on Tuesday, March 26, 2002, at 6:00 p.m. in the council chambers of City Hall. Members Present: Chairperson Paf Meisel; Commissioners Bob Brown, Mark Hanus, David Osmek and Peter Meyer. Others Present: City Attorney, John Dean; Executive Director, Kandis Hanson; City Clerk, Bonnie R#ter Cornrm~unity Cevelopment [~irec~~r, ~araf~ smith; Ci#y Planner, Bruce Chamberlain; Jinn Prosser of Ehlers & Associates; Finance Director, Gino Businaro; Craig Fink, Ken Perbix, Frank Weiland, Cynthia Leiter, Joe Bisanz. 1. OPEN. MEETLNG Chairperson 1111e Iesi opened the meeting at 6:04 p.m. 2. APPI~UVE AGENDA iiAOTION by Hanus, seconded by Osmek to approv$ the agenda. All voted in favor. Motion carried. • 3. ARPR~OVE .MI.NtJTE~ M~TItON by Qsr~ek, seconded by Hanus to approve the minutes of the February 26, 2002 regular meeting. Ail voted in favor. Motion carried. 4. MfJU.~1NG DIi~CT01~'~ 1~EFQlRT MC;)filON by D.srnelc; seconded try Br©wn to approve the bills for Mardi in the amount of $'7,316.11. AW voted in favor. Motion carried. 5. C4NS1© IRA~ION C)F VI,F .P#~t'3FERTIE~ T:~MPORARY MANAGEMENT FILM Hanson reported that Housing director Risky Charon is on a leave of absence until May 1, 2Ol)2. Hanson is rect~rnmending that ViP Properties be retained #o undertake property management responsibil+#ies in Pinky's absence. Cynthia Reiter and Joe Bisanz of V1P Properties presented the main points of their short term management proposal MOTI~~1 by gown; seconded by Hanus to authorize the Executive Director to enter into an agreement with VlR Properties, for the furnishing of management services at Indian lCnoW Manor for up to a two month period commencing on April 1, 2002. The fee payable to VIP under the agreement is to be $1,250 per month. All voted in favor. Motion carried. . • -1- Mcaand WRi4 Mlitut~ - Meroh 26, 2002 6. I~FP~~~~0~;'''~~~~ , „nirvuruv vr~r ,lim Prosser of ~t~lecs & As~eietes ravi®wed this ~l~is dna#f. `here was discussion regarding the $500 ep~alir~~on fee., as wetl as the wording: on ~e owner occupied preference and adding disclosure of aN principles of development firms. MOTION by Har~us, seconded by ~i*own to approve the RFP as revised and made a part f~er®af. All voted in favor. Mo~ori carried. Prosser stated mat the Developer Ir~fonnation session, with the Council present, is scheduled for April ~, but may have to be changed. 7. ADJ MOTION by Manus, seconded by Brown, to adjourn at 7a)0 p.m. ~-II voted in favor. Motion carried. Chairperson Pit Meisel Attest: F_xecutive Director, I~~indis Hanson • 2 -2- • MOUND I-II2A RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF TAXABLE TAX INCREMENT REVENUE NOTES (METROPLAINS REDEVELOPMENT PROJECT); APPROVING FIRST AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BE I'T RESOLVED BY the Board of Commissioners ("Board's of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota (the "Authority") as follows: Section 1. Authorization: Award of Sale. 1:01. Authorization. The Authority and City of Mound (the "City's have heretofore approved the establishment of Tax Increment Financing District No. 1-2 (the "'TIF District's pursuant to Minnesota Statutes, Sections 469.174 to 469.179, as amended (the "Tax Increment Aet°~ within Development District No. 1 (the "Project"), and have adopted a tax increment financing- plan for the purpose of financing certain improvernents within the Project. Pursuant to Minnesota Sta tes Section 469.178, the Authority is authorized to issue and sell its bonds or notes for the purpose of financing a portion of the public redevelopment costs of the Project. Such bonds or notes are payable from all or any portion of tax increment revenues derived from the TIF District and pledged to the payment of the bonds or notes. The Authority hereby finds and determines • that it is in the best interests of the Authority that it issue. and sell its Taxable Tax Increment Revenue Notes (MetroPlains Redevelopment Project), Series 2002, in a maximum aggregate principal amount not to exceed $3,210,000 (the "Notes' for the purpose of financing certain public. costs of the Project. 1.02. Issuance. Sale. and Terms of the. Notes. The Notes shall be issued in accordance with that certain Amended and Restated Contract for Private Redevelopment between the Authority and MetroPlains Developmerrt LLC (the "Redeveloper") dated January 8, 2002, as amended by the First Amendment thereto dated April ~4, 2002 and approved under Section 8 hereof (the "Agreement"). Pursuant to the Agreement, Redeveloper has retained Miller Johnson Steichen Kinnard, Inc. (the "Placement Agent") to arrange the sale of the Notes. The Authority hereby authorizes issuance of the Notes in accordance with terms set forth in this resolution to the purchaser or purchasers. designated by Placement Agent, at a-price of par. The Notes shall be dated as of the date of delivery thereof and shall bear interest at the rate of interest per annum not to exceed 7.5 percent to the earlier of maturity or prepayment. If more than one -Note is purchased, payment schedules will be prepared for each Note by prorating the payments based on the respective principal amounts of the Notes. This authorization to issue the Notes is effective without any additional action of the Board and shall be undertaken by the Executive Director on such. date and upon the terms and conditions deemed reasonable by the Executive Director. Without limiting. the generality of file foregoing, the Executive Director is authorized to set the interest rate on the Notes (up to the maximum rate specified above), to approve changes in the original aggregate principal amount of the Notes (up to the maximum aggregate principal amount set forth in Section 1.01), in the terms of prepayment, the principal amouirts subject to payment or prepayment, and the dates of payment or prepayment of the Notes, and the other terms of the Notes. The issuance and delivery of the Notes shall be conclusive evil- ense that the Executive Director • has approved any changes to the forms of the Notes on file with the Authority on the date hereof SJB-213025~/l MLTi93-14 -3- 1.03. 4utional Frepayment. The Authority may elect on February 1, 2004 or any date • thereafter (each an "Optional Redemption Date's to prepay the Notes in whole or in part. Any prepayment amount will be applied prorata among the appropriate outstanding Notes based on their outstanding principal amounts.. If the Authority prepays any Nate in part, the prepayment will be applied to the appropriate outstanding principal amounts of the Note in inverse order of principal installmelrts due. Twenty-five day's prior notice of any such prepayment shall be given by filet-class mail by the Registrar to the registered owners of any Notes to be prepaid in whole or part. Upon notice having been so given, the Notes shall be due and payable atthe stated prepayment date and price with accrued interest to the prepayment date, and upon such payment on the specified prepayment date, interest thereon shall cease to accrue after such prepayment date, Section 2. Form of Note. The Notes shall be in substantially the following form, with the blanks to be properly filled in as of the date of issue: • [the remainder of this page intentionally blank] • SJB-213023v1 2 MU195-14 -4- • UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HBNNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA No. R- $ TAXABLE TAX INCREMENT REVENUE NOTE (ME'PROPLAINS REDEVELOPMENT PROJECT) SERIES 2002 Interest Date Rate of Ori ' Issue Registered Owner: The Housing and Redevelopment Authority in and fur the City of Mound, Minnesota (the "Authority"), for value received, certifies that it is indebted and hereby promises to pay to the registered owner set forth above or its assigns (the "Owner"), the principal sum of $ and to pay • interest thereon at the above-stated rate, as and to the extent set forth herein. 1. Pa, :tints. Principal and interest ("Payments' shall be paid on August 1, 2002 and each February 1 and August 1 thereafter ("Payment Dates"~ through the Maturity Date, in the amounts set forth in the payment schedule shown in Attachment A to thin Note, payable solely from and to the extent of the sources set forth in Section 3 herein.. Payments shall be applied first to accrued interest, and then to unpaid principal. The term "Maturity Date" means the date that is five years after the date of original issuance of this Note. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. 3. Available Tax Increment. Payments on this Note are payable on each Payment Date in the amount of and solely from Available Tax Increment together with a portion of proceeds of the Note deposited in the Debt Service Fund as capitalized interest. The term "Available Tax Increment" means the amount of Tax Increment with respect to the Redevelopment Property (as defined in the Agreement) paid to the Authority during the period preceding each Payment Date after deducting the amount of Tax • Increment, if any, which the Authority must pay tc~ the school district, the County and the State pursuant to Minnesota Statutes, Sections 469.1'17 subds. 9, 10, and 11; 469.176, subd. 4h; and 469.175, subd. la, as the same may be amended from time to time, and administrative costs as defined in Minnesota SJB-21302341 MU193-14 -5- Statutes, Sections 469.174 subd. 14 of the Authority in the amount of 10% of the Tax Increment, all as • such terms are defined in the Amended and Restated- Contract for Private Development between the Authority and MetroPlains Development LLC (the "Redeveloper"), dated as of January 8, 2002, as amended by a First Amendment thereto dated Apr124, 2002 (the "Agreement'. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment or capitalized inrterest. If on any Payment Date the balance of funds in the Debt Service Fund created under the Resolution is insufficient to make the Payment due on that date, the deficiency will be deferred and paid, without interest thereon, to the extent possible on any subsequent Payment Date on which the Authority has available funds in the Debt Service Fund in excess of the Payment due on such date. Payment of Available Tax Increment is also subject to compliance by Redeveloper, its successors and assigns with the terms of tine Agreement. The Authority makes no warranty or representation that Available Tax Increment will be sufficient to pay all or any portion of the principal or interest on this Note. 4. Optional Prepayment. The Authority may prepay this Note in whole or in part without premium or penalty on February 1, 2004 or any date thereafter (each an "Optional Redemption Date'. If the Authority prepays the Note in part, the prepayment will be applied to the outstanding principal amount of the Note in inverse order of principal installments due. Twenty-five days' prior notice of any such prepayment shall be given by first-class mail by the Registrar to the registered owner of the Note. Optional redemption will be deemed to have occurred in the amount of funds on deposit in a "Prepayment Reserve Account" on any Paylnc~nt Date, as further described m Section 4.04. of the Resolution (as hereinafter defined). No partial prepayment shall affect the amount or tillung of ally other regular paymeirt otherwise required to be made under this Note. • 5. Nature of Obli asp flop. This Note is one of an issue in the total pnncipal amount of $3,210,000 issued to aid in financing- certain public development costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes. Sections 469,U01 through 4.69.047, and is issued pursuant to an authorizing resolution (the "Resolution's duly adopted by the Authority on April 23, 2002 and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes. Sections 4+69.174 to 469.179. This Note is a limited obligation of the Authority which is payable solel-y from Available Tax Increment and capitalized merest pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax .Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon. the books of the Authority kept for that purpose at the principal office of the Authority, by the Owner hereof ill person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such. transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. • sJS-213ozs~1 4 MLJ195-14 -6- • This Note shall not be transferred to any person, unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws or such requirements have been satisfied. • 8. Addi#{onal Obligations. The Authority shall issue no obligation secured in whole or in part by Available Tax Inerernent, unless the pledge to such obligation is subordinate to the pledge to this Note. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the I-lousing azld Redevelopment Authority in and for the City of Mound, Minnesota has caused this Note to be executed with the manual signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above. HOUSING AND AUTHORITY IN AND MOUND, MINNESOTA REDEVELOPMENT FOR THE CITY OF Chair. Executive Director AUTHENTICATION AND REGISTRATION PROVISIONS This is one of the Notes described in the within mentioned Resotution. The ownership of the unpaid balance of the within Note is registered in the bond register, in the name of the person last listed below. Date of Registration Registered Owner Signature of Registrar Tax I.D. No: [the remainder of this page intentionally blank] • SJB-213035v1 5 MU195-14 -]- Attachment A Payment Schedule Date Princi al Interest Total Au st 1, 2002 Feb 1, 2003 Au st 1 2003 Feb 1, 2004 Au st 1 2004 Feb 1, 2005 Au st 1 2005 Febru 1, 2006 Au st 1, 2006 Feb 1, 2007 A ril 2007 SJB-213025v1 MU195-14 • • • -$- • Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Notes shall be issued as one or more typewritten notes numbered from R-1 upwards. The Notes shall be issuable only in fully registered form. Principal of and interest on the Notes shall be payable by check or draft issued by the Registrar described herein. 3.U2. Dates; Interest Payment Dates, Principal of and interest on the Notes shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registrar and Pang Agent. The Executive Director shall appoint a registrar, transfer agent and paying agent (the "Registrar" or the "Paying Agent'. The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Notes and the registration of transfers and exchanges of the Notes. (b) Transfer of Notes. Upon surrender for transfer of the Notes duly endorsed by the registered owner thereof or accompanied by a written instament of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Notes shall not be transferred to any person unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, • in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When a Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instalment of transfei is -legally authorized. 'The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Qwners. The Authority and the Registrar may treat the person in whose name a Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual tc> satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f} Taxes. Fees and Charges. For every transfer or exchange of a Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other goverrunental charge required to be paid with respect to such transfer or exchange. • (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in SJB-213023v1 7 MU19S-14 -g- substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and • charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. (h) Prepayment. In the event a Note is prepaid in whole or in part, notice thereof will be given by the Registraz by mailing a copy of the prepayment notice by first class mail (postage prepaid) not more than 60 and not less than 25-days prior to the date fixed for prepayment to the registered owner of the Note at the address shown on the registration books kept by the Registrar. Failure to give notice by mail to any registered owner, any defect therein, will not affect the validity of any proceeding for the prepaymel of the Note. The Note so called for prepayment will cease to bear interest after the specified prepayment date, provided that the funds for the prepayment are on deposit with the place of payment at that time. 3.04. Preparation and Deliverv. The Notes shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its Chair and Executive Director. In case any officer whose signature shall appear on the Notes shall cease to be such officer before the delivery of the Notes, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, the Notes shall not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until. a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. Celtifieates of authentication on • different Notes certificates need not be signed by the same representative. The executed certificate of authentication on each Note shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Notes have been so executed and authenticated, it shall be delivered by the Secretary to the Owner upon payment of the purchase price therefor, and the Owner shall not be obligated to see to the application of the purchase price. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and ilerest on the Notes all Available Tax Increment as defined in the Notes. Available Tax Increment shall be deposited in the Debt Service Fund in accordance with Section 4:U3 hereof and applied to payment of the principal of and serest on the Notes in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. D~osit of Proc~ds. The Authority shall establish a "Project Fund" with- Chicago. Title Insurance Company (the "Title Company's and deposit therein proceeds of the sale of the Notes, except any funds designated at issuance as capitalized interest, which shall be deposited in the Debt Service Fund to be held by the Paying Agent. The Authority hereby appropriates to the Project Fund from proceeds of the sale of the Notes an amount equal to all costs of issuance of the Notes, to be applied to the payment thereof, including any Placement Agent fee. Funds deposited with the Title Company in the Project Fund will be used to reimburse the Redeveloper for certain Site Costs in accordance with the Agreement. Any balance of the proceeds of the Notes remaining after disbursernellts described herein shall be credited and paid to the Debt Service Fund. 4:03. Debt. Service. Fund. So long. as the Notes are outstanding and any principal thereof or • interest thereon remains unpaid, the Authority shall maintain a "Debt Service Fund" to be used for no sJS-sl~ozs~l g MJ195-14 -~~- purpose other than the payment of the principal of and imerest on the Notes. The Auxhcumty appropriates and • irrevocably pledges to the Debt Service Fund: (a) capitalized iraerest from proceeds of the Notes; (b) Available Tax Increment pledged pursuant to Section 4.01 of this Resolution; (c) any funds remaining after disbursements in accordance with Section 4.02 of this Resolution; (d) all investment earnings on funds held in the Debt Service Fund; and (e) any other funds appropriated to the Debt Service Fund. Any payments received by the Authority under any guaranty by the Redeveloper or relates parties in the event of deficiency in Available 'Tax Increment are also pledged to the Debt Service Fund and shall be deposited therein in the same manner and: times as Available Tax Increment. The Debt Service Funds and alI moneys deposited therein pursuant to this Resolution are hereby pledged to the payment of principal of and interest on the Notes. The Authority shall deposit the Available Tax Increment in the Debt Service- Fund- no later than 3 business days prior to each Payment Date. Disbursements shall be made from the Debt Service Fund to make the Payments described in the form of Note in Section 2: of this Resolution. 4.04. Per pavment .Reserve. Account. The Authority sha11 mairrtain with the Payirlg Agent a "Prepayment Reserve Account" within the Debt Service Fund. Any Excess Available Tax Increment on deposit in the Debt Service Fund prior to the. first permitted Optional Redemption Date for the Notes shall be transferred to the Prepayment Reserve Account. "Excess Available Tax Increment" means any amount of Available Tax Increment in excess of the amount needed to make the Payments due on a Payment Date and which amount is on deposit in the Debt Service Fund on the business day after a Payment Date. ff funds are on deposit in the Prepayment Reserve Account on any permitted Optional Redemption Date, the Authority shall be deemed to have elected to prepay such Note, pursuant to Section 1.03 hereof; in the amount of the funds on deposit in the Prepayment Reserve Account on such Optional Redemption Date, and such prepayment shall' be made in accordance wi#h Section 1.03. • 4.05. Investment of Funds. A11 amounts held in the Debt Service Fund wilt be invested in accordance with the. provisions of Minnesota Statutes, Chapter 118A, governing the investment of funds of governmental entities. Section 5. Reimbursement. The Authority reasonably expects to reimburse itself for expenditures made with respect to the Project in accordance with- the Agreement from the proceeds of the Notes after the- date of payment of all or a portion of such costs. All reimbursed- expenditures will be capital expenditures, costs of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Tax Increment Act. Section 6. Certification. of Proceedings. 6.01. Certification of Proceedings. The officers of the Authority are hereby authorised and directed to prepare and furnish to the Owners of-the Notes certified copies of all proceedings and- records of the Authority, and such other affidavits, certificates, and irlformation as may be required to show the facts relating to the legality and marketability of the Notes as the same appear from the books and records under their custody and corltrol or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, sha11 be deemed representations of the Authority as tiff the facts recited therein: Section 7. Continuing; Dlsc~sure. T'he continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the • "Rule") do not apply to the Ncrtes, because the offering is exempt from such requirements under Section 15c2-12(d)(1)(i). Consequently, the Authority will not eater into any undertaking to provide conrtnuing disclosure of any kind with respect to the Notes. SJB-213023v1 9 MUi95-14 -~~- Section 8. Contract Amendmelht t~pproved. The Authority approves the First Anhendmelht to • Amended a>3d Restated Contract for Private Redevelopment between-the Authoriiy and the redeveloper, and authorizes the Chair and Executive Director to execute that document in the form an file is City Hall, subject to modifications approved by such officials, whose execution of the document will be conclusive evidence of their approval. T"he Chair and Executive Director are further authorized to execute any agreements with the Title Company and Registrar necessary to carry out the purposes of the Agreement as amended and this resolution. Approved this 23'~ day of April by the board of commissioners of the Housing and Redevelopment Authority in and for the City of bound, Minnesota. Chair A'I1'EST: Executive Director • SJS-213023v1 1 ~ MU195-14 -~2- • April 18, 2002 FIRST AMENDMENT TO AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT THIS FIRST AMENDMENT,. is made on or as of the 24th day of April, 2002, by and between THE FIOIJSTNG AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and, METROPLAINS DEVELOFMENT LLC, a Minnesota limited liability company, (the "Redeveloper") and amends that certain Amended and Restated Contract for Private Redevelopment dated as of January 8, 2002, between the HRA and the Redeveloper (the "Agreement"j. WITNESSETH: WHEREAS, the HRA and Redeveloper entered into the Agreement pursuant to which the HRA agreed to provide certain financial assistance to the Redeveloper in connection with the Redeveloper's redevelopment of certain real property located within the City of Mound (the "City"); a:nd WHEREAS, pursuant to -the Agreement the HRA agreed that it would issue certain tax incremenfi revenue bonds and a tax increment revenue note to finance certain public redevelopment costs of the Redeveloper's proposed development; and • WHEREAS, the HRA and the Redeveloper desire to amend the Agreement in order. describe the manner in which the financial assistance will be made available by the HRA to the Redeveloper. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them -does hereby covenant and agree with the other as follows: Section 1. All capitalized terms contained herein- that are not defined in this Amendment shall have the meanings of such terms as defined in the Agreement. Section 2. Section 1.1 is hereby amended by deleting the references in the definition of "Available Tax Increment" to "Bonds", by deleting. the def rations of "Bonds", "Series A Bonds" and "Series B Bonds", and by changing the definition of "Notes" to provide as follows: "Notes" means the "Development Notes" and the "Pay-Go Note" as defined in Article VII of this Agreement. Section 3. Section 6.1 of the Agreement is hereby deleted in its entirety and replaced with the following: Section 6.1. So long as any Development Notes, Refinancing Notes or the • Pay-Go Note issued under Article VI are. outstanding, the Redeveloper will Metroplains mound first amendment -13- provide and maintain at all times, insurance on the portion of the Minimum • Improvements being constructed. From time to time at the request of the HRA, the Redeveloper shall furnish the HRA with proof of payment of premiums on the following coverage: (i) Builder's .risk insurance, insurance written on the so-called "Builder's Risk- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value at the date of completion of the Minimum Improvements then under construction, and with coverage available in non reporting form on the so-called "all risk" form of policy; (ii) Comprehensive general public liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an owner's/contractor's policy with limits against bodily injury and property damage of not less than $1.,000,000 for each occurrence and an aggregate limitation of $2,000,000 (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Worker' s compensation insurance, with statutory coverage. (b) All insurance required in this Article VI will be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the HRA policies evidencing all such insurance, or a certificate or certificates or binders of respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article VI, each policy will contain a provision that the insurer will not cancel or modify it without giving written notice to the Redeveloper and the HRA at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days before the expiration of any policy, the Redeveloper will furnish the HRA evidence satisfactory to the HRA that the policy has been renewed or replaced by another policy conforming to the provisions of this Article VI or that there is no necessity therefore under the terms hereof. In-lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies or a combination thereof, having the coverage required herein, in which event the Redeveloper will deposit with the HRA a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. All policies pursuant to this Agreement will be in a form and content satisfactory to the HRA. (c) The Redeveloper agrees to notify the HRA immediately in the case of damage exceeding $1 U0,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty prior to the issuance of the Certificate of Completion for that Parcel. Subject to the terms of any mortgage granted to secure financing for the construction of the Minimum Improvements, in the event that any such damage does not exceed $100,000, the -14- • Redeveloper will forthwith repair, reconstruct .and restore the Nlinimum Improvements to substantially the same or an improved condition or value as existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper or its successor to the payment or reimbursement of the costs thereof. If while any Development Notes, Refinancing Notes or the Pay-Go Note issued under Article VII of this Agreement are outstanding, the Minimum Improvements or any portion thereof is destroyed by fire or other casualty, and the damage or destruction is estimated to equal or exceed $.100,000, then the Redeveloper, within 150 days after such damage or destruction, subject to the terms of any mortgage granted to secure financing for construction of the Minimum Improvements, will proceed forthwith- to repair, reconstruct and restore the damaged Minimum Improvements to substantially the same condition or utility value as existed prior to the event causing such damage or destruction 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 or destruction received by the Redeveloper or its successor to the payment or reimbursement of the costs thereof. (d) Upon the sale by the Redeveloper of each residential unit in • Residential Component the provisions of this Section 6.1 and the Redeveloper's obligations under this Section 6.1 shall terminate as they relate to such unit Section 4. Article VII of the Agreement is hereby deleted in its entirety and replaced with the following: ARTICLE VII TAX INCRMENT; SITE COSTS Section 7.1. General Descrintion~; Site Costs. .The HRA will provide to the Redeveloper an amount of public assistance to pay for or to reimburse the Redeveloper for the Site Costs incurred by Redeveloper subject to the limits described herein. Available Tax Increment shall be used by the FiRA to pay the Notes. The term "Notes" shall mean the "Development Notes" as defined in Section 7.2, and the "Fay-Go Note", as defined in Section 7.3. Section 7.2. Development Notes. The IRA will provide to the Redeveloper public assistance to pay for the Site Costs, subject to the following limitations: (a) Initial Financing. Upon the request of the Redeveloper and • appropriate resolution authority and upon satisfaction of the conditions precedent -15- in Section 7.4 hereof, the HRA shall issue one or more series of taxable tax increment revenue notes (the "Development Notes") in a time frame consistent with the Redeveloper's commencement of construction of the Commercial Component. The Redeveloper shall be solely responsible for securing purchasers of the Development Notes and the City shall have no responsibility with respect thereto. The Redeveloper has retained Miller Johnson Steichen Kinnard, Inc. (the "Underwriter") to sell the Development Notes. The proceeds of the issuance of the Development Notes. shall be deposited with. Chicago Title Insurance Company (the "Title Company"j in escrow for the payment of Site Costs associated- with construction of the Minimum Improvements. Proceeds shall be disbursed for the payment of Site Costs upon the HRA's approval of a Redeveloper provided Payment Request submitted by the Redeveloper in a form approved by the HItA. Payment Requests must be accompanied by supporting invoices. No portion of the proceeds of the Development Notes shall be used to pay or reimburse for the payment of costs of acquiring land to be donated to the City for park purposes. The Development Notes shall be sized such that the aggregate net proceeds available to the Redeveloper from all such issues will be $2,531,043, net and exclusive of capitalized interest, underwriter's or placement agent's discount, and costs of issuance. The face amount of all such Development Notes shall include capitalized interest, underwriter's or placement agent's discounts, and costs of issuance. $824,986 of the aggregate net proceeds of the Development Notes will be used to pay Site Costs related to the construction of the Commercial Component and $1,706,057 of the aggregate net proceeds of the Development Notes will be used to pay Site Gusts related to the construction of the Residential e Component. The Development Notes sha11 only have Available Tax Increment pledged as a source of debt repayment. Any additional guarantees, pledged security, or credit enhancement necessary to make the Development Notes marketable shall be the responsibility of the Redeveloper Prior to the issuance of the Development Notes, the Redeveloper shall also enter into a Minimum Assessment Agreement on the Commercial Component and the land on which the Commercial Component is located establishing a minimum market value of $5,890,000 as of January 2, 2003, and aMni-mum Assessment Agreement on the Residential Component and the land- on which the Residential Component is located establishing a minimum market value of $9,000,.000 as of January 2, 2003, and a minimum market value of $20,000,000 as of January 2, 2004. The Minimum Assessment. Agreement for the Commercial Component shall be in the form attached- to this Agreement as Exhibit C and the Minimum Assessment Agreement for the Residential Component shall be in the form attached to this Agreement as Exhibit D.. The Redeveloper shall also at the time of the sale of each unit in the Residential Component require the execution by the purchaser of such unit of an instrument in the farm that is part of the Minimum Assessment Agreement attached hereto as Exhibit D consenting to and agreeing to be bound by the Minimum Assessment Agreement as it relates to such unit. The amount of the minimum market value • -16- • attributable to each unit will be equal to at least 90% of the sale. price paid for such unit by the purchaser. At such time as the Refinancing Notes described in Section 7.2(c) are issued all of the Minimum Assessment Agreements shall terminate and be of no further force or effect. Such termination shall be evidenced by a certf cafe of the HRA filed of record against the Property. The Development Notes will be special, limited obligations of the HRA and will be payable solely from the Available Tax Increment. The Development Notes will neither constitute nor give rise to a general obligation or liability or a charge against the general credit or taxing power of the HRA or the City of Mound. (b) HRA's Refinancing of Development Notes. After completion of construction of the Minimum Improvements and in any event no later than April 24, 2U07, upon Redeveloper's request, and thereafter as often as the HRA chooses, the HRA will refinance .the outstanding Development Notes with tax- exempt tax increment revenue notes (the "Refinancing Notes"), subject to the terms and conditions contained herein. The Redeveloper and the HRA will reasonably and timely cooperate with the refinancing efforts, including providing requested information and attorney opinions and signing documents. (c) Refinancing_Notes. While it is the intention of the HRA as of the date of this Agreement to issue the Refinancing Notes in a principal amount • sufficient to provide for the payment in full of the outstanding Development Notes, the principal amount of each series of Refinancing Notes shall be contingent on a number of factors that could result in the size of the Refinancing Notes being insufficient t© produce net proceeds to refinance all of the outstanding principal, imerest and related fees of the Development Notes. Considering the above intention, the principal amount of the Refinancing Notes shall be determined after taking into consideration the following factors: () Projected Available Tax Increment from the Property and Minimurn Improvements through the year 2026 based on the actual estimated market value (as determined by the Hennepin County Assessor's Office)- of the Property; and (it) Market conditions at the time of refinancing (i:e., interest rates, rnarketabie term, required coverage factors, etc.) and the costs of issuing the Refinancing Notes. (d) Notwithstanding the foregoing, the HRA shall have the option to delay refinancing of the Development Notes temporarily or for as long as the following conditions exist: (i) The HRA is prohibited from refinancing the Development • Notes pursuant to changes in federal- law enacted after the date of this Agreement; or -17- (ii) Substantial adverse changes in the market conditions have e occurred that make it infeasible to refinance the Development Notes on a reasonable basis, as confirmed by the Underwriter to the Redeveloper and HRA in writing. (e) Redeveloper Responsibility Upon Refinancing. If, after taking into consideration the factors listed in Section 7.2(c), the HRA determines that the net proceeds of a series of Refinancing Notes will be insufficient to call all outstanding Development Notes of the series it is refinancing or that the Refinancing Notes can not be issued, the Redeveloper shall: (i) at the request of the HRA, provide written assurances to -the HRA, deemed acceptable to the HRA, that the Redeveloper will deliver to the HRA on or before the date of issuance of the Refinancing Notes an amount which, along with the net proceeds of the Refinancing Notes, will be sufficient to call all outstanding Development Notes being refinanced (the "Cash Requirement"); and (ii) deliver the Cash Requirement to the FiRA, in immediately available funds, no later than fifteen (15) days prior to the issuance of the Refinancing Notes or, if the Refinancing Notes are not issued, no later than fifteen (15) days prior to the final maturity date of the Development Notes. (f) Redeveloper Representations. The Redeveloper makes the following representations to the HRA with respect to the HRA's provision of Tax • Increment assistance in accordance with this Section 7.2; (i) The Redeveloper will take no action, and will not fail to take an action, the effect of which will be to cause any Refinancing Note to be determined to be a "private activity bond" (as such term is defined in Section 141 of the Internal Revenue Code of 1986, as amended (the "Code") and in applicable Treasury Regulations promulgated pursuant to applicable provisions of the Code (the "Regulations") (ii) The Redeveloper will take no action, and will not fail to take an action, the effect of which will be to cause the "private security or payment test" (as such term is defined in Section 141 of the Code and in applicable Regulations} or the "private loan financing test (as such term is defined in Section 141 of the Code and in applicable Regulations to be satisfied with respect to the Refinancing Notes. (iii) The Redeveloper will take no action, and will not fail to take an action, the effect of which will be to cause any Refinancing Note to be determined to bean "arbitrage bond"(as such term is defined in Section 148 of the Code and in applicable Regulations). (iv) The Redeveloper will take no action, and will not fail to • take an action, the effect of which will be to cause interest on any _~g_ • Refinancing Note to be includable in gross income for federal income tax purposes. Section 7.3. Pay-As-You-Go Tax .Increment Notes. Upon appropriate resolution authority, the I3RA will provide to the Redeveloper an amount of Available Tax Increment on apay-as-you-go basis to reimburse the Redeveloper for a portion of the Site Costs incurred by the Redeveloper subject to the liTnits described in this Section 7.3. The HRA will issue the note (the "Pay-Go Note") on the date of issuance of the Development Notes in accordance with Section 7.6 of this Agreement and in accordance with the following terms and conditions: (a) The Pay-Go Note shall have a face amount of (5225,497.63- estimated, to be provided at closing). The Pay-Go Note will serve as reimbursement for certified Site Costs not- paid with the proceeds of the Development Notes. The sole source of repayment for the Pay-Go Note will be Available Tax Increment. Available Tax Increment will be applied to the payment of the Pay-Go-Note only after the Development Notes have been paid in full or, if the Refinancing Notes have been issued, after the Refinancing Notes have been paid in full. (b) Upon completion of the work associated with the Site Costs in accordance with the Construction Plans and receipt of acceptable evidence of • payment therefor, the HRA will certify the Site Costs on certificates in a form acceptable to the parties. Only certified Site Costs will be eligible for reimbursement from the Pay-Go .Note in accordance with this Section 7.3. No reimbursement under the Pay-Go Note will be made to reimburse for the payment of costs of acquiring land to be donated to the City for park purposes. (c) The Redeveloper makes the following representations to the HRA with respect to the HRA's provision. of Tax increment assistance in accordance with this Section 7.3. () The Redeveloper has not relied on any representations of the 13RA, or any of its officers,. agents or employees, or on any opinion of any attorney of the IIRA, as • to the Federal or State income tax consequences relating to the purchase and ownership of the Pay-Go Note. (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 Pay-Go Note, and is able to evaluate the risks and merits of the purchase and ownership of the Pay-Go Note. The Redeveloper has been made aware of the security for the Pay-Go Note and the proposed uses of the proceeds of the Pay-Go Note,. and has received the cooperation of the HRA in undertaking any due diligence that the. Redeveloper has deemed necessary or appropriate. • -19- (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- Pay-Go Note; that, except for the possible prepayment of the Pay-Go Note described in Section 7.3(c), neither the HItA nor the City is under any obligation to repurchase the Pay-Go Note from the Redeveloper under any circumstances; that the Pay-Go Note is not a general obligation of the HRA or the City; and that, if the Available Tax Increment is not sufficient to make the payments due under the Pay- Cro Note in full, no right will exist to have taxes levied by the City or the HRA for the payment of the unpaid amounts due under the Pay-Go Note. (iv) The Redeveloper understands that the Pay-Go Note is not registered under the securities laws and regulations of the State or under the Federal securities laws or regulations, the Pay-Go Note is not- listed on any stock or other securities exchange, and the Pay-Go Note will carry no rating from any rating service. (v) The Redeveloper understands that neither the HRA nor the City makes any representation that the Pay-Go Note represents a marketable security or that it is exempt from registration and official statement delivery requirements. The Pay-Go Note shall not be transferred to any person, including without limitation a mortgage lender providing permanent financing for the project, unless a legal opinion from. counsel reasonably acceptable to the IiRA is provided to the HRA that such • transfer is exempt from registration and official statement delivery requirements of federal and applicable State securities law, together with an investment letter executed by the proposed owner in a form reasonably. satisfactory to the HRA. The Redeveloper shall pay all. reasonable out-of-- pocket costs of such legal opinion. Section 7.4 Conditions Precedent to a Note Closing;The obligations of the FiRA to issue a Note (the "Note Closing") are contingent upon each of the following being satisfied by the Redeveloper or waived by the HRA: (a) The representations and warranties of Redeveloper contained in Sections 72 and 7.3 of this Agreement must be true in ali material respects on the date of any Note Closing. (b) On the date of any Note Closing, there must be no uncured Event of Default or circumstances which, with the passage of time, would result in an Event of Default. (c) On or before the Development Note Closing or Pay-Go Note Closing, Redeveloper must have delivered to the HtA all of Redeveloper's Documents related to the Property and Minimum Improvements required to be provided under Section 7.5. • -20- • (d) The Redeveloper must pay at each Closing all necessary closing fees or .charges (provided that such costs shall not include the internal administrative staff time of the HRA incurred prior to each Closing). Section 7.5 Redeveloper's Documents. On or before the date of the Note Closing, Redeveloper shall execute (if required) and deliver to the HRA the following Redeveloper's Documents, all in form and content reasonably satisfactory to the I-IIZA: (a) A marked up title commitment or a title policy, dated as of the date of the 1~Tote Closing, or other evidence that the Redeveloper has fee simple title to the Property, subject only to such liens, defects and encumbrances as will not interfere with the Redeveloper's construction of the Minimum Improvements. (b) HRA approved Construction Contracts for the Minimum Improvements; (c) A project cost statement and evidence that the Redeveloper has sufficient cash resources or has obtained financing sufficient for the construction of the Minimum Improvements; (d) An affidavit of title by Redeveloper indicating on the date of the • Note Closing that there .are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving the Redeveloper or the Property; that there has been no skill, labor or material. furnished or ordered by Redeveloper for the Property in Redeveloper's ownership for which payment has not been made or for which mechanic's liens could be filed; and that, to the best of Redeveloper's knowledge, there are no other unrecorded interests in the Property; (e) A certificate of good standing for Redeveloper from the Secretary of State of the State; (f) Funds sufficient for payment by the Redeveloper at the Note Closing. of any fee or charge imposed by any closing agent. designated by the Title Company, and any other incidental or related closing costs; (g) To the extent required and obtainable as of the date of the Note Closing,. environmental clearances, subdivision approvals, permits, ,and any other required governmental approvals for the Minimum Improvements; (h) A guaranty executed by the Redeveloper and such principals and affiliates of the Redeveloper as the Redeveloper and the Underwriter agree under which the guarantors guarantee the payment of principal and interest on the Development Notes and the principal amount of the Development Notes at • maturity; and -21- (i) Such other documents as shall be required to carry out the intent of • this Agreement. Section 7.6 HRA's Documents. Provided that the Redeveloper has satisfied all of the conditions precedent specified in this Article VII of this Agreement, the IRA shall execute and deliver all of the following HILA's Documents on the date of the Note Closing for the Development Note and Pay- Go Note, which shall be on April 24, 2002, unless otherwise agreed to by the parties.: (a) The Development Notes and Pay-Go Note, duly executed and delivered by the HRA; (b) The opinion of IAA's counsel and bond counsel as are normally required for such a transaction; and (c) Such other documents as shall be required to carry out the intent of this Agreement. Section 5. Section 9.4 is hereby amended by changing the title of such section to "Transfer of Commercial and Residential Components" and adding the following at the end thereof: In addition, the HRA hereby consents to an assignment of .this Agreement as it • relates to the Residential ~ Component and a transfer of that portion of the Redevelopment Property on which the Residential Component will be built to The Village by the Bay Development, LLC, , a Minnesota. limited- liability company (the "Residential Component Redeveloper"), subject to the Residential Component Redeveloper's execution of an assignment and assumption agreement by which the Residential Component Redeveloper assumes and agrees to perform the Redeveloper's obligations under this Agreement with respect to the Residential Component. After execution of such assignment and assumption agreement and the assignment and assumption agreement with the Commercial Component Redeveloper the Redeveloper shall have no further responsibilities or obligations under this Agreement. Section 6. The Agreement is hereby amended by adding a new subsection 10.1(f) as follows: (fj If, at a time when any Development Notes are outstanding, the real estate taxes payable with respect to the Property owned by the Redeveloper are not paid- when due. Section 7. Section 10.2 of the Agreement is hereby amended to provide as follows: • o -22- Section 10.2. Remedies on Default. Whenever any Event of Default referred to in • Section 10.1 of this Agreement occurs, the non defaulting party may, in addition to any other remedies or rights given it under this Agreement, but only after at least thirty (30) days notice to the defaulting party, and its failure to cure (unless a longer cure period is provided with respect to specific defaults under this Agreement) or such longer cure period if reasonably required and the actions to cure have been commenced within such 30-day period, find the defaulting party in default (Default) and take any one or more of the following actions: (a) Suspend its performance under this Agreement or the Development Notes until it receives assurances ~ from the defaulting party or mortgagee reasonably deemed adequate. by the non defaulting party, that the defaulting party will cure the default and continue performance under this Agreement. (b) Withhold the Certificate of Completion if the Event of Default relates to the failure of the Redeveloper to complete the improvements as provided in this Agreement. (c) Subject to the limitations stated in Article III take whatever action at law or in equity may appear necessary or desirable to the non defaulting party to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement or covenant of the defaulting party under this Agreement. Provided, however, that any exercise by the HRA, its successors or assigns, of its right or • remedies hereunder shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way (a) the lien of any mortgage authorized by this Agreement and (b) any rights or interests provided in this Agreement for the protection of the Holder of such mortgages; and provided further that if a default by the Developer relates to only one of the Components, any remedy available to the HRA shall be exercised only as to that Component. Section 8. The Agreement is hereby amended by changing replacing Exhibit A to the Agreement with the Exhibit A attached to this Amendment. Section. 9. The Agreement is hereby amended by adding a new Exhibit C in the form attached hereto. Section 1U. The Agreement is hereby amended by adding a new Exhibit D in the form attached her-eto. Section 11. All other terms of the Agreement shall remain in full force and effect. • 11 -23- IN WiTl~iE55 WHEREOF, the HRA has caused this Amendment to be duly executed in • its name and behalf and the Redeveloper has caused this Amendment to be duly executed on or as of the date first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF MOUND, MIN]\FESOTA By: Its: sy: Its: Executive Director METROPLAINS DEVELOPMENT LLC, a Minnesota limited liability company By: Lawrence W. Olson Its: Its Vice President STATE OF MINNESOTA • ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 2002, by and ,the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Mound, Minnesota. Notary Public STATE OF MINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 2002, by Lawrence W. Olson, the Vice President of MetroPlains Development LLC, a Minnesota limited liability company, on behalf of the company. Notary Public -24- • Exhibit A I,egnl Description of Redevelopment Property 'The following is the legal description of the property on which the Residential Component will be developed: Lot 1, Blocks 2-14; Lot 2, Block 5; and Outlots B, C, D, E, F, ~, H, I Mound Visions 2°d Addition, Hennepin County, Minnesota The following is the legal description of the property on which the Commercial Component will be developed: Lot 1, Block 1 and Outlot A, Mount Visions 2"d Addition, Hennepin County, Minnesota ,. • -25- EXHIBIT C MINIMUM ASSESSMENT AGREEMENT and ASSESSOR'S CERTIFICATION By and among HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND,. MINNESOTA, MOUND MARKETPLACE, LLC and COUNTY ASSESSOR OF THE COUNTY OF HENNEPIN This document- was drafted by: e BRADLEY & DEIKE, P.A 5100 Eden Avenue, Suite 30~ • Edina, Minnesota 55436 -26- • THIS AGREEMENT, dated as of this day of 200 by and between the Housing and Redevelopment Authority In and For the City of Mound, Minnesota, a body politic and corporate (the "HRA") and Mound Marketplace, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: that WHEREAS, on or before the date hereof the HRA and Metroplains Development, LLC, have entered into an Amended and Restated. Contract for Private Redevelopment, which contract has been amended by a First Amendment thereto (as amended, the "Contract") regarding the redevelopment of certain real property located in the City of Mound, which real property is legally described on the attached Exhibit A and is referred to herein as the "Property"; and WHEREAS, under the Contract Metroplains Development, LLC, ageed to construct a commercial development on the Froperty; and WHEREAS, Metroplains Development, LLC, has assigned the rights and obligations under the Contract with respect to the development of the Property to the Redeveloper and the Redeveloper has assumed such rights and obligations; and WHEREAS, the HRA and Redeveloper ageed in the Contract that they would establish a minimum market value for said land and the improvements constructed or to be constructed • thereon, pursuant to Nfinnesota Statutes. Section 469.177, Subdivision 8; and WHEREAS, the HRt~. and the County Assessor for Hennepin County have reviewed the plans and specifications for the irnprovernents which have been or will- be constructed on the Property. NOW, THEREFORE, the parties to this Ageement, in consideration of the promises, covenants and ageements made by each to the other, do hereby agee as follows: 1. Commencing on January 2, 2003, and continuing on each assessment date thereafter until. the termination date stated in paragaph 2 below,. the minimum rnarleet value which shall be assessed for the land described in Exhibit A and the above described improvements shall be not less than $5,890,000. 2. This Agreement shall terminate in its entirety on the earlier of December 31, 2025, or when the HRA has issued those certain Refinancing Notes, as defined in the Contract. The termination of this- Ageement due to the issuance of said Refinancing Notes shall be evidenced by the H[tA's recording in the office of land records appropriate for the filing of such instruments a certificate stating that this Ageement has terminated. 3. The Redeveloper may assign its interests in this Agreement to a lender providing financing for construction of the improvements to be constructed upon the Property pursuant to the Contract. • -27- 4. Redeveloper shall promptly record this Agreement and shall pay all costs of • recording. 5. Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifying the terms of the. Contract between the HRA and Redeveloper. 6. Each of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 7. In the event any provision of this Agreement will be held invalid and unenforceable by any court of competent jurisdiction, such holding shall. not invalidate or render unenforceable any other provision hereof. 8. The parties hereto agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Redevelopment- Property or the Improvements, or for carrying out the expressed intention of this Agreement. 9. Except as provided in Sections 3 and 10 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. lU. This A Bement rna be simultaneously executed in several counterparts, each of • Sn' Y which will be an original and ail of which will constitute but one and the same instrument. 11. 'T'his Agreement will be governed by and construed in accordance with the laws of the State of Minnesota. • -28- • IN WITNESS W$EREOF, the parties hereto have set their hands and seals as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF MOUND, MiNNESO'I'A By: Its: By: Its: Executive Director MOUND MARKETPLACE, LLC a Minnesota limiced liability company By: Brian E. Pellowski Its Chief Manager By: Lawrence W. Olson. Its Chief Financial Manager • STATE OF MINNESOTA ss:. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of , 2002, by and ,the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Mound, Minnesota. Notary Public • STATE OF 1VIINNESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 2002, by Brian E. Pellowski and Lawrence W. Olson, the Chief Manager and Chief Finacial Manager of Mound Marketplace, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public -29- CERTIFICATION BY COUNTY ASSESSOR • The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, and- being of the. opinion that the tnnimurn market value contained in the foregoing Agreement appears reasonable, hereby certifies as follows: The undersigned assessor, being legally responsible for the assessment of the above described property, certifies that the market values assigned to such land and improvements upon completion of the improvements are reasonable. County Assessor for the County of Hennepin STATE OF MINNESOTA) )ss. COUNTY OF 1 The foregoing instrument was acknowledged before me this day of 2002, by the County Assessor for the County of Hennepn.- Notary Public • • -30- • • • EXHIBIT A Legal Description of Land Lot 1, Block 1 and Outlat A, Mount Visions 2"d Addition, Hennepin County, Minnesota -31- EXHIBIT D • MINIMUM ASSESSMENT AGREEMENT and ASSESSOR'S CERTIFICATION By and among HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA, • THE VIILAGE BY THE BAY DEVELOPMENT, LLC and COUNTY ASSESSOR OF THE COUNTY OF HENNEPIN This document was drafted by: BRADLEY & DEIKE, P.A. 5100 Eden Avenue, Suite 308 Edina, Minnesota 55436 -32- • MIl~TIMUM ASSESSMENT AGREEMENT AND ASSESSOR'S CERTIFICATION THIS AGREEMENT, dated as of this day of 20U_, by and between the Housing and Redevelopment Authority In and For the City of Mound, Minnesota, a body politic and corporate (the "HRA") and The Village by the Bay Development, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: that WHEREAS, on or before the date hereof the IRA and Metroplans Development, LLC, have entered into an Amended and Restated Contract for Private Redevelopment, which contract has been amended by a First Amendment thereto (as amended, the "Contract") regarding the redevelopment of certain real property located in the City of Mound, which real property is legally described on the attached Exhibit A and is referred to herein as the "Property"; and WHEREAS, under the Contract Metroplams Development, LLC, agreed to construct a residential development on the Property; and WHEREAS, Metroplains Development, LLC, has assigned the rights and obligations under the Contract with respect to the development of the Property to the Redeveloper and the Redeveloper has assumed such rights and obligations; and • WHEREAS, the HRA and Redeveloper agreed in the Contract that they would establish a minimum market value for said land and the improvements constructed or to be constructed thereon, pursuant to 11~nnesota Statutes, Section 469.177, Subdivision 8; and WHEREAS, the HRA and the County Assessor for Hennepin County have reviewed the plans and specifications for the improvements which have been or will be constructed on the Property. NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: NOW, THEREFORE, the parties hereto do hereby agree as follows: - 1. As of January 2, 2003, the minimum market value, which shall be assigned for the Redevelopment Property and the above-referenced Improvements to be constructed thereon, shall be $9,000,U00. 2. As of January 2, 2004, the minimum market value, which shall be assigned for the Redevelopment Property and the above-referenced Improvements to be constructed thereon shall be $20,000,000. -33- 3. Upon subdivision of the Redevelopment Property, the minimum market values established by this Agreement shall be apportioned to the subdivided Redevelopment Froperty in accordance with Schedule B attached hereto. 4. This Agreement shall terminate in its entirety on the earlier of December 31, 2025, or when the HRA has issued those certain Refinancing Notes, as defined in the Contract. The termination of this Agreement due to the issuance of said Refinancing Notes shall be evidenced by the HRA's recording in the office of land records appropriate for the filing of such instruments a certificate stating that this Agreement has terminated. 5. The Redeveloper may assign its interests in this Agreement to a Lender providing financing for construction of the Improvements to be constructed upon the Property pursuant to the Contract. However, notwithstanding anything in this Agreement to the contrary, the minimum market values assessed to each subdivided unit of the Redevelopment Property pursuant to Schedule B shall only run with the respective unit if the first purchaser of any such unit- expressly consents to the minimum market value assessment for such unit pursuant to a Consent Agreement substantially in the form of Schedule C attached hereto. 6. Redeveloper shall promptly record this Agreement and all Consent Agreements pursuant hereto and shall pay all costs of recording. Upon recording, Redeveloper shall forward copies of any and all Consent Agreements executed pursuant to this Agreement to the H;RA and to the County Assessor's Office. 7. Neither the preambles nor provisions of this Agreement are intended to, nor shall • they be construed as, modifying the terms of the Contract between the HRA and Redeveloper. 8. Each of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 9. In the event any provision of this Agreement will be held invalid and unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof 10. The parties hereto agree that they will, from time to tune, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or --- incorrect description of the Redevelopment Property or the Improvements, or for carrying out the expressed intention of this Agreement. 11. Except as provided in Sections 5 and 1'0 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 12. This Agreement may be simultaneously executed in several counterparts, each of which will be an original and all of which will constitute but one and the same instrument. • la -34- IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the • day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF MOUND, MINNESOTA By: Its: By. Its: Executive Director THE VII,LAGE BY THE BAY DEVELOPMENT, LLC, a Minnesota limited liability company By: Lawrence W. Olson Its Vice President STATE OF MINNESOTA • ss.. The foregoing instrument was acknowledged before me this day of , 2002, by and ,the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Mound, Minnesota. COUNTY OF H[ENNEPIN Notary Public STATE OF MII~INESOTA ss.. COUNTY OF HENNEPIN The foregoing instrument was. acknowledged before me this day of 2002, by Lawrence W. Olson, the Vice President of The Village by the Bay Development, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 12 • -36- CERTIFICATION BY COUNTY ASSESSOR • The undersigned, having reviewed the plans and specifications for the improvements to be constructed-and the market value assigned to the land upon which the improvements are to be constructed, and being of the opinion that the minimum market value contained in the foregoing Agreement appears reasonable, hereby certifies as follows: The undersigned assessor, being legally responsible for the assessment of the above described property, certifies that the market values assigned to such land and improvements upon completion of the improvements are reasonable. County Assessor for the County of Hennepin • LJ STATE OF MINNESOTA) )ss. COUNTY OF 1 The foregoing instrument was acknowledged before me this day of 2D02, by the County Assessor for the County of Hennepin. Notary Public 13 -37- SCHEDULE A TO ASSESSMENT AGREEMENT LEGAL DE~CRIFTION OF LAND • Lot 1, Blocks 2-14; Lot 2, Block 5; and Outlots B, C, D, E, F, G, H, I Mound Visions 2°d Addition, Hennepin County, Minnesota • • -38- SCHEDULE D TO ASSESSMENT AGREEMENT • UNIT ASSESSMENTS • -39- SCIiEDULE C TO ASSESSMENT AGREEMENT FORM OF MINIMUM ASSESSMENT CONSENT AGREEMENT THIS MINIMUM ASSESSMENT CONSENT AGREEMENT (the "Agreement") is made this day of 20 between a ("Purchaser"), and a ("Seller"). RECITALS WHEREAS, Seller and Purchaser are parties to a Purchase Agreement (the "Purchase e Agreement") dated , 20 ,for the sale and purchase of real property and improvements (the "Property") located in Mound, Minnesota, legally described on Exhibit A attached hereto. WHEREAS, Seller and the Housing and Redevelopment Authority In and For the City of Mound, Minnesota (the "HItA") have entered. into that certain Minimum Assessment Agreement dated , 2002 (the "Assessment Agreement") setting the minimum market value that the County Assessor for the Hennepin Count, Minnesota, will assign to the Property for determining property taxes to be assessed to the Property owner at _ (the "Minimum Market Value"). WHEREAS, pursuant to the Minimum Assessment Agreement, the Minimum Market Value of the Property established thereby shall be of no further force and effect on December 31, ,unless previously terminated by the Agency; and WHEREAS, the Purchase Agreement requires Purchaser to execute and deliver this Agreement to Seller; NOW, THEREFORE, in consideration of One and No/100 Dollars ($1.0U) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser does hereby covenant and agree as follows: U -40- 1. Purchaser hereby consents to the County Assessor setting a Minimum Market Value for • the Property of for purposes of assessing property tax to the Property. Z. Purchaser acknowledges that such Minimum Market Value shall continue to be assigned to the Property until December 3l, ,unless previously terminated by the Agency. 3. This Agreement shall inure to .the benefit of and be binding upon the successors and assigns of the parties. 4. This Agreement will be governed by and construed in accordance with the laws of the State of Minnesota. • -41- IN WITNESS WHEREOF, Purchaser has caused this Agreement to be properly • executed and delivered as of the day and year first above written. STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) PURCHASER: By SELLER: By _ Its The foregoing instrument was acknowledged before me this day of 20_ by a STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) Not Public • ~'Y The foregoing instrument was acknowledged before me this day of 20_ by the of a on behalf of the company. This document was drafted by: BRADLEY & DEIKE, P.A. 5100 Eden Avenue, Suite 308 Edina, Minnesota 55436 Notary Public -42- • EXHIIBIT A TO M~1vIMi1M ASSESSMENT CONSENT AGREEMENT • LEGAL DESCRIPTION • C7 -43- EXHIBIT B TO MINIMUM ASSESSMENT CONSENT AGREEMENT • 11!~INIMUM ASSESSMENT AGREEMENT • • -44- • MOUND HRA RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF TAXABLE TAX INCREMENT SUBORDINATE REVENUE NOTE (METROPLAINS REDEVELOPMENT PROJECT) SERIES 2.002B BE IT RESOLVED BY the Board of Conunissianers ("Board's of the Housing and Redevelopment Authority in azld for the City of Mound, Minnesota (the "Authority's as follows: Section 1. Authorization: Award of Sale. 1:01. Authorization: The Authority and City of Mound (the "City") have heretofore- approved the establishment of Tax Increment Financing District No. 1-2 (the `°I'IF District's pursuant to Statutes, Sections 469.174 to 469.179, as amended (the "Tax Increment Act's within Development . District No. 1 (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes. Section 469.178, the Authority is authorized to issue and sell its bonds or notes for the purpose of financing a portion of the public redevelopment costs of the Project. Such bonds or notes are payable from all or any portion of tax increment revenues derived from the T1F District and pledged to the payment of the bonds or notes. • The Authority has authorized issuance of its Taxable Tax Increment Revenue Notes, (MetroPlains Redevelopment Project) Series 2002 in the original principal amount of $3,210,000 (the "Senior Notes") to finance certain costs of the Project, in accordance with that certain Amended and Restated Contract for Private Redevelopment between the Authority and MetroPlains Development LLC (the "Redeveloper's dated January 8, 2002, as amended by the First Amendment thereto dated Apri124, 2002 (the "Agreement"). The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Subordinate Revenue Note (MetroPlains Redevelopment Project), Series 2flU2B, in a maximum aggregate principal amount not to exceed $2,840,000, less the net proceeds of the Senior Notes. The term "net proceeds" means the principal amount of the Senior Notes less all costs of issuance (including placement agent fee) and capitalized interest. 1.02. Issuance. Sale. and Terms of the Notes. The Note shall be issued in accordance with the Agreement. The Note shall be dated as of the date of delivery thereof and shall bear simple interest at a rate not to exceed 7.5 percent per annum to the earlier of maturity or prepayment, accrued from the date of certification by an authorized representative of the Authority that the Redeveloper, its successors or assigns have incurred and paid Site Costs not otherwise paid from proceeds of the Senior Notes, all in accordance with Section 7.3 of the Agreement. The Note shall be issued to the Redeveloper or, at Redeveloper's request, to Mound Marketplace, LLC or Village By The Bay, LLC (each an "Owner"), or any combination of such Owners, in consideration of payment by the Owner of Site Costs in accordance with the Agreement. ff more than one Note is issued, the principal amount of the Note may be allocated to such separate Notes as directed by the Redeveloper. • This authorization to issue the Notes is effective without any additional action of the Board and shall be undertaken by the Executive Director on such date and upon the terms and conditions deemed SJB-213302v1 MU195-14 -45- reasonable by the Executive Director. Without linuting the generality of the foregoing, the Executive • Director is authorized to set the interest rate on the Note (up to the maximum rate specified above), to approve changes in the original aggregate principal amount of the Note (up to the maximum aggregate principal amount set forth in Section l.Ul), in the terms of prepayment, the principal amounts subject to payment or prepayment, and the dates of payment or prepayment of the Notes, and the other terms of the Note. The issuance and delivery of the Note shall be conclusive evidence that the Executive Director has approved any changes to the forms of the Note on file with the Authority on the date hereof. 1.03. Optional Prepayment. The Authority may prepay the Notes on any date in whole or in part. Any prepayment amount will be applied prorata among the appropriate outstanding Notes based on their outstanding principal amounts. Twenty-five day's prior notice of any such prepayment shall be given by first-class mail by the Registrar to the registered owners of any Notes to be prepaid in whole or part. Upon notice having been so given, the Notes shall be due and payable at the stated prepayment date and price with accrued interest to the prepayment date, and upon such paymelrt on the specified prepayment date,. interest thereon shall cease to accrue after such prepaymenrt date. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in as of the date of issue: • [the remainder of this page intentionally blank] e SJB-213025v1 2 MU195-14 -46- • UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA No. R- $ TAXABLE TAX INCREMENT SUBORDINATE REVENUE NOTE (METROPLAINS REDEVELOPMENT PROJECT) SERIES 2002B Interest Date Rate of Original Issue Registered Owner: The Housing and Redevelopment Authority in and for the City of Mound, Minnesota (the "Authority', for value received, certifies that it is indebted and hereby promises to pay to the registered owner set forth above or its assigns (the "Owner', the principal sum of $ and to pay interest thereon at the above-stated rate, as and to the extent set forth herein. • 1. Payments. Principal and interest ("Payments' shall be paid on the first February 1 or August 1 (each a "Payment Date's after the Senior Notes and any Refinancing Notes (as defined in the Agreement) have been paid in full, defeased, or redeemed in accordance with their terms, and continuing through February 1, 2027. Payments on any Payment Date will be made in the amount of and solely from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. " Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of certification by an authorized representative of the Authority that the Redeveloper, its successors or assigns have incurred and paid Site Costs not otherwise paid from proceeds of the Senior Notes, all in accordance with Section 7.3 of the Agreement. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. 3. Available Tax Increment. Payments on this Note are payable on each Paymelrt Date in the amount of and solely from Available Tax Increment. The term "Available Tax Increment" means the amount of Tax Increment with respect to the Redevelopment Property (as defined in the Agreement} paid to the Authority during the period preceding each Payment Date after deducting the amount of Tax Increment, if any, which the Authority must pay to the school district, the County and the State pursuant • to Minnesota Statutes, Sections 469.177 subds. 9, 10, and 11; 469.176, subd. 4h; and 469.175, subd. la, as the same may be amended from time to time; and administrative costs as defined in Minnesota SJB-213302v1 IvIIJ195-14 -47- Statutes, Sections 469.174 subd. 14 of the Authority in the amount of 10% of the Tax Increment, all as such terms are defined in the Agreement. S The Authority shall have no obligation to pay principal of and interest on this Note until the Senior Notes and any Refinancing Notes (as defined in the Agreement) have been paid in full, defeased, or redeemed in accordance with their terms, and thereaRer shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment. Payment of Available Tax Increment is subject to compliance by Redeveloper, its successors and assigns with the terms of the Agreement. The Authority has no obligation to pay any outstanding principal or accrued interest remaining unpaid on February 1, 2029. The Authority makes no warranty or representation that Available Tax Increment will be sufficient to pay all' or any portion of the principal or interest on this Note. 4. Optional Prepayment. The Authority may prepay this Note in whole or in part without premium or penalty on any date. Twenty-five days' prior notice of any such prepayment shall be given. by first-class mail by-the Registrar to the registered owner of the Note. 5. Nature of Obligation. This Note is one of an issue in the total principal amount of $ issued to aid in financing certain public development costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes. Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on April 23, 2002 and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota., including Minnesota tatutes Sections 4:69..174 to 469.179. This. Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the paymerrt hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general • obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon. the books of the Authority kept for that purpose at the principal office of the Authority, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person,. unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws or such requirements have been satisfied. 8. Additional. Obligations. The Authority shall issue no obligation secured in whole or in part by Available Tax Increment, unless the pledge to such obligation is subordinate to the pledge to this Note. • sJS-aiso2svi 4 MU193-14 -48- IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things rewired by the • Constitution and laws of the State of Minnesota to be done, to exist, to happen; and to be performed in order to make this. Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS. WHEREOF, the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota has caused this Note to be executed with the manual signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA Chair Executive Director AUTHENTICATION AND REGISTRATION PROVISIONS This is one of the Notes described in the within mentioned Resolution. The ownership of the unpaid balance ofthe within Note is registered in the bond register, in the name of the person last listed below. . Date of Registration Registered Owner Signature of Registrar Tax I.D. No: SJB-213023v1 MU195-14 [the remainder of this page intentionally blank) -49- Section 3. Terms. Execution and Delivery. 3.01. Denolninataon. Pa~!ment. The Notes shall be issued as one or more typewritten notes • numbered from R-1 upwards. The Notes shall be issuable only in fully registered form. Principal of and interest on the Notes shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Notes shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such: day is a business day. 3.03. Registrar and Paving Agent. The Executive Director shall appoint a registrar, transfer agent and paying agent (the "Registrar" or the "Paying Agent'. The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Resister. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Notes and the registration of transfers and exchanges of the Notes. (b) Transfer of Notes. Upon surrender for transfer of the Notes duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Notes shall not be transferred to any person unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus • delivery requirements of federal and applicable state securities laws. The Registrar may close. the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Im~roner or Unauthorized Transfer. When a Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to-make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed, -Owners. The Authority and the Registrar may treat the person in whose name a Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such-Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes. Fees and Charues. For every transfer or exchange of a Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated. Lost. Stolen or Destroyed Note. In case any Note shall become mutilated or • be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated. Note or in lieu of and in SJB-213025v1 MU193-14 -50- substitution for such Note lost, stolen,- or destroyed, upon the payment of the reasonable expenses and • charges of the Registrar in connection therewith; and, in the case the Note lost,'stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and-the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. (h) Prepayment. In the event a Note is prepaid in whole or in part, notice thereof will be given by the Registrar by mailing a copy of the prepayment notice by first class mail (postage prepaid) not more than 60 and not less than 25 days prior to the date fixed for prepayment to the registered owner of the Note at the address shown on the registration books kept by the Registrar. Failure to give notice by mail to any registered owner, any defect therein, will not affect the validity of any proceeding for the prepayment of the Note. The Note so called for prepayment will cease to bear interest after the specified prepayment date, provided that the funds for the prepayment are on deposit with the place of payment at that time. 3.04. Preparation and Delivery. The Notes shall be prepared under the direction of the Executive Director and shah be executed on behalf of the Authority by the signatures of its Chair and Executive Director. Incase any officer whose signature shall appear on the Notes shall cease to be such officer before the delivery of the Notes, such signature shall nevertheless be valid and sufFicient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, the Notes shall not be valid or obligatory for any purpose or emitted to any security or benefit under this resolution unless and until a certificate of authentication on such Note has been duly executed by • the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Notes certificates need not be signed by the same representative. The executed certificate of authentication. on each Note shall- be conclusive evidence that it has been authenticated and delivered under this resolution. When the Notes have been so executed and authenticated, it shall be delivered by the Secretary to the Owner upon payment of the purchase price therefor, and the Owner shall not be obligated to see to the application of the purchase price. Section 4. Security Provisions. 4.01. Pled¢e. The Authority hereby pledges to the payment of the principal of and imerest on the Notes all Available Tax Increment as defined in the Note. Available Tax Increment shall be deposited in the Debt Service Fund in accordance with Section 4.03 hereof and applied to payment of the principal of and interest on the Notes in accordance with-the terms of the form of Note set forth in Section 2 of this resolution. 4.02. [intentionally Omitted.] 4.03. Debt Service Fund. So long as the Notes are outstanding and any principal thereof or interest thereon remains unpaid, the Authority shall. maintain a "Debt Service Fund" to be used for no purpose other than the payment of the principal of and interest on the Notes. The Authority appropriates and irrevocably pledges to the Debt Service Fund all Available Tax Increment pledged pursuant to Section 4.01 of this Resolution. The Debt Service Funds and all moneys deposited therein pursuam to this Resolution are hereby • pledged to the payment of principal of and interest on the Notes. The Authority shall deposit the Available Tax Increment in the Debt Service Fund no later than 3 business days prior to each Payment Date. SJS-2I3025v1 '~ MU193-14 -51- Disbursements shall be made from the Debt Service Fund to make the Paymerrts described in the form of Note in Section ~ of this Resolution. • Section S. Certification of Proeeedin~s. 5.01. Certification of Proceedingss. The officers of the Authority are hereby authorized and directed to pr-spare and furnish to the Owners of the Notes certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Notes as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furlushed, shall be deemed representations of the Authority as to the facts recited therein, Section 6: Continuing .Disclosure. The continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"j do not apply to the Notes, because the offering is exempt from such requirements under Section 15c2-12(d)(1)(). Consequently, the Authority will not elrter into any undertaking to provide continuing disclosure of any kind with respect to the Notes. Approved this 23~ day of April by the board of commissioners of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota. Chair ATTEST: Executive Director S]8-213023v1 8 MU193-14 -52- r~ U • • Apri118, 2002 Draft DISBURSING AGREEMENT between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA And • CHICAGO TITLE INSURANCE COMPANY Dated as of Apri124, 2002 • SJB-213250v1 MU195-14 -53- TABLE OF CONTENTS PARTIES- .............................................. RECITALS ........................................... ARTICLE I DEFINITIONS 1 Pave .................................................................. 1 .................................................................. 1 Section 1.01 Defined Terms ................................................................................................. 1 ARTICLE Ii CONDITIONS OF DISBURSEMENT ....................................................................... 2 Section 2:01 Project Fund .........................................................................................:............ 2 Section 2:02 Initial Disbursement from the Project Fund ....................................................... 2 Section 2.03 Conditions Precedent to Disbursements .............................................................. 3 Section 2.04 Further Conditions Precedent ............................................................................ 3 Section 2.U5 No Waiver ........................................................................................................ 3 ARTICLE III DISBURSEMENT PROCEDURES ............................................................... 3 Section 3.01 Requests for Disbursements .............................................................................. 3 Section 3:02 Remitting Funds ................................................................................................ 4 Section 3.03 Funds Transferred to the Paying Agent .............................................................. 4 ARTICLE IV OBLIGATIONS OF THE DISBURSING AGENT ....................................... 4 Section 4.U1 Exculpation ....................................................................................................... 4 Section 4:02 Miscellaneous ................................................................................................... 4 SIGNATURES ................................................................................................................................... S-1 EXfIIBI`T A -FORM OF DRAW REQUEST ................................................................................ A-1 EIHIIBIT B -INITIAL DISBURSEMENTS PURSUANT TO SECTION 2.02 ..............:........... B-1 i -54- • •i U DISBURSING AGREEMENT • This Disbursing Agreement is made and entered into as of April 24, 2002 (the "Disbursing Agreement', between the Housing.. and Redevelopment Authority in and for the City of Mound, Minnesota, a public body corporate and politic and a political subdivision of the-State of Minnesota (the "Authority', and Chicago Title Insurance Company, as disbursing agent (the "Disbursing Agent"). Recitals Pursuant to Resolution No. ,adopted by the Board of Commissioners of the Authority on October Apri123, 2002 (the "Note Resolution"), and the terms of an Amended and Restated Contract for Private Redevelopment, dated January 8, 2002, as amended (the "Redevelopment Contract', by and between the Authority and MetroPlains Development, LLC, a Minnesota limited liability company (the "Redeveloper"), the Authority will issue its Taxable Tax Increment Revenue Notes (MetroPlains Development Project), Series 2UU2 (the `2Totes'~, in the original aggregate principal amount of $3,210,000. Pursuant to the terms of the Assignment, Assumption and Consent Agreement, dated Apri124, 2002, between the Redeveloper, Mound Marketplace, LLC and the Authority, the Redeveloper has assigned its interests in the Commercial Component under the Redevelopment Contract to Mound. Marketplace,. LLC. Pursuant to the terms of the Assignment, Assumption and Consent Agreement, dated April 24, 2002, between the Redeveloper, Mound Village By The Bay, LLC and the Authority, the Redeveloper has assigned its interests in the Residential Component under the Redevelopment Contract to Village By The Bay, LLC. For the purposes of this Agreement, the term "Redeveloper" includes Mound • Marketplace, LLC and Village By The Bay, LLC. Pursuant to the terms of the Note Resolution and the Redevelopment Contract, the Authority will apply the proceeds derived from the-sale of the Notes to the payment of certain Site Costs (as defined in the Redevelopment Contract) with respect to the development of certain property in Tax Increment Financing District No. 1-2 (the "TIF District") established by the Authority and the City of Mound, Minnesota. Pursuant to the terms of the Note Resolution and the Redevelopment Contract, the Authority will cause a pardon of the proceeds derived from the sale of the Notes to be deposited in a Project Fund (the "Project Fund's to be established and maintained by the Disbursing Agent pursuant to the terms of this Disbursing Agreement: The proceeds of the Notes deposited in the Project Fund will be advanced in accordance with the provisions of this Disbursing Agreement, the Note Resolution, and the Redevelopment Contract to pay the Site Costs (as defined in the Redevelopment Contract), respectively. Accordingly, the Authority and the Disbursing Agent hereby agree as follows; ARTICLE I Definitions Section 1..01. Defined Terms. For purposes of this Disbursing Ageement, unless the context otherwise requires or unless specifically defined- below, any term used herein which is defined in the • Redevelopment Contract or in the Note Resolution shall have the same definition, scope, or meaning as is given to sneh term in the Redevelopment Contract or in the Note Resolution. All terms defined in the -55- Recitals of this Disbursing Agreement shah have the same meaning throughout this Disbursing e Agreement. ARTICLE II Conditions of Disbursement Section 2.01. Project Fund. The Notes are to be issued by the Authority in the original aggregate principal face amount of $3,210,000. On the date of issuance of the Notes, the proceeds of the Notes in the amount of $3,210,000 shall be deposited in the following funds: (i) $470,045.17 in the Debt Service Fund (as defined in the Note Resolution) to be applied to the payment of inrterest on the Notes (commencing with the initial interest payment date on August 1, 2002); and (ii) $2,739,954.83 in the Project Fund (as defined in the Note Resolution). Section 2.U2. Initial Disbursement from the Project Fund. On the date of issuance of the Notes, an initial disbursement from the Project Fund shall be made pay costs of issuing the Notes. The Disbursing Agent shall disburse such amounts for payment of the costs of issuing the Notes to the payees set forth in F.XI-IIBIT B to this Disbursing Agreement in the respective amounts set forth in EXHIBIT B to this Disbursing Agreement. Such disbursements are not subject to the further provisions of this Disbursing Agreement. Section 2.03. Conditions Precedent to Additional Disbursements. Upon a written request of the Redeveloper made in accordance with the terms of the Redevelopment Contract, and upon satisfaction of all other conditions set forth in the Redevelopment Contract, the Disbursing Agent shall disburse money from the Project Fund to the Redeveloper or a named payee to pay or reimburse Site Costs paid or • incurred by the Redeveloper in accordance with the terms of the Redevelopment Contract. Each disbursement pursuant to this Section 2.03 shall be subject to the condition that the Disbursing Agent shall have received, on or before the date of any such disbursement, a Disbursement Request executed by the Authority in the form of EXHIBIT A to this Disbursing Agreement. Section 2.U4. Further Conditions Precedent. The obligation of the Disbursing Agent to authorize each disbursement from the Project Fund shall be subject to the condition precedent that the Authority shall be in compliance with all applicable conditions set forth in Section 2.03 hereof and the further condition precedent that on the date of such disbursement the disbursement requirements of Section 3.01 hereof have been satisfied. Section 2.05. No Waiver. The making of any disbursement prior to fulfillment of any condition therefor shall not be construed as a waiver- of such condition, and the Disbursing Agent reserves the right to require ful~llrnent of any and all such. conditions prior to making any subsequent disbursement. • 2 -56- • ARTICLE III Disbursement Procedures Section 3.U 1. R~q, nests .for Disbursement. (a) Whenever the Authority requires a disbursement from the Project Fund to pay any Site Costs, the Authority shall submit to the Disbursing Agent a draw request in substantially the form in E3~iIBIT A hereto, duly executed on behalf of the Authority, setting forth the information requested therein. (b) Each draw request shall constitute a certification by the Authority that all conditions set forth in the Redevelopment Contract for any such disbursements have been satisfied as of the date of such draw request, that the disbursement will pay or reimburse a Site Cost that is permitted to be financed by the provisions of Minnesota Statutes, Section 469.174-469.179, as amended, and that the requested disbursement for the purposes requested was not the subject of any prior disbursement from the Project Fund. Section 3:02. Remitting Funds. If on the date a disbursement is requested, the Authority has performed all of its agreements and complied with all requirements to be performed or complied with under this Disbursing Agreement, including satisfaction of all applicable conditions precedent contained in Article II hereof, the Disbursing Agent shall pay, upon written direction of the Authority, to the Redeveloper, or any contractor of the Redeveloper, the amount of the disbursement requested by the Authority from. the Project Fund. • Section 3.03. Funds .Transferred to the Authority. Upon receipt by the Disbursing Agent of a written notification from the Authority that all Site Costs to be financed with the proceeds of the Notes deposited in the Project- Fund have been paid, the Disbursing Agent shall transfer any money retraining in the Project Fund to the Authority for deposit in the Debt Service Fund. ARTICLE IV Obligations of the Disbursing Agent Section 4.01. Excu anon. Neither the Disbursing Agent nor any of its respective- directors, officers, or employees shall be liable or responsible for the validity, enforceability, or sufficiency of any document furnished to the Disbursing Agent pursuant to this Disbursing Agreement, nor shall they be responsible for any representations or statements.. made in such documents. The Disbursing Agern shall be entitled to rely upon advice of counsel concerning legal matters and upon any document or notice delivered to it hereunder which it believes to be genuine or to have been presented by a proper person. A disbursement by the Disbursing Agent shall not be deemed to be a representation or qty by the Disbursing Agent that the proceeds of such disbursement will finance any Site Costs. • 3 -57- Section 4:U2. Miscellaneous. • a) The Disbursing Agent shall have only those duties and. obligations set forth herein and no others, and the Disbursing Agent does not, by execution of this Disbursing Agreemenrt, guarantee the completion of any Bite Costs or the Minimum Improvements (as de£med in the Redevelopment Agreement), or guarantee that sufficient funds are or will be available to complete any Site Costs or the Minimum Improvements. b) The Disbursing Agent may not waive compliance. by the Authority with any requirement of this Disbursing Agreement. c) This Agreement shall be governed by the laws of the State of Minnesota. (The remainder of this page is intentionally left blank.) • • 4 -58- Execution page of the Authority to this Disbursing Agreement. • By • • HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA Executive Director S-1 -59- Execution page o~the Dsbursiaag Agent to dais Disbursing Agreement. • CHICAGO TITLE INSURANCE COMPANY By Its • • S-2 -60- • CONSENT AND AGREEMENT MetroPlains Development LLC, Mound Marketplace, LLC and Village By The Bay, LLC (collectively, "Redeveloper") hereby consent to the terms of this Disbursing Agreement. The Redeveloper hereby agrees to pay the fees of the Disbursing Agent pursuant to this Disbursing Agreement and further agrees to pay or reimburse the Disbursing Agent for its reasonable costs and expenses paid or incurred by the Disbursing Agent in carrying out its duties as Disbursing Agent under this Disbursing Agreement. METROPLAINS DEVELOPMENT LLC By Its MOUND MARKETPLACE, LLC • By Its VILLAGE BY THE BAY, LLC By Its U S-3 -61- EXHIBIT A FORM OF DRAW REQUEST The undersigned authorized representative o€ the Housing and Redevelopment Authority in and for the City of Mound, Minnesota (the "Authority") hereby requests a draw from the Project Fund established under the Disbursing Agreement, dated April 24, 2002 (the "Disbursing Agreement', between the Authority and Commonwealth Land- Title Insurance Company (the "Disbursing Agent', to pay for Site Costs (as defined in the Disbursing Agreement) paid or incurred by the Redeveloper (as defined in the Disbursing Agreement) in accordance with- the terms of the Redevelopment Contract (as defined in the Disbursing Agreement). The disbursement to be made pursuant to this draw request is in the total amouirt of DOLLARS and is requested to be made and disbursed from. the Project Fund in accordance with the terms of the Disbursing Agreement and the other documents referred to in the Disbursing Agreement. Pursuant to Article II and Article III of the Disbursing Agreement, the Authority hereby makes the following representations: • a) The money to be disbursed from the Project Fund pursuant to this Draw Request will • finance Site Costs; b) No "Event of Default" has occurred with respect to the Redevelopment Contract that has not been cured as of the date of this Draw Request; c) The disbursement requiremerrts of Article II and of Article III of the Disbursing Agreement have been satisfied; and d) The Site Costs- to be paid with such disbursement has not been the sub}ect of a prior disbursement pursuam to this Disbursing Agreement. e A-1 -62- Signature page of the A~th©rity to this Draw I+Lequest. Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA By its A-1 -63- EXIiIBIT B INITIAL DISBURSEMENT FROM THE PRQJECT FUND PURSUANT TO SECTION 2.02 An initial disbursement is to be made from the Project Fund to be applied by the Disbursing Agent to the payment of the following -costs of issuance of the Notes: Payee Cflst or Service Miller Johnson Steichen Kinnard, Inc., as Placement Agent Placement Agent fee Miller Johnson Steichen Kinnard, Inc., as Placement Agent Expenses of Placement Agent Gray, Plant, Monty, Monty & Bennett, as counsel to Legal fees the Placement Agent Kennedy & Graven, Chartered, as bond counsel Legal fees Bradley & Deike, as Redeveloper counsel Legal fees M& I Bank, as capitalized interest escrow agent .Escrow agent fees Total srs-Zi32so.~i MUi95-14 Amount • • -64- • CAPITALIZED INTEREST ESCROW AND PAYING AGENT AGREEMENT THIS AGREEMENT, made this 24a' day of April, 2002, by and between the Housing and Redevelopment Authority in and for the City of Mound, Minnesota ("Authority") and Marshall & Islet' Trust Company N.A. ("Bank"). RECITALS A. The Authority has entered into an Amended and Restated Contract for Private Redevelopment with MetroPlains Development LLC dated January 8, 2002, as amended by July 31, 2001, as amended by a First Amendment thereto dated April 24, 2002 ("Contract"). MetroPlains Development LLC has assigned certain of its rights under the Contract to Mound- Marketplace, LLC and certain of its rights under the Contract to Village By The Bay, LLC. MetroPlans Development, LLC, Mound Marketplace, LLC and Village By The Bay, LLC are referred to hereafter collectively as the "Redeveloper." B. Pursuant to the Contract and a resolution approved by the board of commissioners of the Authority of the City on April 23, 2002 (the "Resolution"), the Authority has issued $3,210,000 Taxable Tax Increment Revenue Notes, Series 2002 (the "Note"). C. . A portion of the proceeds of the Notes have been deposited with Chicago Title Insurance • Company ("Disbursing Agent") pursuant to a Disbursing Agreement dated Apri124, 2002 between the Authority and the Disbursing Agent, for disbursement to the Redeveloper to pay certain Site Costs (as defined in the Contract). D. The Authority has agreed to deposit with the Bank, as escrow agent, additional proceeds of the Notes as capitalized interest ("Capitalized Interest"), and the Bank has agreed to disburse Capital Interest in accordance with the terms-and conditions hereof. E. The Bank has further agreed to serve as registrar and paying agent with respect to the Notes in accordance- with the terms and conditions hereof. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows: - 1. The Bank hereby establishes an escrow account referred to as the "Series 2002 Notes Capitalized Interest Account." 2. Upon execution of this Agreement, the City has delivered to the Bank, from proceeds of the Notes, Capitalized Interest in the amount of $470,045.17, which amount is credited to the Series 2002 Note Capitalized Interest Account on such terms and conditions as will render such funds avali~.ble in accordance with the terms of this Agreement. Investment earnings on funds in the Capitalized Interest Account will be credited to that account. • 3. On each February 1 and August 1, commencing August .1, 2002 and continuing through February 1, 2005 (each an "Interest Payment Date"), the Bank shall disburse to the SJB 213301v1 MU195-14 -65- registered owner of each Note, the amount of interest due on such dates on such Note, less any Available Tax Increment paid by the Authority on such Payment Date with respect to the Series • 2442 Note. At least five business days before each Interest Payment Date, the City will notify the Bank in writing as to the amount of Available Tax Increment the City will pay on the subject hrterest Payment Date. 4. On February 2, 2005 or upon earlier prepayment or termination of the Notes in accordance with their terms, the Bank shall disburse any funds remaining in the Capitalized Interest Account by wire transfer to the Authority for deposit in the Note Debt Service Fund. 5. The Bank expressly waives any lien upon or claim against the moneys and investments in the Series 2002 Note Capitalized Interest Accoutlt, except to the extent of the disbursements at the times and in the amounts provided under this Agreement. 6. On or before January 1, 2403 and at least 34 days before each Interest Payment Date thereafter until termination of the Series 2002 Capitalized Interest Accourrt, the Bank shall submit to the Authority and the Redeveloper a report covering all money it shall have received and all payments it shall have made or caused to be made hereunder during the preceding six months. Such report shall also list all investments held in the Series 2042 Capitalized Interest Account and the amount of money on hand in such account on,as of the reporting date. 7. (a) It is recognized and agreed that title to all funds and investments held in the Series 2002 Capitalized Interest Account from time to time shall remain vested in the Authority but subject always to the charge and lien thereon of this Agreement and the use thereof required to be • made by this Agreement. The Bank shall hold all such money and obligations in a special. trust fund and account separate and wholly segregated from all other funds and securities of the Bank, and shall never commingle such money or securities with other money or securities; provided, however, that nothing herein contained shall be construed to require the Bank to keep the identical monies, or any part thereof; received for the Series 2002 Capitalized- Interest Account on hand, but moneys of an equal amount (except to the extent such are represerned by investments permitted under this Agreement) shall always be maintained on hand as funds held by the Bank, as trustee, belonging to the Authority, and a special account shall at all times be maintained on the books of the Bank, together with such investments. In the event of the Bank's failure to account for any money or obligations held. by it in the genes 2042 Capitalized Interest Account, such money and obligations shall be and remain the property of the Authority, and if for any reason such money or obligations cannot be identified, all other assets of the Bank shall be impressed with a trust for..the amount thereof, and the City shall be entitled to a preferred claim upon such assets. It is understood and agreed that the responsibility of the Bank under this Agreement is limited to the safekeeping and segregation of the funds deposited with it in the Bank, and the collection of and accounting for the principal and interest payable with respect thereto. (b) All funds in the Series 2002 Capitalized Interest Account shall be invested in investments in instruments that are permitted investments for political subdivisions of the State of M.lnnesota in accordance with I~Iinnesota Statutes, Chapter 11:8A,. 8. The Bank shall also serve as paying agent and registrar for the Notes, and shall • perform all duties described- in Secton 3.03 of the Resolution. At least three business days before August 1, 2004 and each Payrrlent Date (as defined in the Resolution) thereafter, the Authority shall SJB?2133U1v1 2 MU193-14 -66- deliver to the Bank ail. Available Tax increment (as defined in the Resolution) then on hand at the • Authority., On August 1, 2U04 and each Payment Date thereai~er, the Bank shall pay to the registered Owner of each Note, from and to the extent of Available Tax Increment received from the Authority, the principal and interest then due on each Note. 9. The Bank may at any tune resign and be discharged of its obligations hereunder by giving to the Authority and Redeveloper written notice of such resignation not less than 60 days before the date when the same is to take effect. Such resignation shall take effect upon the date specified in the notice, or upon the appointment and qualifi.cation of a successor prior to that date. In the event of such resignation, a successor shall promptly be appointed by the Authority, and the Authority shall immediately give written notice thereof to the Bank.. I~ in a proper case, no appointment of a successor escrow agent is made within 45 days after the receipt by the Authority and Redeveloper of notice of such resignation, the Bank, the Authority may apply to any court of competent jurisdiction to appoint a successor escrow agent, which appointment may be made by the Court after such notice, if any, as the Court may prescribe. Any successor escrow agent appointed hereunder shall execute, acknowledge and deliver to its- predecessor agent and to the Authority and Redeveloper a written acceptance of such appointment, and shall thereupon without any further act, deed or conveyance become fully vests with all moneys, properties, duties and obligations of its predecessor, but the predecessor shall nevertheless pay over, transfer, assign and deliver all moneys, securities or other property held by it to the successor escrow agent, shall execute, acknowledge and deliver such instruments of conveyance and do such other things as may reasonably be required to vest and confirm more fully and certainly in the successor escrow agent all right, title and interest in clad to any property held by it hereunder. Any bank into which the escrow agent may be merged or • with which it may be consolidated or any bank resulting from any merger or consolidation to which it shall be a party- or any balalc to which it may sell or transfer all or substantially all oftts corporate trust business shall, if the Authority and Redeveloper approve, be the successor escrow agelrt without the execution of any document or the performance of any further act. lU. The duties and obligations of the Bank as escrow agent, registrar and paying agent shall be as prescribed by the provisions of this Agreement and the Bank shall not be liable hereunder except for failure to perform its duties and obligations as specifically set forth herein or to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by the Bank other than those specified herein. Redeveloper undertakes to hold the Bank harmless from any claims for damages arising out of this Agreement and agree to indemnify the Bank for all costs and expenses in connection with this escrow, including court costs and attorney fees, except for the Bank acting in conflict with the terms hereof 11. Upon issuance of the Notes, the Authority shall pay to the Bank, from disbursements drawn from the Project Fund, the amount of $ as full compensation for the Bank's services as escrow agent. under this Agreement. The Bank shall deliver any further invoices for services as paying agent to Redeveloper, who shall- have sole responsibility for payment. The Authority has no liability for the cost of Bank's services under this Agreement other than the deposit from the Project Fund described in this Section. 12. Any notice, authorization, request or demand required or permitted to be given in accordance with the terms of this Agreement shall be in writing and sent by registered or certified • mail addressed: sas-zl3solvl 3 MIJ195-14 -67- If to the Bank: Marshall & Isley Trust Company, N.A. • Telephone: (2fi2) 33:5-3032 If to the Authority: Mound Housing and. Redevelopment Authority 534.1 Maywood Road Mound, MN 553b4 Attention: Executive Director • • SIB-213301v1 MLJ195-14 -68- IN WITNESS WHF,REOF the parties hereto have caused this. instrument to be duly • eoxecuted by their duly authorized off cers, in counterparts, each of which is deemed to be a~ 'ginal agreement, on this 24~' day of April, 2002. • • H4IJSINC'r AND Ai1THORTTY IN AND MOUND, MINNESOTA By: I3y: SJB-213301v1 MU195-14 -69- REDEVELOPMENT FOR THE CITY OF Its: Chair Its: Executive Director • MARSHALL & ISLEY BANK, N:A. By: Its: • • SJB-213301v1 MtJ195-14 -70- • C7 CONSENT AND AGREEMENT MetroPiains Development LLC, Mound l~IarketPlace, LLC and' Village By The Bay, LLC (collectively, "Redeveloper") hereby consent to the terms of this Capitalized Interest Escrow and Paying Agent Agreement ("Agreement"). The Redeveloper hereby agrees to pay the fees of the Batik pursuant to this Agreement except as otherwise provided in Section 11 thereof, and further agrees to pay or reimburse the Bank for its reasonable costs and expenses paid or incurred by the Bank in carrying out its duties- as escrow agent and paying agent under :this Agreement. METROPLAINS DEVELOPMENT LLC By Its MOUND MARI~TPLACE, LLC SJB-213301v1 MiJ195-14 By Its VILLAGE BY THE BAY, LLC By Its -7~- • ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT (Townhome Construction Loan) among THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA, a l~finnesota public body corporate and politic and THE VII.LAGE BY THE BAY DEVELOPMENT LLC • > > a Nf nnesota limited liability company and ASSOCIATED BANK MINNESOTA, a 11~innesota banking corporation Dated as of April , 2002 0 -72- ASSIGNMENT AND SUBORDINATION • OF DEVELOPMENT AGREEMENT THIS ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT (this "Agreement"), is made and entered into as of the _ day of April, 2002, by and among THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FUR THE CITY OF MOUND, IVII1vNESOTA, aMinnesota public body corporate and politic (the "HRA"}, THE VILLAGE BY THE BAY DEVELOPMENT, LLC, a Minnesota limited liability company (the "Developer"), and ASSOCIATED BANK 1VIIlVNESOTA, a Minnesota banking corporation (the "Lender"). WTTNE~SETH: WHEREAS, the HRA and MetroPlains Development LLC, a Minnesota limited liability company ("MetroPlains"} have entered into. that certain Amended and Restated Contract for Private Redevelopment dated as of January 8, 2002 (the "Development Agreement"}, pertaining. to the development of approximately 99 residential units and related site improvements and amenities (the "Residential Component") and approximately 67,000 square feet of commercial space and related site improvements (the "Commercial Component") on property legally described on Exhibit A attached hereto and hereby made a part hereof (the "Project"); and WHEREAS, MetroPlans has assigned to the Developer with the consent of the HRA, the Development Agreement as it related to the Residential Component; and WHEREAS, the Leader has agreed to provide financing to the Developer in connection with the construction of a .portion of the Residential Component pursuant to the terms of that certain Townhome Construction Revolving Credit Loan Agreement dated as of April ~ 20U2 (the "Loan Agreement");.and WHEREAS, the obligation of the Developer to repay amounts advanced under the Loan Agreement is evidenced by that certain Promissory Note dated as of April , 2002 (the "Note"), executed by the Developer in favor of the Lender in the original face amount of $500,000.00; and WHEREAS, the Loan Agreement and the Note evidences an agreement to provide a revolving line of credit under which advances, payments, and re-advances may be made from time to time, but the maximum amount ofwhich may not exceed $500,000:00) at any one time outstanding; and WHEREAS, the Loan Agreement- and the Note is secured among other things, by that certain Mortgage and Security Agreement and Fixture Financing Statement and Assignment of Rents and Leases dated as of April , 20U2 (the "Mortgage), executed by the Developer in favor of the Lender and filed of record in the office of the Hennepin County Recorder on , as Document No. ;and WHEREAS, pursuant to the-terms of the Development Agreement, the IiRA and MetroFlains have entered into that certain Assessment Agreement dated as of , 2002 (the "Assessment Agreement"), and filed of record in the office of the Hennepin County Recorder on as Document No. ; and .WHEREAS, the Leader has required, as an express condition to providing the financing contemplated by the Loan Agreement, (a) that the Developer assign all of its rights underthe Development Agreement to the Lender to secure -73- the obligations of the Developer under the Note, the Loan Agreement and the documents related thereto, (b) that certain rights of the I il~A under the Developrrient Agreement be subordinated to the Mortgage, and (c) that the HRA agree to cer-fain other matters, all as more fully contained herein. • NOW THEREFORE, in consideration of the foregoing recitals and for other good and valuable receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The Developer hereby assigns to the Lender all of its right, title and interest under and pursuant to the Development Agreement to secure the Developer's obligations under Note, the Loan Agreement and the documents related thereto. 2. The Developer hereby represents and warrants that there have been no prior assignments of the Development Agreement as it applies to the Residential Component with the exception of other assignments to Lender to secure Project financing, that the Development Agreement is a valid and enforceable agreement, and that neither the HRA nor the Developer is in default thereunder and-that all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. Except for this Agreement and other assignments made by the Developer to the Lender to secure financing for the Residential Component, the Developer agrees not to sell, assign, pledge, mortgage or otherwise transfer or encumber its interest in the Development Agreement as long as this Agreement is in effect. The Developer hereby irrevocably constitutes and appoints the Lender as its attorney-in-fact to demand, receive and enforce the Developer's rights with respect to the Development Agreement for and on behalf of and in the name of the Developer or, at the option of the Lender, in the name of the Lender, with the some force and effect as the Developer could do if this Agreement had not been made. e 3. This Agreement shall constitute a perfected, absolute and present assignment, provided that the Lender shall have no right under this Agreement to enforce any at the provisions of the Development Agreement or exercise any rights or remedies under this Agreement until an Event of Default (as that term is defined in the Loan Agreement) shall occur and be continuing. 4. Upon the occurrence of an Event of Default, the Lender may, without affecting any of its rights or remedies against the Developer under any other instrument, document or agreement, exercise its rights under this Agreement as the Developer's attorney-in-fact in any manner permitted by law and in addition the Lender shall have the right to exercise and enforce any and all rights and remedies available after a default to a secured party under the Uniform Conunercal Code as adopted in the State of Minnesota: If notice to the Developer of any intended disposition of collateral or of any intended action is required by law in any particular instance, such notice shall be deemed commercially reasonable if given at least ten (1°4) days prior to the intended disposition or other action. 5. The HRA hereby consents and agrees to the terms and conditions of this Agreement. The ll~A further represents and warrants to the Lender that the Development Agreement is a valid and enforceable agreement-and. that neither the H1tA nor the Developer is in default thereunder and that all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after as date. hereof. -2- -74- 6. The HRA hereby agrees that ail of-its rights. in and to the Residential Component pursuant to the Development Agreement shall be subject and subordinate to the lien of the Mortgage. • Notwithstanding the foregoing, the. Lender acknowledges and agrees that the terms and conditions of the Assessment Agreement shall. be prior and superior to the lien of the Mortgage. 7. The HRA hereby acknowledges and agrees that it has approved the concept plans for the development of the. Project as required by Section 4.4 of the Development Agrcement. 8. The HRA acknowledges that the rights of the HRA with respect to the receipt and application of any proceeds of insurance or condemnation awards as set forth in the Development Agreement shall, in all respects, be subject and subordinate to the rights of the Lender under the Mortgage. 9. Pursuant to Section 8:1 of the Development Agreement, the HRA hereby agrees the financing contemplated. by the Loan Agreement and the Mortgage is permitted under the terms of the Development Agreement. 10. The HRA hereby agrees to provide the Lender with copies of any notice of default under the Development Agreement, and that the Lender shall have the right, but not the obligation, to cure any such default on behalf' of the Developer within the periods, of time set forth in the Development Agreement. 11. The parties hereto agree that no change or amendment shall be made to the terms of the Developmenrt Agreement without the prior written consent of the Lender. • 12. .This Ageement can be waived modified, amended, terminated or discharged only explicitly in a writing signed by the Lender. A waiver by the Lender shall be effective only in a specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of the Lender's rights or remedies hereunder. All rights and remedies or the Lender shall be cumulative and may be exercised singularly or concurrently, at the Lender's option, and any exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the- exercise or enforcement of any other. 13. No provision of this Agreement shall be deemed or construed to alter, amend or modify, in any way, the rights and obligations of the HRA with respect to the Developer as contained in the Development Agreement. 14. Any notice, request, demand or other communication hereunder shall be deemed fully given if delivered or postage prepaid, certified or registered addressed to the party as so forth below: if to the City: Housing and Redevelopment Authority 5341 Maywood Road Mound, Minnesota 55364 Attention: Executive Director • -3- -75- If to the Developer: The Village By the Bay Development, LLC S 16G~ University Avenue Suite 212 St. Fain, Minnesota 5 S 1 U4 If to the Lender: Associated Bank Minnesota 2635 Campus Drive Flyrnouth, MN 55441 16. This Agreement will be governed by and construed in accordance with the laws of the State of Minnesota. • -4- -76- IN WITNESS WHEREOF, the parties hereto have made aa~d entered into this Agreement as Qf the day and year first above written. • THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA • -5- By: Its: By: Its: THE VILLAGE BY THE BAY DEVELOPMENT, LLC By: Its: ASSOCIATED BANK MINNESOTA By: Thomas W. Kuck Its: Vice President _~~_ STATE Of MINNESOTA- ). ss COUNTY OF ) • The foregoing instrument was acknowledged before me this day of April, 2002 by and ,the and ,respectively, of The Housing and Redevelopment Authority in and for the City of Mound, Minnesota, a Minnesota public body corporate and politic. Notary Public STATE OF MINNESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of April, 2002, by the of The Village By the Bay Development, LLC, a Minnesota limited liability company, for and on behalf of said company. Notary Public STATE OF 1\~IINNESOTA ) ss COUNTY OF ) • The foregoing instrument was acknowledged before me this day of April, 2002, by Thomas W. Klick, the Vice President of Associated- Bank 1Vlinnesota, a Minnesota banking corporation, for and on behalf of said corporation. Notary Public THIS INSTRUMENT WAS DRAFTED. BY: Leonard, OBrien, Wilford, Spencer & Gale, Ltd. Joseph J. Deuhs, Jr. 100 South Fifth Street Suite 1200 Minneapolis, Minnesota 55402 (612) 332-1030 ::ODMA\(9RPWISE\GWDMPLS.GWPOMPLS.MPLSLIBi:9016T.1 -6- • -78- • ASSIGNMENT AND SiJBORDINATION OF DEVELOPMENT AGREEMENT (Condominium Construction Loan) among THE HOUSING AND REDEVELOPMENT- AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA, a Minnesota public body corporate and politic and THE VILLAGE BY THE BAY DEVELOPMENT, LLC, a Minnesota limited liability company and ASSOCIATED BANK MINNESOTA, a IvJsnnesota banking corporation Dated as of April , 20U2 • -80- • ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT THIS ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT (this "Agreement"), is made and entered into as of the _ day of April, 2002, by and among THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY` OF MOUND, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), THE VILLAGE BY THE BAY DEVELOPMENT, LLC, a 1Vlnnesota limited liability company (the "Developer"), and ASSOCIATED BANK MINNESOTA, a Minnesota banking corporation (the "Lender"). WTTNESSETH: WHEREAS, the HRA and MetroPlains Development LLC, a Minnesota limited liability company ("MetraPlains") have entered into that certain Amended and Restated Contract for Private Redevelopment dated as of ~'anuary 8, 2002 (the "Development Agreement"), pertaining to the development of approximately 99 residential units and related site improvements and amenities (the "Residential Component") and approximately 67,000 square feet of commercial space and related site improvements (the "Commercial C©mponen#") on property legally described on Exhibit A attached hereto and hereby made a part hereof (the "Project"); and WHEREAS, MetroPlains has assigned to the Developer with the consent of the I-EtA, the Development Agreement as it related to the Residential Component; and .WHEREAS, the Leader has agreed to provide financing to the Developer in connection with the construction of a portion of the Residential Component pursuant to the terms of that certain Condominium Construction Revolving Credit Loan Agreement dated as of April , 20U2 (the "Loan Agreement"); and WHEREAS, the obligation of the Developer to repay amounts advanced under the Loan Agreement is evidenced by that certain Promissory Note dated as of April , 2002 (the "Note"), executed by the Developer in favor of the Lender in the original face amount of $1,950,000.00; and WHEREAS, the Loan Agreement and the Note evidences an agreement to provide a revolving line of credit under which advances, payments, and re-advances may be made from time to time, but the maximum amount ofwhich may not exceed $1,950,000.:00) at any one time outstanding; and - WHEREAS, the Loan Agreement and the Note is secured among other things, by that certain Mortgage and Security Agreement and Fixture Financing Statement and Assignment of Rents and Leases dated as of April , 2002 (the "Mortgage), executed by the Developer in favor of the Lender and filed of record in the office of the Hennepin County Recorder on , as Document No. ;and WHEREAS, pursuant to the terms of the Development Agreement, the HRA and MetroPlains have entered into that certain Assessment Agreement dated as of , 2002 (the "Assessment Agreement"), and filed of record in the office of the Hennepin County Recorder on as Document No. ; and • -2- _g~_ WHEREAS, the Leader has required, as an express condition to providing the financing contemplated by the Loan Agreement, (a) that the Developer assign all of its rights under the Development Agreement to the Lender to secure the obligations of the Developer under the Note, the Loan Agreement and the documents related thereto, (b) that • certain rights of the HItA under the Development Ageement be subordinated to the ltitortgage, and (c) that the HRA agree to certain other matters, all as more fully contained herein. NOW THEREFORE, in consideration of the foregoing recitals and for other good and valuable receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. The Developer hereby assigns to the Lender all of its right, title and interest under and pursuant to the Development Agreement to secure the Developer's obligations under Note, the Loan Agreement and the documents related thereto. 2. The Developer hereby represents and warrants- that there have been no prior assignments of the Development Agreement as it applies to the Residential Component with the exception of other assignments to Lender to secure Project financing, that the Development Agreement is a valid and enforceable agreement, and that neither the ~IltA nor the Developer is in default thereunder and that all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. Except for this Agreement and other assignments made by the Developer to-the Lender to secure financing for the Residential Component, the Developer agrees not to sell, assign, pledge, mortgage or otherwise transfer or encumber its interest in the Development Agreement as long as this Agreement is in effect. The Developer hereby irrevocably constitutes and appoints the Lender as its attorney-in: fact to demand, receive and enforce the Developer's rights with respect to the Development Agreement for and on behalf of and in the name of the Developer or, at the option of the Lender, in the Warne of the Lender, with the some force and• effect as the Developer could do if-this Agreement had not been made. 3. This Agreement shall constitute a perfected, absolute and present assignment, provided that the Lender shall have no right under this Agreement to enforce any at the provisions of the Development Agreement or exercise any rights or remedies under this Agreement until an Event of Default (as that term is defined in the Loan Agreement) shall occur and be continuing. 4. Upon the occurrence of an Event of Default, the Lender may, without affecting any of its rights or remedies against the Developer under any other instrument, document or agreement, exercise its. rights under this Agreement as the Developer's attorney-in-fact in any manner permitted by law and in addition the Lender shall have the right to exercise and enforce any and all rights and remedies available after a default to a secured party under the Uniform Commercial Code as adopted in the State of 1Vlinnesota. If notice to the Developer of any intended disposition of collateral or of any intended action is required by law in any particular instance, such notice sha11 be deemed commercially reasonable if given at least ten (i 0) days prior to the intended disposition or other action. 5. The HRA hereby consents and agrees to the terms and conditions of this Agreement. The HRA further represents and warrants to the Lender that the Development Agreement is a valid and enforceable agreement and that neither the HRA nor the Developer is in default thereunder and that all covenants, conditions and agreements have been performed as required. -3- _82_ therein, except those not to be performed until after as date hereof • 6. The HRA hereby agrees that all of its rights in and to the Residential Component pursuant to the Development Agreement shall be subject and subordinate to the lien of the Mortgage. Notwithstanding the foregoing, the Lender acknowledges and agrees that the terms and conditions of the Assessment Agreement shall be prior and superior to the lien of the Mortgage. 7. The HRA hereby acknowledges and agrees that it has approved the concept plans for the development of the Project as required by Section 4.4 of the Development Agreement. 8. The HRA acknowledges that the rights of the HRA with respect to-the receipt and application of any proceeds of insurance or condemnation awards as set forth in the Development Agreement shall, in all respects, be subject and subordinate to the rights of the Lender under the Mortgage. 9. Pursuant to Section 8.1 of the Development Agreement, the HRA hereby agrees the financing contemplated by the Loan Agreement and the Mortgage is permitted under the terms of the Development Agreement. 1 U. The H1tA hereby agrees to provide the Lender with copies of any notice of default under the Development Agreement, and that the Lender shall have the right, but not the obligation, to cure any such default on behalf of the Developer within the periods, of time set forth in the Development Agreement. • 11. The parties hereto agree that no change or amendment shall be made to the terms ofthe Development Agreement without the prior written consent of the Lender. 12. This Agreement can be waived modified, amended, terminated or discharged only explicitly in a writing signed- by the Lender. A waiver by the Lender shall be effective only in a specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of the Lender's rights or remedies hereunder. All rights and remedies or the Lender shall be cumulative and maybe exercised singularly or concurrently, at the Lender's option, and any exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. 13. No provision of this Agreement shall be deemed or construed to alter, amend or modify, in any way, the rights and obligations of the fiRA with respect to the Developer as contained in the Development Agreement. 14. Any notice, request, demand or other communication hereunder shall be deemed fully given if delivered or postage prepaid, certified or registered addressed to the party as so forth. below: • -4- -83- If to the-City: Housing and Redevelopment Authority • 5341 Mayweod-Road Mound, nesota 556 Attention: Executive Director If to the Developer: The Village By the Bay Development, LLC 1.600 University Avenue Suite 212 St. Paul, Minnesota 55104 If to the Lender: Associated Bank Minnesota 2655 Campus. Drive Plymouth, MN 55441 16. This Agreement will be governed by and construed in accordance with the laws of the State of Minnesota, • r~ U -5- -84- IN WIT'1~iE'SS WHERECIF, the-parties hereto have made and entered into this Agreement as ofthe day and yearfirst above written. • THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOIL THE CITY OF MOUND, MINNESOTA By: Its: By: Its: THE VILLAGE BY THE BAY DEVELOPMENT, LLC By. Its: ASSOCIATED BANK MII~TNESOTA By: Thomas W. Kuck Its: Vice President :: -6- -85- STATE Of iVIINNESOTA ) ss COUNTY OF ) •i The foregoing instrument was acknowledged before me this day of April, 2002 by and ,the and ,respectively, of The Housing and Redevelopment Authority nand- for the City of Mound,lVltitiesota, aMinnesota public body corporate and politic. Notary Public STATE OF MINNESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of April, 2002, by the of The Village By the Bay Development, LLC, a Minnesota limited liability company, for and on behalf of said company. Notary Public STATE OF MiN1vESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of April, 2002, by Thomas W. Klick, the Vice President of Associated Bank Minnesota, a 1VImnesota banking corporation, for and on behalf of said corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Leonard, OBrien, Wilford, Spencer ~ Gale, Ltd. Joseph J. Deuhs, Jr. 100 South Fifth Street Suite 1200 lvtinneapolis, Minnesota SS402 (612)332-1030 ::ODMA\ORPWISfi\C~WDMPLS.OWPOMPLS.MPLSLIB1:90168.1 _7_ • -86- ~~ ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT (Land Development Loan) among THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, NIINNESOTA, a 11~1innesota public body corporate and politic and • THE VILLAGE BY THE BAY DEVELOPMENT, LLC, a 1Vlinnesota limited liability company and ASSOCIATED BANK MINNESOTA, a Minnesota banking corporation Dated as of April , 20U2 _gg_ r~ u ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT THIS ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT (this "Agreement"), is made and entered into as of the day of April, 2002, by and among THE HOUSING AND REDEVELOPMENT AUTHORITY I11T AND FOR THE CITY OF MOUND, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), THE VILLAGE BY THE BAY DEVELOPMENT, LLC, a Minnesota limited liability company (the "Developer"), and ASSOCIATED BANK MINNESOTA, a Minnesota banking corporation (the "Lender"). WHEREAS, the HRA and MetroPlains Development LLC, a 1Vlinnesota limited liability company ("MetroPlains") have entered into that certain Amended and Restated Contract for Private Redevelopment dated as of January 8, 2002 (the "Development Agreement"), pertaining to the development of approximately 99 residential units and related site improvements and amenities (the "Residential Component") and approximately 67,000 square feet of conunercial space and related site improvements (the "Commercial Component") on property legally described on Exhibit A attached hereto and hereby made a part hereof (the "Project"); and WHEREAS, MetroPlans has assigned to the Developer with the consent of the HRA, the Development Agreement as it related to the Residential Component; and WHEREAS, the Leader has agreed to provide fuaancing to the Developer in connection with the construction of a .portion of the Residential Component pursuant to the terms of that certain Land Development Loan Agreement dated as of April , 2002 (the "Loan Agreement"); and WHEREAS, the obligation ofthe Developer to repay amounts advanced under the Loan Agreement is evidenced by that certain Promissory Note dated as of April , 2002 (the "Note"), executed by the Developer in favor of the Lender in the original principal amount of $2,650,000.00; and WHEREAS, the Note is secured among other things, by that certain Mortgage and Security Agreement and Fixture Financing Statement and Assignment of Rents and Leases dated as of April , 2002 (the "Mortgage), executed by the Developer in favor of the Lender and filed- of record in the office of the Hennepin County Recorder on as Document No. ;and WHEREAS, pursuant to the terms of the Development Agreement, the H1tA and MetroPlains have entered into that certain Assessment Agreement dated as of , 2002 (the "Assessment Agreement"), and filed of record in the office of the Hennepin County Recorder on as Document No. : and WHEREAS, the Leader has required, as an express condition to providing the financing contemplated by the Loan Agreement, (a) that the Developer assign a:ll of its rights under the Development Agreement to the Lender to secure the obligations of the Developer under the Note, the Loan Agreement and the documents related thereto, (b) that certain rights of the HRA under the Development Agreement be subordinated to the Mortgage, and (c) that the H~A ~gree to certain other matters, all as more fully contained herein. _gg_ NOW THER~FURE, in consideration of the foregoing recitals and for other good and valuable receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: • 1. The Developer hereby assigns to the Lender all of its right, title and interest under and pursuant to the Development Agreement to secure the Developer's obligations under Note, the Loan Agreement and the documents related thereto. 2. The Developer hereby represents and warrants that there have- been no prior assignments of the Development Agreement as it applies to the Residential Component with the exception of other assignments to Lender to secure Project financing, that the Development Agreement is a valid and enforceable agreement,: and. that neither the HRA nor the Developer is in default thereunder and that all- covenants, :conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. Except for this Agreement and other assignments made by the Developer to the Lender to secure financing -for the Residential Component, the Developer agrees not to sell; assign, pledge, mortgage or otherwise transfer or encumber its interest in the Development Agreement as long as-this Agreement is in effect. The Developer hereby irrevocably constitutes and appoints- the Lender as its attorney-in-fact to demand, receive and enforce the Developer's rights with respect to the Development Agreement for and on behalf of and in the name of the Developer or, at the option of the Lender, in the name of the Lender, with the some force and effect as the Developer could do if-this Agreement had- not been made. 3. This Agreement shall constitute a perfected, absolute and present assignment, provided that the Lender shall have no right under this Agreement to enforce any at the provisions of the Development Agreement or exercise any rights or remedies under this Agreement until. an Event of Default (as that term is defined in the Loan Agreement). shall occur and be continuing: • 4. Upon the occurrence of an Event of Default, the Lender may, without a#fecting any of its rights or remedies against the Developer under any-other instrument, document or agreement, exercise its rights under this Agreement as the Developer's attorney-in-fact in any manner permitted by law and in addition the Lender shall have the right to exercise and enforce any and all rights and remedies available. after a default to a secured party under the Uniform Commercial Code as adopted in the State of Minnesota. If notice to the Developer of any intended disposition of collateral or of any intended action is required by law in any particular instance, such notice shall be deemed: commercially reasonable if given at least ten (10) days prior to the intended disposition or other action. 5. The I3RA hereby consents. and agrees to the terms and conditions of this Agreement. The HRA further represents and warrants to the Lender that the Development Agreement is a valid and enforceable agreement and that neither the 1RA nor the Developer is in default thereunder and that all covenants, conditions and agreements- have been performed as required therein, except those not to be performed until- after as date hereof 6. The HRA hereby agrees. that all of its rights in and to the Residential Component pursuant to the Development Agreement shall be subject and subordinate to the lien of the Mortgage. Notwithstanding the foregoing, the Lender acknowledges and agrees that the terms and conditions of the Assessment Agreement shall be prior and superior to the lien of the Mortgage. • -2- -90- 7. The HRA hereby acknowledges and agrees. that- it has approved the concept plans for the • development of the Project-as required by Section 4.4 of the Development Agreement. 8. The H1tA acknowledges that the rights ofthe HRA with respect to-.the receipt and application of any proceeds of insurance or condemnation awards as set forth in the Development Agreement shall, in all respects, be subject and subordinate to the rights of the Lender under the Mortgage. 9. Pursuant to Section 8.1 of the Development Agreement, the HRA hereby agrees the financing contemplated by the Loan Agreement and the Mortgage is permitted under the terms of the Development Agreement. 10. The Him hereby agrees to provide the Lender with copies of any notice of default under the Development Agreement, and that the Lender shall-have the right, but not the obligation, to cure any such default on behalf of the Developer within. the periods, aftime set forth iu the Development Agreement. 11. The parties hereto agree that no change or amendment shall be made to the terms ofthe Development Agreement without the prior written consent of the Lender. 12. This Agreement can be waived modified, amended, terminated or discharged only explicitly in a writing signed by the Lender. A waiver by the. Lender shall be effective only in a specific instance and for the. specific purpose given. Mere delay or failure to act shall not • preclude the exercise or enforcement of any of the Lender's rights or remedies hereunder. All rights and remedies or the Lender shall be cumulative and may be exercised singularly or concwrently, at the Lender's option,. and any exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. 13. No provision of this Agreement shall be deemed or construed to alter, amend or modify, in-any way, the rights and obligations of the HRA with respect to the Developer as contained in the Development Agreement. 14. Any notice, request, demand or other communication hereunder shall be deemed fully given if delivered or postage prepaid, certified or registered addressed to the party as so forth below: If to the City: Housing and Redevelopment Authority 5341 Maywood Road Mound, Minnesota 55364 Attention: Executive Director • -3- -91- If to the Developer: The Village By the Bay Development, LLC • 1600 Vniversit3~ Avenue Suite. 2:12 St. Foul, Minnesota 551U4 If to the Lender: Associated Bank Minnesota 2b55 Campus Drive Plymouth, MN 35441 16. Tlris Agreement will be governed by and construed in accordance with the laws of'the State of Minnesota. • • -4- -92- I1~T WITNES S WHEREOF, the parties.hereto have made and entered into this Agreement as of the day and year first above written. • THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA C7 -5= By: Its: By: Its: THE VILLAGE BY THE BAY DEVELOPMENT, LLC By: Its: ASSOCIATED BANI+~ MINNESOTA By: Thomas W. Kuck Its: Vice President -93- STATE Of MINNESOTA ) ss COUNTY OF ) • The foregoing instrument was acknowledged before me this day of April, 2002 by and ,the and ,respectively, of The Housing and Redevelopment Authority in and for the City of Mound, Minnesota, a Minnesota public body corporate and politic. Notary Public STATE OF MINNESOTA ) )~ COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of April, 2002, by the of The Village By the Bay Development, LLC, a Minnesota 1'ttnted liability company, for and on behalf of said company. Notary Public • STATE OF hIlNNESOTA ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of April, 2002, by Thomas W. Kuck, the Vice President of Associated Bank Minnesota, a Minnesota. banking corporation, for and on behalf of said corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Leonard, O'Brien, Wilford, Spencer & Gale, Ltd. Joseph J. Deuhs, Jr. 100 South Fifth Street Suite 1200 Minneapolis, Minnesota 554U2 (612) 332-1030 ::ODMA\ORPWISfi\GWDMPI.S.CiWPOMPLS.MPLSLIB 1:89437:1 e -6- -94- THIS PAGE IS INTENTIONALLY ~ LEFT BLANK C. -96-