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2007-12-17 Edina Development Corp Bankruptcy Documents HINSHAW ~ ~c" b~C ~/~,.. / 8 "','q, ?tl~ ~<> & CULBERTSON LLP December 17, 2007 ATTORNEYS AT LAW 333 South Seventh Street Suite 2000 Minneapolis, MN 55402-2431 VIA U.S. FIRST CLASS MAIL ALL CREDITORS AND PARTIES IN INTEREST 612-333-3434 612-334-8888 (fax) www.hinshawlaw.com Re: Edina Development Corporation Ch. 11 BKY File No. 06-42532 Our Matter No. 880207 Dear Creditor or Party in Interest: Pursuant to the Bankruptcy Court Rules, I am enclosing the following documents: 1) Order and Noticefor Hearing on Confirmation of Plan dated December 17,2007 setting January 15, 2008 at 10:00 a.m. for hearing and approval of the Debtor's Third Modified Plan of Reorganization. 2) Ballot for Accepting or Rejecting the Plan of Reorganization, which you must return to the Bankruptcy Clerk before January 10, 2008. 3) Debtor's Third Modified Plan of Reorganization dated December 14, 2007 and filed December 14, 2007 and Debtor's Third Amended Disclosure Statement dated December 14,2007 and filed December 14, 2007. The Third Modified Plan of Reorganization is being sent to you for your approval or disapproval. The Plan is detailed in the Disclosure Statement, which was approved by the Bankruptcy Court on December 17, 2007. The Debtor urges you to read the enclosed material and submit your ballot by January 10, 2008 and urges you to vote to accept the Plan. If you have any questions or concerns, please contact the undersigned. Very truly yours, Hinshaw & Culbertson LLP Je-e1 D, rlQ~s~ Joel D. Nesset jnesset@hinshawlaw.com 121201339vl 880207 Arizona California Florida Illinois Indiana Massachusetts Minnesota Missouri New York Oregon Rhode Island Wisconsin UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA ~~ 0<'(> ;~.h. <1 '~ ~..~ p In re: EDINA DEVELOPMENT CORPORATION, Debtor, Chapter 11 Sky Case No. 06-42532 ORDER AND NOTICE FOR HEARING ON CONFIRMATION OF PLAN A Third Amended Disclosure Statement under Chapter 11 of the Bankruptcy Code has been filed by Edina Development Corporation, the proponent, on December 14. 2007, referring to a Third Modified Plan under Chapter 11 of the Code filed on December 14. 2007. The court has determined thatthe Disclosure Statement contains adequate information. Therefore, IT IS ORDERED, AND NOTICE IS HEREBY GIVEN, THAT: 1. Approval of Disclosure Statement. The Third Amended Disclosure Statement ofthe proponent, dated December 14. 2007, regarding the Third Modified Plan of the proponent dated December 14.2007, is approved. 2. Confirmation Hearing. A hearing to consider confirmation ofthe Third Modified Plan will be held on Januarv 15. 2008 at 10:00 a.m., in Courtroom 7 West, U.S. Courthouse, 300 S Fourth St, Minneapolis MN 55415. The hearing may be continued by notice at the hearing, without further written notice. 3. Objections to Confirmation. Five days prior to the confirmation hearing is fixed as the last day to timely deliver an objection to confirmation of the plan, and eight days prior to the hearing is the last day to timely mail an objection. Under LOC. R. BANKR. P. (D. Minn.) 3020-1, objections shall be made by motion. The objection must be filed not later than one day after service. 4. Ballots to Accept or Reject Plan. Five days prior to the confirmation hearing is fixed as the last day to timely file ballots to accept or reject the proponent's plan. Unless otherwise ordered, the proponent's attorney and the unsecured creditors' committee's attorney shall jointly count the ballots and file a report of tabulation not later than 24 hours before the confirmation hearing. 5. Mailing of Notice, Copies and Ballots. Not less than thirty (30) days prior to the confirmation hearing, the proponent under supervision of its attorney shall prepare and mail pursuant to LOC. R. BANKR. P. (D. Minn.) 3017-1 (a)-(b), and in accordance with the clerk's instructions, appropriate copies of this order and notice, letters of transmittal if any, the approved official form ballot, the approved disclosure statement, and the plan, to the entities specified in LOC. R. BANKR. P. (D. Minn.) 9013-3, all creditors, all equity security holders, and all other parties in interest. DATED: December 17, 2007 Gregory F. Kishel United States Bankruptcy Judge NOTICE OF ELECTRONIC ENTRY AND FILING ORDER OR JUDGMENT Filed and Docket Entry made on 12/17/07 Lori A. Vosejpka, Clerk, By AML UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA '~.e <'<tc O~.tJ-" Iff ~ <'(/~~ ~ In re: Edina Development Corporation, Case No. 06-42532 Chapter 11 Case Debtor. BALLOT FOR ACCEPTING OR REJECTING THIRD MODIFIED PLAN OF REORGANIZATION This ballot is being sent to all creditors, for acceptance or rejection of the plan. The plan as filed or modified by the debtor is dated December 14.2007, and filed on December 14,2007. The plan is accompanied by a disclosure statement. The disclosure statement, as filed or amended, is dated December 14. 2007, and was filed on December 14,2007, and approved by the court on December 17, 2007. To have your vote count, you must complete and return this bal/ot. Under 11 U.S.c. S 1126 and Bankruptcy Rule 3018, a class of claims has accepted a plan if the plan has been accepted by creditors that hold at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors that have accepted or rejected the plan. The undersigned, a creditor having a claim in the amount of $ , hereby: D Accepts Check one box: D Rejects the plan of reorganization of the debtor described herein. Dated: Signed: Name of Creditor: Return comvleted ballot to: Clerk of Bankruptcy Court 301 U.S. Courthouse 300 South Fourth Street Minneapolis, MN 55415 Address: This ballot must be received by the Clerk Bankruptcy Court no later than: January 10, 2008. 121201340vl 880207 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA 4~ ~O> b~/,. ~~tw- (,; YIi , tf <'Qtp~b InRe: Edina Development Corporation. Chapter 11 Bankruptcy Debtor. BKY No. 06-42532 ------------------_________________w________________________________.__________..______________________._____________ DEBTORtS TmRD MODIFIED PLAN OF REORGANIZATION --------------------------------------------------------------------------------------------------------------------- I. INTRODUCTION Edina Development Corporation ("Debtor") proposes the following as its Third Modified Plan of Reorganization (''Plan'') under Chapter 11 of the United States Bankruptcy Code.l Defined Terms. Except as otherwise provided in the Plan, terms will have the meanings assigned in the Code. The following defmitions will be used for purposes of the Plan: "Effective Date" means the flTst business day of the first calendar month following entry ofan order confirming the Plan, unless such day would be less than seven days after entry of an order confirming the plan, in which case it means the first business day of the next succeeding month. "Filing Date" means November 1,2006. "Lakeland Entities" means, collectively, LCF Development, LLC ("LCF"), LakeJand Construction Finance, LLC ("Lakeland"), and the Waitt Family Foundation Fund II, LLC ("WFF"). ''Haven Property" means the Debtor's approximately 672 acre parcel of real property in Sherburne County. "Blaine Property" means the Debtor's approximately 178 acre parcel of real property in Blaine, in Anoka County. "Becker Property" means the Debtor's approximately 285 acre parcel of real property in Becker Township, in Sherburne County. 1 Unless otherwise indicated, all statutory references are to the United States Banlauptcy Code, 11 V.S.C. ~101, et seq. (the "Code"). l21201003v1880207 ll. TREATMENT OF CLAIMS AND INTERESTS 2.1 Classified Claims and Interests Class 1 ~ Class of Unsecured Creditors Class 1 consists of the general unsecured claims against the Debtor ("Class 1 Claims'1. In addition to trade debt and various types of insider debt, Class 1 includes claims that are or were secured by liens on the Sandstone Ridge Property and the Foley Property. Based on a review of its schedules, books and records, and the proofs of claim filed with the Bankruptcy Court, the Debtor estimates that the total of all allowed Class 1 Claims, other than those that are subject to the conditional subordination provision applicable to insiders' claims, will be approximately $330,000.00. Treatment of Class 1 Subject to the limitation set forth below, the Debtor will make payments on account of allowed Class 1 Claims as follows: (i) On the Effective Date, the Debtor will distribute the sum of $75,000.00 on a pro rata basis to the holders of Class 1 Claims; (ii) On the first anniversary of the Effective Date, the Debtor will distribute the sum of $225,000.00 on a pro rata basis to the holders orClass 1 Claims; and (iii) On or before the day that is ten days after it has determined in good firith that it will not realize any further or additional recovery on account of any claims asserted under a title insurance policy issued by Fidelity National Title Insurance Company, the Debtor will distribute one hundred percent of the proceeds it has recovered on account of such claims, net of costs, fees, and expenses associated with such recovery. In no event will holders ofCws 1 Claims receive any payment that, when added to the aggregate of prior payments under the Plan, would result in such holders being paid more than the full amount of their allowed claims. Conditional Subordination of Insider Claims Rick Lewandowski, Lanee Lewandowski" and MM Homebuilders, Inc. are all insider general unsecured creditors, with claims in the aggregate amount of approximately $760,000. For purposes of the Plan only, payment of all Class 1 Claims held by insiders will be subordinated to that of all other Class I Claims such that, unless and until all Class 1 Claims held by non-insiders have been paid in full, no payments will be made on account of the subordinated claims. In accordance with Section 1123(a)(4), each of the insider creditors who may be adversely affected by the subordination provided for herein have consented to the proposed treatment and to their inclusion in Class 1 notwithstanding the less favorable treatment of their claims. 2 121201003vl 880207 Class 2A - LCF Development, LLC (Account 400038 - Haven) The Class 2A Claim arises out of the Debtor's obligations to LCF under a promissory note dated September 20,2001 in the original principal amount of$200,OOO.00 (the "September 20,2001 Haven Note''). As of the September 24,2007, the outstanding balance of the September 20,2001 Haven Note, including accrued and unpaid interest, charges, and fees, was $229,018.62. The Debtor's perfonnance under the September 20,2001 Haven Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $200,000.00 Note (the "September 20,2001 Haven Mortgage"). The September 20,2001 Mortgage was recorded on April 2, 2002 with the Office of the County Recorder of Sherburne County (Doc. No. 465282), and evidences a second priority lien on the Haven Property. Treatment of Class 2A Claim LCF will have an allowed secured Class 2A claim in the amount of$229,OI8.62, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2A Claim, the Plan constitutes a promissory note (the "Class 2A Note"), which will include the following material terms: For the frrst year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator ofwhich is the balance owing under the Class 2A Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Haven Property, to be applied first to accmed interest and second to principal, on account of the Class 2A Note. In the event that the Debtor does not timely make the first payment under the Class 2A Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After tbe first payment, the balance of the Class 2A Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments :from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2A Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary of the Effective Date. The Class 2A Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess ofthe aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the 3 11.1201003vl 880207 Class 2A Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property. The Debtor's performance under the tenns of the Class 2A Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being ofthe same priority, dignity, and effect as that of the September 20,2001 Haven Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the forego~g, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional docwnents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the September 20, 2001 Haven Mortgage with respect to the property that is the subject of any sale, and the payments will be applied to installments under the Class 2A Note in order of maturity. The Class 2A Note, together with the PIan, will operate as a restatement and amendment of the September 20,2001 Haven Note, the September 20, 2001 Haven Mortgage, and all related agreements, and confinnation of the Plan will not operate as a replacement or satisfaction of any oftbe Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2A Note will be substantially similar to those included in the September 20, 2001 Note, and, to the extent not inconsistent with the teons of the Class 2A Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2B - LCF Development, LLC (Account 400039 - Blaine) The Class 2B Claim arises out of the Debtor's obligations to LCF under a promissory note dated September 20,2001 in the original principal amount of $150,000.00 (the "September 20,2001 Blaine Note"). As of September 24,2007, the outstanding balance of the September 20,2001 Blaine Note, including accrued and unpaid interest, charges, and fees, was $273,030.64. The Debtor's performance under the September 20, 2001 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $150,000.00 Note (the "September 20,2001 Blaine Mortgage"). The September 20, 200 I Mortgage was recorded on April 2, 2002 with the Office ofthe Registrar of Titles of Anoka County (Doc. No. 394624), and evidences a fifth priority lien on the Blaine Property. 4 121201003vl 880207 Treatment of Class 2B Claim LCF will have an allowed secured Class 2B claim in the amount of$273,030.64, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2B Claim, the Plan constitutes a promissory note (the "Class 2B Note''), which will include the following material tenns: For the fust year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary ofthe Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2B Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Blaine Property, to be applied frrst to accrued interest and second to principal, on account of the Class 2B Note. In the event that the Debtor does not timely make the first payment under the Class 2B Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2B Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (lii) a maturity date on the third anniversary ofthe Effective Date. Payments from and after the first anniversary ofthe Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the flrst payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2B Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2B Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2B Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the terms of the Class 2B Note will be secured bya.continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the September 20, 2001 Blaine Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain 01 continue its interest in the Blaine Property. 5 121201003v1880207 Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the September 20,2001 Blaine Mortgage with respect to the property that is the subject of the relevant sale, and the payments will be applied to installments under the Class 2B Note in order of maturity. The Class 2B Note, together with the Plan, will operate as a restatement and amendment of the September 20,2001 Blaine Note, the September 20, 2001 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pro-petition obligations under the relevant instruments and agreements. The terms ofthe Class 2B Note will be substantially similar to those included in the September 20, 2001 Blaine Note, and, to the extent not inconsistent with the terms of the Class 2B Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2C - LCF Development, LLC (Account 400067 - Blaine) The Class 2C Claim arises out of the Debtor's obligations to LCF under a promissory note dated on or about March 31, 2000 in the original principal amount of$300,000.00, and originally in favor of Bromley Homes, Inc. (the "Bromley Note''). As of the September 24, 2007, the outstanding balance of the Bromley Note, including accrued and unpaid interest, charges, and fees, was $339,266.05. The Debtor's performance under the Bromley Note is secured under that certain Mortgage Deed dated March 31, 2000, originally in favor of Bromley Homes, Inc. (the "Bromley Mortgage''). The Bromley Mortgage was recorded on April 3, 2000 with the Office ofthe County Recorder for Anoka County (Doc. No. 351652), and evidences a second priority lien on the Blaine Property. An Assignment of Mortgage dated April 14, 2005 was recorded with the Office oftbe Registrar of Titles of Anoka County on May 5,2005 (Doc. No. 482790.001), by which the assignment of the Bromley Mortgage to LCF was made a matter of record. Treatment of Class 2C Claim LCF will have an allowed secured Class 2C claim in the amount of $339,266.05, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2C Claim, the Plan constitutes a promissory note (the ''Class 2C Note''), which will include the following material tenns: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rat.e of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2C Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second 6 121201003vl 880201 to principal. on account of the Class 2C Note. In the event that the Debtor does not timely make the first payment under the Class 2C Note. it will deliver. upon demand. a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2C Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary ofthe Effective Date. Payments from and after the first anniversary ofthe Effective Date will be due on the fast business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales ofany part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2C Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2C Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an aIOOunt equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2C Note, and the denominator of which is the aggregate balance, as of the Filing Date, of claims that are secured by the Blaine Property and held by any ofthe Lakeland Entities The Debtor's performance under the terms of the Class 2C Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being ofthe same priority, dignity, and effect as that of the Bromley Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property. except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the Bromley Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 2C Note in order of maturity. The Class 2C Note, together with the Plan. will operate as a restatement and amendment of the Bromley Note, the Bromley Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction orany of the Debtor's pre-petition obligations under the relevant instruments and agreements. The tenns of the Class 2C Note will be substantially similar to those included in the Bromley Note. and, to the extent notinconsistcnt with the tenns of the Class 2C Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference to such extent. By 7 121201003v1880207 way of limitation, notwithstanding any term in any agreement to the contrary, neither the conunencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLCF. Class 2D - LCF Development, LLC (Account 400021- Haven) The Class 2D Claim arises out of the Debtor's obligations to LCF under a promissory note dated February 5,2001 in the original principal amount of $2,025,000.00 (the ''February 5,2001 Haven Note'1. As of the September 24,2007, the outstanding balance oftbe February 5,2001 Haven Note, including accrued and unpaid interest, charges, and fees, was $3,470.635.01. The Debtor's performance under the February S, 2001 Haven Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $2,025,000.00 Note (the "February 5,2001 Haven Mortgage"). The February 5, 2001 Haven Mortgage was recorded on February 7,2001 with the Office of the County Recorder of Sherburne County (Doc. No. 429302), and evidences a fIrst priority lien on a 200 acre portion of the Haven Property. Treatment of Class 2D Claim LCF will have an allowed secured Class 2D claim in the amount of $3,470,635.01, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date; if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2D Claim, the Plan constitutes a promissory note (the "Class 2D Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest. will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2D Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Haven Property, to be applied fust to accrued interest and second to principal, on account of the Class 2D Note. In the event that the Debtor does not timely make the first payment under the Class 2D Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2D Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2D Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary ofthe Effective Date. The Class 2D Contingent 8 lZ1201003vl 880207 Note will mature on the third anniversary of the Effective Date. at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2D Note, and the denominator ofwbich is the aggregate balance ofthe Lakeland Entities' claims secured by the Haven Property. The Debtor's performance under the tenns of the Class 2D Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being of the same priority, dignity, and effect as that ofthe February 5, 2001 Haven Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the February 5, 2001 Haven Mortgage with respect to the property that is the subject of any sale, and the payments will be applied to installments under the Class 2D Note in order of maturity. The Class 2D Note, together with the Plan. will operate as a restatement and amendment of the February 5, 2001 Haven Note, the February 5, 2001 Haven Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2D Note will be substantially similar to those included in the February 5, 2001 Haven Note, and, to the extent not inconsistent with the terms of the Class 2D Note or the Plan, the terms of all pre-petition agreements will continue in :full force and effect, and are hereby incorporated by this reference. By way oflimitatio~ notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2E - LCF Development, LLC (Account 400001 - Blaine) The Class 2E Claim arises out of the Debtor's obligations to LCF under a promissory note dated March 31, 2000 in the original principal amount of$4,135,000.00 (the ''March 31,2000 Blaine Note"). As of September 24,2007, the outstanding balance of the March 31. 2000 Blaine Note, including accrued and unpaid interest. charges, and fees, was $9,447,721.12. The Debtor's performance un4er the March 31,2000 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee. to Secure $4,135,000.00 Note (the "March 31,2000 Blaine Mortgage') The March 9 121201003vl 880207 31,2000 Mortgage was recorded on April 3, 2000 with the Office of the Registrar of Titles of Anoka County (Doc. No. 351651), and evidences a first priority lien on the Blaine Property. Treatment of Class 2E Claim LCF will have an allowed secured Class 2E claim in the amount of $9,447, 721.12, plus accrued and unpaid interest, and less any payments ofprincipal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions ofthe Ban1cruptcy Code. With respect to the Class 2E Claim, the Plan constitutes a promissory note (the "Class 2E Note"), which will include the following material terms: For the flTst year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary ofthe Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing WIder the Class 2E Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 2E Note. In the event that the Debtor does not timely make the first payment under the Class 2E Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2E Claim will be payable on the following terms: (i) interest rate of 10% per annum; (il) 30 year amortization; and (iii) a maturity date on tbe third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales ofany part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2E Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfY all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2E Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% ofthe aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction., the numerator of which is tbe balance owing under the Class 2E Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the terms of the Class 2E Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the March 31, 2000 Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional 10 121201Q03vl 880207 documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange fur such payments, LCF will release its interest under the March 31, 2000 Blaine Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 2E Note in order of maturity. The Class 2E Note, together with the Plan, will operate as a restatement and amendment of the March 31, 2000 Blaine Note, the March 31, 2000 Blaine Mortgage, and all related agreements, and confirmation ofthe Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2E Note will be substantially similar to those included in the March 31,2000 Blaine Note, and, to the extent not inconsistent with the terms of the Class 2E Note or the Plan, the terms of aU pre-petition agreements will continue in full force and effect, and are 'hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration ofthis bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2F - LCF Development, LLC (Account 394623 - Blaine) The Class 2F Claim arises out of the Debtor's obligations to LCF under a promissory note dated on or about January 15, 2002 in the original principal amount of$I,OOO,Ooo.OO (the ''$1,000,000.00 January 15, 2002 Note'~. As of September 24, 2007, the outstanding balance of the $1,000.000.00 January 15, 2002 Note was $1,000,000.00. The Debtor's performance under the $1,000,000.00 January 15, 2002 Note is secured under that certain Mortgage by Edina Development CoIporation as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $1,000,000 Note (the "$1,000,000.00 January 15, 2002 Mortgage'~. The $1,000,000.00 January 15, 2002 Mortgage was recorded on April 2, 2002 with the Office of the Registrar of Titles of Anoka County (Doc. No. 394623), and evidences a fourth priority lien on the Blaine Property. Treatment of Class 2F Claim LCF will haye an allowed secured Class 2F claim in the amount of$l,OOO,OOO.OO, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2F Claim, the Plan constitutes a non. interest- bearing promissory note (the "Class 2F Note"). On the flI'st anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2F Note, and the denominator of which is the aggregate ofthe Lakeland Entities' claims that are secured by the Blaine Property, to be applied fIrst to accrued interest and second to principal, on account of the Class 2F Note. In the event that the Debtor does not timely make the first payment under the Class 2F Note, it will deliver, 11 121201003vl 880207 upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in tbe Blaine Property. The balance of the Class 2F Note will be due and payable on the third anniversary ofthe Effective Date. In addition, at tbe time of the mst payment, the Debtor will be deemed to have delivered a contingent promissory note (the ''Class 2F Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2F Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% oftbe aggregate net proceeds realized upon the sale ofthe Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2F Note, and the denominator of which is the aggregate balance, as of the Filing Date, of the Lakeland Entities. claims that are secured by the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. The Debtor's performance under the terms of the Class 2F Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being ofthe same priority, dignity, and effect as that ofthe $1,000,000.00 January 15,2002 Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery 0 f such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the $1,000,000.00 January 15, 2002 Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to instalhnents under the Class 2F Note in order of maturity. The Class 2F Note, together with the Plan, will operate as a restatement and amendment of the $1,000,000.00 January 15,2002 Note, the $1,000,000.00 January IS, 2002 Mortgage, and aU related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2F Note will be substantially similar to those included in the $1,000,000.00 January 15,2002 Note, and, to the extent not inconsistent with the terms of the Class 2F Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incoIporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLCF. 12 121201003vl 880207 Class 2G - LCF Development, LLC (Account 394622 - Blaine) The Class 2G Claim arises out of the Debtor's obligations to LCF under a promissory note dated on or about January 15, 2002 in the original principal amount of $3,000,000.00 (the ''$3,000,000.00 January 15, 2002 Note"). As of September 24, 2007, the outstanding balance of the $3,000,000.00 January 15, 2002 Note was $3,000,000.00. The Debtor's performance under the $3,000,000.00 January 15,2002 Note is secured under that certain Mortgage by Edina Development Corporation as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $3,000,000 Note (the "$3,000,000.00 January 15,2002 Mortgage"). The $3,000,000.00 January 15,2002 Mortgage was recorded on April 2, 2002 with the Office of the Registrar of Titles of Anoka County (Doc. No. 394622), and evidences a third priority lien on the Blaine Property. Treatment of Class 2G Claim LCF will have an allowed secured Class 20 claim in the amount of $3,000,000.00, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2G Claim, the Plan constitutes a non-interest- bearing promissory note (the "Class 2G Note"). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 20 Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied frrst to accrued interest and second to principal, on account of the Class 2G Note. In the event that the Debtor does not timely make the first payment under the Class 2G Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. The balance ofthe Class 2G Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time ofthe first payment, the Debtor will be deemed to have delivered a contingent promissory note (the ''Class 20 Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfY all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2G Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% ofthe aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2G Note, and the denominator of which is the aggregate balance, as of the Filing Date, of the Lakeland Entities' claims that are secured by the Blaine Property. The Debtor's performance under the terms of the Class 20 Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that ofthe $3,000,000.00 January 15,2002 Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest 13 121201003vl 880207 in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law . Notwithstanding the foregoing, the Debtor wilt cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the $3,000,000.00 January 15, 2002 Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 2G Note in order of maturity. The Class 20 Note, together with the Plan, will operate as a restatement and amendment of the $3,000,000.00 January 15, 2002 Note, the $3,000,000.00 January 15, 2002 Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2G Note will be substantially similar to those included in the $3,000,000.00 January 15, 2002 Note, and, to the extent not inconsistent with the terms of the Class 2G Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration ofthis bankruptcy case may be deemed an event of default or an event otherwise giving "rise to any rights or remedies in favor ofLCF. Class 2H - LCF Development, LLC (Account 400040 - Blaine) The Class 2H Claim arises out oftbe Debtor's obligations to LCF under a promissory note dated January, 2002 in the original principal amount of$l,OOO,OOO.OO (the "January 2002 LCF Blaine Note"). As of September 24,2007, the outstanding balance of the January 2002 Blaine Note, including accrued and unpaid interest, charges, and fees, was $1,791,285.19. Treatment of Class 2H Claim LCF will have an allowed secured Class 2H claim in the amount of$1,791,285.19, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2H Claim, the Plan constitutes a promissory note (the ''Class 2H Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the fust anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2H Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 2H Note. In the event that the Debtor does not timely make the first payment under the Class 2H Note, it will deliver, upon demand, a quitclaim deed to the 14 121201003v1880207 Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2H Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2H Contingent Note'') under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2H Contingent Note will mature on the third anniversary ofthe Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2H Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the tenns of the Class 2H Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 2H Note in order of maturity. The Class 2H Note, together with the Plan, will operate as a restatement and amendment of the January 2002 LCF Blaine Note and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2HNote will be substantially similar to those included in the January 2002 Blaine Note, and, to the extent not inconsistent with the terms of the Class 2H Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of defauh or an event otherwise giving rise to any rights or remedies in favor ofLCF. 15 12120J003vl880207 Class 3A - Lakeland Construction Finance, LLC (Account 211598 - Haven) The Class 3A Claim arises out of the Debtor~s obligations to Lakeland under a Real Estate Construction Note dated December 7,2000 in the original principal amount of $285,000.00 (the <<December 7,2000 Haven Note"). As of September 24,2007, the outstanding balance of the December 7, 2000 Haven Note, including accrued and unpaid interest, charges, and fees, was $438,784.60. The Debtor's performance under the December 7, 2000 Haven Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $285,000.00 Real Estate Construction Note (the ''December 7, 2000 Haven Mortgage''). The December 7,2000 Mortgage was recorded on December 14,2000 with the Office ofthe County Recorder of Sherburne County (Doc. No. 426370), and evidences a first priority lien on a 70 acre portion of the Haven Property. Treatment of Class 3A Claim Lakeland will have an allowed secured Class 3A claim in the amount of $438,784.60, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3A Claim, the Plan constitutes a promissory note (the "Class 3A Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3A Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property, to be applied flIst to accrued interest and second to principal, on account ofthe Class 3A Note. In the event that the Debtor does not timely make the fIrst payment under the Class 3A Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lake1and Entities' option, submit to voluntary foreclosure. After the first payment, the balance ofthe Class 3A Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (ni) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 3A Contingent Note'') under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary of the Effective Date. The Class 3A Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the 16 121201003vl 880207 Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3A Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property. The Debtor's performance under the tenns of the Class 3A Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being of the same priority, dignity, and effect as that of the December 7,2000 Haven Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state ()r federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in tbe Haven Property. In addition to the above-described scheduled payments under the Class 3A Note, upon the sale of any portion of the Haven Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the December 7, 2000 Haven Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3A Note in order of maturity. The Class 3A Note, together with the Plan, will operate as a restatement and amendment of the December 7,2000 Haven Note, the December 7, 2000 Haven Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any ofthe Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3A Note will be substantially similar to those included in the December 7, 2000 Haven Note, and, to the extent not inconsistent with the terms ofthe Class 3A Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lake land. Class 3B - Lakeland Construction Finance, LLC (Account 211133 - Haven) The Class 3B Claim arises out of the Debtor's obligations to Lakeland under a promissory dated December 23,1999 in the original principal amount of$2,OOO,OOO.00 (the "December 23,1999 Haven Note"). As of September 24,2007, the outstanding balance of the December 23, 1999 Haven Note, including accrued and unpaid interest. charges, and fees, was $3,146,072.47. The Debtor's performance under the December 23, 1999 Haven Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation, as Mortgagor. to Lakeland Construction Finance, LLC as Mortgagee, to Secure $2,000,000.00 Note (the "December 23, 1999 Haven Mortgage"). The December 23, 1999 Mortgage was recorded on March 14, 2000 with the Office of the County Recorder of Sherburne 17 121201003vl 880207 County (Doc. No. 409431), and evidences a first priority lien on a 200 acre portion of the Haven Property. Treatment of Class 3B Claim Lakeland will have an allowed secured Class 3B claim in the amount of$3,146,072.47, pros accrued and unpaid interest, and less any payments ofprmcipal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3B Claim, the Plan constitutes a promissory note (the "Class 3B Note''), which will include the following material tenns: For the flI'St year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3B Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property, to be applied fIrst to accrued interest and second to principal, on account ofthe Class 3B Note. In the event that the Debtor does not timely make the first payment under the Class 3B Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance ofthe Class 3B Claim will be payable on the following terins: (i) interest rate of 1 0% per annum; (ii) 30 year amortization; and (lii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the ''Class 3B Contingent Note") Under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary of the Effective Date. The Class 3B Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3B Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property. The Debtor's perfonnance under the tenns of the Class 3B Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being ofthe same priority, dignity, and effect as that of the December 23,1999 Haven Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and 18 121201003v1 880207 additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the December 23, 1999 Haven Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3B Note in order of maturity. The Class 3B Note, together with the PIan, will operate as a restatement and amendment oftbe December 23, 1999 Haven Note, the December 23, 1999 Haven Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any ofthe Debtor's pre-petition obligations under the relevant instruments and agreements. The terms ofthe Class 3B Note will be substantially similar to those included in the December 23, 1999 Haven Note, and, to the extent not inconsistent with the terms of the Class 3B Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLakeland. Class 3C - Lakeland Construction Finance, LLC (Account 481161.002 - Blaine) The Class 3C Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated December 23,2004 in the original principal amount of $6,000,000.00 (the "$6,000,000.00 Blaine Note"). As ofthe September 24,2007, the outstanding balance of the $6,000,000.00 Blaine Note, including accrued and unpaid interest, charges, and fees, was $6,000,000.00. The Debtor's performance under the $6,000,000.00 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $6,000,000.00 Note (the "$6,000,000.00 Blaine Mortgage"). The $6,000,000.00 Blaine Mortgage was recorded on December 30, 2004 with the Office of the Registrar of Titles of Anoka County (Doc. No. 431716), and evidences an eighth priority lien on the Blaine Property. Treatment of Class 3C Claim Lakeland will have an allowed secured Class 3C claim in the amount of $6,000,000.00, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. With respect to the Class 3C Claim, the Plan constitutes a non-interest- bearing promissory note (the "Class 3C Note"). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3C Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 3C Note. In the event that the Debtor does not timely make the first payment under the Class 3C Note, it will deliver, 19 121201003v1880207 upon demand, a quitclaim deed. to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary fureclosure. The balance of the Class 3C Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the "Class 3C Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfY all debt secured. by the Blaine Property before the third anniversary of the Effective Date. The Class 3C Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3C Note, and the denominator of which is the aggregate balance of the Lalceland Entities' claims secured by the Blaine Property. The Debtor's performance under the terms of the Class 3C Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the $6,000,000.00 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lalceland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed. to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the $6,000,000.00 Blaine Mortgage with respect to the property that is the subject of any sale, and payments will be applied to'installments under the Class 3C Note in order ofmaturity. The Class 3C Note, together with the Plan, will operate as a restatement and amendment of the $6,000,000.00 Blaine Note, the $6,000,000.00 Blaine Mort:gage, and all related agreements, and continnation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3C Note will be substantially similar to those included in the $6,000,000.00 Blaine Note, and, to the extent not inconsistent with the tenns of the Class 3C Note or the Plan, the terms of all pre- petition agreements will continue in full force and effect, and are hereby incorporated by this reference to such extent. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland. 20 121201003v1880207 Class 3D - Lakeland Construction Finance, LLC (Account 215978 - Blaine) The Class 3D Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated December 23,2004 in the original principal amount of$9,000,000.00 (the "$9,000,000.00 Blaine Note"). As of the September 24, 2007, the outstanding balance ofthe $9,000,000.00 Blaine Note, including accrued and unpaid interest, charges, and fees, was $11,281,598.79. The Debtor's performance under the $9,000,000.00 Blaine Note is secured under that certain Mortgage by Edina Development Cmporation, as Mortgagor, to Lalceland Construction Finance, LLC as Mortgagee, to Secure $9,000,000.00 Note (the "$9,000,000.00 Blaine Mortgage''). The $9,000,000.00 Blaine Mortgage was recorded on December 30, 2004 with the Office ofthe Registrar of Titles of Anoka County (Doc. No. 431716), and evidences a seventh priority lien on the Blaine Property. Treatment of Class 3D Claim Lakeland will have an allowed secured Class 3D claim in the amount of$II,281,598.79, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respectto the Class 3D Claim, the Plan constitutes a promissory note (the "Class 3D Note'.), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,OOO.00J multiplied by a fraction, the numerator of which is the balance owing under the Class 3B Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Blaine Property, to be applied flIst to accrued interest and second to principa~ on account of the Class 3D Note. In the event that the Debtor does Dot timely make the fltst payment under the Class 3D Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the fIrst payment, the balance of the Class 3D Claim will be payable on the following terms: (i) interest rate of 10% per annum.; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar monthJ except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first paymentJ the Debtor will deliver a contingent promissory note (the "Class 3D Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3D Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fractionJ the numerator of which is the balance owing under the Class 3D 21 121201003vl 880207 Note, and the denominator ofwhich is the aggregate balance ofthe Lakeland Entities' claims secured by the Blaine Property. The Debtor's perfurmance under the terms of the Class 3D Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that ofthe $9,000,000.00 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be requited by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the $9,000,000.00 Blaine Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3D Note in order of maturity. The Class 3D Note, together with the Plan, will operate as a restatement and amendment of the $9,000,000.00 Blaine Note, the $9,000,000.00 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre~petition obligations under the relevant instruments and agreements. The terms of the Class 3D Note will be substantially similar to those included in the $9,000,000.00 Blaine Note, and, to the extent not inconsistent with the teons of the Class 3D Note or the Plan, the terms of all pre- petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lake land. Class 3E - Lakeland Construction Finance, LLC (Account 211113 - Becker) The Class 3E Claim arises out of the Debtor's obligations to Lakeland under a mortgage note dated November 12, 1999 the original principal amount of$990,000.00 (the "Becker Note"). As of September 24,2007, the outstanding balance of the Becker Note, including accrued and unpaid interest, charges, and fees, was $1,514,834.12. The Debtor's performance under the Becker Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $500,000.00 Real Estate Construction Note (the "Becker Mortgage''). The Becker Mortgage was recorded February 9,2000 with the Office ofthe County Recorder of Sherburne County (Doc. No. 407106), and evidences a first priority lien on the Becker Property. . 22 121201003vl 880207 Treatment of Class 3E Claim Lakeland will have an allowed secured Class 3E claim in the amount of$l,514,834.12, pfus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. With respect to the Class 3E Claim, the Plan constitutes a promissory note (the "Class 3E Note"), which will include the following material terms: For the first year after the Effective Date, no payments of interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $750,000.00, to be applied first to accrued interest and second to principal, on account of the Class 3E Note. In the event that the Debtor does not timely make the first payment under the Class 3E Note, it will deliver, upon demand, a quitclaim deed to the Becker Property to those Lakeland Entities with mortgage interests in the Becker Property, or, at the Lakeland's option, submit to voluntary foreclosure. After the first payment, the balance of the Class 3E Claim will be payable on the following terms: (i) interest rate of 10% per annum; (n) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the fitst anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the "Class 3E Contingent Note") under which Lakeland will be entitled to a payment afboDus interest in the event that one or more sales of all or any part ofthe Becker Property yield proceeds sufficient to satisfy all debt secured by the Becker Property before the third anniversary ofthe Effective Date. The Class 3E Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Becker Property in excess ofthe aggregate debt secured by the Becker Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3E Note, and the denominator of which is the aggregate balance, as of the Filing Date, of claims that are secured by the Becker Property and held by any ofthe Lakeland Entities. The Debtor's performance under the terms of the Class 3E Note will be secured by a continuing mortgage interest in the Becker Property, with such interest being of the same priority. dignity, and effect as that of the Becker Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Becker Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Becker Property. Upon the sale of any portion of the Becker Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the Becker Mortgage with 23 12120J003vl 880201 respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3E Note in order of maturity. The Class 3E Note, together with the Plan, will operate as a restatement and amendment of the Becker Note, the Becker Mortgage, and all related agreements, and confrrmation Qfthe Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3E Note will be substantially similar to those included in the Becker Note, and, to the extent not inconsistent with the terms of the Class 3E Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of defuult or an event otherwise giving. rise to any rights or remedies in favor of Lake land. Class 3F - Lakeland Construction Finance, LLC (Account 487502.001 - Blaine) The Class 3F Claim arises out of the Debtor's obligations in favor of Lakeland under a promissory note dated May 8, 2006 in the original principal amount of $800,000.00 (the "May 8, 2006 Blaine Note")..As of September 24,2007, the outstanding balance of the May 8,2006 Blaine Note, including accrued and unpaid interest, charges and fees, was $800,000.00. The Debtor's performance under the May 8, 2006 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $800,000.00 Note (the ''May 8, 2006 Blaine Mortgage'). The May 8, 2006 Blaine Mortgage was recorded on May 8, 2006 with the Office of the Registrar of Titles of Anoka County (Doc. No. 487502.001), and evidences a ninth priority lien on the Blaine Property. Treatment of Class 3F Claim Lakeland will have an allowed secured Class 3F claim in the amount of$800,000.00, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3F Claim, the Plan constitutes a non-interest-bearing promissory note (the "Class 3F Note'). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3F Note, and the denominator of which is the aggregate ofthe Lakeland Entities' claims that are secured by the Blaine Property, to be applied first to accrued interest and second to principa~ on account of the Class 3F Note. In the event that the Debtor does not timely make the first payment under the Class 3F Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. The balance oftbe Class 3F Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time ofthe frrst payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 3F Contingent Note") under which Lakeland will be 24 121201003vl880207 entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3F Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3F Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims that are secured by the Blaine Property. The Debtor's performance under the tenns of the Class 3F Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being ofthe same priority, dignity, and effect as that ofthe May 8, 2006 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the Bromley Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 3F Note in order of maturity. The Class 3F Note, together with the Plan, will operate as a restatement and amendment of the May 8, 2006 Blaine Note, the May 8, 2006 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3F Note will be substantially similar to those included in the Bromley Note, and, to the extent not inconsistent with the terms of the Class 3F Note or the Plan, the terms ofa11 pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any tenn in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of defuult or an event otherwise giving rise to any rights or remedies in favor of Lakeland. Class 3G - Lakeland Construction Financet LLC (Account 431716 - Blaine) The Class 3G Claim arises out of the Debtor's obligations in favor of Lake land under a promissory note dated March 27,2003 in the original principal amount of$2~OOO,000.00 (the "March 27,2003 Blaine Note"). As of September 24,2007, the outstanding balance of the May 8, 2006 Blaine Note, including accrued and unpaid interest, charges and fees, was $2,000,000.00. The Debtor's performance under the March 27,2003 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortg!lgor, to Lakeland Construction Finance, 25 12120J003vl 880207 additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Propertyt the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such paymentst Lakeland will release its interest under the Bromley Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 3G Note in order of maturity. The Class 30 Note, together with the Plan, will operate as a restatement and amendment of the March 27, 2003 Blaine Note, the March 27, 2003 Blaine Mortgaget and all related agreements, and confirmation ofthe Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3G Note will be substantially similar to those included in the March 27, 2003 Blaine Note Note, and, to the extent not inconsistent with the terms of the Class 3G Note or the Plant the terms of all pre-petition agreements will continue in full force and effec~ and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary~ neither the commencement nor the administration of this ban1cruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland. Class 3H - Lakeland Construction Finance, LLC (Account 212366 - Rolling Woods) The Class 3H Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated March 12~ 2002 in the original principal amount of $600,000.00 (the ''Rolling Woods Note"). As of September 24,2007, the outstanding balance ofthe Rolling Woods Note, including accrued and unpaid interest, charges, and fees~ was $470,606.15. The Debtor's performance under the Rolling Woods Note is secured under that certain First Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $600,000.00 Note (the "Rolling Woods Mortgage"). The Rolling Woods Mortgage was recorded on March 21, 2002 with the Office of the County Recorder of Olmsted County (Doc. No. A-910011), and evidences a current first priority lien on 13 undeveloped lots in the Rolling Woods development in Olrru;ted County, Minnesota (the subject property will be referred to as the ''Rolling Woods Property"). Treatment of Class 3H Claim Lakeland will have an allowed secured Class 3H claim in the amount of $470,606.15, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. On the Effective Date, the Debtor will deliver to Lakeland a quitclaim deed to the Rolling Woods Property in complete and fmal satisfaction of the Class 3H Claim. 27 12J201003v1880207 Class 31 - Lakeland Construction Finance, LLC (Account 213436 - Albertvillas 6) The Class 31 Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated March 12~ 2002 in the original principal amount of $800,000.00 (the "Albertvillas 6 Note"). As of September 24,2007, the outstanding balance of the AIbertvillas 6 Note, including accrued and unpaid interest, charges, and fees~ was $1,680,144.81. The Debtor's performance under the Albertvillas 6 Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $800,000.00 Note (the "Albertvillas 6 Mortgage"). The Albertvillas 6 Mortgage was recorded on May 8, 2006. with the Office of the County Recorder of Wright County (Doc. No. 1008637), and evidences a current first priority lien on 23 undeveloped lots in the Albert Villas 6th Addition development in Wright County, Minnesota (the subject property will be referred to as the "Albertvillas 6 Property"). Treatment of Class 31 Claim Lakeland will have an allowed secured Class 31 claim in the amoWlt of$I,680,144.81, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. On the Effective Date, in complete and final satisfaction ofthe Class 31 Claim, the Debtor will either: (i) deliver to Lakeland a quitclaim deed to the Albertvillas 6 Property; or (ii) submit to voluntary foreclosure. Class 3J - Lakeland Construction Finance, LLC (Account 211894 - Albertvillas 7) The Class 3J Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated June 29, 2001 in the original principal amount of $405,000.00 (the "AIbertvillas 7 Note"). As of September 24,2007, the outstanding balance ofthe Albertvillas 7 Note, including accrued and unpaid interest, charges, and fees, was $812,864.17. The Debtor's performance under the Albertvillas 7 Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $800,000.00 Note (the "Albertvillas 7 Mortgage"). The Albertvillas 7 Mortgage was recorded on August 2~ 2001 with the Office of the County Recorder of Wright County (Doc. No. 751570), and evidences a first priority lien on real property in Wright County, Minnesota (the subject property will be referred to as the "Albertvillas 7 Property"). Treatment of Class 3J Claim Lakeland will have an allowed secured Class 3J claim in the amount of$812,864.17, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. From the Effective Date through June 1, 2008 interest will not accrue on the Class 3J Claim, and, from and after June 1, 2008, interest will accrue at the rate often percent per annum. On or before the date that is twelve months after the Effective Date, the 28 121201003vl 880207 LLC as Mortgagee, to Secure $2,000,000.00 Note (the "March 27,2003 Blaine Mortgage"). The March 27, 2003 Blaine Mortgage was recorded on May 21, 2003 with the Office of the Registrar of Titles of Anoka County (Doc. No. 431716), and evidences a sixth priority lien on the Blaine Property. Treatment of Class 3G Claim Lakeland will have an allowed secured Class 3G claim in the amount of $2,000,000.00, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. The With respect to the Class 3G Claim, the Plan constitutes a promissory note (the "Class 3G Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3G Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied fIrSt to accrued interest and second to principal, on account ofthe Class 3G Note. In the event that the Debtor does not timely make the first payment under the Class 3G Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the fITSt payment, the balance of the Class 3G Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 3G Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 30 Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% ofthe aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 30 Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims that are secured by the Blaine Property. The Debtor's performance under the terms ofthe Class 3G Note will be secured by a continuing Jilortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the March 27, 2003 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law . Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and 26 121201003vl 880207 Debtor will pay the Class 3J Claim in full or will consent to voluntary foreclosure of its interest in the Albertvillas 7 Property in complete and final satisfaction of the Class 3J Claim. Class 3K - Lakeland Construction Finance, LLC (Account 213527 - Blaine) The Class 3K Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated January, 2002 in the original principal amount 0[$1,000,000.00 (the "January 2002 Lakeland Blaine Note''). As of September 24,2007, the outstanding balance of the January 2002 Lakeland Blaine Note, including accrued and unpaid interest, charges, and fees, was $1,547,398.24. Treatment of Class 3K Claim Lakeland will bave an allowed secured Class 3K claim in the amount of$I,547,398.24, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3K Claim, the Plan constitutes a promissory note (the "Class 3K Note"), which will include the following material terms: For the rust year after the Effective Date, no interest or principal will be payable, but interest will accme at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3K Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 3K Note. In the event that the Debtor does not timely make the first payment under the Class 3K Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lak.eland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 3K Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the fll'st business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to bave delivered a contingent promissory note (the ''Class 3K Contingent Note'') under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3K Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3K Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. 29 121Z0100)v! 880207 The Debtor~s perfonnance under the terms of the Class 3K Note will be secured by a continuing mortgage interest in the Blaine Property~ with such interest being ofthe same priority, dignity, and effect as before the Filing Date. No further action need be taken by either Lake1and or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing~ the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3K Note in order of maturity. The Class 3K Note, together with the Plan, will operate as a restatement and amendment of the January 2002 Lakeland Blaine Note and all related agreements~ and confirmation of the Plan will not operate as a replacement or satisfaction of any ofthe Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3K Note will be substantially similar to those included in the January 2002 Lakeland Blaine Note, and, to the extent not inconsistent with the tenns of the Class 3K Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lake land. Class 4 - The Waitt Family Foundation Fund II, LLC (Account 40051 - Haven) The Class 4 Claim arises out of the Debtor's obligations to WFF under a promissory note dated May 14, 2002 in the original principal amount of$2,150,000.00 (the "WFF Note"). As of September 24, 2007, the outstanding balance of the WFF Note, including accrued and unpaid interest~ charges, and fees~ was $5,517,585.93. The Debtor's performance under the WFF Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation~ as Mortgagor, to the Waitt Family Foundation Fund TI, LLC Construction Finance, LLC as Mortgagee~ to Secure $2,150,000.00 Real Estate Construction Note (the "WFF Mortgage''). The WFF Mortgage was recorded on January 16,2003 with the Office of the County Recorder of Sherburne County (Doc. No. 493488); and evidences a first priority lien on a 200 acre portion of the Haven Property. Treatment of Class 4 Claim WFF will have an allowed secured Class 4 claim in the amount of $5,517,585.93, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the 30 121201003vl 880207 Bankruptcy Code. With respect to the Class 4 Claim, the Plan constitutes a promissory note (the "Class 4 Notet')t which will include the following material terms: For the frrst year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Datet the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 4 Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Haven Property, to be applied first to accrued interest and second to principal, on account of the Class 4 Note. In the event that the Debtor does not timely make the first payment under the Class 4 Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 4 Claim wiD be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (Hi) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the fIrst business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time ofthe first payment, the Debtor will deliver a contingent promissory note (the "Class 4 Contingent Note") under which WFF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfY all debt secured by the Haven Property before the third anniversary of the Effective Date. The Class 4 Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay WFF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess oftbe aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator ofwmch is the balance owing under the Class 4 Note, and the denominator of which is the aggregate balance, as of the Filing Date, oithe Lakeland Entities' claims that are secured by the Haven Property. The Debtor's performance under the terms of the Class 4 Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being of the same priority, dignity, and effect as that ofthe September 20, 2001 Haven Mortgage before the Filing Date. No further action need be taken by either WFF or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as WFF may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay WFF an amount equal to release prices that have been negotiated and agreed to by the Debtor and WFF. In exchange for such payments, WFF will release its interest under the WFF Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 4 Note in order of maturity. 31 121201003vl 880207 The Class 4 Note. together with the Plan, will operate as a restatement and amendment of the WFF Note, the WFF Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition Qbligations under the relevant instruments and agreements. The tenns of the Class 4 Note will be substantially similar to those included in the WFF Note, and. to the extent not inconsistent with the terms of the Class 4 Note or the Plan, the terms. of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary. neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofWFF. Class 5 . RBP Housing~ LLC Class 5 consists of the Debtor's obligations under that certain Contract for Deed dated March 24, 2005 (the "RBP Contract") between the Debtor and RBP Housing, LLC (uRBP'') under which the Debtor is purchasing 30 unimproved lots in the Fairways Fourth Addition in Benton County (the ''RBP Property''). The RBP Contract was recorded on April I, 2005 with the Office of the Benton County Recorder (Doc. No. 324651). As of the Filing Date, the aggregate of all payments due and to come due under the RBP Contract was $556.051.21. For purposes of the Plan, the Contract for Deed constitutes a fIrst priority lien on the RBP Property. Treatment of Class 5 Claim RBP will have an allowed secured Class 5 claim in the amount of $556,05 1.21, plus accrued and unpaid interest and other charges allowed under the RBP Contract, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 5 Claim, the Plan constitutes a modification of the payment terms under the RBP Contract such that, for the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the sixth anniversary of the Effective Date, at which time all outstanding principal and interest will be due and payable. RBP's interest in the RBP Property will continue to be evidenced by the RBP Contract as currently recorded, and neither the Debtor nor RBP will be required to take any further action to perfect RBP's interest except as may otherwise be required under applicable law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as RBP may deem necessary or appropriate in order to retain or continue its interest in the RBP Property. Except to the extent inconsistent with the tenns of the Plan, the non-monetary terms of the RBP Contract will not be ahered, and will continue in full force and effect. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofRBP. 32 121201003v1880207 Class 6 - Contractors Capital Corporation (Weckerling Acres) The Class 6 Claim arises out of the Debtor's obligations to Contractors Capital Corporation ("Cce') under that certain Mortgage Note dated January 6, 2003 in the original principal amount of$41 0,000.00 (the "CCC Note"). The Debtor's performance under the CCC Note is secured under a Mortgage dated February 6, 2003 (the "CCC Mortgage''). The CCC Mortgage was recorded on December 22, 2004 with the Office ofthe County Recorder for Olmsted County (Doc. No. A-I048548), and represents a first priority interest in certain unimproved property in Olmsted County (the "Weckerling Acres Property''). Treatment of Class 6 Claim On the Effective Date, in exchange for payment ofthe sum of $40,000.00, in the aggregate, from CCC and the Hasslers, the Debtor will deliver a quitclaim deed to the Weckerling Acres Property to such party or parties as CCC and the Hasslers designate. Such delivery of the deed will be in full and final satisfaction of all obligations related to the Class 6 claim. Class 7 - Michael & Laurie Hassler (Weckerling Acres) Michael and Laurie Hassler (the ''Has siers") are the holders ofa claim arising out of their February 6,2003 sale ofthe Weckerling Acres Property to the Debtor. $362,000.00 of the purchase price consisted of seller financing provided by the Hasslers, which is evidenced by a promissory note (the "Hassler Note''), payment of which was secured by a mortgage on the Weckerling Acres Property. The Hasslers voluntarily subordinated their mortgage to that of CCC. and the mortgage securing the Hasslers' claim is of second priority. On or about May 12, 2005, the Hasslers commenced an action for the foreclosure of their mortgage on the Weckerling Acres Property. On or about April 21, 2006, the Hasslers and the Debtor entered into a settlement agreement, and the Debtor executed and delivered a confession of judgment to secure its performance under the settlement agreement. The confession of judgment was entered on October 26, 2006, was certified on November 16> 2006, and constitutes a second priority lien on the Weckerling Acres Property. Treatment of Class 7 Claim On the Effective Date, in exchange for payment of the sum of $40,000.00, in the aggregate, from CCC and the Basslers, the Debtor will deliver a quitclaim deed to the Weckerling Acres Property to such party or parties as CCC and the Hasslers designate. Such delivery ofthe deed will be in full and final satisfaction of all obligations related to the Class 6 claim. Confirmation of the PIan will operate as a discharge of the judgment lien currently ofrecord in favor of the Hasslers. 33 121201003v1880207 Class 8 - S&C Bank (Hanjo Farms Property) The Class 8 Claim arises out of the Debtor's obligations to S&C Bank ("S&C") under: (i) a Promissory Note dated March 29,2004 in the original principal amount of$73.239.00; (ii) a Promissory Note dated April 11, 2005 in the original principal amount of$117,857.00; (iii) a Promissory Note dated May 19, 2006 in the original principal amount of$129,OOO.OO (collectively, the "S&C Notes''). The Debtor's performance under the S&C Notes is secured under the following mortgages on certain unimproved property in Polk County, Wisconsin (the "Hanjo Farms Property''): (i) that certain First Mortgage by Edina Development COIporation, as Mortgagor, to S&C as Mortgagee, to Secure $73,239.00 Note, recorded on March 30,2004 in the Office of the Register of Deeds for Polk County, Wisconsin (Doc. No. 677285); (ii) that certain Second Mortgage by Edina Development Corporation, as Mortgagor, to S&C as Mortgagee, to Secure $117,857.00 Note, recorded on April 18, 2005 in the Office of the Register of Deeds for Polk County, Wisconsin (Doc. No. 697251); and (iii) that certain Third Mortgage by Edina Development Corporation, as Mortgagor, to S&C as Mortgagee, to Secure $129,000.00 Note, recorded on May 26,2006 with the Office of the Register of Deeds for Polk County, Wisconsin (Doc. No. 717041). By order entered on November 13, 2007, the Court approved the sale of the Hanjo Property on terms that included the payment of$3oo,000.00 out of the sale proceeds to S&C in full and final satisfaction of all claims under the S&C Notes, treatment to which S&C had consented. The sale closed on November 15,2007, and S&C was paid in accordance with the Court's order. Treatment of Class 8 Claim S&C's claim having been satis.fied out of the proceeds ofa Court-approved sale, there will be no Class 8 Claim allowed under the Plan. Class 9 - Banjo Farms Class 9 cons.ists of the Debtor's obligations under that certain Land Contract dated March 29, 2004 between the Debtor and Hanjo Farms, Inc. (""Hanjo") under which the Debtor is purchasing the Hanjo Farms Property. The Land Contract was recorded on March 30, 2004 with the Office of the Polk County Recorder (Doc. No. 677283). As of the Filing Date, the aggregate of all payments due and to come due under the Land Contract was $90,000.00. For purposes of the Plan, the Contract for Deed constitutes a second priority lien on the Hanjo Farms Property. By order entered on November 13, 2007. the Court approved the sale of the Hanjo Property on terms that included the payment ofSSO,OOO.OO out of the sale proceeds to Hanjo in full and final satisfaction of all claims under the Land Contract, treatment to which Hanjo had consented. The sale closed on November 15, 2007, and Ranjo was paid in accordance with the Court's order. 34 12120JOO3vl 880207 Treatment of Class 9 Claim Hanjo's claim having been satisfied out of the proceeds of a Court-approved sale, there will be no Class 9 Claim allowed under the Pl~. Class 10 - Sam Montgomery (Balder Property) Class 10 consists of the Debtor's obligations under that certain Contract for Deed dated August 9, 2004 (the ''Montgomery Contract") between the Debtor and David 1. and Yvonee Balder under which the Debtor is purchasing certain real property in Benton County, Wisconsin (the "Balder Property'1. The Contract for Deed was recorded on October 26, 2004 with the Office of the Benton County Recorder (Doc. No. 319824). Under an Assignment of Contract for Deed and Warranty Deed dated August 8, 2006, the Balders assigned their interest in tbe Contract for Deed and the Balder Property to Sam R. Montgomery ("Montgomery"). As of the Filing Date, the aggregate of all payments due and to come due under the Contract for Deed was $150,641.00. For purposes of the Plan, the Contract for Deed constitutes a flI'st priority lien on the Balder Property. Treatment of Class 10 Claim Montgomery will have an allowed secured Class 10 claim in the amount of $ 150,641.00, plus any additional amounts that may bave accrued under the terms of the Montgomery Contract since the Filing Date, and less any payments made since the Filing Date, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 10 Claim, the Plan constitutes a modification of the payment terms under the Montgomery Contract such thatJ for the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the sixth anniversary of the Effective DateJ at which time all outstanding principal and interest will be due and payable. Montgomery's interest in the Balder Property will continue to be evidenced by the Montgomery Contract as currently recorded, and neither the Debtor nor Montgomery will be required to take any further action to perfect Montgomery's interest except as may otherwise be required under applicable law. Notwithstanding the foregoingJ the Debtor will cooperate and comply with all reasonable requests.related to the execution and delivery of such further and additional documents as Montgomery may deem necessary or appropriate in order to retain or continue his interest in the Montgomery Property. Except to the extent inconsistent with the terms of the Plan, the non-monetary terms of the Montgomery Contract will not be altered, and will continue in full force and effect. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the conunencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Montgomery. 35 121201003vl 880207 Class 11 - Merritt Hage Merritt Hage {"Hage'1 is the holder of a claim arising out of an interim arbitration award dated January 25, 2006 and an arbitration award dated March 3, 2006, under which Hage was awarded the amount of $259,328.96, including attorneys' fees, costs, and pre-award interest. On August 2,2006, the Minnesota State District Court in Anoka County granted Hage's motion to confl11Il the arbitration award, and judgment (the ''Hage Judgment'1 was entered on August 4,2006. and has been docketed in eight counties. Treatment of Class 11 Claim The Class 11 Claim will be satisfied upon the Lakeland Entities' payment of the sum of $162,500.00, which payment will be made on the Effective Date. Confirmation of the Plan, together with the payment of the sum of $162,500.00. will operate as a discharge of the judgment lien currently of record in favor ofHage, and, upon his receipt of the above-referenced payment, Hage will be obligated to file and record a release of such judgment in every county in which it bas been docketed and delivery to the Debtor of evidence of such release. Class 12 - Sonie Financial Corporation The Class 12 Claim arises out of the Debtor's obligations in favor of Sonic Financial Corporation ("Sonic") under: (i) that certain Promissory Note dated March 5, 2004 in the original principal amount of$3,6oo,000.00; and (ii) that certain Promissory Note dated March 22,2005 in the original principal amount of$125,OOO.00 (together, as they may have been amended from time to time, the "Sonic Notes"). As of November 30, 2007, the outstanding aggregate balance of the Sonic Notes, including accrued and unpaid interest, late fees, attorneys' fees, and loan extension fees, was approximately $4,398,647.50. The Debtor's performance under the Sonic Notes is secured under that certain Combination Mortgage and Security Agreement (the "Sonic Mortgage"). The Sonic Mortgage was recorded on April 4, 2004 with the Office of the County Recorder for Sherburne County (Doc. No. 546977), and evidences a first priority lien on the Waters Edge Property (as defined below) and a second priority lien on the Becker Property. The Sonic Notes were delivered in connection with the Debtor's acquisition of real property in Benton Co~ty and Sherburne County, a large portion of which was later platted under the name Waters Edge at Donovan Lake (the ''Waters Edge Property''). The Waters Edge Property was later deeded to an affiliated company named Waters Edge Development, LLC ("WED"), which assumed responsibility for payment of the debt associated with the acquisition of the Waters Edge Property. The Debtor continues to be a primary obligor on the Sonic Notes, being jointly and severally liable on the Sonic Notes with WED. On October 31, 2006, WED filed a petition under Chapter II, and by order dated Apri130, 2007 the Bankruptcy Court coufinned WED's Sixth Modified Chapter 11 Plan of Reorganization (the "WED Plan"). The same obligations that 36 121201003vl 880207 make up the Class 12 Claim are treated as a fully secured claim to be paid in full by July 15, 2009 under the WED Plan. Treatment of Class 12 Claim Sonic will have an allowed secured claim in the amount of $4,398,647.50, together with additional interest, late fees, and attorneys' fees as accrue after November 30,2007. With respect to the Class 12 Claim, the Plan will constitute an obligation to pay such claim in accordance with the existing loan documents between Sonic and the Debtor, as modified by the WED Plan, and with respect to which obligation the Debtor and WED will continue to be jointly and severally liable. The Debtor's performance hereunder will be secured by a continuing second priority mortgage interest in the Becker Property, which mortgage will be junior only to the existing first priority mortgage lien in favor of Lake land to secure the Becker Note. No further action need be taken by either Sonic or the Debtor in order to perfect Sonic's ongoing interest in the Becker Property. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Sonic may deem necessary or appropriate in order to retain or continue its second priority mortgage interest in the Becker Property. At any time after the Effective Date and before June I, 2008, the Debtor may, but will not be required to, pay Sonic the sum of$I,OOO,OOO.OO (which sum will be applied by Sonic flIst to the loan extension fee agreed to by WED as part of the WED Plan, second to any late payment fees which have accrued or may continue to accrue under the Sonic Notes, and third to any past or future interest which has accrued or may accrue under the Sonic Notes), and, upon such payment, Sonic will be obligated to execute and deliver a satisfaction ofits mortgage on the Becker Property, and the Debtor will be relieved of all further obligations owing to Sonic pursuant to the Sonic Notes. The Plan, will operate as a restatement and amendment of the Sonic Notes and all related agreements (including, but not limited to, the WED Plan), and confrrmation of the Plan will not operate as a replacement or satisfaction of any oftbe Debtor's pre-petition obligations to Sonic. The terms of obligations to Sonic under the Plan will be substantially similar to those included in the Sonic Notes, as those obligations may have been modified by the WED Plan, and, to the extent not inconsistent with the terms of the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. Class 13 - WBKS & Co. The Class 13 Claim consists ofthe Debtor's allegedly secured obligations to WHKS & Co. ("WHKS") under a settlement agreement dated on or about October 12, 2006. According to a proof of claim filed by WHKS, the Class 13 Claim is secured under a confession of judgment. The Debtor has been unable to confll'II1 that the confession of judgment was filed or docketed before the Filing Date, and has requested that WHKS provide documentation to evidence the secured status of its claim. In the event that the Debtor is not able to confirm that WHKS holds a 37 121201003vl 880207 valid perfected lie~ it may object to the Class 13 Claim, and, if the Debtor prevails in such objection, any allowed claim held by WHKS will be included in Class 1. Treatment of Class 13 Claim To the extent it is allowed as a secured claim, the Class 13 Claim will be paid on the following terms: For the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the frrst through fifth anniversaries of the Effective Date until the Class 13 Note matures on the sixth anniversary of the Effective Date (the "Maturity Date''), at which time all outstanding principal and interest will be due and payable. The Debtor's performance under the tenns applicable to the Class 13 Claim will be secured by a mortgage on a 40 acre portion of the Blaine Property (the "Class 13 Mortgage''). Confirmation of the Plan will operate as a discharge of the judgment lien currently of record in favor ofWHKS, and the Debtor's obligation to make payments on account of the Class 13 Claim is expressly conditioned on WHKS's release of such judgment in every county in which it has been docketed and delivery to the Debtor of evidence of such release. Class 14 - Wilkerson & Hegna P.L.L.P. The Class 14 Claim arises out of the Debtor's obligations in favor of Wilkerson & Hegna P .L.L.P. ("W&H") under that certain Mortgage Note dated September 7, 2006 in the original principal amount of $75,000.00 (the "W&H Note''). The Debtor's performance under the W &H Note is secured under a Mortgage dated January 6, 2003 (the "W&H Mortgage"). The W&H Mortgage was recorded on September 14.2006 with the Office of the County Recorder for Wright County (Doc. No.1 025568), and represents a second priority interest in the Albertvillas 7 Property. Treatment of Class 14 Claim W&H will have an allowed secured Class 14 claim in an amount not to exceed $75.000.00, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. With respect to the Class 14 Claim the PIan constitutes a promissory note (the "Class 14 Note"), which will include the following material terms: For the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the Class 14 Note matures on the sixth anniversary of the Effective Date (the "Maturity Date"), at which time all outstanding principal and interest will be due and payable. The Debtor's performance under the tenns of the Class 14 Note will be secured by a continuing second priority mortgage interest in the Albertvil1as 7 Property. No further action need be taken by either W &H or the Debtor in order to perfect the ongoing interest in the Albertvillas 7 38 121201003v1880207 Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as W &H may deem necessary or appropriate in order to retain or continue their interest in the AlbertviUas 7 Property. At any time before the first anniversary of the Effective Date, the Debtor may, but will not be required to, pay the W&H an aDlOllilt equal to thirty percent of the original principal balance of the Class 14 Note and deliver a mortgage on a 40 acre portion of the Blaine Property as and for security of the Debtor's payment of the balance of the Class 14 Note, and, upon such payment and delivery, W&H will be obligated to execute and deliver a satisfaction of their mortgage on the Albertvillas 7 Property. The Class 14 Note, together with the Plan, will operate as a restatement and amendment of the W &H Note and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any ofthe Debtor's pre-petition obligations to W&H. The tetms of the Class 14 Note will be substantially similar to those included in the W&H Note, and, to the extent not inconsistent with the terms of the Class 14 Note or the Plan, the terms of all pre- petition agreements will continue in full force and effect, and are hereby incorporated by this reference to such extent. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of W&H. Class 15 - GMAC The Class 15 Claim arises out ofthe Debtor's obligations in favor of General Motors Acceptance CotpOration ("GMAC") under that certain Retail Installment Sale Contract December 16, 2003 (the "GMAC Contract") under which the Debtor fInanced the purchase ofa 2004 Cadillac Escalade. The Debtor's performance under the GMAC Contract is secured by a lien on the subject vehicle, which lien was properly perfected by fIling with the Minnesota registrar of motor vehicles. Treatment of Class lS Claim On the Effective Date, the Debtor will cure any arrearages owing under the GMAC Contract, and will thereafter comply with all of the terms of the GMAC Contract, which terms are wholly incorporated into the Plan by this reference. Class 16 - Anoka County Class 16 consists of all of the Debtor's liability for real estate taxes owing to Anoka County, Minnesota ("Anoka"). 39 121201003vl 880207 Treatment of Class 16 Anoh will have an allowed secured Class 16 Claim in the amount of$29,813.14, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. The Class 16 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis of interest at the rate prescribed by Section 549.09 of the Minnesota Statutes and an amortization schedule often years. Class 17 - Benton County Class 17 consists of all of the Debtor's liability for real estate taxes owing to Benton County, Minnesota ("Benton"). Treatment of Class 17 Benton will have an allowed secured Class 17 Claim in the amount of $20,198.43, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. The Class 17 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis of interest at the rate prescribed by Section 549.09 oftbe Minnesota Statutes and an amortization schedule often years. Class 18 - Olmsted County Class 18 consists of all of the Debtor's liability for real estate taxes owing to Olmsted County, Minnesota ("Olmsted"). Treatment of Class 18 Olmsted will have an allowed secured Class 18 Claim in the amount of $16,635.19, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. The Class 18 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis of interest at the rate prescribed by Section 549.09 of the Minnesota Statutes and an amortization schedule often years. Class 19 - Sherburne County Class 19 consists of all of the Debtor's liability for real estate taxes owing to Sherburne County, Minnesota ("Sherburne"). Treatment of Class 19 Sherburne will have an allowed secured Class 19 Claim in the amount of $72,258.83, or in such other amount as may be determined in accordance with the applicable provisions of the 40 121201003vl 880207 Bankruptcy Code. The Class 19 Claim will be paid in ten equal annual installments of principal and interest, with the amount of eacb installment being calculated on the basis of interest at the rate prescnbed by Section 549.09 of the Minnesota Statutes and an amortization schedule often years. Class 20 - MBE, Inc. MBE, Inc. ("MBE") is the holder of a claim arising out of a judgment entered in the matter captioned MBE, Inc. v. Edina Development Corporation, Case No. 86-CV-06-3204, and docketed in Wright County, Minnesota on June 7, 2006. Treatment of Class 20 Claim 1\.ffiE will have an allowed secured Class 20 claim of up to $13,743.61, plus accrued and unpaid interest, and less any payments of principal made from and after the Filing Date, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 20 Claim, the Plan constitutes a promissory note (the "Class 20 Note'), which will provide for payment of the Class 20 Claim on the following material terms: For the first five years after the Effective Date, interest will accrue at the rate ofoine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the Class 20 Note matures on the sixth anniversary of the Effective Date (the ''Maturity Date"), at which time all outstanding principal and interest will be due and payable. The Debtor's performance under the tenns of the Class 20 Note will be secured by a mortgage on a 40 acre portion ofthe Blaine Property (the "Class 20 Mortgage"). The Class 20 Note, Class 20 Mortgage, and the Plan, together, WIll operate as a restatement and amendment of the Debtor's obligations related to the Class 20 Claim, and neither the confirmation of the Plan nor the execution of the Class 20 Note or Class 20 Mortgage will operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations to MBE. Neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otberwise giving rise to any rights or remedies in favor ofMBE. Confirmation of the Plan will operate as a discharge of the judgment lien currently of record in favor ofMBE, and the Debtor's obligation to make payments on account of the Class 20 Note is expressly conditioned on MBE's release of such judgment in every county in which it has been docketed and delivery to the Debtor of evidence of such release. Class 21 . Priority Claims Other Than fiS07(a)(1), (a)(2) and (a){S) Claims Class 21 consists of all timely filed and allowed priority claims other than claims asserted under Section 507(a)(I), (a)(2), and (a)(8) of the Bankruptcy Code. Other than the frrst $10,000.00 of Mr. Lewdowski's $450,000.00 wage claim, the priority treatment of which Mr. Lewandowski has waived, tbe Debtor does not believe that it is liable on any claims that would be included in Class 21. 41 121201003vl 880207 Treatment of Class 21 Class 21 Claims will be paid, in ful~ on the Effective Date, or on such other terms upon which any relevant creditor and the Debtor may agree. Class 22 - Equity Interests Class 22 consists of all interests arising out of or related to the equity interests in the Debtor ("Class 22 Interests"), including, without limitation, all fmancial and all governance rights associated with any and all outstanding stock issued at any time by the Debtor. Treatment of Class 22 Interests The Class 22 Interests will remain in place from and after the date on which an order conftmling the Plan is entered. 2.2 Impaired and Unimpaired Classes All classes of claims are impaired under the PIan, while the class of interests is unimpaired. 2.3 Unclassified Claims - Description of Holders and Treatment of Claims 2.3.1 Pre-Petition Priority Government Claims "Pre--Petition Priority Government Claims" are all timely filed and allowed claims of governmental units for a pre-petition claim that is accorded a priority status pursuant to Section 507(a)(8) of the Bankruptcy Code. Pursuant to the mandates of Section 1123(a)(1) of the Bankruptcy Code, Pre-Petition Priority Government Claims are not classified in the Debtor's PIan. Treatment of Pre-Petition Priority Government aaim Pre-- Petition Priority Government Claims will be paid, in ful~ over a term ending on or before the fifth anniversary of the Filing Date. From and after the Effective Date, Pre--Petition Priority Government Claims will accrue interest on the terms and at the rate provided for in 26 V.S.C. ~6621(b), and will be paid in periodic payments so that such claims are fully amortized and paid in full over a period ending not later than the date that is five years after the Filing Date. 2.3.2 Administrative Expenses "Administrative Claim" means any claim for the payment of any administrative expense arising under Section 503(b) of the Bankruptcy Code. Subject to the specific terms set forth below, the Debtor will pay each holder of an allowed Administrative Claim (except any such holder that agrees to different treatment) the allowed amount of such holder's allowed Administrative Claim, in cash, on the Effective Date; provided, 42 121201003vl 880207 however, that allowed Administrative Claims representing post-petition liabilities incurred in the ordinary course of business by the Debtor will be paid as they come due. (a) ProCessional Fees Professional fees that constitute Administrative Claims are the allowed fees and costs of the professionals that have been employed in the course of the Bankruptcy Case. Allowed professional fees will be paid in full in cash on the Effective Date, or on such date as the Court may fix, or upon such other terms as may be agreed upon by the professional and the Debtor. The Debtor currently projects that professional fees will be paid out of the proceeds of the Exit Loan described below. (b) U.S. Trustee Fees and Court Costs U.S. Trustee fees and court costs that constitute Administrative Claims are those obligations imposed by operation of28 U.S.C. ~1930 (all such fees and costs will be referred to as ''U.S. Trustee Fees"). The Debtor willpay all u.s. Trustee Fees owed by the Debtor, as and when due, until this Bankruptcy Case is closed. In addition, the Debtor will continue to comply with all reporting requirements imposed by the U.s. Trustee lUltil tbis Bankruptcy Case is closed. (e) Other Administrative Expense Claims There may be other Administrative Claims, such as the following: (1) filed proofs of claim for administrative expenses; (2) post-petition taxes; (3) unpaid post-petition claims incurred in the ordinary course of business; and (4) certain claims associated with executory contracts and unexpired leases (the treatment of claims arising out of executory contracts and unexpired leases is more fully described in Section 3.5 below) (all of the foregoing will be referred to as ''Other Administrative Claims"). The Debtor bas remained current on aU of its post-petition obligations, and does not believe that it is liable on any Other Administrative Claims. To the extent that there are any allowed Other Administrative Claims, such claims will be paid, in full and in cash, on the Effective Date, or as otherwise agreed to by the Debtor and the claimant, subject to the following exception: For claims incurred in the ordinary course of business after the Filing Date, the Debtor will pay such claims as they become due, or otherwise in the ordinary course of Debtor's business. 2.4 Executory Contracts and Unexpired Leases The treatment of the various executory contracts and unexpired leases to which the Debtor is a party is specified in the Schedule of Executory Contracts and Leases, attached as Exhibit A. From and after the date on which an order confirming the Plan is entered, the Debtor will timely perform its obligations according to the terms of all asswned contracts, as the same may be 43 121201003vl880207 modified by the terms of the Plan. Notwithstanding the foregoing, with respect to arrearages outstanding as of the date on which a contract or lease is assumed, the Debtor will cure such arrearages promptly after the Effective Date, or as otherwise agreed to by the Debtor and the other party to any affected contract. As to rejected contracts and leases, the parties to such contracts and leases may have claims arising under the terms of the relevant agreement, or arising from the rejection of the contract or lease, or both. In accordance with the provisions of the Bankruptcy Code, any claim based on the rejection of an executory contract or unexpired lease will be treated as an unsecured claim Unless otherwise ordered by the Court, the deadline for filing a proof of claim for any such claim arising from rejection of a contract or lease will be fixed at 30 days from the date on which an order confirming the Plan is entered. TIlE INFORMATION PROVIDED HEREIN CONSTITUTES NOTICE OF THE DEADLINE FOR ASSERTING CLAIMS FOR DAMAGES FROM REJECTION OF ANY EXECUTORY CONTRACT OR UNEXPIRED LEASE. Contracts and Leases not Specified If the Debtor is a party to any executory contracts or unexpired leases that are not specifically identified in the Schedule of Executory Contracts and Leases, the Debtor will REJECT all such executory contracts and unexpired leases, with the following exceptions: (i) except as may be provided for in any prior Court order entered with respect to a motion for assumption or rejection of such executory contract or unexpired lease. and (ii) except as may be provided for in any motion pending before the Bankruptcy Court on the date of the hearing on confirmation oftbe Plan. Except as may be provided otherwise herein, such rejection will be effective as of the date on which an order confirming the PIan is entered. III. PROOFS OF CLAIMS AND OBJECTIONS TO CLAIMS Unless otherwise ordered by the Bankruptcy Court. the deadline by which administrative claims must be timely filed is thirty days after the date on which an order confirming the Plan is entered. Administrative expense claims must be asserted by motion filed and served by the deadline set forth herein. SUBJECT TO SUBSEQUENT ORDER OF THE BANKRUPTCY COURT. THIS INFORMATION CONSTITUTES NOTICE OF THE DEADLINE FOR ASSERTING ADMINISTRATIVE EXPENSE CLAIMS. Claims for damages arising out of the rejection of executory contracts and unexpired leases must be asserted by the filing of a proof of claim within thirty days after the date on which an order confirming the Plan is entered. Parties to executory contracts and unexpired leases that have been or may yet be rejected by the Debtor, by motion or otherwise, at or before confirmation must file proofs of claims for any damages from such rejection in accordance with the Bankruptcy Court's order approving such rejection, or, if the order does not so provide, pursuant to the terms of this paragraph. THE INFORMATION PROVIDED HEREIN CONSTITUfES NOTICE OF THE DEADLINE FOR ASSERTING CLAIMS FOR DAMAGES FROM REJECTION OF ANY EXECUTORY CONTRACT OR UNEXPIRED LEASE. 44 121201003v] 880207 IV. POST CONFIRMATION 4.1 Means for Execution 4.1.1 Plan Funding a. Exit Financing. On or before the day that is five days before the Effective Date, one or more of the Lakeland Entities will loan the Debtor the sum of $450,000 (the "Exit Loan"). The terms of the Exit Loan will be commemorated in a promissory note including the following material terms: (i) interest will accrue at the rate often percent per annwn; (ii) no payments will be due until maturity; and (Hi) the Exit Loan will mature at the same time that the Class 3E Claim matures. The Debtor's obligations under the Exit Loan will be secured by a mortgage interest in the Becker Property. b. Claims of the Debtor. The Debtor will retain all claims that were property of the estate. 4.1.2 Settlement Agreement Confirmation of the Plan will constitute Court approval of the reciprocal release and settlement of aD claims that the Debtor and any of the Lakeland Entities may have against each other as ofthe date on which an order confirming the Plan is entered, with the exception of those claims specifically addressed and provided for in the Plan. Without limiting the generality ofthe foregoing, all of the claims and counterclaims that the parties have asserted or could assert in the pending adversary proceeding captioned Edina Development Corporation v. Lake/and Construction Finance, LLC, Adv. No. 06-4520 will be released, and within ten days after confirmation of the Plan the Debtor will file a notice of voluntary dismissal of such action. 4.1.3 Plan Distributions The distributions under the Plan will be made by the Debtor on the dates provided for in the Plan, or on such earlier dates as the Debtor, in its sole discretion, may choose. The Debtor reserves and retains the right to prepay any obligation under the Plan without penalty. Any payment or distribution required to be made under this Plan on a day other than a business day will be made on the next succeeding business day, or as soon thereafter as practicable. The Debtor will not be required to make any payment or distribution on account of any disputed claim, until the dispute has been resolved and then. only to the extent that the disputed claim becomes an allowed claim, whether by agreement oftbe parties or by final order of the Bankruptcy Court. As soon as practicable after the disputed claim is resolved by the Debtor or the parties. or allowed by agreement or final order, and subject to the terms ofthe Plan, the Debtor will pay and distribute to the holder of such allowed claim the amount provided in the Plan in the manner provided in the Plan, subject to the following condition: The Debtor may choose, in the alternative, to make any additional payment or distribution to the creditor holding a previously disputed allowed claim to bring distributions on account of such claim current with where they would have been had the claim never been subject to objection. 45 121201003vl 880207 In the event that any property to be distributed under the Plan remains unclaimed or otherwise not deliverable to a creditor entitled thereto as of the later of: (a) one year after the date on which an order confirming the Plan is entered; or (b) one hundred twenty (120) days after any distribution called for 1+Dder the terms of the Plan, such property will become vested in and will be transferred and delivered to the Debtor. Unclaimed property includes, but is not limited to, checks issued pursuant to the Plan and not negotiated within ninety (90) days of the date such check was issued. The Debtor will withhold from any property distributed under this Plan, any amounts required to be withheld for federa~ state, or local taxes. The issuance, transfer or exchange of any of the securities issued under, or the transfer of any other property pursuant to this Plan, or the making or delivery of an instrument of transfer under this Plan, is exempt from application of any law imposing a stamp tax, transfer tax, or other similar tax. Except as expressly stated in the Plan or otherwise allowed by a fmal order of the Bankruptcy Court, no interest, penalty, or late charge arising after the Filing Date will be allowed on any claim, regardless of whether any objection to the claim is filed and sustained. No attorneys' fees will be paid with respect to any claim except as specified in the Plan, or as allowed by a fmal order of the Bankruptcy Comt. Accordingly, payments and distributions under the Plan will not include, provide for, or otherwise take into account any such interest, penalty, late charge. or attorneys' fees. Distributions to be made under this Plan to holders of allowed claims will be made by first class United Sates mail, postage prepaid to (a) the latest mailing address set forth in the schedules ifno proof of claim was filed with respect to such claim; or (b) to the address appearing on a proof of claim as the address to which notices should be sent if a proof of claim was filed with respect to such claim. Distributions will be deemed made as of the time they are deposited in the United States mail Any notices related to the Plan should be addressed as follows: Edina Development Corporation Attn. Rick Lewandowski 700 Bunker Lake Blvd. Anoka, MN 55303 4.1.4 Setoffs Subject to the limitations provided in Section 553 of the Bankruptcy Code, the Debtor may. but will not be required to, setoff against any claim and the payments or other distributions to bemmade pursuant to the Plan in respect of such claim, claims of any nature whatsoever the Dehtor may have against the holder of such claim. Neither the failure to setoff, nor the allowance of any claim hereunder will constitute a waiver or release by the Debtor of any such claim that the Debtor may have against such holder. 46 12J201003vl 880207 4.1.5 Continued Existence After the Effective Date, the Debtor will continue to exist in accordance with the applicable law in the jurisdiction in which it is incorporated and pursuant to its articles, bylaws, and other organization documents in effect prior to the Effective Date, except to the exient such articles, bylaws, or other organization documents are amended or modified pursuant to the Plan. The articles, bylaws, and other organizational documents will be and hereby are amended and restated as necessary to satisfy the provisions of the Plan and the Bankruptcy Code. After the Effective Date, the Debtor may, but will not be required to, amend or restate its articles and bylaws as pennitted by applicable law, provided that such amendment or restatement may not conflict with any provisions of the Plan. On the Effective Date, all actions contemplated by the Plan will be authorized and approved in all respects, and all matters provided for in the Plan involving the corporate structure of the Debtor will be deemed to have occurred and will be in effect, without any requirement offurther action by the equity holders, directors, or officers of the Debtor. As of the date on which an order confirming the Plan is entered, the officers and directors of the Debtor are authorized to issue, execute, and deliver the agreements, documents, and other instruments contemplated by the Plan. Without limiting the generality of the foregoing, as of the Effective Date, the Debtor's articles will be deemed to have been amended, to the extent necessary, and as consistent with the requirements of Section 1123(a)(6) of the Bankruptcy Code, to prohibit the issuance of nonvoting securities, and to authorize the number of shares necessary to comply with the terms of the Plan. 4.1.6 Management and Compensation of Management From and after the Effective Date of the Plan, the operations of the Reorganized Debtor will be managed by the board of directors as it was constituted as of the Filing Date. In addition to his continuing role as Debtor's only director, Rick Lewandowski will continue to be the only officer of the Debtor, and will be paid an annual-salary of$180,OOO.00 on account of his services. The Debtor reserves the right to give its officers an~ directors periodic raises, provided that such raises are for the limited purpose of maintaining substantial salary uniformity, on an adjusted dollar basis, during the term of the Plan. In light of the foregoing stated purpose for salary increases, during the term of the Plan, no increase in the salary of an officer or director will deviate substantially from the proportionate increase in the Consumer Price Index during the period between the date on which the proposed raise is to take effect and the later of: (i) the Effective Date, and (ii) the most recent date on which the officers or directors were given a raise. In addition to his salary, Mr. Lewandowski will be entitled to all of the employment-related benefits offered to the Debtor's other full time employees. 4.1.7 Equity Structure of Reorganized Debtor From and after the Effective Date, the equity structure of the Debtor will be substantially identical to its equity structure as afthe Filing Date. 47 121201003v1880207 4.1.8 Implementation of Plan The Plan will be implemented upon entry of an order confirming the Plan. The Plan may be modified in the manner provided for under Section 1127 of the Code. The Debtor will give notice of any proposed modification to the United States Trustee and to any other parties designated by the Court. The Debtor reserves the right to make such modifications at any hearing on confirmation as may be necessary to facilitate confirmation of the Plan. The Debtor's obligations under the Plan are contingent upon entry of an order confirming the Plan, and said order not being stayed., appealed, or otherwise challenged before the expiration of the applicable deadline; provided, however, that the Debtor may, in its sole discretion, choose to undertake and perform its obligations under the Plan notwithstanding the pendency of an appeal. The Debtor's obligations under the Plan are contingent upon entry of an order confirming the Plan. 4.2 Reservation of Rights, Powers and Jurisdiction 4.2.1 Rights and Powers Except as otherwise expressly provided in the Plan, the Debtor will retain, after confirmation of the Plan, full right and power to do any of the following: (a) Object to the allowance of claims; (b) Seek subordination of claims; (c) Pursue any claims against third parties, including, but not limited to those based on theories of preference, fraudulent transfer, or any other action arising under Chapter 5 of the Bankruptcy Code; (d) Pursue any claims and enforce any rights arising under the Bankruptcy Code in favor of a trustee or debtor-in-possession; and (e) Pursue any causes of action that the Debtor may have as ofthe date on which an order confirming the Plan is entered. Any and all causes of action that the Debtor may have had prior to confirmation ofthe Plan will survive confirmation of the Plan, will vest in the Debtor as of confIrmation ofthe Plan, and will not be affected by confirmation or the passing ofthe Effective Date of the Plan, except as otherwise specifically provided in the Plan. The Debtor may object to the allowance of claims within the time period provided for in the order confirming the plan, or as otherwise dictated by order oftbe Court. The Debtor's authority to object to the allowance of claims will not be affected in any way by the Debtor's failure to object to allowance of any claim for purposes of voting. 48 lZ1201003vl 880207 4.2.2 Court Approval After confinnation of the Plan, the Debtor may, but will not required to, seek the Court's approval of any of the following: (a) settlements regarding objections to claims; (b) settlements regarding claims against third parties; (c) settlements regarding allowance of fees and expenses incurred by professionals employed during the pendency of the Banlauptcy Case. If the Debtor chooses to seek court approval of any such settlements, the Debtor will not be required to provide notice to creditors as would typically be provided during the chapter 11 case or to file and serve a motion fur the approval of the settlement. Instead, the Debtor will be authorized to seek approval by filing a stipulation setting forth the material terms of the settlement, along with a proposed order providing for the approval of such stipulation. 4.2.3 Jurisdiction Until the Plan has been fully consummated, the court will retain jurisdiction over, and the Debtor will retain standing and the right to pursue any cause of action, proceeding, or other request for relief related to the fo Howing: (a) classification of the claims of creditors; (b) determination of the allowed amount of any claims arising before or during the pendency of the Bankruptcy Case; (c) subordination of the allowed claims of creditors; (d) determination of any counterclaims against any creditor, including any claim for turnover of property of the Debtor and any claim for offiet of the value of the property against the claim of the creditor;. ( e) determination of the allowed amount of claims for damages from the rejection of executory contracts or unexpired leases; (f) determination of all issues and disputes regarding title to the assets oftbe estate and the Debtor; (g) detennination of all causes of actions between the Debtor and any other party. including, but not limited to, any right of the Debtor to recover assets pursuant to the provisions of the Bankruptcy Code, and to avoid any preferential or fraudulent transfers; 49 121201003vl 880207 (h) correction of any defect~ the cming of any omission or the reconciliation of any inc~nsistency of the Plan or the order confirming the Plan as may be necessary to carry out the purpose and intent of the PIan; (i) interpretation and enforcement of the terms of the Plan; (j) shortening or extending, for cause, any time fIxed for doing any act or thing under the Plan; (k) entry of any order, including any injunction, necessary to enforce the title, rights, and powers of the Debtor; (1) entry of an order concluding and terminating the case; and (m) approval of any settlement related to any of the foregoing. The Debtor's transfer or assigmnent of any interests or rights will not affect the Court's retention of jurisdiction to the full extent provided herein. 4.3 Effects of Plan Confirmation 4.3.1 Binding Effect The Plan will be binding upon and inme to the benefit of the Debtor, all present and former holders of claims against, or interests in, the Debtor, and all respective successors and assigns. 4.3.2 Discharge and Injunction TO THE FULL EXTENT PROVIDED FOR IN SECTION 1141 OF THE CODE, AND ONLY TO SUCH EXTENT, CONFIRMATION OF THIS PLAN CONSTITUTES A COMPLETE DISCHARGE, W AIVER, RELEASE~ AND SATISFACTION OF ALL CLAIMS AGAINST AND lNTERESTS IN THE DEBTOR EXCEPT AS PROVIDED IN THIS PLAN. TIlE DISCHARGE WILL OPERATE TO RELEASE AND EXTINGUISH ANY PURPORTED LIENS, ENCUMBRANCES, OR SECURITY INTERESTS CLAIMED BY A CLAIMANT OR ANY OTHER ENTITY AGAINST PROPERTY OF THE DEBTOR, PROPERTY DEALT WITH BY THE PLAN, AND PROPERTY OF THE ESTATE, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE PLAN. THE ORDER CONFIRMING THE PLAN IS A GENERAL ADJUDICATION AND RESOLUTION WITH PREJUDICE OF ALL PENDING LEGAL PROCEEDINGS AGAINST THE DEBTOR, PROPERTY OF THE DEBTOR, OR PROPERTY OF THE ESTATE, EXCEPT AS OTHERWISE PROVIDED IN THE PLAN. THE DISCHARGE AND THE ORDER CONFIRMlNG THE PLAN OPERATE AS AN INJUNCTION TO THE EXTENT PROVIDED IN SECTION 524 OF THE BANKRUPTCY CODE, AND ONLY TO SUCH EXTENT. ANY CREDITOR OR EQUITY HOLDER ENTITLED TO RECEIVE ANY DISTRIBUTION PURSUANT TO THIS PLAN WILL BE PRESUMED CONCLUSIVELY TO HA VB RELEASED THE DEBTOR FROM ANY CLAIM so 121201003v1880207 RELATED TO THAT WITH RESPECT TO WInCH THE DISTRIBUTION IS MADE. THIS RELEASE WlLL BE ENFORCEABLE AS A MATTER OF CONTRACT AGAINST ANY CREDITOR OR EQUITY HOLDER THAT ACQUIRES ANY RIOfIT TO DISTRIBUTION PURSUANT TO TIDS PLAN. SUBJECT TO ANY LIMITATIONS PROVIDED FOR IN THE BANKRUPTCY CODE, UNLESS A TAXING AUTHORITY HAS ASSERTED A CLAIM AOAlNST THE DEBTOR BEFORE THE DEADLINE FOR FILING CLAIMS, CONFIRMA nON OF THE PLAN WILL OPERATE AS A DISCHARGE OF ANY CLAIM OR LIEN OF ANY TAXING AUTHORITY AGAINST THE DEBTOR, THE ESTATE, ANY PROPERTY OF THE DEBTOR, AND ANY PROPERTY OF THE ESTATE, FOR ANY TAXES, PENALTIES, OR INTEREST: (I) FOR ANY TAX YEAR FOR A PERIOD BEFORE THE FILING DATE; (II) ARISING OUT OF THE FAILURE OF THE DEBTOR TO FILE ANY TAX REruRN; OR (III) ARISING OUT OF AN AUDIT OF ANY TAX RETURN WITH RESPECT TO A PERIOD BEFORE THE FILING DATE. 4.3.3 Re- Vesting Subject to the tenns of the Plan, on the date that the order confirming the Plan is entered, the Debtor will be restored to full ownership of all property owned by the Debtor, all property of the estate, and all property dealt with by the Plan. The property so vested in the Debtor will be free and clear of all claims, liens, encumbrances, charges, and other interests of holders of claims or interests, except as otherwise provided in the Plan. On and after the date on which the order confirming the Plan is entered, the Debtor may freely operate its business and may freely use, acquire, and dispose of property of the estate and property of the Debtor, except as otherwise provided in the Plan. Except as may otherwise be expressly provided for in the Plan or by order of the Court, the Debtor's operation of its business and use of property will not be subject to any restrictions imposed by operation of the Bankruptcy Code, the Bankruptcy Rules, or any prior Bankruptcy Court order entered during the bankruptcy case. [Signature page to follow] 51 121201003vl 880207 EXHIBIT A - SCHEDULE OF EXECUTORY CONTRACTS The Debtor is party to the contracts described below. To the extent that they are executory contracts, the contracts specified will be assumed or rejected on the terms described below. Elan Leasing Services - Equipment Leases The Debtor and Elan Leasing Services ("Elan") are parties to the following equipment leases (the "Elan Leases''): Lease commencing on April 7, 2005, under which the Debtor agreed to pay $38.50 per month for 36 months for the use of a Inspiron 60000 Processor supplied by Dell; Lease commencing onApri17. 2005, under which the Debtor agreed to pay $77.00 per month for 36 months for the use of two Inspiron 60000 Processors supplied by Dell; Lease commencing on October 15,2005, under which the Debtor agreed to pay $624.25 per month for 36 months for the use of a 2004 Q4 Server and Email Project supplied by Intuit; and Lease commencing on January 21,2005, under which the Debtor agreed to pay $244.17 per month for 36 months for the use of 4 Optiplex GX 2080s supplied by Dell. All of the Elan Leases provide that the Debtor may purchase the equipment being leased for one dollar after all of the regular lease payments have been made. Elan will have the option under the Plan of either of the two alternative fonDS of treatment described below: Elan Option 1: Under Elan Option 1, the Debtor will reject the Elan Leases, with such rejection being effective as of the Effective Date. At the time of rejection, the Debtor will and make all of the equipment that is the subject of those leases available for retrieval by Elan. Elan Option 2: Under Elan Option 2, Elan will consent to the Debtor's assumption of the Elan Leases and contemporaneous modification of their terms such that the Debtor will be deemed to have satisfied all of its obligations arising out of or related to the Elan Leases upon its payment to Elan of the sum of$5,000.00 on the Effective Date. Without limiting the generality of the foregoing, the Debtor's payment of the prescribed amount will be in full and:final satisfaction of all cure obligations, all future installments of rent and other charges accming during the term of the leases, and obligations associated with the exercise of the purchase option under the leases, and upon such payment to Elan all of the equipment that is the subject of the Elan Leases will vest in the Debtor free and clear of alltiens and other interests. 121201003vl880207 Ikon Financial Services - Equipment Lease The Debtor and Ikon Financial Services are parties to a Lease Agreement dated December 16, 2004 (the "Ikon Lease''), under which the Debtor agreed to pay $170.00 per month for 36 months for the use of a Savin 3515F copier. The Ikon Lease provides that, after the initial term, it will renew on the same material terms for one month periods until either party gives notice. Ikon will have the option under the Plan of either of the two alternative furms of treatment described below: Ikon Option 1: Under Ikon Option 1, the Debtor will reject the Ikon Lease, with such rejection being effective as of the Effective Date. At the time of rejection, the Debtor will and make all of the equipment that is the subject ofthose leases available fur retrieval by Ikon. Ikon Option 2: Under Ikon Option 2, Ikon will consent to the Debtor's assumption of the Ikon Lease and contemporaneous modification of their terms such that a purchase option will be granted to the Debtor and the Debtor will be deemed to have satisfied all of its obligations arising out of or related to the Ikon Lease upon its payment to Ikon of the sum of $4,000.00 on the Effective Date. Without limiting the generality of the foregoing, the Debtor's payment of the prescribed amount will be in full and final satisfaction of all cure obligations, all future installments of rent and other charges accruing during the term of the lease, and obligations associated with the exercise of the purchase option under the lease, and upon such payment to Ikon all of the equipment that is the subject of the lImn Lease will vest in the Debtor:free and clear of all liens and other interests. IOS Capital- Equipment Lease The Debtor and Ikon Financial Services are parties to a Lease Agreement dated Aprill, 2004 (the "IOS Lease"), under which the Debtor agreed to pay $302.00 per month for 48 months for the use of an Image Runner 3300 copier. The IOS Lease provides that, after the initial tenD, it will renew on the same material terms for one month periods until either party gives notice. 10S will have the option under the Plan of either of the two alternative forms of treatment described below: IOS Option 1: Under IOS Option 1, the Debtor will reject the 10S Lease, with such rejection being effective as of the Effective Date. At the time of rejection, the Debtor will and make all of the equipment that is the subject of those leases available for retrieval by IDS. IOS Option 2: Under 10S Option 2, IOS will consent to the Debtor's assumption of the 10S Lease and contemporaneous modification of their terms such that a purchase option will be granted to the Debtor and the Debtor will be deemed to have satisfied all of its obligations arising out of or related to the 10S Lease upon its payment to 108 of the sum of$6,000.00 on the Effective Date. Without limiting the generality of the foregoing, the Debtor's payment of the prescribed amount will be in full and final satisfaction of all cure obligations, all future installments of rent and other charges accruing during the term of the lease, and obligations 54 121201003vl 880207 associated with the exercise of the purchase option under the lease, and upon such payment to IOS all of the equipment that is the subject ofthe IOS Lease will vest in the Debtor free and clear of all liens and other interests. City of Cannon FaIls - Development Contract The Debtor and the city of Cannon Falls, a Minnesota municipal corporation, are parties to that certain Development Contract dated July 28, 2003, by which the parties agreed on terms related to a real estate development known as Sandstone Ridge. In May, 2005, the Debtor deeded the subject real property to another entity under common ownership with the Debtor. After the Filing Date, Lakeland foreclosed its mortgage on the real property. The Debtor will reject the Development Contract. 55 121201003vI880207 v 4>~ ~vo~ ~ . ~?'b /.D " ',6.""" v ,~'.: ~"~ UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA InRe: Edina Development Corporation, Chapter 11 Bankruptcy Debtor. BKY No. 06-42532 DEBTOR'S THIRD AMENDED DISCLOSURE STATEMENT Edina Development Corporation ("Debtor") proposes the following as its Third Amended Disclosure Statement ("Disclosure Statement") pursuant to Section 1125 of the United States Bankruptcy Code. 1 L INTRODUCTION On November 1, 2006 ("Filing Date"), the Debtor filed a case pursuant to Chapter 11 of the Code. The Debtor is filing this Disclosure Statement and the related Plan of Reorganization ("Plan"). Terms used in this Disclosure Statement have the meanings given to them in the Bankruptcy Code unless the context requires otherwise. This Disclosure Statement is intended to provide all persons known to have claims against Debtor with sufficient information to assist them in deciding whether to vote to accept or reject the Plan. No representations concerning the Debtor or the Plan are authorized by the Debtor. ANY REPRESENTATIONS OR INDUCEMENTS MADE FOR THE PURPOSE OF SOLICITING YOUR ACCEPTANCE, OTHER THAN THOSE IN THIS DISCLOSURE STATEMENT, SHOULD NOT BE RELIED UPON, AND ANY SUCH ADDITIONAL REPRESENTATIONS OR INDUCEMENTS SHODID BE REPORTED TO COUNSEL FOR DEBTOR OR TO THE UNITED STATES TRUSTEE, WHO WILL, IF NECESSARY, CONVEY TillS INFORMATION TO THE BANKRUPTCY COURT FOR SUCH ACTION AS IS APPROPRIATE. THE FINANCIAL INFORMATION CONTAlNED IN TIllS DISCLOSURE STATEMENT HAS NOT BEEN INDEPENDENTLY AUDITED. ALL REPRESENTATIONS AND FORECASTS ARE MADE IN GOOD FAITH AND ARE INTENDED TO BE AS COMPLETE AND AS ACCURATE AS POSSIBLE. BANKRUPTCY COUNSEL FOR THE DEBTOR HAS NOT INDEPENDENTLY VERIFIED ANY OF THE INFORMATION SET FORTH IN mIS DISCLOSURE STATEMENT. 1 Unless otherwise indicated, all statutory references are to the United States Bankruptcy Code, 11 D.S.C. ~101, et seq. (the "Code'1. 12120] l77vl 8S0207 '" Defined Terms. The following definitions will be used for purposes of the Plan: "Effective Date" means the first business day of the first calendar month fo llowing entry of an order conflfIlling the Plan, unless such day would be less than seven days after entry of an order confirming the plan, in which case it means the first business day of the next succeeding month. "Lakeland Entities" means, collectively, LCF Development, LLC ("LCF''), Lakeland Construction Finance, LLC ("Lakeland"), and the Waitt Family Foundation Fund II, LLC ("WFF'). "Haven Property" means the Debtor's approximately 672 acre parcel ofreal property in Sherburne County. "Blaine Property" means the Debtor's approximately 178 acre parcel of real property in Blaine, in Anoka County. "Becker Property" means the Debtor's approximately 285 acre parcel of real property in Becker Township, in Sherburne County. ll. BACKGROUND OF DEBTOR'S BUSINESS AND EVENTS LEADING TO THE CHAPTER 11 CASE 2.1 General Background The Debtor was incorporated in 1995 for the purpose of acquiring raw land for subdivision and residential development. For its entire history, Richard Lewandowski has been its sole. shareholder and director, 88 well 88 president. At present, three individuals work for the Debtor, although they are not technically its employees. 2 In a typical project, the Debtor would purchase agricultural land and then perform the work necessary for subdivision of the property, including engineering, working with zoning, planning, and other governmental bodies, and installing infrastructure such as water and sewer lines and other utility connections, roads, and curbs. Historically, once a development project had received final plat approval, the lots would be sold either to building contractors or individuals for the purpose of building homes. The Debtor's affiliate, MM Homebuilders, Inc., has been a regular purchaser of Debtor's completed lot inventory and is under common management with the Debtor. The Debtor's management, 2 The Debtor shares offices and staff with a number of affiliated companies. Staff is employed by MM Homebuilders, me., which is entitled to monthly re-imbursement from each of the non~ employer affiliates for the actual costs associated with the employees' time spent on that particular affiliate's projects. In an average month, approximately seventy percent of total staff- time is devoted to the Debtor. 2 121201177vl880207 therefore, has been involved in substantially all phases ofresidential development for over a decade. The Debtor's largest projects are located in outer-ring suburbs and in greater Minnesota, areas that have been especially hard hit by the recent downturn in residential construction. With the reduction in housing starts, the Debtor saw a dramatic decline in sales of lots. In addition, as market conditions nationwide deteriorated, lenders fuiled, and valuations became more open to dispute, it became all but impossible to re.finance projects or otherwise bridge operational needs with debt. By late 2006, with several of its largest projects being threatened with foreclosure, management concluded that the only chance to continue as a going concern was to reorganize under Chapter 11. 2.2 Significant Property Transfers During Bankruptcy Case By order entered on January 29,2007, the Bankruptcy Court approved an agreement under which the Debtor sold several parcels of land in Benton County, Minnesota (the "Foley Property'') to a third party in exchange for that party's assumption of the debt secured by the property being transferred. In addition to first priority mortgages in favor of Lakeland, who consented to the sale, the Foley Property was security for: (i) a judgment in favor of Merritt Rage, which judgment was docketed in several other counties in which the Debtor owns property and is dealt with as Class 11; (ii) a judgment in favor of Duane and Susette Strand, who have an interest in the entity that purchased the Foley Property and withdrew their judgment as part of the sale; and (Hi) a mechanic's lien in favor ofSJ Louis Construction. To the extent that SJ Louis still has a claim against the Debtor arising out of its mechanic's lien against the Foley Property, such claim is now unsecured as against the Debtor and will be part of Class 1. After the commencement of the Bankruptcy Case, Lakeland commenced foreclosure proceedings related to certain real property located in Goodhue County, Minnesota known as the Sandstone Ridge Property. The Sandstone Ridge Property was originally purchased by the Debtor, but in May, 2005, as a condition of construction fmancing, it was deeded to an affiliated company organized for the sole purpose of holding such property during development. In addition to Lakeland's mortgages, the above-referenced judgment in favor of Merritt Hage, and the lien for real estate taxes, the Debtor has been advised that SJ Louis had filed a mechanic's lien against the Sandstone Ridge Property to secure payment of a claim it had asserted against the Debtor. A13 the Sandstone Ridge Property is not property of the estate, claims against the Debtor that are secured only by the Sandstone Ridge Property are unsecured for purposes of the Plan, and will be included in Class 1. On July 27,2007, US Federal Credit Union ("USFCU") filed two Motions for Relief from the Automatic Stay by which it sought the right to pursue its remedies with respect to certain real property located in Wright County, Minnesota known as the Fairways Property. After negotiations, the Debtor and USFCU entered into a stipulation providing, in material part, that: (1) USFCU would be granted relief from the automatic stay; (2) the Debtor would submit to voluntary foreclosure; and (3) in exchange for the Debtor's completion of certain construction projects, it would be granted a single undeveloped lot at the conclusion <:If the voluntary foreclosure. By order entered on October IS, 2007, the Bankruptcy Court approved the 3 121201l77vl880207 stipulation between the Debtor and USFCU. In addition to USFCU's mortgages, the above- referenced judgment in favor of Merritt Hage, and the lien for real estate taxes, the Debtor has been advised that the Fairways Property is encumbered by mechanics' liens asserted by E&H Enterprises of Alexandria and Stock Building Supply, LLC. As the Fairways Property is no longer property of the estate, claims against the Debtor that are secured only by the Fairways Property are unsecured for purposes of the Plan, and will be included in Class 1. m. DESCRIPTION OF THE PROPOSED CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS Section 1125 of the Bankruptcy Code requires a debtor to disclose information about the debtor's plan of reorganization in the disclosure statement, including information concerning the debtor's proposed treatment of claims and interests. Set forth below is a general description of the various types of claims against, and interests in, the Debtor, along with the proposed treatment of such claims and interests, and other information relevant to the Plan. The terms of the Plan c~ntrol and become effective on the Effective Date. 3.1 Formulation of Plan of Reorganization A plan of reorganization outlines each of the different types of a debtor's debts and equity interests and provides for the treatment of each. The bankruptcy laws require that certain types of claims and interests be grouped into classes, and that other types of claims not be grouped into classes. The designation of classes of claims and interests, and the treatment of both classified and unclassified claims, and of interests, is detailed in the Plan. In the event of any inconsistency between the contents of this Disclosure Statement and the Plan, the terms of the Plan control. 3.2 Classified Claims and Interests - Description of Holders and Treatment The Bankruptcy Code permits certain claims and interests to be placed in particular classes in a plan of reorganization. In general, any claim or interest within a class must be substantially similar to the other claims or interests in the same class. The classification of claims and interests is significant because different classes of claims and interests may be subject to different treatment. In addition, parties are required to cast ballots only within the classes to which their claims and interests belong. As more fully described in Article vm, a plan of reorganization may be confirmed it: among other requirements, it is accepted by at least one impaired class. Class 1- Class of Unsecured Creditors Class I consists of the general unsecured claims against the Debtor ("Class I Claims"). In addition to trade debt and various types of insider debt, Class 1 includes claims that are or were secured by liens on the Sandstone Ridge Property and the Foley Property. Based on a review of its schedules, books and records, and the proofs of claim filed with the Bankruptcy Court, the Debtor estimates that the total of all allowed Class I Claims, other than those that are subject to the conditional subordination provision applicable to insiders' claims, will be approximately $330,000.00. . 4 121201l77v1880207 Treatment of Class 1 Subject to the limitation set forth below, the Debtor will make payments on account of allowed Class 1 Claims as follows: (i) On the Effective Date, the Debtor will distribute the sum of$75,000.00 on a pro rata basis to the holders of Class 1 Claims; (ii) On tbe first anniversary of the Effective Date, the Debtor will distribute the sum of $225,000.00 on a pro rata basis to the holders of Class 1 Claims; and (iii) On or before the day that is ten days after it has detennined in good fitith that it will not realize any further or additional recovery on account of any claims asserted under a title insurance policy issued by Fidelity National Title Insurance Company, the Debtor will distribute one hundred percent of the proceeds it bas recovered on account of such claims, net of costs, fees, and expenses associated with such recovery. In no event will bolders of Class ] Claims receive any payment that, when added to the aggregate of prior payments under the Plan, would result in such holders being paid more than the full amount of their allowed claims. Conditional Subordination of Insider Claims Rick Lewandowski, Lance Lewandowski" and MM Homebuilders, Inc. are all insider general unsecured creditors, with claims in the aggregate amount of approximately $760,000. For purposes of the Plan only, payment of all Class 1 Claims held by insiders will be subordinated to that of all other Class 1 Claims such that, unless and until all Class 1 Claims held by non-insiders have been paid in full, no payments will be made on account of the subordinated claims. In accordance with Section 1 123(a)( 4), each of the insider creditors who may be adversely affected by the subordination provided for herein have consented to the proposed treatment and to their inclusion in Class I notwithstanding the less favorable treatment of their claims. Class 2A - LCF Development, LLC (Account 400038 - Haven) The Class 2A Claim arises out of the Debtor's obligations to LCF under a promissory note dated September 20, 2001 in the original principal amount of $200,000.00 (the "September 20, 2001 Haven Note"). As of the September 24, 2007, the outstanding balance oithe September 20,2001 Haven Note, including accrued and unpaid interest, charges, and fees, was $229,018.62. The Debtor's performance under the September 20, 2001 Haven Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $200,000.00 Note (the "September 20, 2001 Haven Mortgage"). The September 20, 2001 Mortgage was recorded on Apri12, 2002 with the Office of the County Recorder of Sherburne County (Doc. No. 465282), and evidences a second priority lien on the Haven Property. 5 12121H 177vl 880207 Treatment of Class 2A Claim LCF will have an allowed secured Class 2A claim in the amount of $229,018.62, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any. or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2A Claim, the Plan constitutes a promissory note (the "Class 2A Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2A Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property, to be applied first to accmed interest and second to principal, on account of the Class 2A Note. In the event that the Debtor does not timely make the first payment under the Class 2A Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2A Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary ofthe Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2A Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary ofthe Effective Date. The Class 2A Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2A Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Haven Property. The Debtor's performance under the terms of the Class 2A Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being of the same priority, dignity, and effect as that of the September 20,2001 Haven Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law . Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. 6 121201177vl 880207 Upon the sale of any portion of the Haven Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the September 20, 2001 Haven Mortgage with respect to the property that is the subject of any sale, and the payments will be applied to installments under the Class 2A Note in order of maturity. The Class 2A Note, together with the Plan, will operate as a restatement and amendment of the September 20, 2001 Haven Note, the September 20,2001 Haven Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2A Note will be substantially similar to those included in the September 20. 200 1 Note, and, to the extent not inconsistent with the terms of the Class 2A Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2B - LCF Development, LLC (Account 400039 - Blaine) The Class 2B Claim arises out ofthe Debtor's obligations to LCF under a promissory note dated September 20,2001 in the original principal amount of $150,000.00 (the "September 20,2001 Blaine Note"). As of September 24,2001, the outstanding balance of the September 20,2001 Blaine Note, including accrued and unpaid interest, charges, and fees, was $273,030.64. The Debtor's performance under the September 20, 2001 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $150,000.00 Note (the "September 20, 2001 Blaine Mortgage"). The September 20, 2001 Mortgage was recorded on April 2, 2002 with the Office of the Registrar of Titles of Anoka County (Doc. No. 394624), and evidences a fifth priority lien on the Blaine Property. Treatment of Class 2B Claim LCF will have an allowed secured Class 2B claim in the amount of $273,030.64, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2B Claim, the Plan constitutes a promissory note (the "Class 2B Note"), which will include the following material terms: For the frrst year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary 0 fthe Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2B Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 2B Note. In the event that the Debtor does not timely make the first payment under the Class 2B Note, it will deliver, upon demand, a quitclaim deed to the 7 121201l77vl 880207 Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2B Claim will be payable on the following tenns: (i) interest rate of I 0% per annum; (ii) 30 year amortization; and (Hi) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2B Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2B Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2B Note, and the denominator of which is the aggregate balance of the Lakelab.d Entities' claims secured by the Blaine Property. The Debtor's performance under the terms ofthe Class 2B Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the September 20,2001 Blaine Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law . Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the September 20,2001 Blaine Mortgage with respect to the property that is the subject ofthe relevant sale, and the payments will be applied to installments under the Class 2B Note in order of maturity. The Class 2B Note, together with the PIan, will operate as a restatement and amendment of the September 20, 2001 Blaine Note, the September 20, 2001 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instroments and agreements. The terms of the Class 2B Note will be substantially similar to those included in the September 20, 2001 Blaine Note, and, to the extent not inconsistent with the tenns of the Class 2B Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration ofthis bankruptcy 8 l21201177vl 880~07 case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLCF. Class 2C - LCF Development, LLC (Account 400067 - Blaine) The Class 2C Claim arises out of the Debtor's obligations to LCF under a promissory note dated on or about March 31, 2000 in the original principal amount of $300,000.00, and originally in favor of Bromley Homes, Inc. (the "Bromley Note"). As of the September 24, 2007, the outstanding balance of the Bromley Note, including accrued and unpaid interest, charges, and fees, was $339,266.Q5. The Debtor's performance under the Bromley Note is secured under that certain Mortgage Deed dated March 31,2000, originally in favor of Bromley Homes, Inc. (the ''Bromley Mortgage"). The Bromley Mortgage was recorded on April 3, 2000 with the Office of the County Recorder for Anob County (Doc. No. 351652), and evidences a second priority lien on the Blaine Property. An Assignment of Mortgage dated April 14, 2005 was recorded with the Office of the Registrar of Titles of Anoh County on May S, 2005 (Doc. No. 482790.001), by which the assignment of the Bromley Mortgage to LCF was made a matter of record. Treatment of Class 2C Claim LCF will have an allowed secured Class 2C claim in the amount of $339,266.05, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2C Claim, the Plan constitutes a promissory note (the "Class 2C Note"), which will include the following material terms: For the fll'st year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amoWlt equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2C Note, and the denominator ofwbich is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied fll'st to accrued interest and second to principal, on account of the Class 2C Note. In the event that the Debtor does not timely make the first payment under the Class 2C Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2C Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary ofthe Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time. of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2C Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfY all debt secured by the 9 121201J77v1880207 Blaine Property before the third anniversary of the Effective Date. The Class 2C Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2C Note, and the denominator of which is the aggregate balance, as of the Filing Date. of claims that are secured by the Blaine Property and held by any ofthe Lakeland Entities The Debtor's perfurmance under the terms of the Class 2C Note wilt be secured by a continuing mortgage interest in the Blaine Property, with such interest being ofthe same priority, dignity, and effect as that of the Bromley Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor wilt cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the Bromley Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 2C Note in order of maturity. The Class 2C Note, together with the Plan, will operate as a restatement and amendment ofthe Bromley Note. the Bromley Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2C Note will be substantially similar to those included in the Bromley Note, and, to the extent not inconsistent with the terms of the Class 2C Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference to such extent. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2D - LCF Development, LLC (Account 400021 - Haven) The Class 2D Claim arises out of the Debtor's obligations to LCF under a promissory note dated February 5,2001 in the original principal amount of $2,025,000.00 (the ''February 5, 2001 Haven Note''). As of the September 24,2007, the outstanding balance of the February 5,2001 Haven Note, including accrued and unpaid interest, charges, and fees, was $3,470,635.01. The Debtor's performance under the February 5, 2001 Haven Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $2.025,000.00 Note (the ''February 5, 2001 Haven Mortgage"). The February 5, 2001 Haven Mortgage was recorded on February 7,2001 with the Office of the 10 121201177v1880207 County Recorder of Sherburne County (Doc. No. 429302), and evidences a fIrst priority lien on a 200 acre portion oftbe Haven Property. Treatment of Class 2D Claim LCF will have an allowed secured Class 2D claim in the amount of$3,470,635.01, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, ifany, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2D Claim, the Plan constitutes a promissory note (the "Class 2D Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accme at the rate of 10% per annum. On the first anniversary ofthe Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2D Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property, to be applied first to accrued interest and second to principal, on account of the Class 2D Note. In the event that the Debtor does not timely make the first payment under the Class 2D Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2D Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary ofthe Effective Date. Payments :from and after the first anniversary ofthe Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2D Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary ofthe Effective Date. The Class 2D Contingent Note will mature on the third anniversary ofthe Effective Date at which time the Debtor will pay LCF an amount equal to 15% ofthe aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a :fraction, the numerator of which is the balance owing under the Class 2D Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Haven Property. The Debtor's performance WIder the terms of the Class 2D Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being of the same priority, dignity, and effect as that ofthe February 5,2001 Haven Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional 11 121201177vl 880207 documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the February 5, 200 I Haven Mortgage with respect to the property that is the subject of any sale, and the payments will be applied to installments under the Class 2D Note in order of maturity. The Class 20 Note, together with the Plan, will operate as a restatement and amendment of the February 5, 2001 Haven Note, the February 5, 2001 Haven Mortgage, and all related agreements, and confirmation ofthe Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 20 Note will be substantially similar to those included in the February 5, 2001 Haven Note, and, to the extent not inconsistent with the terms of the Class 20 Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration ofthis banlauptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2E - LCF Development, LLC (Account 400001 - Blaine) The Class 2E Claim arises out of the Debtor's obligations to LCF under a promissory note dated March 31,2000 in the original principal amount of$4, 135,000.00 (the ''March 31, 2000 Blaine Note''). As of September 24,2007, the outstanding balance of the March 31,2000 Blaine Note, including accrued and unpaid interest, charges, and fees, was $9,447,721.12. The Debtor's performance under the March 31t 2000 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $4,135,000.00 Note (the ''March 31, 2000 Blaine Mortgage"). The March 31 t 2000 Mortgage was recorded on April 3, 2000 with the Office of the Registrar of Titles of Anoka County (Doc. No. 351651), and evidences a first priority lien on the Blaine Property. Treatment of Class 2E Claim LCF will have an allowed secured Class 2E claim in the amount of $9,447,721.12, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2E Claim, the Plan constitutes a promissory note (the ''Class 2E Note"), which will include the following material terms: For the fIrst year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2E Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second 12 121201177vl 880207 to principal, on account ofthe Class 2E Note. In the event that the Debtor does not timely make the first payment under the Class 2E Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2E Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (Hi) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account ofsales of any part oftbe Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2E Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2E Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, nmltiplied by a fraction, the numerator of which is the balance owing under the Class 2E Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the terms of the Class 2E Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that oithe March 31, 2000 Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the March 31,2000 Blaine Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 2E Note in order of maturity. The Class 2E Note, together with the Plan, will operate as a restatement and amendment of the0March 31, 2000 Blaine Note, the March 31, 2000 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's prewpetition obligations under the relevant instruments and agreements. The terms of the Class 2E Note will be substantially similar to those included in the March 31, 2000 Blaine Note, and, to the extent not inconsistent with the terms of the Class 2E Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby 13 121201177v1880207 incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of LCF. Class 2F - LCF DevelQpment, LLC (Account 394623 w Blaine) The Class 2F Claim arises out of the Debtor's obligations to LCF under a promissory note dated on or about January 15, 2002 in the original principal amount of$l,OOO,Ooo.OO (the "$1,000,000.00 January IS, 2002 Note''). As of September 24,2007, the outstanding balance of the $1,000,000.00 January 15, 2002 Note was $1,000,000.00. The Debtor's performance under the $1,000,000.00 January 15,2002 Note is secured under that certain Mortgage by Edina Development Corporation as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $1,000,000 Note (the "$1,000,000.00 January 15, 2002 Mortgage"). The $1,000,000.00 January IS, 2002 Mortgage was recorded on April 2, 2002 with the Office of the Registrar of Titles of Anoka County (Doc. No. 394623), and evidences a fourth priority lien on the Blaine Property. Treatment of Class 2F Claim LCF will have an allowed secured Class 2F claim in the amount of$l,OOO,OOO.OO, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2F Claim, the Plan constitutes a non-interest~ bearing promissory note (the "Class 2F Note"). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2F Note. and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 2F Note. In the event that the Debtor does not timely make the fU'St payment under the Class 2F Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property. The balance of the Class 2F Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2F Contingent Note") under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2F Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2F Note, and the denominator of which is the aggregate balance, as of the Filing Date, of the Lakeland Entities' claims that are secured by the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. 14 12J201l77vl880207 The Debtor's performance under the terms of the Class 2F Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the $1,000,000.00 January 15,2002 Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional doclUDents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the $1,000,000.00 January 15, 2002 Mortgage with respect to the property that is the subject of the relevant sate. Payments made under this paragraph will be applied to instalhnents under the Class 2F Note in order of maturity. The Class 2F Note, together with the Plan, will operate as a restatement and amendment of the $1,000,000.00 January 15, 2002 Note, the $1,000,000.00 January 15, 2002 Mortgage, and all related agreements, and confirmation ofthe Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instrwnents and agreements. The tenns of the Class 2F Note will be substantially similar to those included in the $1,000,000.00 January 15, 2002 Note, and, to the extent not inconsistent with the terms ofthe Class 2F Note or the Plan, the terms of all pre.petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLCF. Class 2G - LCF Development, LLC (Account 394622 - Blaine) The Class 2G Claim arises out of the Debtor's obligations to LCF under a promissory note dated on or about January 15,2002 in the original principal amount of$3,000,000.00 (the "$3,000,000.00 January 15, 2002 Note'~. As of September 24, 2007, the outstanding balance of the $3,000,000.00 January 15, 2002 Note was $3,000,000.00. The Debtor's performance under the $3,000,000.00 January 15, 2002 Note is secured under that certain Mortgage by Edina Development Corporation as Mortgagor, to LCF Development, LLC as Mortgagee, to Secure $3,000,000 Note (the "$3,000,000.00 January 15, 2002 Mortgage"). The $3,000,000.00 January 15, 2002 Mortgage was recorded on April 2, 2002 with the Office of the Registrar of Titles of Anoka County (Doc. No. 394622), and evidences a third priority lien on the Blaine Property. 15 121201177vl 880207 Treatment of Class 2G Claim LCF will have an allowed secured Class 20 claim in the amount of $3,000,000.00, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 20 Claim, the Plan constitutes a non-interest- bearing promissory note (the "Class 20 Noten). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, tmlltiplied by a fraction, the numerator of which is the balance owing under the Class 20 Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 20 Note. In the event that the Debtor does not timely make the first payment under the Class 20 Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. The balance of the Class 20 Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 20 Contingent Note'1 under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2G Contingent Note will mature on the third anniversary ofthe Effective Date at which time the Debtor will pay LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by tbe Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 20 Note, and the denominator of which is the aggregate balance, as of the Filing Date, of the Lakeland Entities' claims that are secured by the Blaine Property. The Debtor's perfonnance under the terms of the Class 2G Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that ofthe $3,000,000.00 January 15, 2002 Mortgage before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing. the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest under the $3,000,000.00 January 1 S, 2002 Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 20 Note in order of maturity. The Class 20 Note, together with the Plan, will operate as a restatement and amendment of the $3,000,000.00 January 15,2002 Note, the $3,000,000.00 January 15,2002 Mortgage, and all 16 12J201177vl 880207 related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any ofthe Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2G Note will be substantially similar to those included in the $3,000,000.00 January 15,2002 Note, and, to the extent not inconsistent with the terms ofthe Class 2G Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. Byway of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLCF. Class 2H - LCF Development, LLC (Account 400040 - Blaine) The Class 2H Claim arises out of the Debtor's obligations to LCF under a promissory note dated January, 2002 in the original principal amount ofSl,OOO,OOO.OO (the "January 2002 LCF Blaine Note"). As of September 24,2007, the outstanding balance ofthe January 2002 Blaine Note, including accrued and unpaid interest, charges, and fees, was $1,791,285.19. Treatment of Class 2H Claim LCF will have an allowed secured Class 2H claim in the amount of$I,791,285.19, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 2H Claim, the Plan constitutes a promissory note (the ''Class 2H Note"), which will include the following material terms: For the frrst year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 2H Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 2H Note. In the event that the Debtor does not timely make the first payment under the Class 2H Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 2H Claim will be payable on the following tenns: (i) interest rate of 10010 per annum; (ii) 30 year amortization; and (Hi) a maturity date on the third anniversary ofthe Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales ofany part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 2H Contingent Note'') under which LCF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 2H Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay 17 121201l77v1880207 LCF an amount equal to 15% of the aggregate net proceeds realized upon the sale oithe Blaine Property in excess ofthe aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 2H Note, and the denominator of which is tbe aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the tenus of the Class 2H Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as before the Filing Date. No further action need be taken by either LCF or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as LCF may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay LCF an amount equal to release prices that have been negotiated and agreed to by the Debtor and LCF. In exchange for such payments, LCF will release its interest with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 2H Note in order of maturity. The Class 2H Note, together with the Plan, will operate as a restatement and amendment of the January 2002 LCF Blaine Note and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 2H Note will be substantially similar to those included in the January 2002 Blaine Note, and, to the extent not inconsistent with the tenus ofthe Class 2H Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofLCF. Class 3A - Lakeland Construction Finance, LLC (Account 211598 - Haven) The Class 3A Claim arises out of the Debtor's obligations to Lakeland under a Real Estate Construction Note dated December 7,2000 in the original principal amount of$285,OOO.OO (the "December 7, 2000 Haven Note"). As. of September 24, 2007, the outstanding balance of the December 7, 2000 Haven Note, including accrued and unpaid interest, charges, and fees, was $438,784.60. The Debtor's performance ut;lder the December 7. 2000 Haven Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $285,000.00 Real Estate Construction Note (the "December 7,2000 Haven Mortgage"). The December 7,2000 Mortgage was recorded on December 14, 2000 with the Office of the County Recorder of Sherburne County (Doc. No. 426370), and evidences a fIrst priority lien on a 70 acre portion of the Haven Property. 18 121201l77vl 880207 Treatment of Class 3A Claim Lakeland will have an allowed secured Class 3A claim in the amount of $438,784.60, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3A Claim, the Plan constitutes a promissory note (the "Class 3A Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3A Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property, to be applied first to accrued interest and second to principal, on account of the Class 3A Note. In the event that the Debtor does not timely make the first payment under the Class 3A Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 3A Claim will be payable on the following terms: (i) interest rate of 1 0% per annum; (ii) 30 year amortization; and (Hi) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 3A Contingent Note") under which Lakeland will be entitled to a payment ofbonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary of the Effective Date. The Class 3A Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3A Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property. The Debtor's perfonnance under the terms of the Class 3A Note will be secured by a continuing mortgage interest in the Haven Property. with such interest being of the same priority, dignity, and effect as that of the December 7, 2000 Haven Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal1aw. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. 19 J21201177v1880207 In addition to the above-described scheduled payments under the Class 3A Note, upon the sale of any portion of the Haven Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the December 7, 2000 Haven Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3A Note in order of maturity. The Class 3A Note, together with the Plan, will operate as a restatement and amendment of the December 7, 2000 Haven Note, the December 7,2000 Haven Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction ofany ofthe Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3A Note will be substantially similar to those included in the December 7, 2000 Haven Note, and, to the extent not inconsistent with the tenns of the Class 3A Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lake land. Class 3B - Lakeland Construction Finance, LLC (Aceount 211133 - Haven) The Class 3B Claim arises out of the Debtor's obligations to Lakeland under a promissory dated December 23,1999 in the original principal amount of $2,000,000.00 (the "December 23, 1999 Haven Note''). As of September 24,2007, the outstanding balance of the December 23, 1999 Haven Note, including accrued and unpaid interest, charges, and fees, was $3,146,072.47. The Debtor's performance under the December 23, 1999 Haven Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Cotporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $2,000,000.00 Note (the "December 23, 1999 Haven Mortgage"). The December 23, 1999 Mortgage was recorded on March 14, 2000 with the Office of the County Recorder of Sherburne County (Doc. No. 409431), and evidences a fust priority lien on a 200 acre portion ofthe Haven Property. Treatment of Class 3B Claim Lakeland will have an allowed secured Class 3B claim in the amount of $3, 146,072.47,. plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3B Claim, the Plan constitutes a promissory note (the "Class 3B Note''), which will include the following material terms: For the fust year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3B Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Haven Property, to be applied first to accrued interest 20 121201177vl 880207 and second to principal, on account of the Class 3B Note. In the event that the Debtor does not timely make the first payment under the Class 3B Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 3B Claim will be payable on the following tenns: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a mamrity date on the third anniversary of the Effective Date. Payments from and after the first anniversary ofthe Effective Date will be due on the frrst business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the "Class 3B Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfy all debt secured by the Haven Property before the third anniversary of the Effective Date. The Class 3B Contingent Note will mature on the third anniversary ofthe Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3B Note, and tbe denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Haven Property. The Debtor's performance WIder the terms of the Class 3B Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being ofthe same priority, dignity, and effect as that ofthe December 23, 1999 Haven Mortgage before the Filing Date. No further action need be taken by'either Lakeland or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal1aw. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay Lakeland an amount equal to. release prices that have been negotiated and agreed to by the Debtor and Lakeland. In excbange for such payments, Lakeland will release its interest under the December 23, 1999 Haven Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3B Note in order ofmaturlty. The Class 3B Note, together with tbe Plan, will operate as a restatement and amendment of the December 23, 1999 Haven Note, the December 23, 1999 Haven Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any ofthe Debtor's pre--petition obligations under the relevant instruments and agreements. The terms of the Class 3B Note will be substantially similar to those included in the December 23, 1999 Haven Note, and, to the extent not inconsistent with the terms of the Class 3B Note or the PIan, the terms of all pre-petition agreements will continue in full force and effect, and are 21 121201l77v1880207 hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the .contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lake land. Class 3C - Lakeland Construction Finance, LLC (Account 481161.002 - Blaine) The Class 3C Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated December 23,2004 in the original principal amount of $6,000,000.00 (the "$6,000,000.00 Blaine Note'1. As ofthe September 24,2007, the outstanding balance of the $6,000,000.00 Blaine Note, including accrued and unpaid interest, charges, and fees, was $6,000,000.00. The Debtor's performance under the $6,000,000.00 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $6,000,000.00 Note (the ''$6,000,000.00 Blaine Mortgage"). The $6,000,000.00 Blaine Mortgage was recorded on December 30, 2004 with the Office of the Registrar of Titles of Anoka County (Doc. No. 431716). and evidences an eighth priority. lien on the Blaine Property. Treatment of Class 3C Claim Lakeland will have an allowed secured Class 3C claim in the amount of$6,000,000.00, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3C Claim, the Plan constitutes a non-interest- bearing promissory note (the "Class 3C Note"). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3C Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 3C.Note. In the event that the Debtor does not timely make the first payment under the Class 3C Note, it will deliver, upon demand. a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. The balance of the Class 3C Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the "Class 3C Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3C Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction. the numerator of which is the balance owing under the Class 3C Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. 22 121201177vl880207 The Debtor's performance under the terms oCthe Class 3C Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being ofthe same priority, dignity, and effect as that of the $6,000,000.00 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with aU reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the $6,000,000.00 Blaine Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3C Note in order of maturity. The Class 3C Note, together with the Plan, will operate as a restatement and amendment of the $6,000,000.00 Blaine Note, the $6,000,000.00 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a rephu:ement or satisfaction of any of the Debtor's pre.-petition obligations under the relevant instruments and agreements. The terms of the Class 3C Note will be substantially similar to those included in the $6,000,000.00 Blaine Note, and, to the extent not inconsistent with the tenns of the Class 3C Note or the Plan, the terms of all pre- petition agreements will continue in full force and effect, and are hereby incorporated by this reference to such extent. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland Class 3D - Lakeland Construction Finance, LLC (Account 215978 - Blaine) The Class 3D Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated December 23,2004 in the original principal amount of $9,000,000.00 (the "$9,000,000.00 Blaine Note''). As ofthe September 24, 2007, the outstanding balance of the $9,000,000.00 Blaine Note, including accrued and unpaid interest, charges, and fees, was $11,281,598.79. The Debtor's performance under the $9,000,000.00 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $9,000,000.00 Note (the "$9,000,000.00 Blaine Mortgage"). The $9,000,000.00 Blaine Mortgage was recorded on December 30, 2004 with the Office of the Registrar of Titles of Anoka County (Doc. No. 431716), and evidences a seventh priority lien on the Blaine Property. 23 121201177vl 880207 Treatment of Class 3D Claim Lakeland will have an allowed secured Class 3D claim in the amount of$11,281,598.79, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3D Claim, the PIan constitutes a promissory note (the "Class 3D Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of lOO!o per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3B Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on aCcoWlt ofthe Class 3D Note. In the event that the Debtor does not timely make the first payment under the Class 3D Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 3D Claim will be payable on the following teons: (i) interest rate of 10% per annum; (ii) ~ 0 year amortization; and (iii) a maturity date on the third anniversary ofthe Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate ofany payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the "Class 3D Contingent Note'1 under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3D Contingent Note will mature on the third anniversary oftbe Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale ofthe Blaine Property in excess ofthe aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3D Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the terms of the Class 3D Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the $9,000,000.00 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. 24 121201177vl 880207 Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the $9,000,000.00 Blaine Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3D Note in order of maturity. The Class 3D Note, together with the Plan, will operate as a restatement and amendment of the $9,000,000.00 Blaine Note, the $9,000,000.00 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a rep1acementor satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The tenns of the Class 3D Note will be substantially similar to those included in the $9,000,000.00 Blaine Note, and, to the extent not inconsistent with the terms of the Class 3D Note or the Plan, the tenns of all pre- petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland. Class 3E - Lakeland Construction Finance, LLC (Account 211113 - Becker) The Class 3E Claim arises out ofthe Debtor's obligations to Lakeland under a mortgage note dated November 12, 1999 the original principal amount of$990,OOO.00 (the "Becker Note"). As of September 24,2007, the outstanding balance of the Becker Note, including accrued and unpaid interest, charges, and fees, was $1,514,834.12. The Debtor's performance under the Becker Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $500,000.00 Real Estate Construction Note (the "Becker Mortgage'1. The Becker Mortgage was recorded February 9, 2000 with the Office of the County Recorder of Sherburne County (Doc. No. 407706), and evidences a first priority lien on the Becker Property. Treatment of Class 3E Claim Lakeland will have an allowed secured Class 3E claim in the amount of$1,514,834.12, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3E Claim, the Plan constitutes a promissory note (the "Class 3E Note'1, which will include the following material terms: For the fIrst year after the Effective Date, no payments of interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $750,000.00, to be applied first to accrued interest and second to principal, on account of the Class 3E Note. In the event that the Debtor does not timely make the first payment under the Class 3E Note, it will deliver, upon demand, a quitclaim deed to the Becker Property to those Lakeland Entities with mortgage interests in the Becker Property, or, at the Lakeland's option, submit to voluntary foreclosure. 25 121201117vl 880207 After the first payment, the balance of the Class 3E Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month) except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will deliver a contingent promissory note (the "Class 3E Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Becker Property yield proceeds sufficient to satisfy all debt secured by the Becker Property before the third anniversary of the Effective Date. The Class 3E Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale ofthe Becker Property in excess ofthe aggregate debt secured by the Becker Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3E Note, and the denominator of which is the aggregate balance, as of the Filing Date, of claims that are secured by the Becker Property and held by any of the Lakeland Entities. The Debtor's performance under the terms of the Class 3E Note will be secured by a continuing mortgage interest in the Becker Property, with such interest being of the same priority, dignity, and effect as that ofthe Becker Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Becker Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Becker Property. Upon the sale of any portion of the Becker Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the Becker Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3E Note in order of maturity. The Class 3E Note, together with the Plan, will operate as a restatemeJit and amendment ofthe. Becker Note, the Becker Mortgage, and all related agreements, and confumation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre.petition obligations under the relevant instruments and agreements. The terms ofthe Class 3E Note will be substantially similar to those included in the Becker Note, and, to the extent not inconsistent with the terms of the Class 3E Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lake land. 26 121201177vl 880207 Class 3F - Lakeland Construction Finance, LLC (Account 487502.001 - Blaine) The Class 3F Claim arises out oftbe Debtor's obligations in favor of Lake land under a promissory note dated May 8, 2006 in the original principal amount of$800,000.00 (the ''May 8, 2006 Blaine Note"). A13 ofSepte,nber 24,2007, the outstanding balance of the May 8,2006 Blaine Note, including accrued and unpaid interest, charges and fees, was $800,000.00. The Debtor's performance under the May 8, 2006 Blaine Note. is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $800,000.00 Note (the "May 8, 2006 Blaine Mortgage"). The May 8,2006 Blaine Mortgage was recorded on May 8, 2006 with the Office of the Registrar of Titles of Anoka County (Doc. No. 487502.001), and evidences a ninth priority lien on the Blaine Property. Treatment of Class 3F Claim Lakeland will have an allowed secured Class 3F claim in the amount of$800,000.00. or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3F Claim, the Plan constitutes a non-interest-bearing promissory note (the "Class 3F Note'). On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3F Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account ofthe Class 3F Note. In the event that the Debtor does not timely make the first payment under the Class 3F Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or. at the Lakeland Entities' option, submit to voluntary foreclosure. The balance of the Class 3F Note will be due and payable on the third anniversary of the Effective Date. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 3F Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3F Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3F Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims that are secured by the Blaine Property. The Debtor's performance under the terms of the Class 3F Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the May 8, 2006 Blaine Mortgage before the Filing Date. No further action 27 121201l77vl880207 need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law . Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the Bromley Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to installments under the Class 3F Note in order of maturity. The Class 3 F Note, together with the Plan, will operate as a restatement and amendment of the May 8, 2006 Blaine Note, the May 8, 2006 Blaine Mortgage, and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 3F Note will be substantially similar to those included in the Bromley Note, and, to the extent not inconsistent with the terms of the Class 3F Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland. Class 3G - Lakeland Construction Finance, LLC (Account 431716 - Blaine) The Class 3G Claim arises out ofthe Debtor's obligations in favor of Lake land under a promissory note dated March 27, 2003 in the original principal amount of$2,000,000.00 (the "March 27,2003 Blaine Note'} As of September 24,2007, the outstanding balance ofthe May 8,2006 Blaine Note, including accroed and unpaid interest, charges and fees, was $2,000,000.00. The Debtor's performance under the March 27, 2003 Blaine Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $2,000,000.00 Note (the "March 27, 2003 Blaine Mortgage"). The March 27,2003 Blaine Mortgage was recorded on May 21,2003 with the Office of the Registrar of Titles of Anoka County (Doc. No. 431716), and evidences a sixth priority lien on the Blaine Property. Treatment of Class 3G Claim Lakeland will have an allowed secured Class 30 claim in the amount of$2,000,000.00, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. The With respect to the Class 3G Claim, the Plan constitutes a promissory note (the ''Class 30 Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an 28 121201177vl 880207 amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3G Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Blaine Property~ to be applied first to accrued interest and second to principal, on account of the Class 3G Note. In the event that the Debtor does not timely make the first payment under the Class 3G Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property,. or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the flTSt payment, the balance of the Class 3G Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time oftbe mst payment, the Debtor will be deemed to have delivered a contingent promissory note (the "Class 3G Contingent Note") under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part oftbe Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3G Contingent Note will mature on the third anniversary ofthe Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% oftbe aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3G Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims that are secured by the Blaine Property. The Debtor's performance under the terms of the Class 3G Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as that of the March 27. 2003 Blaine Mortgage before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal1aw. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest under the Bromley Mortgage with respect to the property that is the subject of the relevant sale. Payments made under this paragraph will be applied to instalhnents under the Class 3G Note in order of maturity. The Class 3G Note, together with the Plan, will operate as a restatement and amendment of the March 27, 2003 Blaine Note, the March 27, 2003 Blaine Mortgage, and all related agreements. and conmmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The term;; of 29 l21201l77vl880207 the Class 3G Note will be substantially similar to those included in the March 27, 2003 Blaine Note. and, to the extent not inconsistent with the terms of the Class 3G Note or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any tenn in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland Class 3H - Lakeland Construction Finance, LLC (Account 212366 - Rolling Woods) The Class 3H Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated March 12, 2002 in the original principal amount of $600,000.00 (the "Rolling Woods Note"). As of September 24, 2007, the outstanding balance ofthe Rolling Woods Note, including accrued and unpaid interest, charges, and fees, was $470,606.15. The Debtor's performance under the Rolling Woods Note is secured under that certain First Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $600,000.00 Note (the "Rolling Woods Mortgage"). The Rolling Woods Mortgage was recorded on March 21, 2002 with the Office of the County Recorder of Olmsted County (Doc. No. A-910011), and evidences a current first priority lien on 13 undeveloped lots in the Rolling Woods development in Olmsted County, Minnesota (the subject property will be referred to as the "Rolling Woods Property"). Treatment of Class 3H Claim Lakeland will have an allowed secured Class 3H claim in the amount of $470,606.15, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. On the Effective Date, the Debtor will deliver to Lakeland a quitclaim deed to the Rolling Woods Property in complete and final satisfaction of the Class 3H Claim. Class 31 - Lakeland Construction Finance, LLC (Account 213436 - AIbertvillas 6) The Class 31 Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated March] 2. 2002 in the original principal amount of$800,000.00 (the "Albertvillas 6 Note"). As of September 24,2007, the outstanding balance of the Albertvillas 6 Note, including accrued and unpaid interest, charges, and fees, was $1,680,144.81. The Debtor's performance under the Albertvillas 6 Note is secured under that certain Mortgage by Edina Developmen~ Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $800,000.00 Note (the "Albertvillas 6 Mortgage"). The Albertvil1as 6 Mortgage was recorded on May 8, 2006 with the Office of the County Recorder of Wright County (Doc. No. 1008637), and evidences a current first priority lien on 23 undeveloped lots in the Albert Villas 6th Addition development in Wright County, Minnesota (the subject property will be referred to as the "Albertvillas 6 Property"). 30 12J201177vl 880207 Treatment of Class 31 Claim Lakeland will have an allowed secured Class 31 claim in the amount of$1,680,144.81, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. On the Effective Date, in complete and final satisfaction of the Class 31 Claim, the Debtor will either: (i) deliver to Lakeland a quitclaim deed to the Albertvillas 6 Property; or (ii) submit to voluntary foreclosure. Class 3J - Lakeland Construction Finance, LLC (Account 211894 - Albertvillas 7) The Class 3J Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated June 29,2001 in the original principal amo~t of$405,000.00 (the "Albertvillas 7 Note"). As of September 24, 2007, the outstanding balance of the Albertvillas 7 Note, including accrued and unpaid interest, charges, and fees, was $812,864.17. The Debtor's performance under the Albertvillas 7 Note is secured under that certain Mortgage by Edina Development Corporation, as Mortgagor, to Lakeland Construction Finance, LLC as Mortgagee, to Secure $800,000.00 Note (the "Albertvillas 7 Mortgage"). The Albertvillas 7 Mortgage was recorded on August 2, 2001 with the Office of the COWlty Recorder of Wright County (Doc. No. 751570), and evidences a first priority lie.n on real property in Wright County, Minnesota (the subject property will be referred to as the "Albertvillas 7 Property"). Treatment of Class 3J Claim Lakeland will have an allowed secured Class 3J claim in the amount of $812,864.17. plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, if any, or in such other amount as may be determined in accordance with the applicable provisions ofthe Bankruptcy Code. From the Effective Date through June 1,2008 interest will not accrue on the Class 3J Claim, and, from and after June 1, 2008, interest will accrue at the rate often percent per annum. On or before the date that is twelve months after the Effective Date, the Debtor will pay the Class 3J Claim in full or will consent to voluntary foreclosure of its interest in the Albertvillas 7 Property in complete and final satisfaction of the Class 3J Claim. Class 3K - Lak.eland Construction Finance, LLC (Account 213527 - Blaine) The Class 3K Claim arises out of the Debtor's obligations to Lakeland under a promissory note dated January, 2002 in the original principal amount of$l,OOO,OOO.OO (the "January 2002 LakelandBlaine Note"). As of September 24,2007, the outstanding balance of the January 2002 Lakeland Blaine Note, including accrued and unpaid interest, charges, and fees, was $1,547,398.24. Treatment of Class 3K Claim Lakeland will have an allowed secured Class 3K claim in the amount of$I,547,398.24, plus accrued and unpaid interest. and less any payments of principal from and after the Filing Date, if 31 121201l77v1880207 any, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 3K Claim, the Plan constitutes a promissory note (the "Class 3K Note"), which will include the following material terms: For the first year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary ofthe Effective Date, the Debtor will pay an amount equal to $7,500,000.00, multiplied by a fraction, the numerator of which is the balance owing under the Class 3K Note, and the denominator of which is the aggregate balance of the Lakeland Entities' claims secured by the Blaine Property, to be applied first to accrued interest and second to principal, on account of the Class 3K Note. In the event that the Debtor does not timely make the fIrst payment under the Class 3K Note, it will deliver, upon demand, a quitclaim deed to the Blaine Property to those Lakeland Entities with mortgage interests in the Blaine Property, or, at the Lakeland Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 3K Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (iii) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective Date will be due on the first business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Blaine Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the first payment, the Debtor will be deemed to have delivered a contingent promissory note (the ''Class 3K Contingent Note'') under which Lakeland will be entitled to a payment of bonus interest in the event that one or more sales of all or any part ofthe Blaine Property yield proceeds sufficient to satisfy all debt secured by the Blaine Property before the third anniversary of the Effective Date. The Class 3K Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay Lakeland an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Blaine Property in excess of the aggregate debt secured by the Blaine Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 3K Note, and the denominator of which is the aggregate balance ofthe Lakeland Entities' claims secured by the Blaine Property. The Debtor's performance under the terms of the Class 3K Note will be secured by a continuing mortgage interest in the Blaine Property, with such interest being of the same priority, dignity, and effect as before the Filing Date. No further action need be taken by either Lakeland or the Debtor in order to perfect the ongoing interest in the Blaine Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Lakeland may deem necessary or appropriate in order to retain or continue its interest in the Blaine Property. Upon the sale of any portion of the Blaine Property, the Debtor will pay Lakeland an amount equal to release prices that have been negotiated and agreed to by the Debtor and Lakeland. In exchange for such payments, Lakeland will release its interest with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 3K Note in order of maturity. 32 121201177vl 880207 The Class 3K Note, together with the Plan, will operate as a restatement and amendment of the January 2002 Lakeland Blaine Note and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfuction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The tenns of the Class 3K Note will be substantially similar to those included in the January 2002 Lakeland Blaine Note, and, to the extent not inconsistent with the terms of the Class 3KNote or the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way oflimitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Lakeland. Class 4 - The Waitt Family Foundation Fund II, LLC (Account 40051- Haven) The Class 4 Claim arises out of the Debtor's obligations to WFF under a promissory note dated May 14, 2002 in the original principal amount of $2, 150,000.00 (the "WFF Note"). As of September 24, 2007, the outstanding balance of the WFF Note, including accmed and unpaid interest, charges, and fees, was $5,517,585.93. The Debtor's performance under the WFF Note is secured under that certain Mortgage, Security Agreement and Fixture Financing Statement by Edina Development Corporation, as Mortgagor, to the Waitt Family Foundation Fund II, LLC Construction Finance, LLC as Mortgagee, to Secure $2,150,000.00 Real Estate Construction Note (the "WFF Mortgage"). The WFF Mortgage was recorded on January 16, 2003 with the Office of the County Recorder of Sherburne County (Doc. No. 493488), and evidences a first priority lien on a 200 acre portion of the Haven Property. Treatment of Class 4 Claim WFF will have an allowed secured Class 4 claim in the amount of$5,517,585.93, plus accrued and unpaid interest, and less any payments of principal from and after the Filing Date, ifany, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 4 Claim, the Plan constitutes a promissory note (the "Class 4 Note"), which will include the following material terms: For the fIrSt year after the Effective Date, no interest or principal will be payable, but interest will accrue at the rate of 10% per annum. On the first anniversary of the Effective Date, the Debtor will pay an amount equal to $5,000,000.00, multiplied by a :fraction. the numerator of which is the balance owing under the Class 4 Note, and the denominator of which is the aggregate of the Lakeland Entities' claims that are secured by the Haven Property, to be applied first to accrued interest and second to principal, on account of the Class 4 Note. In the event that the Debtor does not timely make the flCst payment under the Class 4 Note, it will deliver, upon demand, a quitclaim deed to the Haven Property to those Lakeland Entities with mortgage interests in the Haven Property, or, at the LakeIand Entities' option, submit to voluntary foreclosure. After the first payment, the balance of the Class 4 Claim will be payable on the following terms: (i) interest rate of 10% per annum; (ii) 30 year amortization; and (Hi) a maturity date on the third anniversary of the Effective Date. Payments from and after the first anniversary of the Effective 33 121201l77vl 880207 Date will be due on the frrst business day of each succeeding calendar month, except to the extent that the aggregate of any payments made on account of sales of any part of the Haven Property before the date that any monthly installment would otherwise be due exceed the amount that would otherwise be due. In addition, at the time of the fll'st payment, the Debtor will deliver a contingent promissory note (the "Class 4 Contingent Note") under which WFF will be entitled to a payment of bonus interest in the event that one or more sales of all or any part of the Haven Property yield proceeds sufficient to satisfY all debt secured by the Haven Property before the third anniversary oithe Effective Date. The Class 4 Contingent Note will mature on the third anniversary of the Effective Date at which time the Debtor will pay WFF an amount equal to 15% of the aggregate net proceeds realized upon the sale of the Haven Property in excess of the aggregate debt secured by the Haven Property and the costs associated with the sales, multiplied by a fraction, the numerator of which is the balance owing under the Class 4 Note, and the denominator ofwhich is the aggregate balance, as of the Filing Date, of the LakeIand Entities' claims that are secured by the Haven Property. The Debtor's performance under the terms of the Class 4 Note will be secured by a continuing mortgage interest in the Haven Property, with such interest being of the same priority, dignity, and effect as that of the September 20, 2001 Haven Mortgage before the Filing Date. No further action need be taken by either WFF or the Debtor in order to perfect the ongoing interest in the Haven Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as WFF may deem necessary or appropriate in order to retain or continue its interest in the Haven Property. Upon the sale of any portion of the Haven Property, the Debtor will pay WFF an amount equal to release prices that have been negotiated and agreed to by the Debtor and WFF. In exchange for such payments, WFF will release its interest under the WFF Mortgage with respect to the property that is the subject of any sale, and payments will be applied to installments under the Class 4 Note in order of maturity. The Class 4 Note, together with the Plan, will operate as a restatement and amendment of the WFF Note, the WFF Mortgage, and aU related agreements, and confll'IDation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations under the relevant instruments and agreements. The terms of the Class 4 Note will be substantially similar to those included in the WFF Note, and, to the extent not inconsistent with the teons of the Class 4 Note or the Plan, the tenns of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of demult or an event otherwise giving rise to any rights or remedies in favor ofWFF. Class 5 - RBP Housing, LLC Class 5 consists of the Debtor's obligations under that certain Contract for Deed dated March 24, 2005 (the ''RBP Contract') between the Debtor and RBP Housing, LLC ("RBP") under which 34 121201l77v1880201 the Debtor is purchasing 30 unimproved lots in the Fairways Fourth Addition in Benton County (the "RBP Property"). The RBP Contract was recorded on April 1, 2005 with the Office of the Benton County Recorder (Doc. No. 324651). As ofthe Filing Date, the aggregate of an payments due and to come due under the RBP Contract was $556,051.21. For purposes of the Plan, the Contract for Deed constitutes a first priority lien on the RBP Property. Treatment of Class 5 Claim RBP will have an allowed secured Class 5 claim in the amount of $556,051.21, plus accrued and unpaid interest and other charges allowed under the RBP Contract, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 5 Claim, the Plan constitutes a modification of the payment terms under the RBP Contract such that, for the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the sixth anniversary of the Effective Date, at which time all outstanding principal and interest will be due and payable. RBP's interest in the RBP Property will continue to be evidenced by the RBP Contract as currently recorded, and neither the Debtor nor RBP will be required to take any further action to perfect RBP's interest except as may otherwise be required under applicable law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as RBP may deem necessary or appropriate in order to retain or continue its interest in the RBP Property. Except to the extent inconsistent with the terms of the Plan, the non-monetary terms of the RBP Contract will not be altered, and will continue in full force and effect. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this ban1cruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofRBP. Class 6 - Contractors Capital Corporation (WeckerHog Acres) The Class 6 Claim arises out of the Debtor's obligations to Contractors Capital Corporation ("CCC") under that certain Mortgage Note dated January 6, 2003 in the original principal amount of$410,000.00 (the "CCC Note"). The Debtor's performance under the CCC Note is secured under a Mortgage dated February 6, 2003 (the "CCC Mortgage"). The CCC Mortgage was recorded on December 22, 2004 with the Office of the County Recorder for Obnsted County (Doc. No. A-1048548), and represents a first priority interest in certain unimproved property in Olmsted County (the ''Weckerling Acres Property"). 35 121201177v1880207 Treatment of Class 6 Claim On the Effective Date, in exchange for payment of the sum of$40,000.00, in the aggregate, from CCC and the Hasslers, the Debtor will deliver a quitclaim deed to the Weckerling Acres Property to such party or parties as CCC and the Hasslers designate. Such delivery of the deed win be in full and final satisfaction of all obligations related to the Class 6 claim. Class 7 - Michael & Laurie Hassler (Weckerling Acres) Michael and Laurie Hassler (the "Has siers") are the holders ofa claim arising out of their February 6, 2003 sale of the Weckerling Acres Property to the Debtor. $362,000.000fthe purchase price consisted of seller financing provided by the Hasslers, which is evidenced by a promissory note (the "Hassler Note"), payment ofwmch was secured by a mortgage on the Weckerling Acres Property. The Hasslers voluntarily subordinated their mortgage to that of CCC, and the mortgage securing the Hasslers' claim is ofsecond priority. On or about May 12,2005, the Hasslers commenced an action for the foreclosure of their mortgage on the Weckerling Acres Property. On or about April 21, 2006, the Hasslers and the Debtor entered into a settlement agreement, and the Debtor executed and delivered a confession of judgment to secure its performance under the settlement agreement. The confession of judgment was entered on October 2(j, 2006, was certified on November 16,2006, and constitutes a second priority lien on the Weckerling Acres Property. Treatment of Class 7 Claim On the Effective Date, in exchange for payment ofthe sum of $40,000.00, in the aggregate, from CCC and the Hasslers, the Debtor will deliver a quitclaim deed to the Weckerling Acres Property to such party or parties as CCC and the Hasslers designate. Such delivery of the deed will be in full and final satisfaction of all obligations related to the Class 6 claim. Confinnation of the Plan will operate as a discharge of the judgment lien currently of record in favor of the Hasslers. Class 8 - S&C Bank (Hanjo Farms Property) The Class 8 Claim arises out of the Debtor's obligations to S&C Bank ("S&C") under: (i) a Promissory Note dated March 29, 2004 in the original principal amount of$73,239.00; (ii) a Promissory Note dated Aprilll, 2005 in the original principal amount of$117,857.00; (Hi) a Promissory Note dated May 19, 2006 in the original principal amount of$129,000.00 (collectively, the "S&C Notes"). The Debtor's performance under the S&C Notes is secured under the following mortgages on certain unimproved property in Polk County, Wisconsin (the "Hanjo Farms Property"): (i) that certain First Mortgage by Edina Development Corporation, as Mortgagor, to S&C as Mortgagee, to Secure $73,239.00 Note, recorded on March 30, 2004 in the Office of the Register of Deeds for Polk. County, Wisconsin (Doc. No. 677285); (ii) that certain Second Mortgage by Edina 36 121201171vl880207 Development Corporation, as Mortgagor, to S&C as Mortgagee, to Secure $117,857.00 Note, recorded on April 18, 2005 in the Office of the Register of Deeds for Polk County, Wisconsin (Doc. No. 697251); and (Hi) that certain Third Mortgage by Edina Development Corporation, as Mortgagor, to S&C as Mortgagee, to Secure $129,000.00 Note, recorded on May 26,2006 with the Office of the Register of Deeds for Polk County, Wisconsin (Doc. No. 717041). By order entered on November 13, 2007, the Court approved the sale of the Hanjo Property on tel1llS that included the payment of$300,000.00 out of the sale proceeds to S&C in full and final satisfaction of all claims under the S&C Notes, treatment to which S&C had consented. The sale closed on November 15, 2007, and S&C was paid in accordance with the Court's order. Treatment of Class 8 Claim S&C's claim having been satisfied out of the proceeds ofa Court.approved sale, there will be no Class 8 Claim allowed under the Plan. Class 9 - Banjo Farms Class 9 consists of the Debtor's obligations under that certain Land Contract dated March 29, 2004 between the Debtor and Hanjo Farms, Inc. ('"Hanjo") under which the Debtor is purchasing the Hanjo Farms Property. The Land Contract was recorded on March 30,2004 with the Office ofthe Polk County Recorder (Doc. No. 677283). As of the Filing Date, the aggregate of all payments due and to come due under the Land Contract was $90,000.00. For purposes of the Plan, the Contract for Deed constitutes a second priority lien on the Hanjo Farms Property. By order entered on November 13, 2007, the Court approved the sale of the Hanjo Property on tenns that included the payment of $80,000.00 out of the sale proceeds to Hanjo in full and final satisfaction of all claims under the Land Contract, treatment to which Hanjo had consented. The sale closed on November 15, 2007, and Hanjo was paid in accordance with the Court's order. Treatment of Class 9 Claim Hanjo's claim having been satisfied out of the proceeds of a Court-approved sale, there will be no Class 9 Claim allowed under the Plan. Class 10 . Sam Montgomery (Balder Property) Class 10 consists of the Debtor's obligations under that certain Contract for Deed dated August 9, 2004 (the ''Montgomery Contract') between the Debtor and David 1. and Yvonee Balder under which the Debtor is purchasing certain real property in Benton County, Wisconsin (the "Balder Property"). The Contract for Deed was recorded on October 26, 2004 with the Office of the Benton County Recorder (Doc. No. 319824). Under an Assignment of Contract for Deed and Warranty Deed dated August 8, 2006, the Balders assigned their interest in the Contract for Deed and the Balder Property to Sam R. Montgomery ("Montgomery"). As of the Filing Date, the aggregate of all payments due and to come due under the Contract for Deed was $150,641.00. 37 121l0llnvl880207 For purposes of the Plan, the Contract for Deed constitutes a first priority lien on the Balder Property. Treatment of Class 10 Claim MontgomerywiU have an allowed secured Class 10 claim in the amount of$150,641.00, plus any a4ditional amounts that may have accrued under the terms ofthe Montgomery Contract since the Filing Date, and less any payments made since the Filing Date, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 10 Claim, the Plan constitutes a modification of the payment terms under the Montgomery Contract such that, for the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the sixth anniversary ofthe Effective Date, at which time all outstanding principal and interest will be due and payable. Montgomery's interest in the Balder Property will continue to be evidenced by the Montgomery Contract as currently recorded, and neither the Debtor nor Montgomery will be required to take any further action to perfect Montgomery's interest except as may otherwise be required under applicable law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as Montgomery may deem necessary or appropriate in order to retain or continue his interest in the Montgomery Property. Except to the extent inconsistent with the terms of the Plan, the non-monetary terms of the Montgomery Contract will not be altered, and will continue in full force and effect. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of Montgomery. Class 11 - Merritt Rage Merritt Rage ("Hage'') is the holder of a claim arising out of an interim arbitration award dated January 25,2006 and an arbitration award dated March 3, 2006, under which Rage was awarded the amount of$259,328.96, including attorneys' fees, costs, and pre-award interest. On August 2, 2006, the Minnesota State District Court in Anoka County granted Hage's motion to confirm the arbitration award, and judgment (the "Rage Judgment") was entered on August 4, 2006, and has been docketed in eight counties. Treatment of Class 11 Claim The Class 11 Claim will be satisfied upon the Lakeland Entities' payment of the sum of $162,500.00, which payment will be made on the Effective Date. Confirmation of the Plan, together with the payment of the sum of$162,500.00, will operate as a discharge of the judgment lien currently of record in favor of Hage, and, upon his receipt of the 38 121201l77vl 880207 above-referenced payment, Rage WIll be obligated to file and record a release of such judgment in every county in which it has been docketed and delivery to the Debtor of evidence of such release. Class 12 - Sonic Financial Corporation The Class 12 Claim arises out of the Debtor's obligations in favor of Sonic Financial COIporation ("Sonic") under: (i) that certain Promissory Note dated March 5, 2004 in the original principal amount of $3,600,000.00; and (ii) that certain Promissory Note dated March 22,2005 in the original principal amount of$125,000.00 (together, as they may have been amended from time to "time, the "Sonic Notes"). As of November 30, 2007, the outstanding aggregate balance of the Sonic Notes, including accrued and unpaid interest, late fees, attorneys' fees, and loan extension fees, was approximately $4,398,647.50. The Debtor's performance under the Sonic Notes is secured under that certain Combination Mortgage and Security Agreement (the "Sonic Mortgage"). The Sonic Mortgage was recorded on April 4, 2004 with the Office of the County Recorder for Sherburne County (Doc. No. 546977), and evidences a first priority lien on the Waters Edge Property (as defined below) and a second priority lien on the Becker Property. The Sonic Notes were delivered in connection with the Debtor's acquisition ofrea1 property in Benton County and Sherburne County, a large portion of which was later platted under the name Waters Edge at Donovan Lake (the ''Waters Edge Property"). The Waters Edge Property was later deeded to an affiliated company named Waters Edge Development, LLC (''WED''), which assumed responsibility for payment of the debt associated with the acquisition of the Waters Edge Property. The Debtor continues to be a primary obligor on the Sonic Notes, being jointly and severally liable on the Sonic Notes with WED. On October 31,2006, WED filed a petition under Chapter 11, and by order dated April 30, 2007 the Bankruptcy Court confirmed WED's Sixth Modified Chapter 11 Plan of Reorganization (the "WED Plan''). The same obligations that make up the Class 12 Claim are treated as a fully secured claim to be paid in full by July 15, 2009 under the WED Plan. Treatment of Class 12 Claim Sonic will have an allowed secured claim in the amount of$4,398,647.50, together with additional interest, late fees, and attorneys' fees as accrue after November 30, 2007. With respect to the Class 12 Claim, the Plan will constitute an obligation to pay such claim in accordance with the existing loan documents between Sonic and the Debtor, as modified by the WED Plan, and with respect to which obligation the Debtor and WED will continue to be jointly and severally liable. The Debtor's performance hereunder will be secured by a continuing second priority mortgage interest in the Becker Property, which mortgage will be junior only to the existing first priority mortgage lien in favor of Lake land to secure the Becker Note. No further action need be taken by either Sonic or the Debtor in order to perfect Sonic's ongoing interest in the Becker Property. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable 39 121201l77vl 880207 requests related to the execution and delivery of such further and additional documents as Sonic may deem necessary or appropriate in order to retain or continue its second priority mortgage interest in the Becker Property. At any time after the Effective Date and before June 1, 2008, the Debtor may, but will not be required to, pay Sonic the sum of$I,OOO,OOO.OO (which sum will be applied by Sonic frrst to the loan extension fee agreed to by WED as part of the WED PIan, second to any late payment fees which have accrued or may continue to accrue under the Sonic Notes, and third to any past or future interest which has accrued or may accrue under the Sonic Notes), and, upon such payment, Sonic will be obligated to execute and deliver a satisfaction ofits mortgage on the Becker Property, and the Debtor will be relieved of all further obligations owing to Sonic pursuant to the Sonic Notes. The Plan, will operate as a restatement and amendment of the Sonic Notes and all related agreements (including, but not limited to, the WED Plan), and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations to Sonic. The tenns of obligations to Sonic under the Plan will be substantially similar to those included in the Sonic Notes, as those obligations may have been modified by the WED Plan, and, to the extent not inconsistent with the tenns of the Plan, the terms of all pre-petition agreements will continue in full force and effect, and are hereby incorporated by this reference. Class 13 - WHKS & Co. The Class 13 Claim consists of the Debtor's allegedly secured obligations to WHKS & Co. ("WHKS") under a settlement agreement dated on or about October 12, 2006. According to a proof of claim filed by WHKS, the Class 13 Claim is secured under a confession of judgment. The Debtor bas been unable to confirm that the confession of judgment was filed or docketed before the Filing Date, and has requested that WHKS provide documentation to evidence the secured status of its claim. In the event that the Debtor is not able to confirm that WHKS holds a valid perfected lien, it may object to the Class 13 Claim, and, ifthe Debtor prevails in such objection, any allowed claim held by WHKS will be included in Class 1. Treatment of Class 13 Claim To the extent it is allowed as a secured claim, the Class 13 Claim will be paid on the following terms: For the first five years after the Effective Date, interest will accrue at the rate ofnme percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date until the Class 13 Note matures on the sixth anniversary of the Effective Date (the "Maturity Date"), at which time all outstanding principal and interest will be due and payable. The Debtor's performance under the terms applicable to the Class 13 Claim will be secured by a mortgage on a 40 acre portion of the Blaine Property (the .'Class 13 Mortgage''). Confirmation of the Plan will operate as a discharge of the judgment lien currently of record in favor ofWHKS, and the Debtor's obligation to make payments on account of the Class 13 Claim 40 121201177vl 880207 is expressly conditioned on WHKS's release of such judgment in every county in which it has been docketed and delivery to the Debtor of evidence of such release. Class 14 - Wilkerson & Hegna P.L.L.P. The Class 14 Claim arises out of the Debtor's obligations in favor of Wilkerson & Hegna P .L.L.P. e'W &H") under that certain Mortgage Note dated September 7, 2006 in the original principal amount of $75,000.00 (the ''W&H Note"). The Debtor's performance under the W &H Note is secured under a Mortgage dated January 6, 2003 (the "W&H Mortgage''). The W&H Mortgage was recorded on September 14,2006 with the Office of the County Recorder for Wright County (Doc. No. 1025568), and represents a second priority interest in the Albertvillas 7 Property. Treatment of Class 14 Claim W &H will have an allowed secured Class 14 claim in an amount not to exceed $75,000.00, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 14 Claim the Plan constitutes a promissory note (the "Class 14 Note"), which will include the following material terms: For the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries ofthe Effective Date until the Class 14 Note matures on the sixth anniversary of the Effective Date (the "Maturity Date''), at which time all outstanding principal and interest will be due and payable. The Debtor's performance under the tenus of the Class 14 Note will be secured by a continuing second priority mortgage interest in the Albertvillas 7 Property. No further action need be taken by either W &H or the Debtor in order to perfect the ongoing interest in the Albertvillas 7 Property, except to the extent that further action may be required by otherwise applicable state or federal law. Notwithstanding the foregoing, the Debtor will cooperate and comply with all reasonable requests related to the execution and delivery of such further and additional documents as W &H may deem necessary or appropriate in order to retain or continue their interest in the Albertvillas 7 Property. At any time before the first anniversary ofthe Effective Date, the Debtor may, but will not be required to, pay the W &II an amount equal to thirty percent of the original principal balance of the Class 14 Note and deliver a mortgage on a 40 acre portion of the Blaine Property as and for security of the Debtor's payment of the balance of the Class 14 Note, and, upon such payment and delivery, W&H will be obligated to execute and deliver a satisfaction of their mortgage on the Albertvillas 7 Property. The Class 14 Note, together with the Plan, will operate as a restatement and amendment of the W &H Note and all related agreements, and confirmation of the Plan will not operate as a replacement or satisfaction of any of the Debtor's pre-petition obligations to W&H. The terms of the Class 14 Note will be substantially similar to those included in the W&H Note, and, to the 41 121201177vl 880207 extent not inconsistent with the tenns of the Class 14 Note or the Plan, the tenns ofall pre- petition agreements will continue in full force and effect, and are hereby incorporated by this reference to such extent. By way of limitation, notwithstanding any term in any agreement to the contrary, neither the connnencement nor the administration ofthis bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor of W&H. Class 15 - GMAC The Class 15 Claim arises out of the Debtor's obligations in favor of General Motors Acceptance COIpOration ("GMAC") under that certain Retail Installtnent Sale Contract December 16, 2003 (the ''GMAC Contract") under which the Debtor fInanced the purchase of a 2004 Cadillac Escalade. The Debtor's performance under the GMAC Cont.mct is secured by a lien on the subject vehicle, which lien was properly perfected by filing with the Minnesota registrar of motor vehicles. Treatment of Class 15 Claim On the Effective Date, the Debtor will cure any arrearages owing under the GMAC Contract, and will thereafter comply with all of the tenns of the GMAC Contract, which terms are wholly incorporated into the Plan by this reference. Class 16 - Anoka County Class 16 consists ofa11 of the Debtor's liability for real estate taxes owing to Anoka County, Minnesota ("Anoka"). Treatment of Class 16 Anoka will have an allowed secured Class 16 Claim in the amount of $29,813.14, or in such other amount as may be detennined in accordance with the applicable provisions of the Bankruptcy Code. The Class 16 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis of interest at the rate prescribed by Section 549.09 of the Minnesota Statutes and an amortization schedule of ten years. Class 17 - Benton County Class 17 consists of all of the Debtor's liability for real estate taxes owing to Benton County, Minnesota ("Benton"). Treatment of Class 17 Benton will have an allowed secured Class 17 Claim in the amount of $20,198.43, or"in such other amount as may be detennined in accordance with the applicable provisions of the 42 121201177v1880207 Bankruptcy Code. The Class 17 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis of interest at the rate prescnbed by Section 549.09 of the Minnesota Statutes and an amortization schedule often years. Class 18 - Olmsted County Class 18 consists of all of the Debtor's liability for real estate taxes owing to Olmsted County, Minnesota ("Olmsted"). Treatment of Class 18 Olmsted will have an allowed secured Class 18 Claim in the amount of$16,635 .19, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. The Class 18 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis of interest at the rate prescnbed by Section 549.09 of the Minnesota Statutes and an amortization schedule often years. Class 19 - Sherburne County Class 19 consists ofall of the Debtor's liability for real estate taxes owing to Sherburne County, Minnesota ("Sherburne"). Treatment of Class 19 Sherburne will have an allowed secured Class 19 Claim in the amount of$72,258.83, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. The Class 19 Claim will be paid in ten equal annual installments of principal and interest, with the amount of each installment being calculated on the basis ofinterest at the rate prescribed by Section 549.09 of the Minnesota Statutes and an amortization schedule often years. Class 20 - MBE, Inc. MBE, Inc. ("MBE") is the holder of a claim arising out of ajudgment entered in the matter captioned MBE. Inc. v. Edina Development Corporation, Case No. 86wCY-06-3204, and docketed in Wright County, Minnesota on June 7, 2006. Treatment of Class 20 Claim MBE will have an allowed secured Class 20 claim of up to $13,743.61, plus accrued and unpaid interest, and less any payments of principal made from and after the Filing Date, or in such other amount as may be determined in accordance with the applicable provisions of the Bankruptcy Code. With respect to the Class 20 Claim, the Plan constitutes a promissory note (the "Class 20 Note"), which will provide for payment of the Class 20 Claim on the following material tenns: 43 121201117v1880207 For the first five years after the Effective Date, interest will accrue at the rate of nine percent per annum, with annual payments calculated according to a thirty (30) year amortization schedule being due on the first through fifth anniversaries of the Effective Date lUltil the Class 20 Note matures on the sixth anniversary ofthe Effective Date (the "Maturity Date"), at which time all outstanding principal and interest will be due and payable. The Debtor's performance under the terms of the Class 20 Note will be secured by a mortgage oil a 40 acre portion of the Blaine Property (the "Class 20 Mortgage''). The Class 20 Note, Class 20 Mortgage, and the Plan, together, will operate as a restatement and amendment of the Debtor's obligations related to the Class 20 Claim, and neither the confinnation of the Plan nor the execution of the Class 20 Note or Class 20 Mortgage will operate as a replacement or satisfaction of any of the Debtor's pre~petition obligations to MBE. Neither the commencement nor the administration of this bankruptcy case may be deemed an event of default or an event otherwise giving rise to any rights or remedies in favor ofMBE. Confirmation of the PJan will operate as a discharge of the judgment lien currently of record in favor ofMBE, and the Debtor's obligation to make payments on account ofthe Class 20 Note is expressly conditioned on MBE 's release of such judgment in every county in which it has been docketed and delivery to the Debtor of evidence of such release. Class 21 - Priority Claims Other Than iS07(a)(I), (a)(2) and (a)(8) Claims Class 21 consists of all timely filed and allowed priority claims other than claims asserted under Section 507(a)(I), (a)(2), and (a)(8) of the Bankruptcy Code. Other than the fIrst $10,000.00 of Mr. Lewdowski's $450,000.00 wage claim, the priority treatment of which Mr. Lewandowski has waived, the Debtor does not believe that it is liable on any claims that would be included in Class 21. Treatment of Class 21 Class 21 Claims will be paid, in full, on the Effective Date, or on such other terms upon which any relevant creditor and the Debtor may agree. Class 22 - Equity Interests Class 22 consists of all interests arising out of or related to the equity interests in the Debtor ("Class 22 Interests"), including, without limitation, aU financial and all governance rights associated with any and all outstanding stock issued at any time by the Debtor. Treatment of Class 22 Interests The Class 22 Interests will remain in place from and after the date on which an order confirming the Plan is entered. 44 121201 mv! 880201 3.3 Impaired and Unimpaired Classes All classes of claims are impaired under the Plan, while the class of interests is unimpaired. 3.4 Unclassified Claims - Description of Holders and Treatment of Claims 3.4.1 Pre-Petition Priority Government Claims "Pre-Petition Priority Government Claims" consists of all timely filed and allowed claims of governmental units for a pre-petition claim that is accorded a priority status pursuant to Section 507(a)(8) of the Bankruptcy Code. Pursuant to the mandates of Section 1123(a)(1) of the Bankruptcy Code, Pre-Petition Priority Government Claims are not classified in the Debtor's Plan. Treatment of Pre-Petition Priority Government Claim Pre- Petition Priority Government Claims will be paid, in full. over a tenn ending on or before the fifth anniversary of the Filing Date. From and after the Effective Date, Pre-Petition Priority Government Claims will acerne interest on the tenns and at the rate provided for in 26 U.s.C. S6621 (b). and will be paid in periodic payments so that such claims are fully amortized and paid in full over a period ending not later than the date that is five years after the Filing Date. 3.4.2 Administrative Expenses "Administrative Claim" means any claim for the payment of any administrative expense arising under Section 503(b) of the Bankruptcy Code. Subject to the specific terms set forth below, the Debtor will pay each holder of an allowed Administrative Claim (except any such holder that agrees to different treatment) the allowed amount of such holder's allowed Administrative Claim, in cash, on the Effective Date; provided, however, that allowed Administrative Claims representing post-petition liabilities incurred in the ordinary course of business by the Debtor will be paid as they come due. (a) Professional Fees Professional fees that constitute Administrative Claims are the allowed fees and costs of the professionals that have been employed in the course of the Bankruptcy Case. Assuming the relatively orderly administration of the Bankruptcy Case, the Debtor estimates that professional fees will accrue and be paid as follows: 45 121201177vl 880207 Professional Estimated Fees & Costs Amounts Paid and/or Retainer to be Applied Amount to be Paid through Plan Henson & Efron, P.A. Attys. for Debtor $73,961.00 $23,961.00 $50,000.00 Hinshaw & Culbertson LLP Attys. for Debtor $100,000.00 $100.000.00 $100,000.00 Provided the professionals receive Bankruptcy Court approval of their fees and expenses. these claims fOT professional fees identified above shall be paid in full in cash on the Effective Date, or on such date as the Court may fix, or upon such other terms as may be agreed upon by the professional and the Debtor. The Debtor currently projects that professional fees will be paid out of the proceeds of the Exit Loan described below. (b) u.s. Trustee Fees and Court Costs u. S. Trustee fees and court costs that constitute Administrative Claims are those obligations imposed by operation of28 U.S.C. g 1930 (all such fees and costs will be referred to as "U.S. Trustee Fees''). The Debtor will pay all U.S. Trustee Fees owed by the Debtor, as and when due, until this Bankruptcy Case is closed. In addition, the Debtor will continue to comply with all reporting requirements imposed by the U.S. Trustee until this Bankruptcy Case is closed. (c) Other Administrative Expense Claims There may be other Administrative Claims, such asthe following: (I) fIled proofs of claim for administrative expenses; (2) post-petition taxes; (3) unpaid post-petition claims incurred in the ordinary course of business; and (4) certain claims associated with executory contracts and unexpired leases (the treatment of claims arising out of executory contracts and unexpired leases is more fully described in Section 3.5 below) (all oftbe foregoing will be referred to as "Other Administrative Claims''). The Debtor has remained current on all of its post-petition obligations, and does not believe that it is liable on any Other Administrative Claims. To the extent that there are any allowed Other Administrative Claims, such claims will be paid, in full and in cash, on the Effective Date. or as otherwise agreed to by the Debtor and the claimant, subject to the following exception: For claims incurred in the ordinary course of business after the Filing Date, the Debtor will pay such claims as they become due, or otherwise in the ordinary course ofDebtor's business. 46 121201 177vl 880207 3.5 Executory Contracts and Unexpired Leases The Debtor is party to those executory contracts and unexpired leases described in Exhibit A, the Schedule of Executory Contracts and Leases. Pursuant to Section 365 of the Bankruptcy Code, a debtor in possession may either (i) assume the contract, (ii) reject the contract, or (iii) assume and assign the contract. The treatment that any contract or lease receives in the course of a bankruptcy case dictates the nature of the claim that the non-debtor party may have by reason of the contract or lease. Generally, the rejection of a contract or lease will give rise to a general unsecured claim for damages and pre.petition arrearages, while the assumption of a contract or lease will require that aU defaults be cured, and claims related to monetary defaults will be afforded priority status under the Bankruptcy Code. The treatment of the various executory contracts and unexpired leases to which the Debtor is a party is specified in the Schedule of Executory Contracts and Leases. From and after the date on which an order confirming the Plan is entered, the Debtor will timely perform its obligations according to the terms of all assumed contracts, as the same may be modified by the terms of the Plan. Notwithstanding the foregoing, with respect to arrearages outstanding as of the date on which a contract or lease is assumed, the Debtor will cure such arrearages promptly after the Effective Date, or as otherwise agreed to by the Debtor and the other party to any affected contract. As to rejected contracts and leases, the parties to such contracts and leases may have claims arising under the terms of the relevant agreement, or arising from the rejection of the contract or lease, or both. In accordance with the provisions of the Bankruptcy Code, any claim based on the rejection of an executory contract or unexpired lease will be treated as an unsecured claim. Unless otherwise ordered by the Court. the deadline for filing a proof of claim for any such claim arising from rejection of a contract or lease will be fixed at 30 days from the date on which an order confirming the Plan is entered. THE INFORMATION PROVIDED HEREIN CONSTITUTES NOTICE OF THE DEADLINE FOR ASSERTING CLAIMS FOR DAMAGES FROM REJECTION OF ANY EXECUTORY CONTRACf OR UNEXPIRED LEASE. Contracts and Leases not Specified If the Debtor is a party to any executory contracts or unexpired leases that are not specifically identified in the Schedule ofEx.ecutory Contracts and Leases, the Debtor will REJECT all such executory contracts and Wlexpired leases, with the following exceptions: (i) except as may be provided for in any prior Court order entered with respect to a motion for assumption or rejection of such executory contract or unexpired lease, and (ii) except as may be provided for in any motion pending before the Bankruptcy Court on the date of the hearing on confirmation of the Plan. Except as may be provided otherwise herein, such rejection will be effective as of the date on which an order confirming the Plan is entered. 47 121201177v1880207 3.6 Summary of Estimated Recoveries Under the Plan The Debtor has analyzed the claims as set forth in its schedules, and in the proofs or claim filed in these cases. Based on evaluation ofthe various claims, the Debtor has estimated the allowed claims and the recoveries for those claims as set forth below. The estimates represent the Debtor's good fuith analysis of claims that have been asserted, and are subject to uncertainties of any claims litigation that may be necessary. Twe/Class of Claim Administrative Claims3 Priority Tax Claims Class 1 ~ Unsecured Class 2A - LCF Class 2B - LCF Class 2C - LCF Class 20 - LCF Class 2E - LCF Class 2F - LCF Class 2G - LCF Class 20 - LCF Class 3A - Lakeland Class 3B - Lakeland Class 3C - Lakeland Class 3D - Lakeland Class 3E - Lakeland Class 3F - Lakeland Class 30 - Lakeland Class 3H - Lakeland Class 31 - Lakeland Class 3J - Lakeland Class 3K - Lakeland Class 4 - WFF Class 5 - RBP Class 6 - Contractors Capital Class 7 - Hasslers Class 8 - S&C Class 9 - Hanjo Farms Class 10 - Montgomery Class II - Hage Class 12 - Sonic 3 Does not include professional fees. Dollar Amt or Total ClaimslInterests Total Dollar Amt ofPmts Made/to be ~ -0- -0- -0- -0- $330,000.00 $330,000.00 $229,018.62 $229,018.62 $273,030.64 $273,030.64 $339,266.05 $339,266.05 $3,470,635.01 $3,470,635.01 $9,447,721.12 $9,447,721.12 $1,000,000.00 $1,000,000.00 $3,000,000.00 $3,000,000.00 $1,791,285.19 $1,791,285.19 $268,726.97 $268,726.97 $3,146,072.47 $3,146,072.47 $6,000,000.00 $6,000,000.00 $11,281,598.79 $11,281,598.79 $1,393,199.88 $1,393,199.88 $800,000.00 $800,000.00 $2,000,000.00 $2,000,000.00 $470,606.15 $470,606.15 $1,680,144.81 $1,680,144.81 $812,864.17 $812,864.17 $1,547,398.24 $1,547,398.24 $5,517,585.93 $5,517,585.93 $556,051.21 $556,051.21 (deed in satisfaction of debt) (deed in satisfaction of debt) (previously paid) (previously paid) $150,641.00 $271,673.96 $4,398,647.50 $150,64.1.00 $162,500.00 $4,398,647.50 48 Estimated Recovery 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 60% 100% 121201l17vI 880207 Type/Class of Claim Class 13 ~ WHKS & Co. Class 14 - Wilkerson & Hegna Class 15-GMAC Class 16 ~ Anoka County Class 17 ~ Benton County Class 18 - Olmsted County Class 19 - Sherburne County Class 20 - Priority Wage, etc. Class 21 - MBE Executory contracts Dollar Amt OfTota! CIaimslInterests -0- $75,000.00 $28,529.48 $29,813.14 $20,198.43 $16,635.19 $72,258.83 -o~ $13,743.61 $15,000.00 Total Dollar Amt ofPmts Madelto be made -0- $75,000.00 $28,529.48 $29,813.14 $20,198.43 $16,635.19 $72,258.83 -0- $13,743.61 $15,000.00 Estimated Recovery 100% 100% 100% 100% 100% 100% 100% THE AMOUNTS SET FORTH ABOVE ARE BASED ON TIIE FILED PROOFS OF CLAIM AND DO NOT CONSTITUTE AN ADMISSION BY THE DEBTOR REGARDING THE AMOUNT OR SECURED STATUS OF ANY CLAIM IN ANY CLASS. WITHOUT LIMITING OR QUALIFYING ANY OTHER RESERVATION OF RIGHTS PROVIDED FOR IN THE PLAN, THE DEBTOR RESERVES ALL RIGHT TO OBJECT TO CLAIMS, TO SEEK THE AVOIDANCE OF ANY LIEN OR OTHERWISE CHALLENGE THE SECURED STATUS OF ANY CLAIM, AND TO SEEK THE SUBORDINATION OF ANY CLAlM OR LIEN. IV. PROOFS OF CLAIMS AND OBJECTIONS TO CLAIMS In general, creditors are permitted to file proofs of claims with the Bankruptcy Court pursuant to Bankruptcy Rules 300 I or 3002. The deadline for timely filing a proof of claim for non~ governmental creditors was March 19, 2007. Certain creditors may hold or assert claims for the payment of administrative expenses of the types described in Section 503(b) of the Bankruptcy Code. Unless otherwise ordered by the Bankruptcy Court, the deadline by which administrative claims must be timely filed is thirty days after the date on which an order confirming the Plan is entered. Administrative expense claims must be asserted by motion filed and served by the deadline set forth herein. SUBJECT TO SUBSEQUENT ORDER OF TIIE BANKRUPTCY COURT, THIS INFORMATION CONSTITUTES NOTICE OF TIIE DEADLlNE FOR ASSERTING ADMINISTRATIVE EXPENSE CLAIMS. Certain creditors may have claims arising from the rejection of executory contracts or unexpired leases, whether rejected under the Plan or pursuant to a motion filed during the pendency of the Bankruptcy Case. Claims for damages arising out of such rejection must be asserted by the filing of a proof of claim within thirty days after the date on which an order confrrming the Plan is entered. Parties to executory contracts and unexpired leases that have been or may yet be rejected by the Debtor, by motion or otherwise, at or before confirmation nmst file proofs of claims for any damages from such rejection in accordance with the Bankruptcy Court's order approving such rejection, or, ifthe order does not so provide, pursuant to the terms of this 49 121201l77vl880207 paragraph. THE INFORMATION PROVIDED HEREIN CONSTITUTES NOTICE OF THE DEADLINE FOR ASSERTING CLAIMS FOR DAMAGES FROM REJECTION OF ANY EXECUTORY CONTRACT OR UNEXPIRED LEASE. V. CLAIMS OF THE DEBTOR AGAINST OTIlERS 5.1 Claims from Bankruptcy Laws - Preferences, etc. The bankruptcy laws create a number of claims and causes of action that a debtor. in-possession may pursue for the benefit of the bankruptcy estate. Among the rights of recovery that are available to a debtor.in-possession are those based on theories of preferential and fraudulent transfer. A preference is a payment or other transfer of property to or for the benefit of a creditor, before the bankruptcy case was commenced, on account of an antecedent debt, that: (I) was made while the debtor was insolvent; (2) was made within the time period(s) specified in Section 547(b)(4) of the Bankruptcy Code; and (3) enabled the creditor receiving the transfer to receive more than the creditor would receive if the case were a case under Chapter 7 of the Bankruptcy Code. When a debtor avoids a preferential transfer, the preference defendant is required to return the payment or other transfer made, and the preference defendant then ordinarily has an unsecured claim in the amount of the retwned preference. An avoidable fraudulent conveyance under the bankruptcy laws is a transfer of an interest of the debtor in property, or any obligation incurred by the debtor, that was either: (a) undertaken with actual intent to hinder, delay, or defraud any present or future creditor; or (b) a transaction under which the debtor received less than a reasonably equivalent value, and (i) the debtor was insolvent on the date the transfer was made or such obligation was incurred or became insolvent as a result of such transfer or obligation; (ii) the debtor was engaged in business or a transaction, or was about to engage in such business or transaction for which the debtor's remaining assets would be insufficient; or (iii) the debtor intended to incur or believed that it would incur debts that would be beyond the debtor's ability to pay as such debts matured. For the purposes of the Plan, the Debtor has determined that it was solvent during the 90 day period before the Filing Date, and therefore will not be pursuing any actions for the avoidance of preferences or constructively fraudulent transfers. The Debtor's conclusion regarding its solvency is expressly conditioned on confirmation of the Plan, constitutes a term of settlement with its creditors, and is not in any way binding on the Debtor in any context other than confirmation of the Plan. 5.2 Claims of or a2ainst Insiders The Debtor is unaware ohny viable claims against insiders. Richard Lewandowski, the Debtor's president and sole shareholder, has a scheduled claim in the amount of$435,000.00 against the Debtor. Mr. Lewandowski's claim arises out ofanumber of unsecured loans he has made to the Debtor and accrued and unpaid salary, and will be part of Class 1, subject, however, to the conditional subordination provision applicable to that class. 50 121201177vl 880207 5.3 Setoffs Subject to the limitations provided in Section 553 of the Bankruptcy Code, the Debtor may, but will not be required to, setoff against any claim and the payments or other distributions to be made pursuant to the Plan in respect of such claim, claims of any nature whatsoever the Debtor may have against the holder of such claim Neither the failure to setoff: nor the allowance of any claim hereunder will constitute a waiver or release by the Debtor of any such claim that the Debtor may have against such holder. VI. POST CONFIRMATION 6.1 Means for Execution 6.1.1 Plan Funding a. Exit Financing. On or before the day that is five days before the Effective Date, one or more of the Lakeland Entities will loan the Debtor the sum of $450,000 (the "Exit Loan"). The tenns of the Exit Loan will be commemorated in a promissory note including the following material terms: (i) interest will accrue at the rate often percent per annum; (ii) no payments will be due until maturity; and (Ui) the Exit Loan will mature at the same time that the Class 3E Claim matures. The Debtor's obligations under the Exit Loan will be secured by a first priority mortgage interest in the Becker Property. The proceeds of the Exit Loan will be used first to fund all of the Debtor's payment of professional fees incurred during the bankruptcy case, an amount currently projected to be approximately $150,000.00. The remainder of the Exit Loan will be used to fund ordinary operations and distributions to Class 1 Creditors. b. Claims of the Debtor. The Debtor has various claims against third parties, including, but not necessarily limited to, the following: (i) Claims under an owner's title policy issued by Fidelity National Title Insurance Company, arising out of the filing of a number of mechanics' liens; (ii) CI.aimB arising out of allegedly negligent engineering work done on property previously owned by the Debtor; and (iii) Claims arising out of commissions that were paid to a third party but not earned; and (iv) Claims arising out ofa third party's collection of amounts owing to the Debtor. In the aggregate, the Debtor estimates that it will be able to collect between $300,000 and $350,000 on account of its claims against third parties. Amounts so collected will be used flTst to pay the costs of collection, second to funding ordinary operations, and third to funding Plan payments. c. Ongoing Operations. The Debtor will continue its ordinary operations after the Effective Date. During the term of the PIan, the Debtor will be free to deal with its property without restriction, and will fund the PIan largely with the proceeds generated by the sale and refinancing of its property. As of the date of this Disclosure Statement, in addition to the sales that were the subject of pending motions for approval, the Debtor had entered into an agreement under which it would sell the Albertvillas 7 Property to an unrelated third party for the sum of 51 J21201lnvl880207 $1,025,000.00. The purchase agreement was negotiated at arms' length, and provides that the parties' obligations are subject to various contingencies, and contemplates a closing on or before March 31, 2008. If the sale closes, the Debtor will use the proceeds net of closing costs first to pay the claims secured by mortgages on the Albertvillas 7 Property, and second for ordinary operating expenses. If the sale does not close, the Debtor will consent to voluntary foreclosure of the AIbertvillas 7 Property. Attached as Exhibit B are projections of the Debtor's operations during the Plan term. The Debtor's projections assume that market conditions will improve over the term of the Plan such that by the end of2008 values will stabilize at approximately the same level at which they were in 2004. With this improvement, the Debtor will either be able to fund payments to secured creditors through a combination of sales and refinancing. The projections are based on the assumption that the current downturn will not be significantly longer than others since the Great Depression. Whether this assumption proves to be accurate depends on a nUIr!.ber of metors including tbose related to the sub-prime lending market and the diminishing strength ofthe dollar. There is substantial debate among experts on this subject, and there are some wbo contend that the slump will be considembly longer. 6.1.2 Settlement Agreement. Confirmation of the Plan will constitute Court approval of the reciprocal release and settlement of all claims that the Debtor and any of the Lakeland Entiti~s may have against each other as of the date on which an order confrrming the Plan is entered, with the exception ofthose claims specifically addressed and provided for in the Plan. Without limiting the generality of the foregoing, all of the claims and counterclaims tbat the parties have asserted or could assert in the pending adversary proceeding captioned Edina Development Corporation v. Lakeland Construction Finance, LLC, Adv. No. 06-4520 will be released, and within ten days after confirmation of the Plan the Debtor will file a notice of voluntary dismissal of such action. 6.1.3 Plan Distributions The distributions under the Plan will be made by the Debtor on tbe dates provided for in the Plan, or on such earlier dates as the Debtor, in its sole discretion, may choose. The Debtor reserves and retains the right to prepay any obligation under the Plan without penalty. Any payment or distribution required to be made Wider this Plan on a day otber than a business day will be made on the next succeeding business day, or as soon thereafter as practicable. The Debtor will not be required to make any payment or distribution on account of any disputed claim, Wltil the dispute has been resolved and then, only to the extent that the disputed claim becomes an allowed claim, whether by agreement of the parties or by final order of the Bankruptcy Court. As soon as practicable after the disputed claim is resolved by the Debtor or the parties, or allowed by agreement or final order, and subject to the terms of the Plan, the Debtor will pay and distribute to the holder of sucb allowed claim the amoWlt provided in the Plan in the manner provided in the Plan, subject to the following condition: The Debtor may choose, in the alternative, to make any additional payment or distribution to the creditor holding a previously disputed allowed claim to bring distributions on aCcoWlt of such claim current with where they would have been had the claim never been subject to objection. 52 121201 I 77vl 880207 In the event that any property to be distributed under the Plan remains unclaimed or otherwise not deliverable to a creditor entitled thereto as of the later of: (a) one year after the date on which an order confirming the Plan is entered; or (b) one hundred twenty (120) days after any distribution called for under the terms of the Plan, such property will become vested in and will be transferred and delivered to the Debtor. Unclaimed property includes, but is not limited to, checks issued pursuant to the Plan and not negotiated within ninety (90) days ofthe date such check was issued. The Debtor will withhold from any property distributed under this PIan, any amounts required to be withheld for federa~ state, or local taxes. The issuance, transfer or exchange of any of the securities issued under, or the transfer of any other property pursuant to this Plan~ or the making or delivery of an instrument of transfer under this Plan, is exempt from application of any law imposing a stamp tax, transfer tax, or other similar tax. Except as expressly stated in the Plan or otherwise allowed by a final order of the Banlo:uptcy Court, no interest, penalty, or late charge arising after the Filing Date will be allowed on any claim, regardless of whether any objection to the claim is filed and sustained. No attorneys' fees will be paid with respect to any claim except as specified in the Plan, or as allowed by a fmal order of the Bankruptcy Court. Accordingly, payments and distributions WIder the Plan will not include, provide for, or otherwise take into account any such interest, penalty, late charge, or attorneys' fees. Distributions to be made under this Plan to holders of allowed claims will be made by first class United Sates mail, postage prepaid to (a) the latest mailing address set forth in the schedules ifno proof of claim was filed with respect to such claim; or (b) to the address appearing on a proof of claim as the address to which notices should be sent if a proof of claim was filed with respect to such claim. Distributions will be deemed made as of the time they are deposited in the United States mail. Any notices related to the Plan should be addressed as follows; Edina Development Corporation Attn. Rick Lewandowski 700 Bunker Lake Blvd. Anoka, MN 55303 6.1.4 Continued Existence After the Effective Date, the Debtor will continue to exist in accordance with the applicable law in the jurisdiction in which it is incorporated and pursuant 10 its articles, bylaws, and other organization documents in effect prior to the Effective Date, except to the extent such articles, bylaws, or other organization documents are amended or modified pursuant to the Plan. The articles, bylaws, and other organizational documents will be and hereby are amended and restated as necessary to satisfy the provisions oftbe Plan and the Bankruptcy Code. After the Effective Date, the Debtor may, but will not be required to, amend or restate its articles and 53 121201177v1880207 bylaws as permitted by applicable law, provided that such amendment or restatement may not conflict with any provisions of the Plan. On the Effective Date, all actions contemplated by the Plan will be authorized and approved in all respects, and all matters provided for in the Plan involving the corporate structure of the Debtor will be deemed to have occurred and will be in effect, without any requirement of further action by the equity holders, directors, or officers of the Debtor. ~ of the date on which an order confuming the Plan is entered, the officers and directors ofthe Debtor are authorized to issue, execute, and deliver the agreements, documents, and other instruments contemplated by the Plan. Without limiting the generality ofthe foregoing, as ofthe Effective Date, the Debtor's articles will be deemed to have been amended, to the extent necessary, and as consistent with the requirements of Section 1123(a)(6) of the Bankruptcy Code, to prohibit the issuance of nonvoting securities, and to authorize the number of shares necessary to comply with the terms of the Plan. 6.1.5 Management and Compensation of Management From and after the Effective Date of the Plan, the operations of the Reorganized Debtor win be managed by the board of directors as it was constituted as of the Filing Date. In addition to his continuing role as Debtor's only director, Rick Lewandowski will continue to be the only officer of the Debtor, and will be paid an annual salary of$180,000.00 on account of his services. The Debtor reserves the right to give its officers and directors periodic raises, provided that such raises are for the limited pmpose of maintaining substantial salary unifurmity, on an adjusted dollar basis, during the term of the Plan. In light of the foregoing stated purpose for salary increases, during the term of the Plan, no increase in the salary of an officer or director will deviate substantially from the proportionate increase in the Consumer Price Index during the period between the date on which the proposed raise is to take effect and the later of: (i) the Effective Date, and (ii) the most recent date on which the officers or directors were given a raise. In addition to his salary, Mr. Lewandowski will be entitled to all of the employment-related benefIts offered to the Debtor's other full time employees. 6.1.6 Equity Structure of Reorganized Debtor From and after the Effective Date, the equity structure of the Debtor will be substantially identical to its equity structure as of the Filing Date. 6.1.7 Implementation of Plan The Plan will be implemented upon entry of an order confirming the Plan. The Plan may be modified in the manner provided for under Section 1127 of the Code. The Debtor will give notice of any proposed modification to the United States Trustee and to any other parties designated by the Court. The Debtor reserves the right to make such modifications at any hearing on confirmation as may be necessary to fucilitate confirmation of the Plan. 54 12 J 20 1117...1 880207 The Debtor's obligations under the Plan are contingent upon entry of an order confirming the Plan, and said order not being stayed, appealed, or otherwise challenged before the expiration of the applicable deadline; provided, however, that the Debtor may, in its sole discretion, choose to undertake and perform its obligations under the Plan notwithstanding the pendency of an appeal. The Debtor's obligations under the Plan are contingent upon entry of an order confirming the Plan. 6.2 Reservation of Rights, Powers and Jurisdiction 6.2.1 Rights and Powers Except as otherwise expressly provided in the Plan, the Debtor will reta~ after confumation of the Plan, full right and power to do any of the following: (a) Object to the allowance of claims; (b) Seek subordination of claims; (c) Pursue any claims against third parties, including, but not limited to those based on theories of preference, fraudulent transfer, or any other action arising under Chapter 5 oftbe Bankruptcy Code; (d) Pursue any claims and enforce any rights arising under the Bankruptcy Code in favor of a trustee or debtor-in-possession; and (e) Pursue any causes of action that the Debtor may have as of the date on which an order confirming the Plan is entered. Any and all causes of action that the Debtor may have had prior to confirmation of the Plan will survive confirmation of the Plan, will vest in the Debtor as of confirmation of the Plan, and will not be affected by confirmation or the passing of the Effective Date of the Plan, except as otherwise specifically provided in the Plan. The Debtor may object to the allowance of claims within the time period provided for in the order confirming the plan, or as otherwise dictated by order of the Court. The Debtor's authority to object to the allowance of claims will not be affected in any way by the Debtor's :fuilure to object to allowance of any claim for pmposes of voting. 6.2.2 Court Approval After confirmation of the Plan, the Debtor may, but will not required to, seek the Court's approval of any 0 f the following: (a) settlements regarding objections to claims; (b) settlements regarding claims against third parties; 55 12120lJ77vl 880207 (c) settlements regarding allowance of fees and expenses incurred by professionals employed during the pendency of the Bankruptcy Case. If the Debtor chooses to seek cowt approval of any such settlements, the Debtor will not be required to provide notice to creditors as would typically be provided during the chapter 11 case or to file and serve a motion for the approval of the settlement. Instead, the Debtor will be authorized to seek approval by filing a stipulation setting forth the material terms ofthe settlement, along with a proposed order providing for the approval of such stipulation. 6.2.3 Jurisdiction Until the Plan has been fully consummated, the court will retain jurisdiction over, and the Debtor will retain standing and the right to pursue any cause of action, proceeding, or other request for relief related to the following: (a) classification of the claims of creditors; (b) determination of the allowed amount of any claims arising before or during the pendency ofthe Bankruptcy Case; (c) subordination of the allowed claims of creditors; (d) determination of any counterclaims against any creditor, including any claim for turnover of property of the Debtor and any claim for offset of the value of the property against the claim of the creditor; (e) determination of the allowed amount of claims for damages from the rejection of executory contracts or unexpired leases; (f) determination of all issues and disputes regarding title to the assets ofthe estate and the Debtor; (g) determination of all causes of actions between the Debtor and any other party, including, but not limited to, any right of the Debtor to recover assets pursuant to the provisions of the Bankruptcy Code, and to avoid any preferential or fraudulent transfers; (h) correction of any defect, the curing of any omission or the reconciliation of any inconsistency of the Plan or the order confirming the Plan as may be necessary to carry out the purpose and intent of the Plan; (i) interpretation and enforcement of the terms of the Plan; CD shortening or extending, for cause, any time fIXed for doing any act or thing under the Plan; S6 121201177vl 880207 (k) entry of any order, including any injunction, necessary to enforce the title, rights, and powers of the Debtor; (I) entry of an order concluding and terminating the case; and (m) approval of any settlement related to any of the. foregoing. The Debtor's transfer or assignment of any interests or rights will Dot affect the Court's retention of jurisdiction to the :full extent provided herein. 6.3 Effects of Plan Confirmation 6.3.1 Binding Effect The PIan will be binding upon and inure to the benefit of the Debtor, all present and former holders of claims against, or interests in, the Debtor, and all respective successors and assigns. 6.3.2 Discharge and Injunction TO THE FULL EXTENT PROVIDED FOR IN SECTION 1141 OF THE CODE, AND ONLY TO SUCH EXTENT, CONFIRMATION OF THIS PLAN CONSTITUTES A COMPLETE DISCHARGE, W AlYER, RELEASE, AND SATISFACTION OF ALL CLAIMS AGAINST AND INTERESTS IN THE DEBTOR EXCEPT AS PROVIDED IN TInS PLAN. THE DISCHARGE WILL OPERATE TO RELEASE AND EXTINGUISH ANY PURPORTED LlENS, ENCUMBRANCES, OR SECURITY INTERESTS CLAlMED BY A CLAIMANT OR ANY OTHER ENTITY AGAINST PROPERTY OF THE DEBTOR, PROPERTY DEALT WITH BY THE PLAN, AND PROPERTY OF THE ESTATE, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE PLAN. THE ORDER CONFIRMING THE PLAN IS A GENERAL ADJUDICATION AND RESOLUTION WITH PREJUDICE OF ALL PENDING LEGAL PROCEEDINGS AGAINST THE DEBTOR, PROPERTY OF THE DEBTOR, OR PROPERTY OF THE ESTATE, EXCEPT AS OTHERWISE PROVIDED IN THE PLAN. THE DISCHARGE AND THE ORDER CONFIRMING THE PLAN OPERATE AS AN INJUNCTION TO THE EXTENT PROVIDED IN SECTION 524 OF THE BANKRUPTCY CODE, AND ONLY TO SUCH EXTENT. ANY CREDITOR OR EQUITY HOLDER ENTITLED TO RECEIVE ANY DISTRIBUTION PURSUANT TO TIllS PLAN WILL BE PRESUMED CONCLUSIVELY TO HA VB RELEASED THE DEBTOR FROM ANY CLAIM RELATED TO THAT WITH RESPECT TO WHICH THE DISTRIBUTION IS MADE. TIllS RELEASE WILL BE ENFORCEABLE AS A MATTER OF CONTRACT AGAINST ANY CREDITOR OR EQUITY HOLDER THAT ACQUIRES ANY RIGHT TO DISTRIBUTION PURSUANT TO THIS PLAN. SUBJECT TO ANY LIMITATIONS PROVIDED FOR IN THE BANKRUPTCY CODE, UNLESS A TAXING AUTHORITY HAS ASSERTED A CLAIM AGAINST THE DEBTOR BEFORE THE DEADLINE FOR FILING CLAIMS, CONFIRMATION OF THE PLAN WILL OPERATE AS A DISCHARGE OF ANY CLAIM OR LIEN OF ANY TAXING AUTHORITY 57 12J201177v1880201 AGAINST THE DEBTOR, THE EST ATE, ANY PROPERTY OF THE DEBTOR, AND ANY PROPERTY OF THE ESTATE, FOR ANY TAXES, PENALTIES, OR INfEREST: (1) FOR ANY TAX YEAR FOR A PERIOD BEFORE THE FILING DATE; (ll) ARISING OUT OF THE FAILURE OF THE DEBTOR TO FILE ANY TAX RETURN; OR (lIT) ARISING OUT OF AN AUDIT OF ANY TAX RETURN WITH RESPECT TO A PERIOD BEFORE THE FILING DATE. 6.3.3 Re- Vesting Subject to the terms of the Plan, on the date that the order confirming the Plan is entered, the Debtor will be restored to full ownership of all property owned by the Debtor, all property of the estate, and all property dealt with by the Plan. The property so vested in the Debtor will be free" and clear of all claims, liens, encumbrances, charges, and other interests of holders of claims or interests, except as otherwise provided in the Plan. On and after the date on which the order confirming the Plan is entered, the Debtor may freely operate its business and may freely use, acquire, and dispose of property of the estate and property of the Debtor, except as otherwise provided in the Plan. Except as may otherwise be expressly provided for in the Plan or by order of the Court, the Debtor's operation of its business and use of property will not be subject to any restrictions imposed by operation of the Bankruptcy Code, the Bankruptcy Rules, or any prior Bankruptcy Court order entered dwing the banlauptcy case. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN The following is intended only as a summary of potential material Federal income tax consequences of the Plan. Neither this swnmary nor any other information provided herein should be construed to be the opinion of the Debtor or the Debtor's counsel for purposes of tax planning or reporting by any creditor or other party in interest. Neither the IRS nor any other taxing authority has participated in the preparation of these materials, and this discussion of tax consequences is not binding on the IRS or any other taxing authority. Confirmation and performance according to the terms of the Plan may result in certain creditors having reportable loss or gain for purposes of Federal income taxes. Whether a given creditor will have gain or loss will depend on a number of factors, including, but not limited to, the following: (i) whether the creditor's claim arises out of a transaction that was of a personal rather than a business nature; (ii) the tax basis of the creditor's claim; and (ill) the degree to which the creditor may be able to claim that the value of a particular claim is affected by the Plan. With respect to the Debtor, the most significant potential tax consequence of the Plan would be that certain tax attributes, including, but not limited to, net operating losses, certain tax credits, and the Debtor's basis in property, could be reduced to the extent that debt is discharged. The Debtor has not determined what, if any, tax consequences it will experience by reason of the Plan. The foregoing discussion does not constitute tax advice, and is only intended to provide a summary of certain material tax issues that each creditor might consider in deciding how to vote on the Plan. The tax consequences for any particular creditor or other party in interest will 58 121201177vl880207 necessarily involve a large number of variables, and the Debtor therefore makes no representations as to the specific tax implications for any creditor. Creditors and other parties in interest are therefore strongly urged to seek professional advice regarding the tax. consequences of the Plan. PURSUANT TO U$. TREASURY REGULATIONS, PLEASE BE ADVISED THAT ANY U.S. FEDERAL TAX ADVICE INCLUDED IN THIS COMMUNICATION (1) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, TO AVOID ANY U.S. FEDERAL TAX PENALTIES, AND (2) IS PROVIDED TO SUPPORT THE PROMOTION OR MARKETING OF THE PLAN. ANY TAXPAYER RECEIVING TllIS COMMUNICATION SHOULD SEEK ADVICE FROM AN INDEPENDENT TAX ADVISOR. VII. ALTERNATIVES TO THE PLAN OF REORGANIZATION One alternative to confinnation of the Plan is conversion of the reorganization case to a liquidation case under Chapter 7 of the Bankruptcy Code. In liquidation, all ofthe Debtor's assets would be used first to satisfy claims held by secured creditors, and the unsecured creditors would receive a distribution only if assets were available after payment of secured claims, priority claims} administrative expense claims, and taxes incurred as a result of liquidation. The Debtor's liquidation analysis, summarized in the attached Exhibit C, shows the values of the assets based on the most recent balance sheet, adjustments to those values, and the estimated value upon liquidation. Given the current state of the market for real property of the sort at issue in this case, the Debtor does not believe that any particular sale that might occur in the context of a general liquidation would result in any significant revenue in excess of allowed secured claims that would have to be paid out of the proceeds of the sale. While the sale of some of its smaller parcels might generate revenues that would be available for payment of unsecured claims, the Debtor believes that liquidation of the larger properties could give rise to deficiency claims of such a magnitude that the ultimate distribution to creditors with general unsecured claims under this Plan would be much lower in liquidation. Furthermore, the Exit Loan would not be available in the event of liquidation, and unsecured creditors, of course, would not enjoy any of the benefits of such loan as they will under the Plan. vm. CONFIRMATION STANDARDS Before confirmation, the Court must determine whether the Plan has been accepted by the holders of claims in each impaired class. For a class of claims to accept the Plan. an affirmative vote must be cast by creditors holding at least two thirds in amount and more than fifty percent in number of allowed claims. For a class of interests to accept the Pian, an affrrmative vote of at least two thirds in amount of allowed interests must be cast by those who vote. In the event that one or more impaired classes reject the Plan, the Bankruptcy Court may nevertheless confrrm the Plan if it finds that the Plan meets the requirements of 11 U.S.C. ~ 1129(a) other than (a)(8) and also accords fair and equitable treatment to the rejecting classes. Generally, this means that, pursuant to 11 US.C. ~ I 129(b). the Plan may be confirmed even if 59 121201l77v1880201 12/14/2007 FRI 14:01 FAX 7633231245 M~ Homebuilders 12/14/2007 FRI 11:22 FAX 7633231245 MI HomebUilders i?i RiQK ~ewandowsK~ . . . . ., .. .. '. ...... . . . ~ 0031003 IS! UU~/UU4 . ". ." ona or more claSSe$ ofeldms or interests rejects the PIau. so IODg.$ the Plan provides that (J) each holder of 8 claim or intet~st in. rejeoting cl<\ss receives the v.duc oflhat cJairn or interes:ti or (2) no holder of 8 claim or interest junior to those held by members of 1l1'eJecting cJaf~ will receive or retain an)' property under tho PlllQ. The Dobtor henlby specifically reserves the tight to ~I:k confirmation ot'the 'Plan pul'S\U1J1t to Section 112~(b} of the BllnkruptCY Code. IX. CONCLUSION Tho Debtor believes that 8CCeptlLl1Qe of the Plu is in tho best interest of all parties and theret'ore- l.1!ges aU holder~ of t:Iaims and interest;: to vote in favor ofthe Plan. Dated: December 14. 2007 EDlNADEVELOFMBNT CORPORATION t L~ lticJlard Lewandowski Its :Pr.e!:ident HINSHAW & CULBERTSON UP By: lei TbOlTl&Il G, Wallrieh ThODUlS G. W-.llrioh (213354) loeI D. Nessel (03047SX) 333 Soulb Seventh. Street Suits 2000 Minneapolis,.MN 5S4C2 (612) 333-3434 Attorneys for Edine. Oevelopmont Corporll.tion 60 12120117M U0Z(I7 l"d llS9 'oN W~H:l IOfil 'vI 'HO EXlDBIT A - SCHEDULE OF EXECUTORY CONTRACTS The Debtor is party to the contracts described below. To the extent that they are executory contracts, the contracts specified will be assumed or rejected on the terms described below. Elan Leasing Services - Equipment Leases The Debtor and Elan Leasing Services ("Elan") are parties to the following equipment leases (the "Elan Leases"): Lease commencing on April 7, 2005. under which the Debtor agreed to pay $38.50 per month for 36 months for the use of a Inspiron 6000D Processor supplied by Dell; Lease commencing on April 7, 2005, under which the Debtor agreed to pay $77.00 per month for 36 months for the use of two Inspiron 60000 Processors supplied by Dell; Lease commencing on October 15,2005. under which the Debtor agreed to pay $624.25 per month for 36 months for the use ofa 2004 Q4 Server and Email Project supplied by Intuit; and Lease commencing on January 21, 2005, under which the Debtor agreed to pay $244.17 per month for 36 months for the use of 4 Optiplex OX 2080s supplied by Dell. All of the Elan Leases provide that the Debtor may purchase the equipment being leased for one dollar after all ofthe regular lease payments have been made. Elan will have the option under the Plan of either of the two alternative forms of treatment described below: Elan Option 1: Under Elan Option I, the Debtor will reject the Elan Leases, with such rejection being effective as of the Effective Date. At the time of rejection, the Debtor will and make all of the equipment that is the subject of those leases available for retrieval by Elan. Elan Option 2: Under Elan Option 2, Elan will consent to the Debtor's assumption of the Elan Leases and contemporaneous modification of their tenns such that the Debtor will be deemed to have satisfied all of its obligations arising out of or related to the Elan Leases upon its payment to Elan of the sum of $5,000.00 on the Effective Date. Without limiting the generality of the foregoing, the Debtor's payment of the prescribed amoWlt will be in full and final satisfaction of all cure <>bligations, all future installments of rent and other charges accruing during the term of the leases, and obligations associated with the exercise of the purchase option under the leases, and upon such payment to Elan all of the equipment that is the subject oftbe Elan Leases will vest in the Debtor free and clear of all liens and other interests. 12]20] 177vl 880207 Ikon Financial Services - Equipment Lease The Debtor and Ikon Financial Services are parties to a LeMe Agreement dated December 16, 2004 (the "Ikon Lease''), under which the Debtor agreed to pay $170.00 per month for 36 months for the use of a Savin 3515F copier. The Ikon Lease provides that, after the initial term, it will renew on the same material terms for one month periods until either party gives notice. Ikon will have the option under the Plan of either of the two alternative forms of treatment described below: Ikon Option 1: Under Ikon Option I, the Debtor will reject the Ikon Lease, with such rejection being effective as of the Effective Date. At the time of rejection, the Debtor will and make all of the equipment that is the subject of those leases available for retrieval by Ikon. Ikon Option 2: Under Ikon Option 2, Ikon will consent to the Debtor's assumption of the Ikon Lease and contemporaneous modification of their terms such that a purchase option will be granted to the Debtor and the Debtor will be deemed to have satisfied all of its obligations arising out of or related to the Ikon Lease upon its payment to Ikon of the sum of $41000.00 on the Effective Date. Without limiting the generality of the foregoing, the Debtor's payment of the prescribed amount will be in full and final satisfaction of all cure obligations, all future installments of rent and other charges accming during the term of the lease, and obligations associated with the exercise of the purchase option under the lease, and upon such payment to Ikon all of the equipment that is the subject ofthe Ikon Lease wiu vest in the Debtor:free and clear of all liens and other interests. IOS Capital- Equipment Lease The Debtor and Ikon Financial Services are parties to a Lease Agreement dated April 1, 2004 (the "IOS Lease''), under which the Debtor agreed to pay $302.00 per month for 48 months for the use of an Image Runner 3300 copier. The lOS Lease provides that, after the initial term, it will renew on the same material terms for one month periods until either party gives notice. 108 will have the option under the Plan of either of the two alternative forms of treatment described below: IOS Option 1: Under 10S Option I, the Debtor will reject the 10S Lease, with such rejection being effective as ofthe Effective Date. At the time of rejection, the Debtor will and make all of the equipment that is the subject of those leases available for retrieval by 10S. IDS Option 2: Under IOS Option 2, 10S will consent to the Debtor's assumption of the IOS Lease and contemporaneous modification of their terms such that a purchase option will be granted to the Debtor and the Debtor will be deemed to have satisfied all 0 f its obligations arising out of or related to the 10S Lease upon its payment to IOS of the sum of$6,ooO.00 on the Effective Date. Without limiting the generality of the foregoing, the Debtor's payment of the prescribed amount will be in full and final satisfaction of all cure obligations, aU future installments of rent and other charges accming during the term of the lease, and obligations 2 121201l77vl 880207 associated with the exercise of the purchase option under the lease, and upon such payment to IOS all of the equipment that is the subject of the IOS Lease will vest in the Debtor free and clear of a1lliens and other interests. City of Cannon Falls - Development Contract The Debtor and the city of Cannon Falls, a Minnesota municipal corporation. are parties to that certain Development Contract dated July 28,2003, by which the parties agreed on terms related to a real estate development known as Sandstone Ridge. In May, 2005, the Debtor deeded the subject real property to another entity under common ownership with the Debtor. After the Filing Date, Lakeland foreclosed its mortgage on the real property. The Debtor will reject the Development Contract. 3 121201177vl 880207 Exhibit B Statement of Cash Flow 2008-2012 20D8 2D09 2010 2011 2012 Total Cash Avalable or Short 2358521 4378291.56 4375148.12 5452554.68 Proceeds from sale or refinancing, net Blaine Properly 792000 9000000 27000000 36792000 Becker Property 0 1845000 1845000 Balder Property Sam Montgomery 225000 225000 Haven Property 8316000 648000 5103000 14067000 A1berMIe 7th 922500 922500 Weckerling Acres 567900 567900 Hanjo Farms 371250 371250 Ranis 63000 67000 70000 73000 35000 308000 LakBland Loan effective data 450000 450000 Commissions Earned 1243500 12nOOO 567000 '3000000 6087500 Total Proceeds 12951150 12837000 70000 5743000 30035000 61636150 0 paymsnts on Mortgages 0 Total of Lakeland Haven Notes 7484400 583200 0 4592700 0 12660300 Total of Lakeland Blene Notes 712600 8100000 0 0 27979200 36792000 Class 3E 0 1570141 0 0 0 1570141 Lakeland 450,000 exit loan 490500 490500 Class 5 RPB Falrway& 54124 54124 54124 54124 556051 Class 6 Contrectors Capital 249799 249799 Class 7 HASSLERS 295554 295554 Class 8 S&C 313979 313979 Clasa9 C F DEED 90000 90000 Cless 10 BALDER. SAM MONT 150641 150641 Class 11 Meritt HAGE 162500 162500 Class 12 SONIC 0 Class 13WHKS 0 Class 14 W & H 75000 75000 Class 15 GMAC 28529 Class 16 ANOKA CITY 3279.43 3279.43 3279.43 3279.43 13117.72 Class 17 BENTON 2221.78 2221.78 2221.78 2221.78 8887.12 Class 18 OLMSTED 1629.85 1829.85 1829.65 1829.85 7319.4 Class 19 SHERBURNE 7948.38 7948.38 794a38 7948.38 31793.52 Class 20 PRIORTY CLAIMS 16538 16538 Class 21 GOV'T CLAIMS PRE 0 ADMINISTRATIVE CLAIMS 30000 30000 PROFESSIONAl FEES 150000 150000 US TRUSTEE FEES 1000 1000 OTHER ADMINISTRATIVE 0 UNEXPIRED LEASES 15000 15000 OTHER ADMINISTRATIVE 0 MBE 3985 3740 3490 3245 14460 Total Mortgage. 10592629 10817229.44 73143.44 4665593.44 28051848.44 54200443.8 0 Cash Available or Short 2358521 4378292 4375148 5452555 74357.06 7435706 121201l77v1880207 Exhibit C - Liquidation Analysis Property Book Value4 Liquidation Secured Debt' Net Proceeds Values Blaine $33,000,000 $10,500,000 $37,480,300 - Haven $23,520,000 $7.100.000 $12,632,039 - Becker $5,720,000 $3,150,000 $5,459,640 - Rollin~ Woods $1,260,000 $193,500 $470.606 - AlbertwiL1as 6 $2,158,932 $1,100,000 $1,680,144 - Albertvillas 7 $1,500,000 $700,000 $887,864 - Weckerling $990,000 $523,000 $593,571 - Acres Balder $330,000 $200,000 $150,641 $49,359 RBP (Fairways) $1,150,000 $460,000 $556,051 - Other $109,400 $50,000 - $50,000 Total Net Proceeds: $99,359.00 $150,000.00 Less Administrative Expenses: Available fOT Unsecured Creditors: - 4 The book value for Blaine is based on assumed value in peak market conditions. The book values for Haven, Rolling Woods, AlbertviIlas 6, Albertvillas 7, Balder, and RBP are based on comparable sales in peak market conditions. The book value for Cox is based on the Debtor's most recent appraisal. The book value for Weckerling Acres is based on a broker's price opinion. 5 The liquidation values for Blaine, Haven, Cox, Rolling Woods, Albertvillas 6, and Albertvillas 7 are equal to the appraised values as alleged in the Lakeland Entities' June 8, 2007 motion for relief from the automatic stay. The liquidation value ofWeckerling Acres is that alleged in Contractor Capital's October 1, 2007 lift stay motion. The remainder of the liquidation values are based on an assumption that the relation of liquidation value to book value is approximately the same for all properties. 6 Total secured debt figures do not include judgment liens, mechanics' liens, or liens real estate taxes. The liens may be summarized as follows: (a) Blaine: Security for classes 2B, 2C, 2Et 2F, 2G, 2H, 3C, 3D, 3F, 3G, and 3K.; (b) Haven: Security for classes 2A, 2D, 3A, 3B, and 4; (c) Becker: Security for class 3E; (d) Rolling Woods: Security for class 3H; (e) Albertvillas 6: Security for class 31 (frrst priority) and 14; (t) Albertvillas 7: Security for class 3J; (g) Wecker ling Acres: Security for classes 6 (first priority) and 7; (h) Balder: Security for class 10; (i) RBP: Security for class 5. 121201177vl 880207 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: Edina Development Corporation ~~...... <?~. O~ ~l\ ."'1'; Affidavit of Mailing ) 6><,~ ~.() Debtor: Chapter 11 Case: Case No. BKY 06-42532 STATE OF MINNESOTA COUNTY OF Hennepin ) ) ) I, Amy E. Kulbeik , hereby declare: That I am employed by Hinshaw & Culbertson LLP in-possession named above; , the attorney for the debtor- And that on the ---1LDay of December, 2007 , true and correct copies conformed to the original of the confirmation hearing Notice and Order dated December 17,2007 , a Ballot con- forming to the official form, the final Plan as filed or as modified dated December 14, 2007 , and the final Disclosure Statement as filed or as amended and approved by the court dated December 14, 2007 , were placed by me in individual envelopes with the First Class Mail postage prepaid affixed thereto or imprinted thereon; that said envelopes were addressed individually to each ofthe entities named hereinafter at their last known addresses; and that said envelopes were sealed and on the day aforesaid were placed in the United States mails at Mpls , Minnesota, to; 1. All creditors of debtor, as named in and at the address stated in the creditors' mailing matrix filed in this case consisting of 6 pages; 2. (Strike ifnot applicable) All equity security holders of the debtor, consisting of holders, being the 'holders of record as disclosed by the appropriate records of the debtor or transfer agent of the debtor for the transfer of interests held by such holders; 3. The United States Trustee, United States Attorney, IRS District Counsel, IRS District Director, Securities and Exchange Commission if debtor is a corporation, and the Tax Compliance Division of the Minnesota Department of Revenue; and 4. The debtor, debtor's attorney, trustee or examiner if any, the attorney for and each member of every appointed official committee, any creditor who has requested notice under Rule 2002(i), and any attorney who has filed a notice of appearance under Rule 90l0(b). I declare under penalty of perjury that the foregoing is true and correct. ~ IUlQJ;)JVL Executed on: ~ 8/22/85; 07/07/97 Lakeland Construction Finance, LLC c/o Joel A. Hilgendorf Hellmuth & Johnson P A 10400 Viking Drive Suite 560 Eden Prairie, MN 55344 Anderson Engineering ofMN, LLC Thomas J. Lallier Foley & Mansfield, PLLP 250 Marquette Avenue Suite 1200 Minneapolis, MN 55401 Waitt Family Foundation c/o Joel A. Hilgendorf Hellmuth & Johnson PLLC 10400 Viking Drive #500 Eden Prairie, MN 55344 US Federal Credit Union Jeffery A. Mintz Wendland, Utz, Stahl & Mintz, Ltd. 21 First Street SW Suite 300 Rochester, MN 55041 S.J. Louis Construction, Inc. c/o Ryan J. Hatton Rinke-Noonan 1015 West St. Germain Street Suite 300 St. Cloud, MN 56302 LCF Development LLC c/o Joel A. Hilgendorf Hellmuth & Johnson P A 10400 Viking Drive Suite 560 Eden Prairie, MN 55344 Greg Reigel Reigel & Associates, Ltd. 921 Main Street Hopkins, MN 55343 RBP Housing, LLC c/o Gary I. Syverson 710 Broadway P.O. Box 787 Alexandria, MN 56308 Michael and Laurie Hassler 13006 New Haven Road NW Pine Island, MN 55963-9438 Merritt Hage c/o David Hoiland 120 South Sixth Street # 1100 Minneapolis, MN 55402 " US Federal Credit Union c/o David C. Anastasi Anastasi & Associates, P.A. 14985 60th Street North Stillwater, MN 55082 Sonic Financial c/o Richard C. Salmen Felhaber, Larson, Fenlon & Vogt, P.A. 220 South Sixth Suite Suite 2200 Minneapolis, MN 55402 Contractors Capital Corporation c/o Ryan J. Trucke Brutlag, Hartmann & Okoneski, P.A. 200 South Sixth Street 1100 U.S. Bank Plaza Minneapolis, MN 55402 Michael and Laurie Hassler c/o James P. Ryan Ryan & Grinde, Ltd. 407 14th Street NW P.O. Box 6667 Rochester, MN 55903-6667 M&I Marshall & Ilsley Bank c/o Matthew R. Burton Leonard, O'Brien, Spencer, Gale, Sayre, Ltd. 100 South Fifth Street Suite 2500 Minneapolis, MN 55402 121201360vl 880207 Kuechle Underground, Inc. Bankruptcy Administration Franklin Outdoor Advertising c/o Aaron A. Dean IKON Financial Services Co. Fabyanske, Westra, Hart & 1738 Bass Road c/o John R. Stoebner Thomson, P.A. P.O. Box 13708 Lapp, Libra, Thomson, 800 LaSalle Avenue Macon, GA 31208-3708 Stoebner & Pusch, Chartered Suite 1900 120 South 6th Street Minneapolis, MN 55402 Suite 2500 Minneapolis, MN 55402 E&H Enterprises of S&C Bank Henson & Efron, P.A. Alexandria, Inc. d/b/a William P. Wassweiler 220 South Sixth Street Ellingson Plumbing, Heating Lindquist & Vennum, PLLP Suite 1800 & AlC, c/o Scott T. Johnston 80 South 8th Street, Suite 4200 Minneapolis, MN 55402-4503 Johnston Law Office Minneapolis, MN 55402 Easton Place 510 22nd A venue East Suite 101 P.O. Box 1218 Alexandria, MN 56308 Franklin Outdoor Advertising Laurie Hassler Merritt Hage P.O. Box 188 13006 Newhaven Road NW 110 Regan Lane 20092 Edison Circle East Pine Island, MN 55963-9438 #305 Clearwater, MN 55320-1632 Osseo, M 5569-1065 RBP Housing, LLC Sam R. Montgomery Anoka County P.O. Box 535 4295 Shorewood Trail 2100 3rd Ave Morris, MN 56267-0535 Medina, MN 55340-9376 Anoka, MN 55303 Aquila Bakke Norman, SC Benton County 2665 145th Street W. 2919 Schneider Avenue 531 Dewey Street PO Box 455 P.O. Box 280 PO Box 129 Rosemount, MN 55068 Menomonie, WI 54751 Foley, MN 56329-0129 Berglund and Baumgartner, BP Pipelines Cedar Corporation LTD 980 Berwood Ave. 604 Wilson Ave. 2140 Fourth Ave. N. St. Paul, MN 55126 Menomonie, WI 54751 Anoka, MN 55303 Center Point Energy Central MN Builders Assoc. CITY OF ALBERTVILLE PO Box 1144 1124 W. St. Germain St. C/O IVERSON REUVERS Minneapolis, MN 55440 St. Cloud, MN 56301 9321 ENSIGN AVE S BLOOMINGTON MN 55438 City of Albertville City of Pine Island City of St. Cloud 5964 Main Ave. PO Box 1000 400 South 2nd St. 2 121201360vl 880207 Albertville, MN 55301 Pine Island, MN 55963 St. Cloud, MN 56301 Continental Great Sign Contractors Capital Contractors Capital 1300 Old Highway 8 17316 Kenyon Ave. W. 1248 5th Ave. New Brighton, MN 55112 Lakeville, MN 55044 Anoka, MN 55330 Coyote Moon Dean's Outdoor Services Domain Name Registry 480 55th Ave. SE 500 N. Main 2316 Delaware Ave. #226 St. Cloud, MN 56304 Pine Island, MN 55963 Buffalo, NY 14216 Doucettes Landscaping Duane Strand Dunlap & Seeger, PA and Contracting 12655 85th St. PO Box 549 16401 Ramsey Lane Foley, MN 56329 Rochester, MN 55903 Little Falls, MN 56345 Dunn County E & H Enterprises of EG Rud & Sons, Inc. 800 Wilson Ave Alexandria, Inc., 6776 LAKE DR NE Fll 0 Menomonie, WI 54751 dba Ellingson Plumbing LINO LAKES MN 50014 Heating & AlC 2510 Broadway Street Alexandria, Minnesota 56308 EG Rud & Sons, Inc. Elan Leasing Services ELAN LEASING SERVICES 9180 Lexington Ave. NE Two Appletree Square 1310 MADRID ST STE 106 Circle Pines, MN 55014 Suite 325 MARSHALL MN 56258 Minneapolis, MN 55425 Elements, Inc. Erosion Works, Inc. Finance & Commerce 10044 Flanders Court NE 18140 Zane St. 730 2nd Ave. S. Suite 100 Elk River, MN 55330 Minneapolis, MN 55402 Blaine, MN 55449 Fredrikson & Byron GMAC GMAC 200 South 6th St. PO BOX 130424 5700 Crooks Road #4000 ROSEVILLE MN 55113 Troy, MI 48098 Minneapolis, MN 55402 Goodhue County Hanjo Farms-CFD Henry Construction 509 W. 5th Street 1758 190th Street 6633 115th Ave. NE Red Wing, MN 55066 Centuria, WI 54824 Foley, MN 56329 Huber Court Reporting Independent Testing Tech Jake Lewandowski 204 Wilson Ave. NE PO Box 325 5540 Highland Trail St. Cloud, MN 56304 Waite Park, MN 56387 Big Lake, MN 55309 JOHN J DIERBECK John Oliver and Assoc. Kermit Gilyard CONSULTANT 580 Dodge Ave. 18605 325th Ave 252 S COVE ROAD 3 121201360vl 880207 HUDSON WI 54016 Elk River, MN 55330 Princeton, MN 55371 Kjolhaug Environmental Svcs Krause Masonry Krause Masonry 26105 Wild Rose Lane 30 Jefferson Dr. 705 4th Street Shoreview, MN 55331 Zumbrota, MN 55992 Zumbrota, MN 55992 Kuechle Underground Lakeland Construction Lanee Lewandowski 20 Main St. N. 830 Blue Gentian Rd. 2670 40th Street PO Box 509 Eagan, MN 55121 Buffalo, MN 55313 Kimball, MN 55353 Larkin Hoffman Daly & Listingcorp.com Lot Surveys Co. Inc. Lindgren 305 W. Broadway Ave. 7601 73rd Ave. N. 1500 Wells Fargo Plaza Suite 118 Minneapolis, MN 55428 7900 Xerxes Ave. S. NY, NY 10013 Mpls, MN 55431-1194 Lowertown Advertising Lowertown Advertising Luann R. Jones, Inc. 287 E. 6th St. 509 Sibley St. 3416 Longfellow Ave. S. St. Paul, MN 55101 Suite 650 Minneapolis, MN 55407 St. Paul, MN 55101 Lurie Besikof Lapidus & Co. Main Motors Marx Tree Trimming Svc 2501 Wayzata Blvd. 435 W. Main St. 100 Frontage Rd E Minneapolis, MN 55405 Anoka, MN 56303 Pine Island, MN 55963 MBE Inc. McCombs Frank Roos Assoc. Mel & Diane Maves PO Box 1056 14800 28th Ave N. E6004 51 Oth Ave. 530 River St. S. Plymouth, MN 55447 Menomonie, WI 54751 Delano, MN 55328 Merrit Hage MERRITT HAGE Michael McCarthy 850 84th Lane NW 110 REGAN LN STE 305 7100 Riverview Terrace NE Coon Rapids, MN 55433 OSSEO MN 55369 Fridley, MN 55432 Midwest Landscapes Midwest Landscapes Mike and Carol Murphy 6221 Oakwood Ave. NE 15050 93rd Ave. N. 5359 Nottingham Road Otsego, MN 55330 Maple Grove, MN 55369 North Branch, MN 55056 MM Home Builders New Home Sales Coach New Look Contracting 700 Bunker Lake Blvd. 8420 153rd Place 19696 County Rd. 72 Anoka, MN 55303 Savage, MN 55378 Elk River, MN 55330 Olmsted County Peterson Fram & Bergman Pinnacle Engineering 151 4th Street SE 55 E. Fifth St. 101 Broadway St. W. Rochester, MN 55904 Suite 800 Suite 100 St. Paul, MN 55101 Minneapolis, MN 55369 4 121201360vl 880207 Pinnacle Engineering Plowe Engineering Plowe Engineering 11541 95th Ave. N. 9180 Lexington Ave NE 6776 LAKE DRIVE NE STE Osseo, MN 55369 Circle Pines, MN 55014 110 LINO LAKES MN 55014 Popp.com PR Advantage Precision Lawn Irrigation & PO Box 27110 1034 33rd St. S. Landscaping Golden Valley, MN 55427 St. Cloud, MN 56301 Eric Moore 1016 Water Ave S. Sauk Rapids, MN 56379 Pro Courier Property Source RBP Housing, LLC 8375 Sunset Rd. NE PO Box 431 P.O. Box 535 Minneapolis, MN 55432 Brainerd, MN 56401-0431 Morris, MN 56267 Regal Film and Video Richard 1. Lewandowski Riley Brothers Co. 400 E. St. Germain Street 700 Bunker Lake Blvd. 46369 208th Street Suite 250 Anoka, MN 55303 Morris, MN 56267 St. Cloud, MN 56304 Riverview Community Bank Rochester Service Co. Ruhland Commercial 9040 Quaday Ave. NE 2150 Schuster Lane NW Consultants Otsego, MN 55330 Rochester, MN 55901 14 N. 7th Ave. St. Cloud, MN 56303 Ryan and Grinde, Ltd. S&CBank Sam Montegomery Wayne Mehrkens PO BOX 10 4295 Shorewood Trail 407 14th St. NW 100 Mill Street Medina, MN 55340 Rochester, MN 55903 Balsam Lake, WI 54810 Schumacher Excavating, Inc. Shamrock Enterprises Sherburne County 155770440 St. 6415 Bandel Rd. NW 13880 Highway 10 Zumbrota, MN 55992 Rochester, MN 55901 Elk River, MN 55330 SJ Louis Construction SJ Louis Construction SJ Louis Construction 3032 CountyRd 138 PO Box 1497 PO Box 1373 Waite Park, MN 56387 St. Cloud, MN 56302 St. Cloud, MN 56302 Sonic Financial St. Cloud Area St. Cloud Sprinkler Co., Inc. Alliance Bank Chamber of Commerce 1727 75th Ave. S. 120 Town Sq. 444 Cedar St. PO BOx 487 St. Cloud, MN 56301 St. Paul, MN 55110 St. Cloud, MN 56302 St. Cloud Times STATE OF MN DEPT OF Stock Building Supply 3000 7th Street North REVENUE 915 Yankee Doodle Rd. St. Cloud, MN 56303 PO BOX 64447 Eagan, MN 55121 BKY SEe 5 121201360vl 880207 ST PAUL MN 55164-0447 STS Consultants, Inc. SYNERGY RESOURCES T &J Concrete and Masonry 10900 73rd Ave. N., Suite 150 ATTN CORPORATE 17720 Highway 65 NE Maple Grove, MN 55369 ATTORNEY Ham Lake, MN 55304 1310 MADRID ST STE 100 MARSHALL MN 56258 TNT Seeding US Federal Waste Management 1202 6th Ave SE St. 1400 Riverwood Dr. PO Box 609 Stephen, MN 56375 Bumsville, MN 55337 Winstead, MN 55395 WHKS & Co. Wilkerson & Hegna Wright County 2905 South Broadway 7300 Metro Blvd. 10 2nd Street NW Rochester, MN 55904-5515 Suite 300 Room 240 Edina, MN 55439 Buffalo, MN 55313 Xcel Energy US Attorney Internal Revenue Service 800 Interchange W 300 South Fourth Street STOP 5700 435 Ford Road #600 30 E. ih Street Minneapolis, MN 55426 Minneapolis, MN 55415 Suite No. 1222 St. Paul, MN 55101 District Counsel of IRS MN Dept. of Revenue U.S. Trustee 650 Galtier Plaza Bankruptcy Section U.S. Courthouse, Suite 1015 380 Jackson Street P.O. Box 64447 300 South Fourth Street St. Paul, MN 55101 St. Paul, MN 55164-0447 Minneapolis, MN 55415 District Director of IRS 30 East ih Street Stop 1000 Suite 1222 St. Paul, MN 55101 Edina Development Corporation 700 Bunker Lake Road Anoka, MN 55303-5014 Securities and Exchange Commission Merri Jo Gillette, Regional Director 175 W. Jackson Boulevard Suite 900 Chicago, IL 60604 6 121201360vl 880207 STATE OF MINNESOTA COUNTY OF WRIGHT DISTRICT COURT TENTH JUDICIAL DISTRICT Other Civil- Breach of Contract City of Albertville, Minnesota, Court File No. C9-0S-2481 Plaintiff Edina Development Corporation CITY OF ALBERTVILLE'S ANSWERS TO DEFENDANT'S ENTERROGATO~ES vs. Defendant. TO: Mr. Kyle Hegna, Wilkerson & Hegna, P .L.L.P., One Corporate Center III, Suite 300, 7300 Metro Boulevard, Edina, MN 55439-2302 1. Identify every person who you believe has knowledge of any facts or issues which are in any way connected to this action and for each such person provide a general statement of his or her area of knowledge. ANSWER: The City objects to this interrogatory as overly broad, and unduly oppressive and burdensome. Notwithstanding said objection, the City answers as follows: Linda Goeb Larry Kruse, City of Albertville, 5975 Main Ave. N.E., Albertville, Minnesota 55301 Tina Lannes, City of Albertville, 5975 Main Ave. N.E., Albertville, Minnesota 55301 Bridget Miller, City of Albertville, 5975 Main Ave. N.E., Albertville, Minnesota 55301 Pete Carlson, SEH Colorado Center Tower One, Suite 6000, 2000 S. Colorado Boulevard, Denver, CO 80222 Bob Moberg, SEH, 3535 Vadnais Center Drive, St. Paul, MN 55110 651-491-2000 Russ Bly, SEH, 3535 Vadnais Center Drive, St. Paul, MN 55110 651-491-2000 1 Mike Czech, 8EH, 3535 Vadnais Center Drive, 81. Paul, MN 55110 651-491-2000 Deric Deuschle" SEH, 3535 Vadnais Center Drive, 81. Paul,MN 55110 651-491-2000 2. Identify by author, date, and subject matter, all statements (as the term "statement" is defined in Minn. R. Civ. P. Rule 26.02) made by any person concerning the subject matter of this lawsuit or concerning the parties' claims or defenses. ANSWER: No such statements have been made to date. 3. Identify any and all persons whom you intend to call as witness in this matter. ANSWER: Linda Goeb Larry Kruse Pete Carlson Russ Bly Mike Czech Bob Moberg Tina Lannes Bridget Miller 4. Have you employed, or do you intend to employ, experts to furnish their opinions regarding any matter involved in this lawsuit? If so, identify and describe in detail: a. The name and address of each expert you expect to consult or call at trial; ANSWER: To the extent that the witnesses identified in answer number 3 above may be experts in their respective fields, they may be called to testify. No other experts have been identified to date, but Plaintiff reserves the right to name additional experts as the need may be identified. 2 b. The subject matter on which each expert is expected to testify; ANSWER: Pete Carlson, Bob Moberg and Russ Bly, civil engineering and services related thereto. Tina Lannes, city finance operations. c. The substance of the facts and opinions to which each expert is expected to testify; ANSWER: The scope of their expected expert testimony is not known at this time. d. A separate summary of the grounds for each opinion to be given by each expert; ANSWER: The scope of their expected expert testimony is not known at this time. e. All documents reviewed or relied upon by the expert in regard to the expert's opinions; and ANSWER: No such documents have yet been identified as the scope of their expected expert testimony is not known at this time. f. The expert's curriculum vitae. ANSWER: These documents will be made available with the production of documents. 5. Identify any and all communications between you and Defendant concerning the parties' City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's "Development Agreements") or the June 20, 2005 Amended Wetland Mitigation Agreement, and provide and/or identify: (a) The date of the communications; 3 (b) To whom the communications were directed; (c) All documents related to any communications between Defendant and yourself regarding the development work under the Development Agreements or the June 20, 2005 Amended Wetland Mitigation Agreement Joint Development Agreement; and (d) Identify all persons with knowledge of such communications. ANSWER: The City objects to this interrogatory as overly broad, and unduly oppressive and burdensome. Notwithstanding said objection, the City answers as follows: All such written communication between the City and Defendant will be produced in document production. Oral communication has occurred throughout the development process on hundreds of occasions which have not been documented and are unable to be determined with specificity as to when such communication occurred. Such communication likely involved the following -people on behalf of the Plaintiff: Linda Goeb Larry Kruse Pete Carlson Russ Bly Mike Czech Bob Moberg Tina Lannes Bridget Miller 4 Deric Deuschle Michael Couri 6. Identify in detail any and all communications between you and Defendant concerning any and all billings, costs, and fees assessed by you to Defendant under the Development Agreements and provide and/or identify: a. All documents related to any and all bil1ings~ cost, and fees assessed by you to Defendant under the Development Agreements, including, but not limited to all time sheets and work records. ANSWER: All such documents will be produced with the document discovery. 7. Identify in detail any and all billing, invoices, and/or requests for payment sent to Defendant with respect to the Development Agreements specified herein and list, provide, and/or identify: a. The nature of the work for which the City of Albertville is requesting payment (e.g. administrative, legal, planning, engineering, etc.); b. The date(s) on which said work was allegedly provided; c. The identity of the firm, entity, and/or person who allegedly provided said work; d. All time sheets for said work; ANSWER: The City will produce those records in its possession with the document production, but has no authority to produce such records of employees who are not City employees or documents relating to City employees which may contain private data. e. All work records for said work; and ANSWER: The City will produce those records in its possession with the document production, but has no authority to produce such records of employees who are not City employees or documents relating to City employees which may contain private data. 5 f. Payroll records for all firms, entities, and/or persons with respect to the request for payment for the work. ANSWER: The City will produce those records in its possession with the document production, but has no authority to produce the payroll records of employees who are not City employees or documents relating to City employees which may contain private data.. 8. Identify in detail all facts in support of your assertion of the claim for breach of contract regarding Albert Villas Plat in Count I of your Complaint in this matter. ANSWER: On or about August 11, 2000, in the City of Albertville, County of Wright, State of Minnesota, Plaintiff and Defendant entered into a written contract entitled "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's." Pursuant to Sections 2D and 8 of said development contract, Defendant agreed to pay all of Plaintiff's costs and expenses related to the creation, administration, enforcement or execution of the development contract and related plat. Pursuant to Section 13H of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's", Defendant agreed to follow all water, ponding and wetland related restrictions as required under the terms of the City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas. Plaintiff, by certified letter dated June 15, 2004, defaulted Defendant on the Agreement due to Defendant's failure to pay the reasonable engineering costs which Plaintiff had incurred in the creation, administration, enforcement and execution of the development 6 contract and the approval of the development of Defendant's lands. . Plaintiff, by letter dated July 29, 2004, again notified Defendant that Plaintiff had not been reimbursed by Defendant for all reasonable engineering costs incurred in the creation, administration, enforcement or execution of the development contract and the approval of the development of Defendant's lands, and that Defendant had failed to pay Plaintiff's costs and expenses related to the creation, administration, enforcement or execution of the various development contracts and related plats. Plaintiff, by letter dated April 5, 2005, again defaulted Defendant and provided detailed information relating to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. Defendant was also provided detailed information regarding Defendant's failure to comply with wetland mitigation plans and failure to sign the wetland maintenance agreement. Pursuant to Sections 2D and 8 of the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's" and by letter dated April 5, 2005, Defendant was formally notified by Plaintiff that Plaintiff considered Defendant to be in default of the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's." Pursuant to Section 21 of said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villa's," Defendant agreed to pay all of the professional fees incurred by Plaintiff as a result of Plaintiff's efforts to enforce the terms of the Agreement. Defendant requested timesheets and invoices pursuant to Section. 8 of the Agreement. Plaintiff provided Defendant with reasonable documentation to justify the billings, as requested. On or about July 15, 2004, Defendant breached said "City of Albertville 7 Conditional 'Vse/Planned Unit' Development Agreement Albert Villa's," by failing to reimburse the Plaintiff for all reasonable engineering costs incurred in the creation, administration, enforcement or execution of the contract and the approval of the development of defendant's lands within 30 days of billing by the City. As such, demand has been made on Defendant for reimbursement of fees expended on Defendant's behalf but Defendant has failed and refused and continues to fail and refuse, to repay the sum owed to Plaintiff. By reason of Defendant's breach of said development contract as herein alleged, the Plaintiff has suffered damages in the sum of $31,497.57 for costs associated with reasonable professional engineering services, $125.00 for costs associated with the City's reasonable costs for weed removal, $130.50 for costs associated with the City's reasonable costs of professional planning services related to a sign issues and $182.50 for costs associated with the City's reasonable cost for professional engineering services related to lot problems (aerials), all of which are now due, owing, and unpaid plus interest at the legal r8;te fro.m and after the date due according to proof. The amounts identified in this answer were amounts O\yed as of September 30,2005. Interest in the total amount of$27,653.82 (calculated through September 30,2005) is owed to the City, said interest being calculated on all amounts owed to the City under all counts in the City's complaint. As of September 30,2005, legal fees in the amount of $13,782.00 have been incurred by the City in pursuing collection of the monies identified in the complaint and such amount is thus due and owing to the City from Defendant. 9. Identify in detail all facts in support of your assertion of the claim for breach of contract regarding Albert Villas Second Addition Plat in Count II of your Complaint in this matter. 8 ANSWER: On or about October 9,2000, in the City of Albertville, County of Wright, State of Minnesota, Plaintiff and Defendant entered into a written agreement entitled "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Second Addition." This development contract incorporated by reference and supplemented the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's." By the terms of Sections 2D and 8 of the "City of Albertville Conditional Use/Planned Unit . Development Agreement Albert Villa's Second Addition." Defendant agreed to pay all of Plaintiff's Costs and Expenses related to the creation, administration, enforcement or execution of the contract and related plat. By tenns of Section 13H of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's Second Addition", Defendant agreed to follow all water, ponding and wetland related restrictions and to sign the wetland maintenance agreement as required by the wetland mitigation plan. By terms of Section 21 of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's Second Addition", Defendant agreed to pay all of the professional fees incurred by Plaintiff. Plaintiff, by certified letter dated June 15, 2004, defaulted Defendant on the Agreement due to Defendant's failure to pay the reasonable administrative, legal, planning, engineering and other professional costs which Plaintiff had incurred in the creation, administration, enforcement and execution of the development contract and the approval of the development of Defendant's lands. In this letter, Defendant was reminded that Plaintiff had previously requested payment of such expenses and that Plaintiff had provided Defendant with a worksheet and detailed invoices outlining the costs. Plaintiff, by letter dated July 29, 2004, notified Defendant that Plaintiff had not been 9 reimbursed by Defendant for all reasonable engineering costs incurred in the creation, administration, enforcement or execution of the development contract and the approval of development of Defendant's lands, that Defendant had failed to pay Plaintiff's costs and expenses related to the creation, administration, enforcement or execution of the "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Second Addition", and the approval of the development of Defendant's lands. Plaintiff, by letter dated AprilS, 2005, again defaulted Defendant and provide detailed information relating to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. Pefendant also provided detailed information regarding Plaintiff's failure to comply with wetland mitigation plans and failure to sign the wetland maintenance agreement. Defendant requested timesheets and invoices pursuant to Section 8 of the Agreement. Plaintiff provided Defendant with reasonable documentation to justify the billings, as requested. Pursuant to Sections 2D and 8 of the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas," by certified letter dated June 15, 2004, Defendant was formally notified by Plaintiff that Plaintiff considered Defendant to be in default of the various development contracts. On or about July 15, 2004, Defendant breached the said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Second Addition," by failing to reimburse the Plaintiff for all reasonable administrative, legal, planning, engineering and other professional costs incurred in the creation, administration, enforcement or execution of the contract and the approval of the development of defendant's lands within 30 days 10 of billing by the City. As such, demand has been made on Defendant for reimbursement of fees expended on Defendant's behalf but Defendant has failed and refused and continues to fail and refuse, to repay the sum owed to Plaintiff. By reason of Defendant's breach of said development contract as herein alleged, the Plaintiffhas suffered damages in the sum of $47,586.70 in unpaid engineering fees incurred by the City and $31.25 in unpaid legal fees incurred by the City which is now due, owing, and unpaid plus interest at the legal rate from and after the date due according to proof. The amounts identified in this answer were amounts owed as of September 30,2005. Interest in the total amount of $27,653.82 (calculated through September 30, 2005) is owed to the City, said interest being calculated on all amounts owed to the City under all counts in the City's complaint. As of September 30,2005, legal fees in the amount of$13,782.00 have been incurred by the City in pursuing collection of the monies identified in the complaint and such amount is thus due and owing to the City from Defendant. 10. Identify in detail all facts in support of your assertion of the claim for breach of contract regarding Albert Villas Third Addition Plat in Count III of your Complaint in this matter. ANSWER: On or about April 6, 2001, in the City of Albertville, County of Wright, State of Minnesota, Plaintiff and Defendant entered into a written agreement entitled "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Third Addition" a copy of which is attached hereto as Exhibit "P" and made a part hereof. This development contract incorporated by reference and supplemented the "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas." 11 By the terms of Sections 2D and 8 of the "City of Albertville Conditional UselPlannedUnit Development Agreement Albert Villas Third Addition." Defendant agreed to pay all of Plaintiff's Costs and Expenses related to the creation, administration, enforcement or execution of the development contract and related plat. By terms of Section 21 of said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villa's Third Addition", Defendant agreed to pay all of the professional fees incurred by Plaintiff as a result of Plaintiff's efforts to enforce the terms of the Agreement. By terms of Sections 10 of said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Third Addition," Defendant agreed to comply with all requirements set forth in this Agreement regarding maintenance of county or any other ditches through which water from Defendant's Property may drain. Defendant has failed to clean such portions of County Ditch No. 9 which located on Defendant's property, thereby breaching the Agreement with respect to Section 10 of said Agreement. By terms of Sections 2A and 2B of said "City of Albertville Conditional UselPlanned Unit Development Agreement Albert Villas Third Addition," Defendant agreed to construct municipal improvement on and off the Defendant's property as detailed in the plans and specifications prepared by E.G. Rud & Sons, Inc. dated October 20, 2000. Defendant has failed to flatten slopes at outlet ditch of structure south of Katie Street and parallel to Kagan Street, failed to install sidewalk and curb replacement and failed to saw and seal curb and failed to remove fabric from catch basins in such locations as are on Defendant's Property and has thereby breached Sections 2A and 2B of said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Third Addition". 12 By tenns of Section 1 C of said '~ity of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Third Addition," defendant has failed to construct side walks and trails in locations specified in this Agreement and therefore breached said Agreement. By tenns of Section 11 of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Third Addition," Defendant agreed to comply with all requirements set forth in this Agreement regarding damages to and cleaning of county or any other ditches through which water from Defendant's Property may drain. Defendant has failed to clean and maintain County Ditch No. 9 in such locations as are on Defendant's Property and has thereby breached Section 11 of "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Third Addition". By tenns of Section 13H of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's Third Addition", Defendant agreed to follow all water, ponding and wetland related restrictions and to sign the wetland maintenance agreement as required by the wetland mitigation plan. Defendant has failed to comply with the wetland mitigation plan and failed to sign the wetland maintenance agreement thereby breaching Section 13H of "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Third Addition." Plaintiff, by letter dated AprilS, 2005, again defaulted Defendant and provided detailed information relating to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. Defendant was also provided detailed information regarding Defendant's failure to comply with wetland mitigation plans and failure to sign the wetland maintenance agreement. Plaintiff, by certified letter dated June 15, 2004, defaulted Defendant on the Agreement due to 13 Defendant's failure to pay the reasonable engineering costs which Plaintiff had incurred in the creation, administration, enforcement and execution of the development contract and the approval of the development of Defendant's lands. In this letter, Defendant was reminded that Plaintiff had previously requested payment of such expenses and that Plaintiff had provided Defendant with a worksheet and detailed invoices outlining the costs. Plaintiff, by letter dated July 29, 2004, notified Defendant that Plaintiff had not been reimbursed by Defendant for all reasonable engineering and planning costs incurred in the creation, administration, enforcement or execution of the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Third Addition," and the approval of the development of Defendant's lands. Defendant requested timesheets and invoices pursuant to Section 8 of the Agreement. Plaintiff provided Defendant with reasonable documentation to justify the billings, as requested. Pursuant to Sections 2D and 8 of the "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas," by certified letter dated June 15, 2004, Defendant was formally notified by Plaintiff that Plaintiff considered Defendant to be in default of the various development contracts. On or about July 15, 2004, Defendant breached the said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Third Addition," by failing to reimburse the Plaintiff for all reasonable engineering and planning costs incurred in the creation, administration, enforcement or execution of the contract and the approval of the development of defendant's lands within 30 days of billing by the City. As such, demand has been made on Defendant for reimbursement of fees expended on Defendant's behalf but Defendant has failed and refused and continues to fail and refuse, to repay the sum owed to Plaintiff. Plaintiff, by letter dated April 5, 2005, provided Defendant with detailed information 14 relating to breaches Defendant made to the said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Third Addition/' and as to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. By reason of Defendant's breach of said development contract as herein alleged, the Plaintiff has suffered damages in the sum of $77,891.31 for failure to pay the City's reasonable cost for professional engineering services and $3,017.80 for failure to pay the City's reasonable costs for planning services, and $62.50 in for failure to pay the City's reasonable cost for legal services, all of which are now due, owing, and unpaid plus interest at the legal rate from and after the date due according to proof. The amounts identified.in this answer were amounts owed as of September 30, 2005. Interest in the total amount of$27,653.82 (calculated through September 30,2005) is owed to the City, said interest being calculated on all amounts owed to the City under all counts in the City's complaint. As of September 30,2005, legal fees in the amount of $ 13,782.00 have been incurred by the City in pursuing collection of the monies identified in the complaint and such amount is thus due and owing to the City from Defendant. 11. Identify in detail all facts in support of your assertion of the claim for breach of contract regarding Albert Villas Fourth Addition Plat in Count IV of your Complaint in this matter. ANSWER: On or about April 1, 2002, in the City of Albertville, County of Wright, State of Minnesota, Plaintiff and Defendant entered into a written agreement entitled "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Fourth Addition". This development 15 contract incorporated by reference and supplemented the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas". By the terms of Sections 2D and 8 of the "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Fourth Addition" Defendant agreed to pay all of Plaintiff's Costs and Expenses related to the creation, administration, enforcement or execution of the development contract and related plat. Pursuant to Section 21 of said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villa's Fourth Addition", Defendant agreed to pay all of the professional fees incurred by Plaintiff as ~ result of Plaintiff's efforts to enforce the terms of the Agreement. By terms of Sections 2A and 2B of said "City of Albertville Conditional UseIPlanned unit Development Agreement Albert Villas Fourth Addition," Defendant agreed to construct municipal improvements on and off the Defendant's property as detailed in the plans and specifications prepared by Plow Engineering dated August 14, 200 1. Defendant has failed to remove fabric from catch basins, failed to install band to flared end of apron at County Ditch No.9, failed to clean sediment from drainage ponds and failed to install sidewalk and curb replacement and to saw and seal curb in such locations as are on Defendant's Property and has thereby violated Sections 2A and 2B of "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Fourth Addition dated April 1 , 2002". By tenns of Section ID of said ''City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Fourth Addition" Defendant agreed to install sidewalks and curbs on Defendant's property. Defendant has failed to install sidewalk and curb replacement and failed to saw and seal curb in such locations as are on Defendant's 16 Property and has thereby violated Sections ID of "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Fourth Addition dated April 1, 2002". By terms of Section 3F of said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Fourth Addition," Defendant agreed to install storm water retention/water quality ponds and basins on Defendant's property. Defendant has failed to clean sediment from drainage ponds in such locations as are on Defendant's Property and has thereby violated Sections 3F "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Fourth Addition dated April 1, 2002. By terms of Sections 10 and 11 of said "City of Albertville Conditional UselPlanned unit Development Agreement Albert Villas Fourth Addition," Defendant agreed to comply with all requirements set forth that Agreement regarding damages to and cleaning of county or any other ditches through which water from Defendant's Property may drain. Defendant has failed to remove constroction debris and washout material in County Ditch No.9 at 49th Street in such locations as are on Defendant's Property and has thereby violated Sections 10 and 11 of "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Fourth Addition dated April 1, 2002". Defendant requested timesheets and invoices pursuant to Section 8 of the Agreement. Plaintiff provided Defendant with reasonable documentation to justify the billings, as requested. Plaintiff, by certified letter dated June 15, 2004, defaulted Defendant on the Agreement due to Defendant's failure to pay the reasonable engineering costs which Plaintiff had incurred in the creation, administration, enforcement and execution of the development contract and 17 the approval of the development of Defendant's lands. In this letter, Defendant was reminded that Plaintiff had previously requested payment of such expenses and that Plaintiff had provided Defendant with a worksheet and detailed invoices outlining the costs. On or about July 15, 2004, Defendant breached the said "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Fourth Addition", by failing to reimburse the Plaintiff for all reasonable engineering costs incurred in the creation, administration, enforcement or execution of the contract and the approval of the development of defendant's lands within 30 days of billing by the City. As such, demand has been made on Defendant for reimbursement of fees expended on Defendant's behalf but Defendant has failed and refused and continues to fail and refuse, to repay the sum owed to Plaintiff. Pursuant to Sections 2D and 8 of the "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Fourth Addition", Defendant was again notified by Plaintiff by certified letter dated July 29, 2004 that Plaintiff considered Defendant to be in default of the various development contracts. PlaintitI, by letter dated AprilS, 2005, provided Defendant with detailed infonnation relating to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. By reason of Defendant's breach of said development contract as herein alleged, the Plaintiff has suffered damages in the sum of $93,320.96 for failure to pay the City's reasonable cost for professional engineering services and $62.50 in for failure to pay the City's reasonable cost for legal services, all of which are now due, owing, and unpaid plus 18 interest at the legal rate from and after the date due according to proof. The amounts identified in this answer were amounts owed as of September 30, 2005. Interest in the total amount of$27,653.82 (calculated through September 30,2005) is owed to the City, said interest being calculated on all amounts owed to the City under all counts in the City's complaint. As of September 30, 2005, legal fees in the amount of $13,782.00 have been ,.. incurred by the City in pursuing collection of the monies identified in the complaint and such amount is thus due and owing to the City from Defendant. 12. Identify in detail all facts in support of your assertion of the claim for breach of contract regarding Albert Villas Sixth Addition Plat in Count V of your Complaint in this matter. ANSWER: On or about May 30, 2003, in the City of Albertville, County of Wright, State of Minnesota, Plaintiff and Defendant entered into a written agreement entitled "City of Albertville Conditional , Use/Planned Unit Development Agreement Albert Villas Sixth Addition". This development contract incorporated by reference and supplemented the "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas". By the terms of Sections 2D and 8 of the "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Sixth Addition," Defendant agreed to pay all of Plaintiff's Costs and Expenses related to the creation, administration, enforcement or execution of the development contract and related plat. Pursuant to Section 21 of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's Sixth Addition", Defendant agreed to pay all of the professional fees incurred by Plaintiff as a result of Plaintiff's efforts to enforce the terms of the Agreement. By tenus of Sections lA, IC, 2A, and 2C of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Sixth Addition," Defendant agreed 19 to construct and maintain the storm sewer system on Defendant's property as detailed in the plans and specifications prepared by Plow Engineering dated August 14, 200 1. Defendant has failed to clean the storm water sewer in such locations as are on Defendant's Property and has thereby violated Sections lA, 2A, and 2C of "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Sixth Addition dated May 30, 2003. By terms of Sections 2C, 10, 11 of said "City of Albertville Conditional UseIPlanned unit Development Agreement Albert Villas Sixth Addition," Defendant agreed to comply with all requirements set forth in this Agreement regarding damages to and cleaning of county or any other ditches through which water from Defendant's Property may drain and to remove structures over said county ditches. Defendant has failed to repair the top section on the gate valve box at hydrant located at Lot 25, Block 7, failed to re-grade the storm water pond to stabilize slopes in vicinity of storm sewer outlets, failed to restore major washouts at entrance culverts, failed to remove the fabric from catch basins, failed to clean County Ditch No. 9 and failed to remove the concrete bridge structure of Count Ditch No. 9 near Albert Villas Park in such locations as are on Defendant's Property and has thereby violated Sections 2C, 10 and 11 of "City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Sixth Addition dated May 30, 2003. By terms of Section 3A of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's Sixth Addition", Defendant agreed to construct all on and off site improvements, including but not limited, construction of turf for areas disturbed by installation of drain tile lines. 20 Defendant has failed to restore turf for areas disturbed by installation of drain tile lines in such locations as are on Defendant's Property and has thereby violated Sections 3A of "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Sixth Addition dated May 30, 2003. By terms of Section lC of said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's Sixth Addition", Defendant agreed to construct sidewalks, including but not limited to a bituminous trail. Defendant has failed to complete construction of bituminous trail in such locations as are on Defendant's Property and has thereby violated Sections ID of "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villas Sixth Addition dated May 30, 2003. Plaintiff provided Defendant with reasonable documentation to justify the billings, as requested. Plaintiff, by certified letter dated June 15,2004, defaulted Defendant on the Agreement due to Defendant's failure to pay the reasonable administrative, legal, planning, engineering and other professional costs which Plaintiff had incurred in the creation, administration, enforcement and execution of the development contract and the approval of the development of Defendant's lands. In this letter, Defendant was reminded that Plaintiff had previously requested payment of such expenses and that Plaintiff had provided Defendant with a worksheet and detailed invoices outlining the costs. On or about July 15, 2004, Defendant breached said "City of Albertville Conditional Use/Planned Unit Development Agreement Albert Villa's," by failing to reimburse the Plaintiff for all reasonable administrative, legal, planning, engineering and other professional costs incurred in the creation, administration, enforcement or execution of 21 the contract and the approval of the development of defendant's lands within 30 days of billing by the City. As such, demand has been made on Defendant for reimbursement of fees expended on Defendant's behalf but Defendant has failed and refused and continues to fail and refuse, to repay the sum owed to Plaintiff. Plaintiff, by letter dated July 29, 2004, notified Defendant that Plaintiff had not been reimbursed by Defendant for all reasonable administrative, legal, planning, engineering and other professional costs incurred in the creation, administration, enforcement or execution of the ''City of Albertville Conditional UseIPlanned Unit Development Agreement Albert Villas Sixth Addition", and the approval of the development of Defendant's lands. Plaintiff, by letter dated AprilS, 2005, provided Defendant with detailed information relating to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. Pursuant to Sections 2D and 8 of the "City of Albertville Conditional UseIPlanned Unit Development Agreement Sixth Addition Albert Villas" by certified letter dated July 29, 2004, Defendant was formally notified by Plaintiff that Plaintiff considered Defendant to be in default of the various development contracts. By reason of Defendant's breach of said "City of Albertville Developer Use/Planned Unit Development Sixth Addition", development contract as herein alleged, the Plaintiff has suffered damages in the sum of$14,801.76 for failure to pay the City's reasonable costs for professional engineering services, $28.05 for failure to pay the City's reasonable costs for professional planning services, and $93.75 for failure to pay the City's reasonable costs for professional legal services, all of which are now due, owing, and unpaid plus interest at the legal 22 rate from and after the date due according to proof. The amounts identified in this answer were amounts owed as of September 30, 2005. Interest in the total amount of $27,653.82 (calculated through September 30,2005) is owed to the City, said interest being calculated on all amounts owed to the City under all counts in the City's complaint. As of September 30,2005, legal fees in the amount of$13,782.00 have been incurred by the City in pursuing collection of the monies identified in the complaint and such amount is thus due and owing to the City from Defendant. 13. Identify in detail all facts in support of your assertion of your claim for breach of contract regarding the City of Albertville Zoning Request Application in Count VI of your Complaint in this matter. ANSWER: On or about May 22, 2001, in the City of Albertville, County of Wright, State of Minnesota, Plaintiff and Defendant entered into a written agreement entitled "City of Albertville Zoning Request Application." By the terms of the "City of Albertville Zoning Request Application" Defendant agreed to pay all of Plaintiff's Costs and Expenses related to the creation, administration, enforcement or execution of the development contract and related plat. Plaintiff, by letter dated April 5, 2005, provided Defendant with detailed information relating to the amounts owed by Defendant for various developments which occurred within the City of Albertville for which Defendant was obligated to reimburse Plaintiff for its costs and expenses. By reason of Defendant's breach of said ''City of Albertville Zoning Request Application" development contract as herein alleged, the Plaintiff has suffered damages in the sum of $330.00 for failure to pay reasonable costs for professional legal services related to the development, and $2.60 for failure to pay reasonable costs for professional 23 planning services, both of which are now due, owing, and unpaid plus interest at the legal rate from and after the date due according to proof. The amounts identified in this answer were amounts owed as of September 30,2005. Interest in the total amount of $27,653.82 (calculated through September 30, 2005) is owed to the City, said interest being calculated on all amounts owed to the City under all counts in the City's complaint. As of September 30, 2005, legal fees in the amount of$13,782.oo have been incurred by the City in pursuing collection of the monies identified in the complaint and such amount is thus due and owing to the City from Defendant. 14. Identify all documents that you refuse to produce in this lawsuit as a result of a claim by you of privilege or reliance upon the attorney work product doctrine. ANSWER: A list of such documents will be produced with document production. Submitted this 20th day of October, 2005. ~ ~. City Clerk Subscribed and sworn before me this 20th day of October, 2005. ~ ~~ JC07/lPO Notary Public TINA LourSE LANNES ~OTARY PUBUC-MINNESOTA My Comm. Exp. Jan. 31,2009 24 Michael C. Couri, Attorney No. 214887 Attorney for Plaintiff Couri, Macarthur & Ruppe, P .L.L.P. P.O. Box 369 St. Michael, MN 55376 (763) 497-1930 25 STATE OF MINNESOTA COUNTY OF WRIGHT DISTRICT COURT TENTH JUDICIAL DISTRICT Other Civil- Breach of Contract City of Albertville, Minnesota, Court File No. C9-05-2481 Plaintiff Defendant. CITY OF ALBERTVILLE'S RESPONSE TO DEFENDANT'S REQUEST FOR PRODUCTION OF DOCUMENTS vs. Edina Development COlporation TO: Mr. Kyle Hegna, Wilkerson & Hegna, P.L.L.P., One Corporate Center III, Suite 300, 7300 Metro Boulevard, Edina, MN 55439-2302 1. All documents identified in your answers to the above interrogatories. REPLY: All such dQcuments currently identified will be made available for examination by Defendant at a mutually agreeable time. Plaintiff reserves the right to identify additional documents in the future. 2. All.documents consulted or relied upon by you in answering any of the above interrogatories. REPLY: All such documents will be made available for examination by Defendant at a mutually agreeable time. 1 3. All documents you intend to offer as exhibits in the trial of this matter. REPLY: All such documents currently identified will be made available for examination by Defendant at a mutually agreeable time. Plaintiff reserves the right to identify additional documents in the future. 4. All documents you contend comprise any communications between the parties. REPLY: All such documents currently identified will be made available for examination by Defendant at a mutually agreeable time. Plaintiff reserves the right to identify additional documents in the future. 5. All documents, including without limitation, proposals, contracts, subcontracts, supplemental agreements, reports, correspondence, internal memoranda or communications by, to or among you, price quotations, time sheets, calendars, billing documents, payment applications, meeting minutes, invoices and other documents related to any and all claims or defenses raised in the Plaintiffs Complaint or Defendant's Answer and Counterclaim. REPLY: Plaintiff objects to this request as vague, overly broad and burdensome. Notwithstanding such objection, all such documents currently identified will be made available for examination by Defendant at a mutually agreeable time. Plaintiff reserves the right to identify additional documents in the future. 6. All documents relating to billing, costs, and fees assessed by you to Defendant under any and/or all of the Development Agreements, including without 2 limitation, all time sheets and work records relating to any billing, costs, and/or fees assessed by you to Defendant. REPLY: All such documents currently identified will be made available for examination by Defendant at a mutually agreeable time. Plaintiff reserves the right to identify additional documents in the future. 7. All documents relating to payment by you of any costs, fees, or invoices related to your request for payment from Defendant with respect to the Development Agreements entered into by the parties. REPLY: All such documents currently identified will be made available for examination by Defendant at a mutually agreeable time. Plaintiff reserves the right to identify additional documents in the future. 8. All documents provided to, or otherwise relied upon by all experts expected to testify at trial. REPLY: No such documents have been identified to date. 9. All documents referring to, relating to, or otherwise bearing upon the claims, or defenses in this lawsuit. REPLY: Plaintiff objects to this request as vague, overly broad and burdensome. 3 Submitted this 20th day of October, 2005. ~~#rI. DtJip~ Bridget Mil' r, City Clerk Subscribed and sworn before me this 20th day of October, 2005. ~ ~;-e d~nUJ Notary Public , >.i\ LUU:SE LANNES . ....... ,,; N,);~:Y P()GUC-MINNESOTA . , v>V" ('~ l:v~ '''',z'!!::f"' 1'<'Y ",-,111m, ""'1'" J.!l.n. 31,2009 ~ /:/'.l""!:'o"<*<.:/" "'-"I"A\"'!,,~~" Michael C.Couri, Attorney No. 214887 Attorney for Plaintiff Couri, Macarthur & Ruppe, P .L.L.P. P.O. Box 369 St. Michael, MN 55376 (763) 497-1930 4 HINSHAW & CULBERTSON LLP February 13, 2008 VIA U.S. FIRST CLASS MAIL ALL CREDITORS AND PARTIES IN INTEREST Re: Edina Development Corporation Ch. 11 BKY File No. 06-42532 Our Matter No. 880207 Dear Creditor or Party in Interest: ll~C~ FEa I;' ~J;"l$lJ " ~008 ATTORNEYS AT LAW 333 South Seventh Street Suite 2000 Minneapolis, MN 55402-2431 612-333-3434 612-334-8888 (fax) www.hinshawlaw.com Enclosed and served upon you in the above referenced bankruptcy please find the following: 1. Notice of Hearing and Objection to Claims; 2. Memorandum of Law 3. Order on Debtor's Claim Objection; and 4. Proof of service. Please contact our office if you have any questions. Very truly yours, Hinshaw & Culbertson LLP -bcJ. O. (U~. Joel D. Nesset jnessetla>.hinshawlaw.com JDN~' Enclosures 121206004vl 880207 Arizona California Florida Illinois Indiana Massachusetts Minnesota Missouri New York Oregon Rhode Island Wisconsin '. , IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Case No.: 06-42532 Edina Development Corporation, LLC, Debtor. Chapter 11 Case NOTICE OF HEARING AND OBJECTION TO CLAIMS To: All parties in interest as provided in Local Rule 9013-3. 1. Edina Development Corporation, LLC ("Debtor"), by its undersigned attorneys, moves the Court for the relief requested below and gives notice of hearing. 2. The Court will hold a hearing on the Debtor's motion on March 18,2008 at 10:30 a.m. before the Honorable Gregory F. Kishel in Courtroom 7 West of the United States Courthouse at 300 South Fourth Street, Minneapolis, Minnesota. 3. Any response to this motion must be filed and delivered no later than March 13, 2008, which is three (3) days before the time set for hearing, or filed and served my mail not later than March 7, 2008, which is seven (7) days before the time set for the hearing. UNLESS A RESPONSE OPPOSING THE MOTION IS TIMELY FILED, THE COURT MAY GRANT THE MOTION WITHOUT A HEARING 4. This Court has jurisdiction over this motion pursuant to 28 U.S.C. SS 157 and 1334, Fed.R.Bankr.P. 5005, and Local Rule 1070-1. This motion is a core proceeding. The petition commencing this bankruptcy case was filed on November 1,2006 ("Filing Date"). The case is now pending before this Court. 121203615vl 880207 5. This motion arises under II U.S.C. 9 502 and Fed.R.Bankr.P. 3007. This motion is filed under Bankruptcy Rule 9013 and Local Rule 3007-1. The Debtor requests relief with respect to the disallowance of certain claims, and the allowance of others on particular terms. GENERAL OBJECTIONS 6. The following claims I were either scheduled or filed in amounts that are greater than the amounts that are actually owing according to the Debtor's most recent investigation. The Debtor requests that the Court enter an order allowing the claims in the proposed modified amount. Claim No. Creditor Claim Amount Proposed Allowed Amount and Summary of Grounds of Objection P.O.C. #1 Schumacher $7,936.56 o (No contract with Debtor) Excavatin~ P.O.C. #3 Independent $1,837.25 $1,581.80 {Creditor did not fully (See also Testing Tech perform according to contract objection to terms) classification) . P.O.C. #4 John Dierbeck $7,400.00 o (No contract with Debtor) Consultant P.O.C. #5 Plowe $5,927.45 o (Creditor did not fully perform En~ineerin~ accordin~ to contract terms.) P.O.C. #6 Rochester $240.00 $120.00 (Per Debtor's books and Service Co. records.) P.O.C. #10 Bakke Norman, $1,745.00 o (No contract with Debtor) SC P.O.C. #11 Kuechle $70,000.00 $50,000.00 (Previously agreed upon Under~round amount of claim) P.O.C. #12 S&C Bank $313,979.77 0 (Satisfied III connection with court-approved sale of real property owned bv the Debtor.) P.O.C. #15 EG Rud & Sons, $1,927.25 Priority o (Creditor did not perform Inc. accordin~ to contract terms) 1 All referenced proofs of claim are attached as exhibits to this motion as filed. As the exhibits are over 50 pages in length, consistent with Local Rule 9013-2{e), the only exhibits attached to the motion as served will be those exhibits that are relevant to the claim of creditor receiving such service. 2 121203615vl 880207 P.O.c. #16 Sherburne $72,258.83 $46,551.00 (Per Debtor's books and (See also County Priority records.) objection to classification) P.O.c. #18 McCombs Frank $8,056.20 o (Creditor did not perform Roos according to contract terms). P.O.C. #22 Anderson $242,808.00 0 (Satisfied under settlement (See also Engineering of (secured) agreement with affiliate of Debtor.) objection to MN classification) Scheduled Berglund and $40,671.25 $27,622.00 (Per Debtor's books and Baumgartner records. ) Scheduled BP Pipelines $19,634.80 o (No contract with Debtor) (same creditor - listed as Synergy on Claims Register) Scheduled Centerpoint $57.06 o (No contract with Debtor) Energy Scheduled Central MN $575.00 o (No contract with Debtor) Builders Assoc. Scheduled Certified $2,200.00 o (No contract with Debtor) Appraisal Services Scheduled City of Pine $618.75 0 (Creditor did not perform Island services) Scheduled Continental $2,287.37 o (No contract with Debtor) Great Sign Scheduled Dean's Outdoor $1,176.82 $500 (Per Debtor's books and Amount Services records.) (See also objection to late filed P.O.c.) Scheduled Domain Name $40.00 o (Creditor did not perform Registry according to contract terms) Scheduled Doucettes $7,300.00 o (Creditor did not perform Landscaping according to contract terms) Scheduled Duane Strand $240,268.75 Secured 0 (Satisfied III connection with court-approved sale of real property owned by the Debtor.) Scheduled Dunn County $2,017.95 o (Real estate taxes owing on property not owned by Debtor) Scheduled Elements, Inc. $527.57 o (Creditor did not perform according to contract terms) 3 121203615vl 880207 Scheduled Erosion Works, $1,655.60 o (Creditor did not perform Inc. according to contract terms) Scheduled Finance & $80.00 o (No contract with Debtor) Commerce Scheduled Huber Court $270.35 o (Previously paid) Reporting Scheduled John Oliver & $12,839.33 o (No contract with Debtor) (See also Assoc. P.O.c. #55 Scheduled Kjolhaug $1,626.53 o (Creditor did not perform Environmental according to contract terms) Services Scheduled Krause Masonry $2,054.00 o (Creditor did not perform according to contract terms) Scheduled ListingcofP. $59.95 o (No contract with Debtor Scheduled Lot Surveys Co. $150.00 o Q\fo contract with Debtor Scheduled Luann R. Jones $111.00 0 Previously paid) Scheduled Main Motors $116.23 0 Previously paid) Scheduled Mansfield, $24,674.32 o (No contract with Debtor) Tanick & Cohen Scheduled MBE, Inc. $12,019.25 $6,000.00 Scheduled Mel and Diane $50,000.00 Secured o (Satisfied by cancellation of Maves contract for deed.) Scheduled Midwest $3,000.00 o (No contract with Debtor) Landscapes Scheduled Peterson Fram & $3,392.13 o (No contract with Debtor) Amount Bergman (See also objection to late- filed claim. ) Scheduled Popp.com $693.75 o (Previously paid) Scheduled PR Advantage $267.50 o (No contract with Debtor Scheduled Pro Courier $22.82 o (No contract with Debtor Scheduled Property Source $650.00 O(No contract with Debtor 4 121203615vl 880207 Scheduled Regal Film and $696.00 o (No contract with Debtor) Video Scheduled Rinke Noonan $67.60 0 o contract with Debtor Scheduled Riverview $348,500.00 o (The Debtor is a guarantor on a Community loan that is fully secured, and which Bank the Debtor believes will be paid in full u on sale of the ro e Scheduled Ruhland $1,125.00 o (No contract with Debtor) Commercial Consultants Scheduled Shamrock $350.00 o (No contract with Debtor) Ente nses Scheduled St. Cloud Area $835.00 0 o contract with Debtor Scheduled Stock Building $3,993.75 o (No contract with Debtor) Su 1 Scheduled T &J Concrete $27,130.00 0 o contract with Debtor Scheduled US Federal $1,038.840.00 o (Satisfied by court-approved stipulation for relief from automatic sta . Scheduled Waste $1,036.38 o (No contract with Debtor) Mana ement Scheduled Xcel Ener $1,600.00 0 LATE FILED CLAIMS 7. The Debtor objects to the following claims on the grounds that they were not filed by the bar date. Claim No. Creditor Claim Description P.O.C. #50 Peterson Fram & Bergman $2,902.90 Unsecured P.O.C. #52 Wilkerson & Hegna $53,007.21 Unsecured $75,000.00 Secured P.O.C. #54 Precision Lawn Irrigation $39,083.50 Unsecured P.O.C. #55 John Oliver & Assoc. $50,857.49 Unsecured P.O.c. #56 SJ. Louis $25,596.00 unsecured $121,510.32 secured P.O.C. #59 City of Albertville $2,527.20 Unsecured P.O.C. #60 E&H Enterprises $8,995.00 Secured P.O.C. #61 E&H Enterprises $8,995.00 Secured P.O.C. #62 E&H Enterprises $9,345.00 Secured 5 121203615vl 880207 8. Except to the extent that the above-named creditors have undisputed scheduled claims, the Debtor requests that the Court disallow their claims in their entirety. MIS-CLASSIFIED CLAIMS 9. The Debtor objects to the following claims on the grounds that the creditor wrongly asserted either priority or secured status. Claim No. Creditor Claim DescriDtion P.O.C. #3 Independent Testing Tech $1,837.25 Priority P.O.c. #15 EG Rud & Sons, Inc. $1,927.25 Priority P.O.C. #16 Sherburne County $72,258.83 Priority P.O.c. #47 WHKS & Co. $52,850.00 Secured P.O.C. #52 Wilkerson & Hegna $53,007.21 Unsecured $75,000.00 Secured 10. To the extent that the above-named creditors have otherwise allowable claims, the Debtor requests that the Court allow such claims as general unsecured claims, except for the claim of Sherburne County, which should be allowed as a secured claim as provided for in the Debtor's confirmed plan of reorganization. 11. To the extent that any creditor objects to the relief sought in this motion, the Debtor requests that the first hearing be conducted as a scheduling conference. WHEREFORE, the Debtor requests that the Court enter an order: (1) allowing the claims described above only on the terms and in the amounts proposed; and (2) granting such further relief as the Court deems just and equitable. 6 121203615vl 880207 Dated: February 13, 2008 HINSHAW & CULBERTSON LLP By: lei Thomal' G. Wallrich Thomas G. Wallrich (213354) Joel D. Nesset (030475X) 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Telephone: 612-333-3434 Fa..'c: 612-334-8888 VERIFICATION r, Richard Lewandowski, the president of the Debtor herein, hereby certify under penalty ofpeIjury, that the statements contained in the foregoing Objection to Claims are true and correct to the best of my knowledge, information and belief. A_1~ L. , Richard Lewandowski Dated: February 13,2008 7 1212036: Sv I SS0207 rnn Irnn 1m SJaDTI0aamOR WI ~tZTrzrr~' YVA Ct:tT aHM ROOZ/rTIZO IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Case No.: 06-42532 Edina Development Corporation, Chapter 11 Case Debtor. MEMORANDUM OF LAW Edina Development Corporation ("Debtor") respectfully submits this memorandum in support of its claims Objection. STATEMENT OF FACTS The Debtor relies on the statement of facts contained in the verified Objection and incorporates the same herewith. LEGAL ARGUMENT AND DISCUSSION Section 502 of the Bankruptcy Code provides, in part, that "A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest.. . objects." 11 U.S.C. 9502. "[I]f such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim.. . and shall allow such claim.. . except to the extent that - (1) such claim is unenforceable against the debtor and property of the debtor, under any agreement or applicable law..." Id. Accordingly, if the Debtor is not liable for the claim under general contract law, the claim is not allowable. The Debtor has examined its books and records and determined that the claims listed are either: (i) not allowable as against the Debtor under general contract law; or (ii) allowable against the Debtor in a different amount than had been scheduled or otherwise claimed. In 121203620vl 880207 addition, the Debtor has determined that none of the claims listed in the Objection is entitled, in any part, to priority status under Section 507 of the Bankruptcy Code. CONCLUSION Based on the foregoing, the Debtor requests that the Court enter an order disallowing each of those claims with respect to which the Debtor has determined it has no liability, and allowing the other claims in the amounts and on the terms described in the Objection. Dated: February 13, 2008 HINSHAW & CULBERTSON LLP lei Thomas G. Wallrich Thomas G. Wallrich (213354) Joel D. Nesset (030475X) By: 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Telephone: 612-333-3434 Fax: 612-334-8888 Attorneys for Debtor Edina Development Corporation 2 121203620vl 880207 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Case No.: 06-42532 Edina Development Corporation, LLC, Debtor. Chapter 11 Case ORDER ON DEBTOR'S CLAIM OBJECTION This matter came before the Court on the Debtor's Omnibus objection to certain claims. Appearances, if any, were as noted on the record. Based on the Objection, arguments of counsel and the Court's file, IT IS HEREBY ORDERED: 1. Debtor's objections are sustained. 2. The following claims are allowed in the proposed modified amount: Claim No. Creditor Allowed Amount P.O.C. #1 Schumacher Excavating 0 P.O.c. #3 Independent Testing Tech $1,581.80 P.O.c. #4 John Dierbeck Consultant 0 P.O.C. #5 Plowe Engineering 0 P.O.C. #6 Rochester Service Co. $120.00 P.O.C. #10 Bakke Norman, SC 0 P.O.C. #11 Kuechle Underground $50,000.00 P.O.c. #12 S&C Bank 0 P.O.C. #15 EG Rud & Sons, Inc. 0 P.O.c. #16 Sherburne County $46,551.00 P.O.c. #18 McCombs Frank Roos 0 P .O.C. #22 Anderson Engineering of MN 0 Scheduled Berglund and Baumgartner $27,622.00 Scheduled BP Pipelines 0 Scheduled Centerpoint Energy 0 Scheduled Central MN Builders Assoc. 0 Scheduled Certified Appraisal Services 0 Scheduled City of Pine Island 0 Scheduled Continental Great Sign 0 Scheduled Dean's Outdoor Services $500.00 Scheduled Domain Name Registry 0 121203638vl 880207 Claim No. Creditor Allowed Amount Scheduled Doucettes Landscaping 0 Scheduled Duane Strand 0 Scheduled Dunn County 0 Scheduled Elements, Inc. 0 Scheduled Erosion Works, Inc. 0 Scheduled Finance & Commerce 0 Scheduled Huber Court Reporting 0 Scheduled John Oliver & Assoc. 0 Scheduled Kjolhaug Environmental Services 0 Scheduled Krause Masonry 0 Scheduled Listingcorp. 0 Scheduled Lot Surveys Co. 0 Scheduled Luann R. Jones 0 Scheduled Main Motors 0 Scheduled Mansfield, Tanick & Cohen 0 Scheduled MBE, Inc. $6,000.00 Scheduled Mel and Diane Maves 0 Scheduled Midwest Landscapes 0 Scheduled Peterson Fram & Bergman 0 Scheduled Popp.com 0 Scheduled PR Advantage 0 Scheduled Pro Courier 0 Scheduled Property Source 0 Scheduled Regal Film and Video 0 Scheduled Rinke Noonan 0 Scheduled Riverview Community Bank 0 Scheduled Ruhland Commercial Consultants 0 Scheduled Shamrock Enterprises 0 Scheduled St. Cloud Area 0 Scheduled Stock Building Supply 0 Scheduled T&J Concrete 0 Scheduled US Federal 0 Scheduled Waste Management 0 Scheduled Xcel Energy 0 3. The following claims, having been filed after the claim bar date, are disallowed in their entirety: Claim No. Creditor P.O.C. #50 Peterson Fram & Bergman P.D.C. #52 Wilkerson & Hegna P.O.C. #54 Precision Lawn Irrigation P.O.C. #55 John Oliver & Assoc. 2 121203638vl 880207 Claim No. Creditor P.D.C. #56 S.J. Louis P.D.C. #59 City of Albertville P.D.C. #60 E&H Enterprises P.D.C. #61 E&H Enterprises P.D.C. #62 E&H Enterprises 4. The following claims, to the extent they are otherwise allowed, will be allowed as general unsecured claims. Claim No. Creditor P.D.C. #3 Independent Testing Tech P.D.C. #15 EG Rud & Sons, Inc. P.D.C. #47 WHKS & Co. 5. The claim represented by Proof of Claim No. 16, to the extent it is otherwise allowed, will be allowed as a secured claim. Dated: The Honorable Gregory F. Kishel United States Bankruptcy Judge 3 121203638vl 880207 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Edina Development Corporation, BKY Case No.: 06-42532 Debtor. Chapter 11 Case PROOF OF SERVICE Amy E. Kulbeik, an employee of Hinshaw & Culbertson LLP, and in the course of said employment on February 13, 2008, caused the following documents: 1. Notice of Hearing and Objection to Claims; 2. Memorandum of Law; and 3. Order on Debtor's Claim Objection to be served upon the parties on the attached service list via first class U.S. mail, addressed, postage prepaid at Minneapolis, Minnesota and that she certifies the foregoing under penalty of perjury. The undersigned further certifies that upon information and belief the documents were filed electronically with the Clerk of Court on February 13,2008 through ECF and a copy of the above-referenced documents were delivered to the people listed below who are Filing Users, by automatic e-mail notification pursuant to the Electronic Case Filing System and this notice constitutes service or notice pursuant to Local Rule 9006-1 (a). Matthew R Burton mburton@losgs.com Mary L. Cox ecfbky@hensonefron.com, mcox@hensonefron.com Matthew R. Doherty mdoherty@brutlaw.com, matthew doherty@hotmai1.com Ryan J. Hatton rhatton@moon.com, ldanielson@moon.com David G Hellmuth dhellmuth@hjlawfirm.com David Jon Hoiland vbrouillette@e-Iawfinn.com, Hoilandesq@ao1.com Scott T. Johnston iohnston@iohnstonlawoff.com, aaberg@iohnstonlawoff.com Thomas Lallier tlallier@foleymansfield.com Thomas W. Larkin twlarkin@mhslaw.com, imianski@mhslaw.com Brian F Leonard bleonard@losgs.com Jeff Mintz J eff@Wendlaw.com, iulie@wendlaw.com:stephanie@wendlaw.com Michael E. Ridgway mike.ridgwav@usdoj.gov James P. Ryan sjs@ryanandgrinde.com, iody@ryanandgrinde.com Richard C Salmen rsalmen@felhaber.com Bradley W. Solheim bwsolheim@mhslaw.com, aabloomgren@mhslaw.com T. Chris Stewart tchris@analawfirm.com, allison@analawfirm.com John R. Stoebner istoebner@lapplibra.com, lmoravek@lapplibra.com; lfrey@lapplibra.com 121205978vl 880207 Gary I. Syverson gis@alexandriamnlaw.com, sap@alexandriamnlaw.com Ryan J. Trucke rtrucke@brutlaw.com US Trustee ustpregion12.mn.ecf@usdoi.gov William P. Wassweiler wwassweiler@lindquist.com, Inortol1@lindquist.com Dated: February 13, 2008 ~ 2 121205978vl 880207 Blake R. Nelson Scott T. Johnston US Attorney Hellmuth & Johnson PA Johnston Law Office 300 South Fourth Street 10400 Viking Drive Easton Place #600 Suite 560 510 22nd A venue East Minneapolis, MN 55415 Eden Prairie, MN 55344 Suite 1218 Alexandria, MN 56308 Internal Revenue Service District Counsel of IRS MN Dept. of Revenue STOP 5700 650 Galtier Plaza Bankruptcy Section 30 E. ih Street 380 Jackson Street P.O. Box 64447 Suite No. 1222 St. Paul, MN 55101 St. Paul, MN 55164-0447 St. Paul, MN 55101 Anoka county Benton County Contractors Capital 2100 3rd Avenue 531 Dewey Street 1248 5th Avenue Anoka, MN 55303 P.O. Box 129 Anoka, MN 55330 Foley, MN 56329 Duane Strand GMAC Goodhue County 12655 85th Street 5700 Crooks Road 509 W. 5th Street Foley, MN 56329 Troy, MI 48098 Redwing, MN 55066 Henry Construction Lakeland Construction Ikon Financial Services 6633 115th Avenue NE 860 Blue Gentian Road Attn: Bankruptcy Admin. Foley, MN 56329 Suite 135 1738 Bass Road Eagan, MN 55121 P.O. Box 13708 Macon, GA 31208-3708 Mel & Diane Maves Michael & Laurie Hassler Ryan and Grinde, Ltd. E6004 51 Oth Avenue 13006 New Haven Road NW Wayne Mehrkens Menomonie, WI 54751 Pine Island, MN 55963 James P. Ryan, Jr. 407 14th Street NW Rochester, MN 55903 Olmsted County Property Tax Riley Brothers Sam Montgomery Division 46369 208th Street 4295 Shorewood Trail 151 4th Street SE Morris, MN 56267 Medina, MN 55340 Rochester, MN 55904 Sherburne County Riverview Community Bank Rinke-Noonan 13880 Highway 10 9040 Quaday Ave. NE 1015 W. St. Germain Street Elk River, MN 55330 Otsego, MN 55330 #300 St. Cloud, MN 56302 3 121205978vl 880207 Kevin A. Smith Kari 1. Smith Elan Leasing Services Aquila 657 Ridge Road Two Appletree Square 2665 145th Street W. Osceola, WI 54020 Suite 325 P.O. Box 455 Minneapolis, MN 55425 Rosemount, MN 55068 Wright County Aaron A. Dean Bradley W. Solheim 10 2nd Street NW Fabyanski, Westra, Hart & Melchert, Hubert & Sjodin Room 240 Thomson 121 West Main Street Buffalo, MN 55313 800 LaSalle Avenue Suite 200 Suite 1900 Waconia, MN 55387 Minneapolis, MN 55402 William P. Wassweiler Hanjo Farms - CFD S & C Bank Lindquist & Vennum, PLLP 1758 190th Street Balsam Lake 80 South 8th Street, Suite 4200 Centuria, WI 54824 100 Mill Street Minneapolis, MN 55402 P.O. Box 10 Balsam Lake, WI 54810 WHKS & Co. T &J Concrete and Masonry Mansfield, Tanick & Cohen, 2905 South Broadway 17720 Highway 65 NE PA Rochester, MN 55904-5515 Ham Lake, MN 55304 220 South Sixth Street Suite 1700 Minneapolis, MN 55402 District Director of IRS SJ Louis Construction Kuechle Underground 30 East 7th Street PO Box 1373 20 Main Street N. Stop 5700 St. Cloud MN 56302 P.O. Box 509 Suite 1222 Kimball, MN 55353 St. Paul, MN 55101 Wilkerson & Hegna Berglund and Baumgartner, John Oliver and Associates 7300 Metro Boulevard Ltd. 580 Dodge venue Edina, MN 55439 2140 Fourth Avenue N. Elk River, MN 55330 Anoka, MN 55303 Sonic Financial Edina Development Anderson Engineering ofMN, Alliance Bank Corporation LLC 120 Town Sq. 444 Cedar St. 700 Bunker Lake Blvd. 13605 1st Ave. N. St. Paul MN 55110 Anoka, MN 55303 Suite 100 Plymouth MN 55441 4 121205978vl 880207 Bakke Norman, SC BP Pipelines Center Point Energy 2919 Schneider Avenue 980 Berwood Ave. PO Box 1144 P.O. Box 280 St. Paul MN 55126 Minneapolis MN 55440 Menomonie WI 54751 Central MN Builders Assoc. Certified Appraisal Services City of Albertville 1124 W. St. Germain St. 13016 Owatonna Street NE 5964 Main Ave. St. Cloud MN 56301 Blaine, MN 55449 Albertville MN 55301 City of Pine Island Continental Great Sign Dean's Outdoor Services PO Box 1000 1300 Old Highway 8 500 N. Main Pine Island MN 55963 New Brighton MN 55112 Pine Island MN 55963 Domain Name Registry Doucettes Landscaping Dunn County 2316 Delaware Ave. #226 and Contracting 800 Wilson Ave Buffalo NY 14216 16401 Ramsey Lane Menomonie WI 54751 Little Falls MN 56345 Elements, Inc. EG Rud & Sons, Inc. Erosion Works, Inc. 10044 Flanders Court NE 9180 Lexington Ave. NE 18140 Zane St. Suite 100 Circle Pines MN 55014 Elk River MN 55330 Blaine MN 55449 Finance & Commerce Huber Court Reporting Independent Testing Tech 730 2nd Ave. S. 204 Wilson Ave. NE PO Box 325 Minneapolis MN 55402 St. Cloud MN 56304 Waite Park MN 56387 Kjolhaug Environmental Svcs Krause Masonry Listingcorp.com 26105 Wild Rose Lane 705 4th Street 305 W. Broadway Ave. Shoreview MN 55331 Zumbrota MN 55992 Suite 118 New York, NY 10013 Lot Surveys Co. Inc. Luann R. Jones, Inc. Main Motors 7601 73rd Ave. N. 3416 Longfellow Ave. S. 435 W. Main St. Minneapolis MN 55428 Minneapolis MN 55407 Anoka MN 55303 MBE Inc. Midwest Landscapes Peterson Fram & Bergman PO Box 1056 6221 Oakwood Ave. NE 50 E. Fifth St. 530 River St. S. Otsego MN 55330 Suite 300 Delano MN 55328 St. Paul MN 55101 Plowe Engineering Popp.com PR Advantage 9180 Lexington Ave NE PO Box 27110 1034 33rd St. S. Circle Pines MN 55014 Golden Valley MN 55427 St. Cloud MN 56301 Pro Courier Property Source Regal Film and Video 8375 Sunset Rd. NE PO Box 431 400 E. St. Germain Street Minneapolis MN 55432 Brainerd MN 56401-0431 Suite 250 St. Cloud MN 56304 Ruhland Commercial Schumacher Excavating, Inc. Shamrock Enterprises Consultants 155770 440 St. 6415 Bandel Rd. NW 5 121205978vl 880207 14 N. 7th Ave. S1. Cloud MN 56303 S1. Cloud Area Chamber of Commerce PO BOx 487 S1. Cloud MN 56302 Waste Management PO Box 609 Winstead MN 55395 E&H Enterprises of Alexandria, Inc. 2510 South Broadway Street Alexandria, MN 56308 McCombs Frank Roos Assoc. 14800 28th Avenue N. Plymouth, MN 55447 Zumbrota MN 55992 Stock Building Supply 915 Yankee Doodle Rd. Eagan MN 55121 Xcel Energy 800 Interchange W 435 Ford Road Minneapolis MN 55426 John Dierbeck 252 S. Cove Road Hudson, WI 54016 Synergy Resources Attn: Corporate Attorney 1310 Madrid Street Suite 100 Marshall, MN 56258 6 Rochester MN 55901 US Federal 1400 Riverwood Dr. Burnsville MN 55337 Precision Lawn & Landscape 1016 Water Avenue South Sauk Rapids, MN 56379 Rochester Service Co. 2150 Schuster Lane NW Rochester, MN 55901 121205978vl 880207 B 10 IOfficial Form 101104/071 United States Bankruptcy Court for the District of Minnesota ~~IWtjIM Name of Debtor CllSe Number 07 A R30 PH 3: IE Edina Develooment Comoration 06-42532 NOTE: This form should not be used to make a claim for an administrative expense arising after the commencement of the cllSe. A "reauest" for navment ofan administrative expense mav be filed Dursuant to II V.S.C. 6 503. II c:. R Nl<RUPTCY COlJ~ Name of Creditor (The person or other entity to whom the debtor [J Check box if you are aware that anyone else has filed a proof otHl NEAPOllS. HH owes money or property): claim relating to your claim. Attach copy of statement giving City of Albertville particulars. Name and address where notices should be sent: [J Check box if you have never received any notices from the Iverson Reuvers bankruptcy court in this case. 9321 Ensign Ave. South [J Check box if the address differs from the address on the envelope THIS SPACE IS FOR Bloomington. MN 55438 COURT USE ON I. Y Telenhone number: sent to you by the court. Last four digits of account or other number by which creditor Check here o replaces identities debtor: if this claim [J amends a previously filed claim. dated: t. Basis for ClaIm (1 Personal injury/wrongful death 0 Wages. salaries, and compensation (till out o Goods sold below) o Taxes Last four digits of your SS #:_ rI Services performed Unpaid compensation for services performed 0 Retiree benetits as detined in II U.S.c. * 1114(a) 0 Money loaned From 08/02/2006 to 10/24/2006 o Other (date) (date) 2. Date debt was incurred: 08/02/2006 3. If court judcment, date obtained: 4. Classification orClalm. Check the appropriate box or boxes that best describe your claim and state the amount of the claim at the time the case was filed. See reverse side for important explanations. 2527.20 Secured Claim lInsecured Nonpriority Claim $ 0 Check this box if your claim is secured by collateral (including a right of setoll). If Check this box if: a) there is no collateral or lien securing your claim, or b) your claim exceeds the value of the property securing it, or c) none or only part Brief Description of Collateral: of your claim is entitled to priority. o Real Estate o Other o Motor Vehicle Unsecured Priority Claim Value of Collateral: $ o Check this box if you have an unsecured claim. all or part of which is Amount of arrearage and other charges at time case filed included in secured claim, if entitled to priority. any: $ Amount entitled to priority $ Specify the priority ofthe claim: o Up to $2,425+ of deposits toward purchllSe. lease, or rental of property or services for personal, family, or household use. II U.S.C. * 507(a)(7). 0 Domestic support obligations under II U.S.C. * 507(a)(1 )(A) or (a)(1 )(B). o Taxes or penalties owed to governmental units. II V.S.C. * 507(a)(8). 0 Wages, salaries, or commissions (up to $10.950),+ earned within 180 days before tiling of the bankruptcy petition or cessation of the debtor's business, D Other - Specify applicable paragraph of II U.SC. * 507(a)(->. whichever is earlier. II U.S.C. * 507(a)(4), Contributions to an emnlovee benetit plan - 11 U.S.c. ~ 507/aI/51. + Amounts art' subject to adjustment on 4/1110 and every 3 years therealier with 0 reSDect to cases commenced on or alier the date of adjustment. 5, Total Amount orClaim at Time Case Filed: :$ 2527.20 (unsecured) (secured) (priority ) (total) rI Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement of all interest or additional chanzes. 6- Credits: The amount of all payments on this claim has been credited and deducted for the purpose of making this proof of claim. THIS SPACE IS FOR COURT USE ONL Y 7. Supporting Documents: AUaclr copies of supporting documents. such as promissory notes, purchllSe orders, invoices, itemized Send original to: statements of running accounts, contracts, court judgments, mortgages, security agreements, and evidence of perfection oflien. DO NOT SEND ORIGINAL DOCUMENTS. If the documents are not available, explain. If the documents are voluminous, attach a summary. U.S. Bankruptcy Court 8. Date-Stamped Copy: To receive an acknowledgment of the filing of your claim, enclose a stamped, self.addressed envelope and 301 U.S. Courthouse copy of this proof of claim. 300 S. Fourth Street Minneapolis, MN 55415 Date Sign and print the name and title, if any, of the creditor or other person authorized to file this claim (attach copy ofpoweroflltlorney, ifany): I/' - 04/30/2007 /1'-' Penalty for presentingfraudulent claim: of up to $500,000 or im risonment for u to 5 ears, or both. 18 V.S.C. H 152 and 3571. p T p y 7390 B 10 (Official Form 10) (04/07) INSTRUCTIONS FOR PROOF OF CLAIM FORM The instructions and definitions below are general explanations of the law. In particular types of cases or circumstances. such as bankruptcy cases that are not filed voluntarily bya debtor. there may be exceptions to these general rules. Debtor The person, corporation, or other entity that has filed a bankruptcy case is called the debtor. Creditor A creditor is any person. corporation, or other entity to whom the debtor owed a debt on the date that the bankruptcy case was filed. Proof of Claim A form telling the bankruptcy court how much the debtor owed a creditor at the time the bankruptcy case was filed (the amount of the creditor's claim). This form must be filed with the clerk of the bankruptcy court where the bankruptcy case was filed. -- DEFINITIONS- Secured Claim A claim is a secured claim to the extent that the creditor has a lien on property of the debtor (collateral) that gives the creditor the right to be paid from that property before creditors who do not have liens on the property. Examples of liens are a mortgage on real estate and a security interest in a car, truck. boat, television set, or other item of property. A lien may have been obtained through a court proceeding before the bankruptcy case began; in some states a court judgment is a lien. In addition. to the extent a creditor also owes money to the debtor (has a right of setofl), the creditor's claim may be a secured claim. (See also Unsecured Claim.) Unsecured Claim If a claim is not a secured claim it is an unsecured claim. A claim may be partly secured and partly unsecured if the property on which a creditor has a lien is not worth enough to pay the creditor in full. Unsecured Priority Claim Certain types of unsecured claims are given priority, so they are to be paid in bankruptcy cases before most other unsecured claims (if there is sufficient money or property available to pay these claims). The most common types of priority claims are listed on the proof of claim form. Unsecured claims that are not specifically given priority status by the bankruptcy laws are classified as Unsecured Nonorioritv Claims. Items to be completed in Proof of Claim form (if not already filled in) Court. Name of Debtor, and Case Number: filed. A claim may be partly secured and partly unsecured. (See Fill in the name of the federal judicial district where the bankruptcy case DEFINITIONS, above). was tiled (for example, Central District of California), the name of the debtor in the bankruptcy case. and the bankruptcy case number. If you received a notice of the case from the court, all of this information is near the top of the notice. Information about Creditor: Complete the section giving the name, address, and telephone number of the creditor to whom the debtor owes money or property, and the debtor's account number, ifany. If anyone else has already filed a proof of claim relating to this debt, if you never received notices from the bankruptcy court about this case, if your address differs from that to which the court sent notice, or ifthis proof of claim replaces or changes a proof of claim that was already tiled, check the appropriate box on the form. 1. Basis for Claim: Check the type of debt for which the proof of claim is being filed. If the type of debt is not listed, check "Other" and briefly describe the type of debt. If you were an employee of the debtor, fill in the last four digits of your social security number and the dates of work for which you were not paid. 2. Date Debt Incurred: Fill in the date when the debt first was owed by the debtor. Unsecured Priority Claim: Check the appropriate place if you have an unsecured priority claim, and state the amount entitled to priority. (See DEFINITIONS, above). A claim may be partly priority and partly nonpriority if, for example, the claim is for more than the amount given priority by the law. Check the appropriate place to specifY the type of priority claim. Unsecured Nonpriority Claim: Check the appropriate place if you have an unsecured nonpriority claim, sometimes referred to as a "general unsecured claim." (See DEFINITIONS, above.) If your claim is partly secured and partly unsecured, state here the amount that is unsecured. If part of your claim is entitled to priority, state here the amount not entitled to priority. Total Amount of Claim at Time Case Filed: Fill in the total amount of the entire claim. If interest or other charges in addition to the principal amount of the claim are included. check the appropriate place on the form and attach an itemization of the interest and charges. 5. 3. Court Judgments: If you have a court judgment for this debt, state the date the court entered the judgment. 6. Credits: By signing this proof of claim, you are stating under oath that in calculating the amount of your claim you have given the debtor credit for all payments received from the debtor. 4. C'assineation of Claim: Secured Claim: Check the appropriate place if the claim is a secured claim. You must state the type and value of property that is collateral for the claim, attach copies of the documentation of your lien, and state the amount Dast due on the claim as of the date the bankruotcv case was 7. Supporting Documents: You must attach to this proof of claim form copies of documents that show the debtor owes the debt claimed or, if the documents are too lengthy, a summary of those documents. I f documents are not available, you must attach an explanation of why they are not available. Invoice Date Principle Interest (throuah 10/31/06) Total 8/212006 $1,370.02 $11.43 $1,381.45 8/24/2006 $19.38 $0.16 $19.54 9/26/2006 $72.50 $0.00 $72.50 8/4/2006 $126.00 $1.05 $127.05 8/212006 $100.00 $0.83 $100.83 10/12/2006 $100.00 $0.00 $100.00 1 0/24/2006 $100.00 $0.00 $100.00 1 0/24/2006 $525.00 $0.00 $525.00 8/24/2006 $100.00 $0.83 $100.83 TOTAL $2,512.90 $14.30 $2,527.20 04-26-'137 14:35 FROM-Albertville/City of +763-497-32113 T-34f3 Pf3f32 F-647 N,^ .~. ; ~ ~ ,+~~ .." '.. ~:J~ .. :" ~ CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 Invoice ---.-. ----"l ,- No. 02006120 I Date 8/212006 . ---.-- ~ To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 SubTotal ,Tax t I Shipping . _._ j : T...' $1,438.60 $0.00 $0.00 - _~ 19l1..u -j . PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVILLE, MN 55301 , 3a/.t.iS' I IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA LANNES @ 763-497-3384 IIIIJO (III JlI,~IJII~~ 1111 ThankYou ! 04-26-'07 14:36 FROM-Albertville/City of +763-497-3210 T-340 P003 F-647 SEH INVOICE Remit payment tor 3S35Vadnais.C.nter Drive SL Paul, MN 55110-5196 FEIN: 4. "IUI10a I 651,490.2000 I 800.325.2055 CITY OF ALBERTVILLE ATrN: LARRY KRUSE, CITY ADM. 5975 MAIN AVENUE NORTHEAST PO BOX 9 ALBERTVILLE MN 55301 July 14, 2006 Project No: MLBEV0212.00 Invoice No; 0148468 ALBERT VilLAS 6TH ADDITION Professional Services: June 1. 2006 throUQh June 30. 2006 Professional Personnel Hours Rate Amount PROJECT MANAGER MOBERG, ROBERT L 0.50 141.05 70.53 Site review MOBERG, ROBERT L 1.50 141.05 211.58 Turl restoration issue TECHNICIAN BL Y, GLEN R 4.00 73.45 293.80 Jake fixing David Olsens yard BL Y, GLEN R 1.50 73.45 110.18 Letter to David olsen Regarding yard restoration. BL Y, GLEN R 7.50 73.45 550.88 RON Resodding David olsens yard. ADMINISTRATIVE STAFF HENKEMEYER, KATIE J 0.25 77.51 19.38 ADMINISTRATIVE TECHNICIAN MARSHALL, NANCY M 0.30 90.35 27.11' Itr to Olsen reo damage to property Totals 15.55 1.283.46 Total labor 1,283.48 Reimbursable Expenses EMPLOYEE MILEAGE 53.40 EMPL TRAVlOTHER PROJ EXP 20.00 OTHER REIMBURSABLE EXP 13.16 Total Reimbursables 86.&6 86.56 Total this Invoice $1,370.02 $!'lO:'I: :":llul1: na:'I~'rlei~M)(, '1"<:., ;J~\i 1,5.:. ....\.;,;,,,.. ~r,~t!'r. ~(j. ~:;)( 1;'11. $1;. Claud. i"I'J if.3ili.-11i7 $EH is ,n :t~i.li'\! "'!:t;'f,\I'"t"."li.') er.~(.>i'!"/~!' ~ ':.J..'~v.y.tl.~h;h{:.~'.'~'.;. t i'.1i~ "~!;.41{~ ~ ;:';:~(t 1)'" 0;":7 i -i?:\ ."" c!1'n; t~~ 04-26-'07 14:36 FROM-Albertville/City of 1-763-497-3210 CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker lake Blvd Anoka MN 55303 SEH Inv 149638 AlbertVilla'~ ~th .. Interest Char e 0.834% 9123/2006.1012412006 .I!lteresl Charge q.834% 101241200~~.1112912006 Interest Char~ 0.834% 11129/~006.1212112006. Interest Ch 0.834% 1212112006-1/1812007 Int~~t Charge O.834%Y1812007-2126~007 Interest Cha e 0.834% 212612007-312312007 $19.38 $0.16 $0.16 $0.16 $0.16 $0.16 $0.16 I. _ Total T-340 P004 F-647 Invoice ---- .. I No. 02006187 Date 8/2412006 . '9.1a. ~ ~ $20.34 $0.00 $0.00 U~ .e.r- i ..----i 11. s'1 PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVillE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA LANNES @ 763-497-3384 111111'~ (IIIJUI Jllllll 'III ThankYou ! 04-26-'07 14:36 FROM-Albertville/City of +763-497-32Hl . . SEH INVOICE Rem.t payment Co: 3535 Vadnais Center Drive St. Palll. MN 5511 0-5196 FEIN: 41-1211208 , 651."90.2000 I 800.325.2055 CITY OF ALBERlVlLLE A TIN: LARRY KRUSE, CITY ADM. 5975 MAIN AVENUE NORTHEAST PO BOX 9 ALBERTVillE MN 55301 ~ ~l1W ALBERT VI LLAS 6TH ADDITION Professlona' Services: Julv 1. 2006 throuah July 31.2006 Professional Personnel Hours Rate ADMINISTRATIVE STAFF HENKEMEYER. KATIE J Totals Total Labor 0.25 0.25 77.51 T-340 P005 F-647 August 10. 2006 Project No: AALBEV0212.00 Invoice No: 0149638 Amount 19.38 19.38 19.38 Total this invoice $19.38 Short Elliott Hendrickson Inc., 1200 25th Av.nue South. P.O. Box 1717, St. Cloud. MN $6302-1717 SEH Is :Ln eqlAlIl opportunity employer I www.sehlnc;.comI320.22...t300 I 800.572.0617 I 320.229.4301 fax 04-26-'07 14:36 FROM-Albertville/City of +763-497-3210 T-340 P006 F-647 CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERlVlLLE MN 55301 763-497-3384 FAX 763-497-3210 Invoice i No. O~~62~;-.1 I Date 9/2612006 I' ...-'.- To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 t_ J 1;::TOIa' Shipping ._-. ~~I $75.50 I $0.00 $0.00 i ~I I~SO PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERlVILLE, MN 55301 IF YOU HAVE ANY aUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA LANNES @ 763-497-338<4 IIIIIIIIIIIIIII~IIII RI I III , 2 , I 8 2 2 5 ThankYou ! 04-26-'07 14:36 FROM-Albertville/City of +763-497-3210 T-340 P007 'City of Albertville September 25, 2006 Page 4 of33 ALBERT VILLAS 6 HOURS 8/8/06 Conference with Larry Kruse and Tina Lannes 0.25 regarding payments due and release of letter of credit for 6th Addition; telephone conference with Charlotte regarding same. ALBERT VILLAS 6 8/9/06 Read and reply to Charlotte.s.email regarding release of letter of credit for 6th Addition. ALBERT VILLAS 6 0.25 TOTAL ALBERT VILLAS 6 TIME: 00 HOURS 30 MINUTES 00 HOURS 30 MINUlES @$1451HR= $ 72.50 TOTAL NOW DUE AND OWING = S 72.50 F-647 04-26-/07 14:37 FROM-Albertville/City of +763-497-3210 . . ~ CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 . . . .... "";"t.l. -r~ ~. ~1'~~~\;.".~+ '-4- ,'.. .~- 1'';' To: EDINA DEVELOPMENT Attn: Charoletle Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To; Attn: Charolette Gabler 700 Bunker Lake BlVd Anoka MN 55303 Bolton & Menk lnv 96435 Albertvillas 7th -. '" -.. _.. Interest Cha 0.834% 91312006-1012412006 Interest q!1arge O.834%..1012412006-11~~912006 Jnte~st Charge 0.8~ro 11/2912006-,12/2112006 Interest Cha e 0.834% 12/2112006-1/18/2007 Interest Cha~~ 0.834% 1/18!~007-2/261200?_ Interest Charge 0.834% 212612007-312312007 --~---~ -~ --~~-~ SubTotal Tax , Shipping .--J I Total.. . . I J '7" oS- PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVILLE, MN 66301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA LANNES @ 763-497-3384 T-340 P008 F-647 Invoice I No~006106.1 I Date .~~~12006 t1 QCj ~ --$1.9i- 5132.30 $0.00 --~ 1IIIIIIIjn ll~ ,- _ ~I JII JIIII ThankYou ! 04-26-'07 14:37 FROM-Albertville/City of +763-497-3210 T-340 PIi:l1i:l9 F-647 AJ\" . E3C::> L TOI"'J &- ~ E: f'J 1<, II"-JC:. Consulting Engineers & Surveyors 1960 Premier Drive · Mankato, MN 56001-5900 ,to \1' Phone (507) 625-4171 · FAX (507) 625-4177 )...f....., L/'-' Invoice (j'r- July 26. 2006 Project No: T15.21660 Invoice No: 0096435 City of Albertville Larry Kruse, City Administrator 5975 Main Avenue NE Albertville, MN 55301 Albertville/General Engineering Professional Services from June 3, 2006 through June 30, 2006: $ 159.00 - Advance Fitness $ 576.00 - Towne Lakes 5th Addition - Project Management - $ 5,005.00 - Towne Lakes 5th Addition - Construction Observation- $ 665.00 - T -Square_ $ 1.435.00 - Towne lakes 3rd Addition- $ 315.00 - Kollvllle 2nd Addltion- $ 560.00. Kollville 3rd Addition- $ 756.00 - Eult Concrete Site - $. ' 630.00 - Staff Me8ting $ 210.00 - JPWB Meeting $ 378.00 - Engineering Transition $ 522.00 - Drainage Review -wI( $ 378.00 - STMA School (New Elementary) $ 546.00 -1-94 tmplementatlonA~ $ 126.00 - Albert Villas 7th Addition- $ 84.00 ~ Welcome Fumiture- $12,345.00 -Invoice Total Professional Person...el Hours Rate Amount Associate Engineer Huseby, Jon 3.00 Kasma, Mark 4.00 Attend City Council Meeting Kasma. Mark 2.00 TownfJ Lakes 5th Proj/Deslgn Engineer Leichty, Lanai 2.00 53rd Street Wetland Aerial Review Nafstad. Adam 1.00 Advance Fitnsss Meeting Nafstad. Adam 1.50 Albeit VI/la6 (Grading Perm;' for 7th and Dlaussion wHh Charlotte) 126.00 120.00 378.00 480.00 120.00 240.00 93.00 186.00 84.00 84.00 84.00 126.00 NOTICE: A finance charge of 1.5% per month (annual percentage rate of 18%) Is charged on balances 30 days or over. MANKATO, MN · FAIRMONT, MN · SlEepy EYE, MN . BURNSVILlEt MN · WILLMAR. MN . RAMSEY, MN · CHASKA. MN · AMES, IA www.boIton-menk.com An EQual O/:JtxJrlunifv ElJlD/over 04-26-'07 14:37 FROM-Albertville/City of +763-497-3210 T-340 P010 F-647 ~ t\!~~r.t~tl~., CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVillE MN 55301 763-497-3384 FAX 763-497-3210 Invoice r:-'.--' n_' ! I No. 02006146 I Date 81212006 .__._.1 .. ,.._~: _--:..............." ..~.f.. ~ ' ~'" r..... To; EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 11 eed Elimination 1 man hour plus mower 4895 .-' Kamal10600 48th 5t -..~.. , " .--.-..-....- 1 Int~~~rge O.8~% 9/112006-1012412006 1 .Interest 9.harge 0.834% 19(24120Q6..11/2~.. 1 Interest Cha e 0.834% 11/2912006-12f.Z1/2006 1 Interest Charg~ 0.834% 1212112Q06..1/1~OO7 ._. 1 Inte~st Charge 0.834% 111~~07-2J2612007 ._"_ 1 Interest Cha e 0.834% 2/26/2007-312312007 $e.99- ~ 18.85. $6;89"' SubTotal $104.98 iTax $0.00 I Shipping $0.00 . l lotlll _ -. ;"'84..0 j l_ PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVILLE, MN 55301 100. i' 3 IF YOU HAVe ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA LANNES @ 763-497-3384 IIIMUIIIIIIUIIIUIUI , 2 , l . 1 ~ 6 ThankYou ! 04-26-'07 14:37 FROM-Albertville/City of +763-497-3210 T-340 P011 F-647 . . . . "'j,~ ''''~' ,;.f:..., .,' :":"~ ~~~X'":' - , . ~'1.:- ~ ~ CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 Invoice ~--.-'.'1 I No.02006246 i I Date 10/12/2006 J -....~_._. To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake BlVd Anoka MN 55303 .. . sed E1i".l!nation 1 man hour plus ~Y'er 1 ~25 48th ~t Interest Charge 0.834% 11/1112008-12/2112006 Interest Char 8 O.834~ 1212112.~06-1118J.2007 In!!,rest Charge O.fl~% 1118/?007-212612007 Interest Charge 0.834% 2/2612007-312312007 ." I I. I I . --~ - - -- ----- SubTotal Tal( I Shipping ~UI ._.---1 $103.32 $0.00 $0.00 L- -'~?~I PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVILLE, MN 55301 100.00 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT THE CITY OF ALBERTVILLE @ 763-497.3384 1111~11~llllllln III 01 ~m 111111 . 2 , , 6 9 4 I ThankYou ! 04-26-'07 14:37 FROM-Albertville/City of +763-497-3210 CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERlVlLLE MN 55301 763497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker lake Blvd Anoka MN 55303 T-340 P012 F-647 Invoice 1- -. -"I No. 02006251 ! L Date 1012412006. J $100.00 $0.83 $0.83 $0.83 $0.83 SubTotal Tax I Shipping bta, .fe.-ea.., ~".e~ -$0.83 $103.32 SO;JOO $0.00 ~".;'2 PLEASE MAKE PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 AlBERlVlL.LE. MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT THE CITY OF ALBERTVillE @ 763-497.3384 /CJO.uU IIII !IIIJ II~IJJJIJIJIIII ThankYou ! 04-26-'07 14:38 FROM-Albertville/City of +763-497-3210 T-340 P013 F-647 ~ CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763.497.3384 FAX 763-497.3210 or ~^, ~:'b; ~ . ~_' _ """'....-....:"""'_ -. t.~......, ~~_ To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Invoice ! No. .~2006264 ...."1 I Date ~~12412006 . j $100.00 $4.38 $4.38 $4.38 $4.38 SubTotal Tax Shipping Total . $4.3&. '4.38 . $4.3lr $542.52 $0.00 $0.00 - ~ s- ~ $', cji) PLEASE MAKE PAYMENT TO: CllY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVILLE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT THE CllY OF ALBERlVlLLE @ 763-497-3384 IIIII~ (III ~111111111~ Jill JII Jill III III ThankYou ! 04-26-'07 14:38 FROM-Albertville/City of +763-497-3210 . CITY OF ALBERTVILLE POBOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: AUn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 T-340 P014 F-647 Invoice r-- '---.. .- No. 02006188 ! ~a~" 6/2412006 . J eed Elim!r'~tion 1 man h~l;I.!' plus rtIowe~ 4929 Kama Av~ Interest Chaf e 0.834% 912312006.10/2412006 t~~ere8t Charge O~~34% 10124120~6-1112912006 Interest Ch.r ~. 0.834% 1112~12006-12/211?906 Interest Char e 0.834% 12/2112006-1/1812007 Interest.9harge 0.834%_~/1812oo7.~~OO7 Interest Charge 0.834% 2/2612007-3/2312007 Shipping b~, $100.00 $0.83 $0.83 $0.83 . $0.83 $0.83 $0.83 .J1nA~ i PLEASE MAK~ PAYMENT TO: CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX 9 ALBERTVILLE. MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA LANNES @ 763-497-3384 I OU . ft "2> I ~IIII HI Hillin IIIII1I1II . 2 . . 5 1 , , ThankYou ! \. '@ IVERSON REUVERS ATTORNEYS AT LAW JEFFREY A. EGGE DIRECT: 952.548.7201 JEGGE@IVERSOI'll.AW.COM April 30, 2007 HAND DELIVERED Clerk, U.S. Bankruptcy Court 301 U.S. Courthouse 300 South Fourth Street Minneapolis, MN 55415 In Re: Edina Development Corporation Case No. 06-42532 Dear Clerk of Court: Enclosed herein for filing find diskette containing Proof of Claim with supporting documents. A paper copy of the same is also enclosed. Yours truly, IVERSON REUVERS ~, Jeffrey A. Egge JAE:bh Enclosure IVERSON REUVERS,LLC I 9321 ENSIGN AVENUE SOUTH I BLOOMINGTON,MN 55438 I 952.548.7200 I FAX: 952.548.7210 JON K.lvERSON PAUL D. REUVERS JEFF M. ZALASKY JASON J. KUBOUSHEK PAMELA J.F. WHITMORE JASON M. HIVELEY SUSAN M. TINDAL JEFFREY A. EGGE AMBER S. LEE WWW.IVERSONLAW.COM H 1 NSi~1AW & C U L B E R T S O N L L P February 13, 2008 VIA U.S. FIRST CLASS MAIL ALL CREDITORS AND PARTIES 1N INTEREST Re: Edina Development Corporation Ch. 11 BKY File No. 06-42532 Our Matter No. 880207 ~.~~,, ~~: ~~~~ ~ ~ ATTORNEYS AT LAW 333 South Seventh Street Suite 2000 Minneapolis, MN 55402-2431 612-333-3434 612-334-8888 (fax) www.hinshawlaw.com ......Dear Creditor or Party in Interest: Enclosed and served upon you in the above referenced bankruptcy please find the following: 1. Notice of Hearing and Objection to Claims; 2. Memorandum of Law 3. Order on Debtor's Claim Objection; and 4. Proof of service. Please contact our office if you have any questions. Very truly yours,. Hinshaw & Culbertson LLP _~ ~ --~~ ~° Joel D. Nesset jnesset a,hinshawlaw.com JDN~ae Enclosures __ 121206004v1 880207 Arizona California Florida Illinois Indiana Massachusetts Minnesota Missouri Newyork Oregon Rhode Island Wisconsin F r'}' ~x IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Edina Development Corporation, LLC, Debtor. NOTICE OF HEARING AND OBJECTION TO CLAIMS To: All parties in interest as provided in Local Rule 9013-3. Chapter 11 Case 1. Edina Development Corporation, LLC ("Debtor"), by its undersigned attorneys, moves the Court for the relief requested below and gives notice of hearing. 2. The Court will hold a hearing on the Debtor's motion on March 18, 2008 at 10:30 a.m. before the Honorable Gregory F. Kishel in Courtroom 7 West of the United States Courthouse at 300 South Fourth Street, Minneapolis, Minnesota. 3. Any response to this motion must be filed and delivered no later than March 13, 2008, which is three (3) days before the time set for hearing, or filed and served my mail not later than March 7, 2008, which is seven (7) days before the time set for the hearing. UNLESS A RESPONSE OPPOSING THE MOTION IS TIMELY FILED, THE COURT MAY GRANT THE MOTION WITHOUT A HEARING 4. This Court has jurisdiction over this motion pursuant to 28 U.S.C. §§ 157 and 1334, Fed.R.Bankr.P. 5005, and Local Rule 1070-1. This motion is a core proceeding. The petition commencing this bankruptcy case was filed on November 1, 2006 ("Filing Date"). The case is now pending before this Court. Case No.: 06-42532 121203615v1 880207 5. This motion arises under 11 U.S.C. § 502 and Fed.R.Bankr.P. 3007. This motion is filed under Bankruptcy Rule 9013 and Local Rule 3007-1. The Debtor requests relief with respect to the disallowance of certain claims, and the allowance of others on particular terms. GENERAL .OBJECTIONS 6. The following claims 1 were either scheduled or filed in amounts that are greater than the amounts that are actually owing according to the Debtor's most recent investigation. The Debtor requests that the Court enter an order allowing the claims in the proposed modified amount. Claim No. Creditor Claim Amount Proposed Allowed Amount and Summary of Grounds of Obeection P.O.C. #1 Schumacher $7,936.56 0 (No contract with Debtor) Excavatin P.O.C. #3 Independent $1,837.25 $1,581.80 (Creditor did not fully (See also Testing Tech perform according to contract objection to terms) classification P.O.C. #4 John Dierbeck $7,400.00 0 (No contract with Debtor) Consultant P.O.C. #5 Plowe $5,927.45 0 (Creditor did not fully perform En ineerin accordin to contract terms. P.O.C. #6 Rochester $240.00 $120.00 (Per Debtor's books and Service Co. records. P.O.C. #10 Bakke Norman, $1,745.00 0 (No contract with Debtor) SC P.O.C. #11 Kuechle $70,000.00 $50,000.00 (Previously agreed upon Under round amount of claim P.O.C. #12 S&C Bank $313,979.77 0 (Satisfied in connection with court-approved sale of real property owned b the Debtor. P.O.C. #15 EG Rud & Sons, $1,927.25 Priority 0 (Creditor did not perform Inc. accordin to contract terms 1 All referenced proofs of claim are attached as exhibits to this motion as filed. As the exhibits are over 50 pages in length, consistent with Local Rule 9013-2(e), the only exhibits attached to the motion as served will be those exhibits that are relevant to the claim of creditor receiving such service. 2 121203615v1 880207 P.O.C. #16 Sherburne $72,258.83 $46,551.00 (Per Debtor's books and (See also County Priority records.) objection to classification P.O.C. #18 McCombs Frank $8,056.20 0 (Creditor did not perform Roos accordin to contract terms . P.O.C. #22 Anderson $242,808.00 0 (Satisfied under settlement (See also Engineering of (secured) agreement with affiliate of Debtor.) objection to MN classification Scheduled Berglund and $40,671.25 $27,622.00 (Per Debtor's books and Baum artner records. Scheduled BP Pipelines $19,634.80 0 (No contract with Debtor) (same creditor - listed as Synergy on Claims Register) Scheduled Centerpoint $57.06 0 (No contract with Debtor) Ener Scheduled Central MN $575.00 0 (No contract with Debtor) Builders Assoc. Scheduled Certified $2,200.00 0 (No contract with Debtor) Appraisal Services Scheduled City of Pine $618.75 0 (Creditor did not perform Island services Scheduled Continental $2,287.37 0 (No contract with Debtor) Great Si n Scheduled Dean's Outdoor $1,176.82 $500 (Per Debtor's books and Amount Services records.) (See also objection to late filed P.O.C. Scheduled Domain Name $40.00 0 (Creditor did not perform Re is accordin to contract terms Scheduled Doucettes $7,300.00 0 (Creditor did not perform Landsca in accordin to contract terms Scheduled Duane Strand $240,268.75 Secured 0 (Satisfied in connection with court-approved sale of real property owned b the Debtor. Scheduled Dunn County $2,017.95 0 (Real estate taxes owing on roe not owned b Debtor Scheduled Elements, Inc. $527.57 0 (Creditor did not perform accordin to contract terms 121203615v1 880207 Scheduled Erosion Works, $1,655.60 0 (Creditor did not perform Inc. accordin to contract terms Scheduled Finance & $80.00 0 (No contract with Debtor) Commerce Scheduled Huber Court $270.35 0 (Previously paid) Re ortin Scheduled. John Oliver & $12,839.33 0 (No contract with Debtor) (See also Assoc. P.O.C. #55 Scheduled Kjolhaug $1,626.53 0 (Creditor did not perform Environmental according to contract terms) Services Scheduled Krause Masonry $2,054.00 0 (Creditor did not perform according to contract terms) Scheduled Listin co $59.95 0 o contract with Debtor Scheduled Lot Surve s Co. $150.00 0 o contract with Debtor Scheduled Luann R. Jones $111.00 0 Previousl aid Scheduled Main Motors $116.23 0 Previousl aid Scheduled Mansfield, $24,674.32 0 (No contract with Debtor) Tanick & Cohen Scheduled MBE, Inc. $12,019.25 $6,000.00 Scheduled Mel and Diane $50,000.00 Secured 0 (Satisfied by cancellation of Mayes contract for deed. Scheduled Midwest $3,000.00 0 (No contract with Debtor) Landsca es Scheduled Peterson Fram & $3,392.13 0 (No contract with Debtor) Amount Bergman (See also objection to late-filed claim. Scheduled Po .com $693.75 0 Previousl aid Scheduled PR Advanta e $267.50 0 o contract with Debtor Scheduled Pro Courier $22.82 0 o contract with Debtor Scheduled Pro e Source $650.00 0 o contract with Debtor 121203615vi 880207 Scheduled Regal Film and $696.00 0 (No contract with Debtor) Video Scheduled Rinke Noonan $67.60 0 o contract with Debtor Scheduled Riverview $348,500.00 0 (The Debtor is a guarantor on a Community loan that is fully secured, and which Bank the Debtor believes will be paid in full u on sale of the ro e Scheduled Ruhland $1,125.00 0 (No contract with Debtor) Commercial Consultants Scheduled Shamrock $350.00 0 (No contract with Debtor) Ente rises Scheduled St. Cloud Area $835.00 0 o contract with Debtor Scheduled .Stock Building $3,993.75 0 (No contract with Debtor) Su 1 Scheduled T&J Concrete $27,130.00 0 o contract with Debtor Scheduled US Federal $1,038.840.00 0 (Satisfied by court-approved stipulation for relief from automatic sta . Scheduled Waste $1,036.38 0 (No contract with Debtor) Mana ement Scheduled Xcel Ener $1,600.00 0 Previousl aid LATE FILED CLAIMS 7. The Debtor objects to the following claims on the grounds that they were not filed by the bar date. Claim No. Creditor Claim Descri tion P.O.C. #50 Peterson Fram & Ber man $2,902.90 Unsecured P.O.C. #52 Wilkerson & Hegna $53,007.21 Unsecured $75,000.00 Secured P.O.C. #54 Precision Lawn Irri ation $39,083.50 Unsecured P.O.C. #55 John Oliver & Assoc. $50,857.49 Unsecured P.O.C. #56 S.J. Louis $25,596.00 unsecured $121,510.32 secured P.O.C. #59 City of Albertville $2,527.20 Unsecured P.O.C. #60 E&H Ente rises $8,995.00 Secured P.O.C. #61 E&H Ente rises $8,995.00 Secured P.O.C. #62 E&H Ente rises $9,345.00 Secured 5 121203615v1 880207 8. Except to the extent that the above-named creditors have undisputed scheduled claims, the Debtor requests that the Court disallow their claims in their entirety. MIS-CLASSIFIED CLAIMS 9. The Debtor objects to the following claims on the grounds that the creditor wrongly asserted either priority or secured status. Claim No. Creditor Claim Descri tion P.O.C. #3 Inde endent Testin Tech $1,837.25 Priori P.O.C. #15 EG Rud & Sons, Inc. $1,927.25 Priori P.O.C. #16 Sherburne County $72,258.83 Priori P.O.C. #47 WHKS & Co. $52,850.00 Secured P.O.C. #52 Wilkerson & Hegna $53,007.21 Unsecured $75,000.00 Secured 10. To the extent that the above-named creditors have otherwise allowable claims, the Debtor requests that the Court allow such claims as general unsecured claims, except for the claim of Sherburne County, which should be allowed as a secured claim as provided for in the Debtor's confirmed plan of reorganization. 11. To the extent that any creditor objects to the relief sought in this motion, the Debtor requests that the first hearing be conducted as a scheduling conference. WHEREFORE, the Debtor requests that the Court enter an order: (1) allowing the claims described above only on the terms and in the amounts proposed; and (2) granting such further relief as the Court deems just and equitable. 6 121203615v1 880207 Dated: February 13, 2005 HINSHAW ~ CU>rBERTSON .LLP By: /e! Thomas G. V4'allrich Thomas G. Wallrich (213354) Joe] D. Nesse.t (030475X) 333 Soufl~ Seventh Street, Suiie 2000 Minneapolis, YIN 5402 "telephone: 612-333-3434 Fax: 612-334-5858 VER)<)FICATTON I, Richard Lewandowski, the president of the Debtor herein, hereby certify under penalty of perjury, thst the statements contained in the foregoing Objection to Claims are true and correct to the best of my knowledse, information and belief.. Dated: February 13, 200£ ~~ ~ ~_ Richard Lewandowski 7 1210?fi$vl RL'U207 ~nn,~~~~1~ S,~2pTZI1Qa~l0A iG'1~ ~~7.T~7.4'~91. I'~',~ ~~.fiT f1~~U R0~7/~TI7,D IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Edina Development Corporation, Debtor. MEMORANDUM OF LAW Case No.: 06-42532 Chapter 11 Case Edina Development Corporation ("Debtor") respectfully submits this memorandum in support of its claims Objection. STATEMENT OF FACTS The Debtor relies on the statement of facts contained in the verified Objection and incorporates the same herewith. LEGAL ARGUMENT AND DISCUSSION Section 502 of the Bankruptcy Code provides, in part, that "A claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest...objects." 11 U.S.C. §502. "[I]f such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim...and shall allow such claim...except to the extent that - (1) such claim is unenforceable against the debtor and property of the debtor, under any agreement or applicable law..." Id. Accordingly, if the Debtor is not liable for the claim under general contract law, the claim is not allowable. The Debtor has examined its books and records and determined that the claims listed are either: (i) not allowable as against the Debtor under general contract law; or (ii) allowable against the Debtor in a different amount than had been scheduled or otherwise claimed. In 121203620v1 880207 addition, the Debtor has determined that none of the claims listed in the Objection is entitled, in any part, to priority status under Section 507 of the Bankruptcy Code. CONCLUSION Based on the foregoing, the Debtor requests that the Court enter an order disallowing each of those claims with respect to which the Debtor has determined it has no liability, and allowing the other claims in the amounts and on the terms described in the Objection. Dated: February 13, 2008 HINSHAW & CULBERTSON LLP /e/ Thomas G. Wallrich Thomas G. Wallrich (213354) Joel D. Nesset (030475X) By: 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Telephone: 612-3 3 3 -3434 Fax: 612-334-8888 Attorneys for Debtor Edina Development Corporation 2 121203620v1 880207 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Edina Development Corporation, LLC, Debtor. Chapter 11 Case ORDER ON DEBTOR'S CLAIM OBJECTION This matter came before the Court on the Debtor's Omnibus objection to certain claims. Appearances, if any, were as noted on the record. Based on the Objection, arguments of counsel and the Court's file, IT IS HEREBY ORDERED: 1. Debtor's objections are sustained. 2. The following claims are allowed in the proposed modified amount: Claim No. Creditor Allowed Amount P.O.C. #1 Schumacher Excavating 0 P.O.C. #3 Independent Testing Tech $1,581.80 P.O.C. #4 John Dierbeck Consultant 0 P.O.C. #5 Plowe Engineering 0 P.O.C. #6 .Rochester Service Co. $120.00 P.O.C. #10 Bakke Norman, SC 0 P.O.C. #11 Kuechle Underground $50,000.00 P.O.C. #12 S&C Bank 0 P.O.C. #15 EG Rud & Sons, Inc. 0 P.O.C. #16 Sherburne County $46,551.00 P.O.C. #18 McCombs Frank Roos 0 P.O.C. #22 Anderson Engineering of MN 0 Scheduled Berglund and Baumgartner $27,622.00 Scheduled BP Pipelines 0 Scheduled Centerpoint Energy 0 Scheduled Central MN Builders Assoc. 0 Scheduled Certified Appraisal Services 0 Scheduled City of Pine Island 0 Scheduled Continental Great Sign 0 Scheduled Dean's Outdoor Services $500.00 Scheduled Domain Name Re istry 0 Case No.: 06-42532 121203638v1 880207 Claim No. Creditor Allowed Amount Scheduled Doucettes Landsca ing 0 Scheduled Duane Strand 0 Scheduled Dunn County 0 Scheduled Elements, Inc. 0 Scheduled Erosion Works, Inc. 0 Scheduled Finance & Commerce 0 Scheduled Huber Court Reporting 0 Scheduled John Oliver & Assoc. 0 Scheduled Kjolhaug Environmental Services 0 Scheduled Krause Masonry 0 Scheduled Listingcorp. 0 Scheduled Lot Surveys Co. 0 Scheduled Luann R. Jones 0 Scheduled Main Motors 0 Scheduled Mansfield, Tanick & Cohen 0 Scheduled MBE, Inc. $6,000.00 Scheduled Mel and Diane Maves 0 Scheduled Midwest Landscapes 0 Scheduled Peterson Fram & Bergman 0 Scheduled Popp.com 0 Scheduled PR Advantage 0 Scheduled Pro Courier 0 Scheduled Property Source 0 Scheduled Regal Film and Video 0 Scheduled Rinke Noonan 0 Scheduled Riverview Community Bank 0 Scheduled Ruhland Commercial Consultants 0 Scheduled Shamrock Enterprises 0 Scheduled St. Cloud Area 0 Scheduled Stock Building Supply 0 Scheduled T&J Concrete 0 Scheduled US Federal 0 Scheduled Waste Management 0 Scheduled Xcel Energy 0 3. The following claims, having been filed after the claim bar date, are disallowed in their entirety: Claim No. Creditor P.O.C. #50 Peterson Fram & Bergman P.O.C. #52 Wilkerson & Hegna P.O.C, #54 Precision Lawn Irrigation P.O.C. #55 John Oliver & Assoc. 2 121203638v1 880207 Claim No, Creditor P.O.C. #56 S.J. Louis P.O.C. #59 City of Albertville P.O.C. #60 E&H Enterprises P.O.C. #61 E&H Ente rises P.O.C. #62 E&H Enterprises 4. The following claims, to the extent they are otherwise allowed, will be allowed as general unsecured claims. Claim No. Creditor P.O.C. #3 Inde endent Testing Tech P.O.C. #15 EG Rud & Sons, Inc. P.O.C. #47 WHKS & Co. 5. The claim represented by Proof of Claim No. 16, to the extent it is otherwise allowed, will be allowed as a secured claim. Dated: The Honorable Gregory F. Kishel United States Bankruptcy Judge 3 121203638v1 880207 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Edina Development Corporation, BKY Case No.: 06-42532 Debtor. Chapter 11 Case PROOF OF SERVICE Amy E. Kulbeik, an employee of Hinshaw & Culbertson LLP, and in the course of said employment on February 13, 2008, caused the following documents: 1. Notice of Hearing and Objection to Claims; 2. Memorandum of Law; and 3. Order on Debtor's Claim Objection to be served upon the parties on the attached service list via first class U.S. mail, addressed, postage prepaid at Minneapolis, Minnesota and that she certifies the foregoing under penalty of perjury... The undersigned further certifies that upon information and belief he documents_were filed electronically with the Clerk of Court on February 13, 2008 through ECF and a copy of the above-referenced documents were delivered to the people listed below who are Filing Users, by automatic e-mail notification pursuant to the Electronic Case Filing System and this notice constitutes service or notice pursuant to Local Rule 9006-1(a). Matthew R Burton mburton(c~los s' Mary L. Cox ecfbky(a~hensonefi-on.com, mcox cr hensonefron.com Matthew R. Doherty mdoherty a,brutlaw.com, matthew_doherty~u,hotmail.com Ryan J. Hatton rhatton cr,rnoon.com, ldanielson~rnoon.com David G Hellmuth dhellmuth(a,hjlawfinn.com David Jon Hoiland vbrouillette c~i,e-lawfinn.com, Hoilandesq~ic ,aol.com Scott T. Johnston johnston ,johnstonlawoff.com; aaber~a,johnstonlawoff.com Thomas Lallier tlallier(~foleymansfield.com Thomas W. Larkin twlarkin a,mhslaw.com, jmjanski cr,mhslaw.com Brian F Leonard bleonard(a~los s~ com Jeff Mintz Jeffn,Wendlaw.com, julie(a~wendlaw.com;stephanie c~,wendlaw.com Michael E. Ridgway mike.rid~way cr,usdoj. og_v James P. Ryan sjs~r a~~rinde.com, jody~a~ryanandgrinde.com Richard C Salmen rsahnen~felhaber.com Bradley W. Solheim bwsolheim cr,mhslaw.com, aabloom ren ,mhslaw.com T. Chris Stewart tchris~analawfirm.com, allison cr,analawfirm.com John R. Stoebner jstoebner cr,la~plibra.com, hnoravek(a~lapplibra.com; lfrey ~r,lapplibra.com ~ztzos9~s~i gaozo~ Gary I. Syverson his alexandriamnlaw.com, sap(cr~,alexandriamnlaw.com Ryan J. Trucke rtrucke(a~brutlaw.com US Trustee ustpre~ionl2.mn.ecf(u,usdoj.~ William P. Wassweiler wwassweiler(a~lindquist.com, lnorton ,lindquist.com Dated: February 13, 2008 Amy E. lbeik 2 ialzos97s~i aao2o~ Blake R. Nelson Hellmuth & Johnson PA 10400 Viking Drive Suite 560 Eden Prairie, MN 55344 Internal Revenue Service STOP 5700 30 E. 7th Street Suite No. 1222 St. Paul, MN 55101 Anoka county 2100 3rd Avenue Anoka, MN 55303 Duane Strand 12655 85th Street Foley, MN 56329 Scott T. Johnston Johnston Law Office Easton Place 510 22»d Avenue East Suite 1218 Alexandria, MN 56308 District Counsel of IRS 650 Galtier Plaza 380 Jackson Street St. Paul, MN 55101 Benton County 531 Dewey Street P.O. Box 129 Foley, MN 56329 GMAC 5700 Crooks Road Troy, MI 48098 Henry Construction 6633 115th Avenue NE Foley, MN 56329 Mel & Diane Maves E6004 510th Avenue Menomonie, WI 54751 Lakeland Construction 860 Blue Gentian Road Suite 135 Eagan, MN 55121 Michael & Laurie Hassler 13006 New Haven Road NW Pine Island, MN 55963 Olmsted County Property Tax Riley Brothers Division 46369 208th Street 151 4th Street SE Morris, MN 56267 Rochester, MN 55904 Sherburne County 13880 Highway 10 Elk River, MN 55330 Riverview Community Bank 9040 Quaday Ave. NE Otsego, MN 55330 3 US Attorney 300 South Fourth Street #600 Minneapolis, MN 55415 MN Dept. of Revenue Bankruptcy Section P.O. Box 64447 St. Paul, MN 55164-0447 Contractors Capital 1248 5th Avenue Anoka, MN 55330 Goodhue County 509 W. 5th Street Redwing, MN 55066 Ikon Financial Services Attn: Bankruptcy Admin. 1738 Bass Road P.O. Box 13708 Macon, GA 31208-3708 Ryan and Grinde, Ltd. Wayne Mehrkens James P. Ryan, Jr. 407 14th Street NW Rochester, MN 55903 Sam Montgomery 4295 Shorewood Trail Medina, MN 55340 Rinke-Noonan 1015 W. St. Germain Street #300 St. Cloud, MN 56302 i2i2os9~a~~ sao2o~ Kevin A. Smith Kari J. Smith 657 Ridge Road Osceola, WI 54020 Wright County 10 2°a Street NW Room 240 Buffalo, MN 55313 Elan Leasing Services Two Appletree Square Suite 325 Minneapolis, MN 55425 Aaron A. Dean Fabyanski, Westra, Hart & Thomson 800 LaSalle Avenue Suite 1900 Minneapolis, MN 55402 William P. Wassweiler Hanjo Farms - CFD Lindquist & Vennum, PLLP 1758 190th Street 80 South 8th Street, Suite 4200 Centuria, WI 54824 Minneapolis, MN 55402 WHKS & Co. T&J Concrete and Masonry 2905 South Broadway 17720 Highway 65 NE Rochester, MN 55904-5515 Ham Lake, MN 55304 District Director of IRS 30 East 7th Street Stop 5700 Suite 1222 St. Paul, MN 55101 SJ Louis Construction PO Box 1373 St. Cloud MN 56302 Wilkerson & Hegna 7300 Metro Boulevard Edina, MN 55439 Sonic Financial Alliance Bank 120 Town Sq. 444 Cedar St. St. Paul MN 55110 Berglund and Baumgartner, Ltd. 2140 Fourth Avenue N. Anoka, MN 55303 Edina Development Corporation 700 Bunker Lake Blvd. Anoka, MN 55303 Aquila 2665 145th Street W. P.O. Box 455 Rosemount, MN 55068 Bradley W. Solheim Melchert, Hubert & Sjodin 121 West Main Street Suite 200 Waconia, MN 55387 S & C Bank Balsam Lake 100 Mill Street P.O. Box 10 Balsam Lake, WI 54810 Mansfield, Tanick & Cohen, PA 220 South Sixth Street Suite 1700 Minneapolis, MN 55402 Kuechle Underground 20 Main Street N. P.O. Box 509 Kimball, MN 55353 John Oliver and Associates 580 Dodge venue Elk River, MN 55330 Anderson Engineering of MN, LLC 13605 1st Ave. N. Suite 100 Plymouth MN 55441 4 121205978x1 880207 Bakke Norman, SC 2919 Schneider Avenue P.O. Box 280 Menomonie WI 54751 Central MN Builders Assoc. 1124 W. St. Germain St. St. Cloud MN 56301 City of Pine Island PO Box 1000 Pine Island MN 55963 Domain Name Registry 2316 Delaware Ave. #226 Buffalo NY 14216 Elements, Inc. 10044 Flanders Court NE Suite 100 Blaine MN 55449 Finance & Commerce 730 2nd Ave. S. Minneapolis MN 55402 BP Pipelines 980 Berwood Ave. St. Paul MN 55126 Certified Appraisal Services 13016 Owatonna Street NE Blaine, MN 55449 Continental Great Sign 1300 Old Highway 8 New Brighton MN 55112 Doucettes Landscaping and Contracting 16401 Ramsey Lane Little Falls MN 56345 EG Rud & Sons, Inc. 9180 Lexington Ave. NE Circle Pines MN 55014 Huber Court Reporting 204-Wilson Ave. NE St. Cloud MN 56304 Kjolhaug Environmental Svcs Krause Masonry 26105 Wild Rose Lane 705 4th Street Shoreview MN 55331 Zumbrota MN 55992 Lot Surveys Co. Inc. 7601 73rd Ave. N. Minneapolis MN 55428 MBE Inc. PO BOX 1056 530 River St. S. Delano MN 55328 Plowe Engineering 9180 Lexington Ave NE Circle Pines MN 55014 Pro Courier 8375 Sunset Rd. NE Minneapolis MN 55432 Luann R. Jones, Inc. 3416 Longfellow Ave. S. Minneapolis MN 55407 Midwest Landscapes 6221 Oakwood Ave. NE Otsego MN 55330 Popp.com PO Box 27110 Golden Valley MN 55427 Property Source PO Box 431 Brainerd MN 56401-0431 Ruhland Commercial Consultants Schumacher Excavating, Inc 155770 440 St. 5 Center Point Energy PO Box 1144 Minneapolis MN 55440 City of Albertville 5964 Main Ave. Albertville MN 55301 Dean's Outdoor Services 500 N. Main Pine Island MN 55963 Dunn County 800 Wilson Ave Menomonie WI 54751 Erosion Works, Inc. 18140 Zane St. Elk River MN 55330 Independent Testing Tech PO Box-325 - Waite Park MN 56387 Listingcorp.com 305 W. Broadway Ave. Suite 118 New York, NY 10013 Main Motors 435 W. Main St. Anoka MN 55303 Peterson Fram & Bergman 50 E. Fifth St. Suite 300 St. Paul MN 55101 PR Advantage 1034 33rd St. S. St. Cloud MN 56301 Regal Film and Video 400 E. St. Germain Street Suite 250 St. Cloud MN 56304 Shamrock Enterprises 6415 Bandel Rd. NW iziaos9~s~i asozo~ 14 N. 7th Ave. Zumbrota MN 55992 St. Cloud MN 56303 St. Cloud Area Stock Building Supply Chamber of Commerce 915. Yankee Doodle Rd. PO BOx 487 Eagan MN 55121 St. Cloud MN 56302 Waste Management Xcel Energy PO Box 609 800 Interchange W Winstead MN 55395 435 Ford Road Minneapolis MN 55426 E&H Enterprises of John Dierbeck Alexandria, Inc. 252 S. Cove Road 2510 South. Broadway Street Hudson, WI 54016 Alexandria, MN 56308 McCombs Frank Roos Assoc. Synergy Resources 14800 28th Avenue N. Attn: Corporate Attorney Plymouth, MN 55447 1310 Madrid Street Suite 100 Marshall, MN 56258 6 Rochester MN 55901 US Federal 1400 Riverwood Dr. Burnsville MN 55337 Precision Lawn & Landscape 1016 Water Avenue South Sauk Rapids, MN 56379 Rochester Service Co. 2150 Schuster Lane NW Rochester, MN 55901 i212os9~a~~ aso2o~ B 10 (Official Form 101(04/071 United States Bankruptcy Caurt for the District of Minnesota ~~~~ CV IM Name of Debtor Case Number Edina Develo ment Cor oration 06-42532 R ~ ~ ~~ ~; NOTE: This form should not be used to make a claim for an administrative expense arising after the commencement of the case. A "re uest" for a ment of an administrative ex nse ma be filed ursuant to I I U.S.C. ' 503. ~ ~, R U as T C Y C Q U Name of Creditor (The person or other entity to whom the debtor ^ Check box ifyou are aware that anyone else has filed a proof ofN ~ N E ~~ P Q (, ~ S , MN owes money or property): claim relating to your claim. Attach copy of statement giving City of Albertville partiwlars. Name and address where notices should be sent: ^ Check box ifyou have never received any notices from the Iverson ReUVerS bankruptcy court in this case. 9321 Ensign Ave. South Bloomington, MN 55438 ^ Check box if the address differs from the address on the envelope THIS SPACE IS FOR COURT USE ONLY Tele hone number: sent to you by the court. Last four digits of account or other number by which creditor Check here ^ replaces identifies debtor: if this claim ^ amends a previously filed claim, dated: 1. Basis for Claim n Personal injury/wrongful death ^ Wages, salazies, and compensation (fill out ^ Goods sold below) ^ Taxes Cast four digits of your SS tt: G~ Services performed Unpaid compensation for services performed ^ Retiree benefits as defined in I I U.S.C. ~ I 1 14(a) ^ Money loaned From 08/02/2006 to ~ 0/24!2006 o Other (date) (date) 2. Date debt was incurred: 08/02/2006 3. If court judgment, date obtained: 4. Classification of Claim. Check the appropriate box or boxes that best describe your claim and state the amount of the claim at the time the case was filed. See reverse side for important explanations. 2527.20 Secured Claim unsecured Nonpriority Claim $ ^ Check this box if your claim is secured by collateral (including a right of setoff). t~Check this box if a) there is no collateral or lien securing your claim, or b) your claim exceeds the value ofthe property securing it, or c) none or only part Brief Description of Collateral: of)'our claim is entitled to priority. ^ Real Estate ^ Other ^ Motor Vehicle Unsecured Priority Claim Value of Collateral: $ ^ Check this box ifyou have an unsecured claim, all or part of which is entitled to priority. Amount of arrearage and other charges at time case filed included in secured claim, if any: $ Amount entitled to priority $ Specify the priority of the claim: ^ Up to $2,425+ of deposits toward purchase, lease, or rental of property or services for personal, family, or household use - I I U.S.C. § 507(ax7). ^ Domestic support obligations under 1 1 U.S.C. ,~~' S07(axl)(A) or (ax I)(B). ^ Taxes or penalties owed to governmental units - 11 U.S.C. ~ 507(ax8). c Wages, salaries, or commissions (up to $10,950),1 earned within 180 days before tiling of the bankruptcy petition or cessation of the debtor's business, ^ Other -Specify applicable paragraph of I 1 U.S.C. § 507(ax~. whichever is earlier- I 1 U.S.C. k 507(ax4). 1Amounts are subject to adjustment on 4/1/1(1 and every 3 years thereafter with ^ Contributions to an em to ee benefit Ian - 11 U.S.C. ' 507 a 5 . res ect to cases commenced on or a ter the dare o 'ad'ustment. 5, Total Amount of Claim at Time Case Filed: $ 2527'20 (unsecured) (secured) (priority) (total) Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement of all interest or additional char es. 6. Credits: The amount of all payments on this claim has been credited and deducted for the purpose of making this proof of claim. THtS SPACE tS FOR COURT USE ONLY 7. Supporting Documents: Attach copies of'supporring documents, such as promissory notes, purchase orders, invoices, itemized statements of running accounts, contracts, court judgments, mortgages, security agreements, and evidence of perfection of lien. DO NOT Send original to: SEND ORIG[NAL DOCUMENTS. If the documents are not available, explain. If the documents are voluminous, attach a summary. U.S. Bankruptcy Court 8. Date-Stamped Copy: To receive an acknowledgment of the filing of your claim, enclose a stamped, self-addressed envelope and 301 U.S. Courthouse copy of this proof of claim. 300 S. Fourth Street Minneapolis, MN 55415 Pate Sign and print the name and title, if any, of the creditor or other person authorized to file this claim (attach copy of power of attorney, if any): 04/30!2007 enauy~ar preseumg,/rauautenr c[mm: rme of up to y~W,WU or Impnsonment for up to 5 years, or both. 18 U.S.C. §§ 152 and 3571. tT 7390 tf tU lUtttc~al Corm IQ INSTRUCTIONS FOR PROOF OF CLAIM FORM The instructions and defrnitions below are general explanations ojthe law. /n particular types of cases or circumstances, such as bankruptcy cases that are not filed voluntarily by a debtor, there may be exceptions to these general rules. Debtor The person, corporation, or other entity that has filed a bankruptcy case is called the debtor, Creditor A creditor is any person, corporation, or other entity to whom the debtor owed a debt on the date that the bankruptcy case was filed. Proof of Claim A form telling the bankruptcy court how much the debtor owed a creditor at the time the bankruptcy case was filed (the amount of the creditor's claim). This form must be filed with the clerk of the bankruptcy court where the bankruptcy case was filed. --DEFINITIONS ---- Secured Claim Unsecured Claim A claim is a secured claim to the extent that the If a claim is not a secured claim it is an creditor has a lien on property of the debtor (collateral) that gives the creditor the right to be paid from that property before creditors who do not have liens on the property. Examples of liens are a mortgage on real estate and a security interest in a car, truck, boat, television set, or other item of property. Alien may have been obtained through a court proceeding before the bankruptcy case began; in some states a court judgment is a lien. In addition, to the extent a creditor also owes money to the debtor (has a right of setoff), the creditor's claim may be a secured claim. (See also Unsecured Claim.) Items to be completed in Proof of Clai Court, Name of Debtor, and Case Number: Fill in the name of the federal judicial district where the bankruptcy case was filed (for example, Central District of California), the name of the debtor in the bankruptcy case, and the bankruptcy case number. If you received a notice of the case from the court, all of this information is near the top of the notice. Information about Creditor: Complete the section giving the name, address, and telephone number of the creditor to whom the debtor owes money or property, and the debtor's account number, if any. if anyone else has ah•eady filed a proof of claim relating to this debt, if you never received notices from the bankruptcy court about this case, if your address differs from that to which the court sent notice, or if this proof of claim replaces or changes a proof of claim that was already filed, check the appropriate box on the form. 1. Basis for Claim: Check the type of debt for which the proof of claim is being filed. 1 the type of debt is not listed, check "Other" and briefly describe the type of debt. If you were an employee of the debtor, fill in [he last four digits of your social security number and the dates of work for which you were not paid. 2. Date Debt Incurred: Fill in the date when the debt first was owed by the debtor. 3. Court Judgments: [f you have a court judgment for this debt, state the date the court entered the judgment. unsecured claim. A claim may be partly secured and partly unsecured if the property on which a creditor has a lien is not worth enough to pay the creditor in full. Unsecured Priority Claim Certain types of unsecured claims are given priority, so they are to be paid in bankruptcy cases before most other unsecured claims (if there is sufficient money or property available to pay these claims). The most common types of priority claims are listed on the proof of claim form. Unsecured claims that are not specifically given priority status by the bankruptcy laws are classified as Unsecured Nonnriority Claims. m form (if not already filled in) filed. A claim may be partly secured and partly unsecured. (See DEFINITIONS, above). Unsecured Priority Claim: Check the appropriate place if you have an unsecured priority claim, and state the amount entitled to priority. (See DEFINITIONS, above). A claim may be partly priority and partly nonpriority if, for example, the claim is for more than the amount given priority by the law. Check the appropriate place to specify the type of priority claim. Unsecured Nonpriority Claim: Check the appropriate place if you have an unsecured nonpriority claim, sometimes referred to as a "general unsecured claim:' (See DEFINITIONS, above.) If your claim is partly secured and partly unsecured, state here the amount that is unsecured. If part of your claim is entitled to priority, state here the amount not entitled to priority. 5. Total Amount of Claim at Time Case Filed: Fill in the total amount of the entire claim. If interest or other charges in addition to the principal amount of the claim are included, check the appropriate place on the form and attach an itemization of the interest and charges. 6. Credits: By signing this proof of claim, you are stating under oath that in calculating the amount of your claim you have given the debtor credit for all payments received from the debtor. 4. Classification of Claim: 7. Supporting Documents: Secured Claim: You must attach to this proofofclaim form copies ofdocuments Check the appropriate place if the claim is a secured claim. You that show the debtor owes the debt claimed or, if the documents are must state the type and value of property that is collateral for the too lengthy, a summary of those documents. If documents are not claim, attach copies of the documentation of your lien, and state the available, you must attach an explanation of why they are not amount past due on the claim as of the date the bankruptcv case was available. Invoice Date Principle Interest (through 10131/06) Total 8/2/2006 $1,370.02 $11.43 $1,381.45 8/24/2006 $19.38 $0.16 $19.54 9/26/2006 $72.50 $0.00 $72.50 8/4/2006 $126.00 $1.05 $127.05 8/2/2006 $100.00 $0.83 $100.83 10/12/2006 $100.00 $0.00 $100.00 10/24/2006 $100.00 $0.00 $100.00 10/24/2006 $525.00 $0.00 $525.00 8/24/2006 $100.00 $0.83 $100.83 TOTAL $2,512.90 $14.30 $2,527.20 `~ 04-26-'0? 14:35 F)30M-Albertville/City of +763-497-3210 y~,~,.~ CITY OF ALBERNILLE ~;n ~ : ,,.~, ~ T'f'Y1 lE P O BOX 9 5959 MAIN AVE NE ALBERNILLE MN 55301 763-497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 UPON RECEIPT Shlp EDINA DEVELOPMENT To' Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 T-340 P002 F-647 Invoice No. 02006120 Date 8/2/2006 _._ _ i 11 SEH inv 148468 Albertvilla's 6th $/7/p~ _ $1,370.02 $1,370.02 1 Interest Char a 0.$34% 9/1/2006-10/24/2006 I $11.43 $11.43 1 Interest Charge 0.834% 10/24/2006-11/2912006 1 Interest Charge 0.834°~ 11/29/2006-12/21/200_8 1 Interest Charge 0.834% 12/21/2008-1/18/2007 1 Interest Charge 0,834°k 1/18/2007-2126/2007 _ 1 Interest Charge 0.834% 2/26/2007.3/23/2007 . . ISubTotal $1,438.80 ~ ,Tax 50.00 Shipping 50.00 - _.. ' TOtal i . $it439~tT~l PLEASE MAKE PAYMENT TO: ~ ~ I , t1s I t CITY OF ALBERNILLE 5975 MAIN AVE NE POBOX9 ALBERNILLE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA CANNES ~ 763-497-3364 ThankYou ! 04-26-'07 14:36 FROM-Albertville/City of *763-497-3210 SEH INVOICE Remlt payment toi 3535 Vadnais Censer Drive St Paul, MN SSlIQ•SI96 I:EIN: 41. 12 SI208 I 65!,490,2000 I 800.325.2055 CITY OF ALBERTVILLE ATTN: LARRY KRUSE, CITY ADM. ' 5975 MAIN AVENUE NORTHEAST po sox 9 ALBERTVILLE MN 55301 ALBERT VILLAS 6TH ADDITION Professional_Services: June 7 2006 throuclh June 30.2006 Professional Personnel Hours PROJECT MANAGER MOBERG, ROBERT L 0.50 Site review MOBERG, ROBERT L 1.50 Turf restoration issue TECHNICIAN BLY, GLEN R 4.00 Jake frxing David Olsens yard BLY, GLEN R 1.50 Letter to David oxen Regarding yard restoration. BLY, GLEN R 7.50 RDN Resodding David olsens yard. ADMINISTRATIVE STAFF HENKEMEYER, KATIE J 0.25 ADMINISTRATIVE TECHNICIAN MARSHALL, NANCY M 0.30 Itr to Olsen re. damage to property Totals 15.55 Total Labor Reimbursable Expenses EMPLOYEE MILEAGE EMPL TRAY/OTHER PROJ EXP OTHER REIMBURSABLE EXP Total Reimbursables Rate 141.05 141.05 73,45 73.45 73.45 77.51 90.35 T-340 P003 F-647 July 14, 2006 Project No: AALBEV0212.00 Involve No: 0148468 Amount 70.53 211.58 293.90 110,18 550.88 19.38 27.11 1,283.46 1,283.48 53.40 20.OD 13.16 86.56 86.56 Total this invoice 51,370.02 :~harr.:~i?iGXi+'~;•ceriCi<3an •:~,c:.; [1 ~ >~:; .. = arc,..°. :'v .. ..,,_.~ i, ~ G.?3:a: !~f7, 5r.'_:!e;ICi, `^r; SF,33~-17!? ~FI'i ;5 30 .?Gi~A! 3!iJr,.rYi~6!t7 Er'.`71:=•~?:f 'a•.J~q,>aj~, di>5:.., ,, iii. 'S~..6:rtB ! r~.r~,r ..~ r ~'y (ln'7 1 Y9R 99~r 14~e; Fav ` 04-26-'07 14:36 FROM-Albertville/City of +763-497-3210 y~yJ,~ CITY OF ALBERNILLE ..~.:~Y :: ; ,.: ~a:~r. tvi IE.. P o Box s 5959 MAIN AVE NE ALBERNILLE MN 55301 7fi3-497-3384 FAX 763-497-3210 Ta; EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Bivd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Invoice --- ~~ ~ No, 02008187 Date 8/24/2006 L--_..~ 1 1 UPON RECEIPT SEW Inv 14_9838 Al6erlyilla's 6th $19.38 $19.38 1 Interest Charge 0.834°~ 9/23/2006-10/24/2006 $0.16 $0.18 1 Interest Charge 0.834% 10/24/2008-11/29/2006 $0.16 1 Interest Charge 0.834% 11/29/2006-12/21/Z006 i $0.16 .--$8-48, 1 i Interest Charge 0.834% 12/21/2006-1/18/2007 $0.18 1 Interest Charge 0.834% 1/18/2007-2/26/2007 $0.16 -$Bi~G• 1 ~, interest Char a 0.834% 2/26/2007-3!23!2007 $0.16 SubTotal 'Tax Shipping Total '-$~'t8 $20.34 $0.00 $0.00 .~6.34- PLEASE MAKE PAYMENT TO; CITY OF ALBERTVILLE 5975 MAI N AVE N E POBOX9 AIBERTVILLE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA CANNES (~ 763-497-3384 19~s~ T-340 P004 F-647 A~W~~ANii ThankYou! y 04-26-'87 14;36 FROM-Albertville/City of +763-497-3210 - ~ ~~ INVOICE S ~ ~ R8g11t; p~yrnent Ld: 3535 Vadnais Censer Drive Sc. Paul, MN 55110-5196 L:EIN: 41- 1251208 1651,490.2000 I eoo,3z5.2oss CITY OF ALBERTVILLE ATTN: LARRY KRUSE, CITY ADM. 5975 MAIN AVENUE NORTHEAST PO BOX 9 ALBERTVILLE MN 55301 ~j ~ ~ ~, b ALBERT VILLAS 6TH ADDITION Professional Services: July 1, 2006 through July 31, 2006 Professional Personnel Hours F2ate ADMINISTRATIVE STAFF HENKEMEYER, KATIE J 025 77.51 Totals 0.25 Total Labor T-340 P005 F-647 August 10, 2006 Project No: AALBEV0212.00 Invoice No; 0149638 Amount 19.38 19.38 19.38 Total this invoice $49.38 Short Elliott Hendrickson Inc., 1200 25th Avenue South, P.O. Box 1717, 5t, Cloud, MN 56302.1717 SJ:H Is an equal vpporcuniry employer I www sehinc.cam I 320.224.4300 I e0p.S72,0617 I 320,229.9301 fax 04-Z6-` 07 14:36 FRIX`9-Albertville/Cit~,~ of +763-497-3210 ~y~ CiTY OF ALBERTVILLE ^~:.:; ,~ ~: ..Yl 1E P 0 BOX 9 5959 MAIN AVE NE ALBERNILLE MN 55301 763-497-3384 FAX 763-497-3210 70: EDINA dEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 RECEIPT 1 1 Couri Le9a1 Albert Villas Bth 1 Interest Char a 0.834% 90/28/2006-11/29/2008 1 Interest Charge 0.834°~ 11/29/200&12/21/2006 1 Interest Charge 0.834°~ 12121/2006-1/18/2007 1 Interest Charge 0.834% 1/18/2007-2/2ti/2007 1 Interest Charge 0.834% 2/26/2007-3/23/2007 _ Invo_ice_ No. 02046225 Date 9/26/2006 'SubTotal 57'5,50 i ITax $0.00 Shipping $0.00 i _. _Total ~3~a PLEASE MAKE PAYMENT TO: `~~,~"(7 CITY OF ALBERNILLE 5975 MAIN AVE NE POBOX9 ALBERNILLE, MN 55301 IF YOU HAVE ANY pUEST10NS CONCERNING THIS INVOICE PLEASE CONTACT TINAII I.ANNES Q 763-497-33114 IIII~ Ili III II~~ ill II~) II~~ I~'I ~II IIII ThankYou T-340 P006 F-647 04-26-'07 14:3fi FF30M-Albertville/City of +763-497-3210 T-340 P007 City' of Albertvi]le September 25, 2006 Page 4 of 33 ALBERT VILLAS 6 HOURS 8/8/06 --- Conference with Larry Kruse and Tina Lannes 0.25 regarding payments due and release of letter of credit for bth Addition; telephone conference with Charlotte regarding same. ALBERT VILLAS 6 819/06 --- Read and reply to Charlotte's email regarding 0.25 release of letter of credit for 6th Addition. ALBERT VILLAS 6 TOTAL ALBERT VILLAS 6 TIME: 00 HOURS 30 MINUTES F-647 00 HOURS 30 MINTJTES @ $145/HIt= $ 72.50 TOTAL NOW DUE AND OWING = $ 72.50 04-26-'07 14:37 FROM-Albertville/City of +763-497-3210 ^~~ .'~4 ;,, To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 CITY OF ALBERTVILLE P O ROX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 UPON RECEIPT Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake BNd Anoka MN 55303 T-340 P008 F-647 Invoice _., No. 02006156 Date 8/4/2006 .._.. 1 1 Bolton 8 Menk Inv 86435 Albertvillas 7th $126.00 $128.00 1 _ Interest Char a 0.834% 9/312006-10/24/2008 $1.05 $1.05 1 Interest Charge 0.834% 10/24/2006-11/29/2006 $1.05 1 _ _ Interest Charge 0.834% 1112912006-12/21/2006 $1.05 ~-~1.05- 1 Interest Charge 0.834°~ 12127/2006-1/1$/2007 $1,05 ~~-A.,ti 1 Interest Charge 0.834°k 1/18/2007-2/26/2007 05 ~$1~. ..-$~66. 1 _ _ Interest Charge 0.834% 2/26/2007-3123/2007 . I $1.05 $fiU SubTotal $132.30 r~X $o.oo . _ _ _. _ .~ ,Shipping Total $0.00 .. PLEASE MAKE PAYMENT TO: I a 7,, OS CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX9 ALBERTVILLE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA CANNES I~ 763,497-3384 ~~~~~~~~~~~~~~~~ ThankYou ! ` 04-26-'07 14:37 FBOM-Albertville/City of +763-497-3210 T-340 P009 F-647 ~~ ~ BQ LTON c~ . I~/I ~ N K , I NG• Consulting Engineers & Surveyors 1960 Premier Drive • Mankato, MN 56001-5900 Phone (507) 625-4171 FAX <507) 625-4177 ~~~~~ ~`" Invoice ;,~'~ July 26, 2006 Project No: T15.21660 Invoice N o: 0096435 City of Atbettville Larry Kruse, City Administrator 5975 Main Avenue NE Albertville, MN 55301 AlbertvillelGerteral Engin®®ring Professional S®tvices from June 3, 2006 through June 30, 2006: $ 159.00 -Advance Fitness $ 576.00 -Towne Lakes 5th Addition -Project Management - $ 5,005.00 -Towne Lakes 5th Addition -Construction Observation-- $ 665.00 - T-Square $ 1,435.00 -Towne Lakes 3rd Addition-- $ 315.00 - Kollville 2nd Addition $ 560.00 - KollviUe 3rd Addition $ 756.00 - Eull Concrete Site - $. ~ 630.00 -Staff Meeting $ 210.00 - JPWB Meeting $ 378.00 -Engineering Transition $ 522.00 -Drainage Review -~`( $ 378.00 - STMA School (New Elementary) $ 546.00 - 1-94 Implementation-'d(v8 $ 126-00 -Albert Villas Tth Addition-- $ 84.00 -Welcome Fumiture- $12,345.00 -Invoice Total Professtonal Personnel Hours hate Amount Associate Engineer Huseby, Jon 3.00 126.00 378.00 Kasma, Mark 4.00 120.00 480.00 Attend Clty Council Meeflrtg Kasma, Mark 2.00 120.00 240.00 Towne Lakes 5th Proj/Design Engineer Lsichty, Lanol 2.00 93.00 186.00 53rd Street W®fland Aoria! Review Nafstad, Adam 1.00 84.00 84.00 Advanc® Fitness Meeting Nafstad, Adam 9.50 84.00 126.00 Alb®rt Vlllas (Grading Permif for 7th and Dicussion wifh Chatiotte) NOTICE: A finance charge of i .5°~ per month (annual percentage rate of 18%) is charged on balances 30 days or over. MANKATO, MN FAIRMONT, MN SLEEPY EYE, MN BURNSVILIE, MN WILLMAR. MN RAMSEY, MN CHASKA, MN AMES, IA www.botton-menk.com An Equal Opportunity Emgtoyer 04-26-'07 14:37 FR~'I-Albertville/City of +763-497-3210 y~y,~,~ CITY OF ALBEIZNILLE t~~3Ei"~V1~~E P O BOX 9 ~~~~~`~ 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 UPON Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Bivd Anoka MN 55303 Invoice r No. 02006146 Date 8/2!2006 ., 1 1 Weed Elimination 1 man hour plus mower 4895 I $100.0()_ $100.00 Kama/10600 48th St f"- ~ - -1~- Interest Charge 0.834°~ 9/112006-10/24/2008 $0.83 $0.83 1 Interest Charge 0.834% 10/24/2006-11/29/20D6 $0.83 1. Interest Char a 0.834% 11l2l1/2D06-12/21/2008 $0.83 1 Interest Charge 0.834% 72/21/2006-1!1812007 $0.83 ---943 ' 1 Interest Charg® 0.834% 1/18/2007-2/28/2007 _ $0.83 ~-~Bi~3~ 11 _ Int®rest Charge 0.834% 2/Z6/2007-3/23/2007 $0.831 $9i~' . . ...., •, sG/81`IR MGF~ . fl~,r..; ;:i', _ ~:je.~i,_ ;,~:,.: ~daa::: :,g,;c ,-u jTax $0.00 Shipping $0.00 .. _. ._ !Total .'"'-..-- .J PLEASE MAKE PAYMENT TO: ~~ . ~ 3 CITY OF ALBERTViLLE 5975 MAIN AVE NE P O BOX 8 ALBERTVILLE, MN 55301 (E YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA CANNES (~ 763~g7-3384 IIIIY III DIY ill! ll~ ll~l lMl ill ~l 1111 ThankYou T-340 P019 F-647 04-26-'07 14;37 FROM-Albertville/City of +763-497-3210 y~y~y~ CITY OF ALBERTVILLE ;~,..~a >. ~ ~Vl~ £ P O BOX 9 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Bivd Anoka MN 55303 Ship EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 T-340 P011 F-647 Invoice ... ~ No. 02006248 Date 10/12/2006 i_ UPON RECEIPT 1 1 Weed Elimination 1 man hour lus mow®r 10625 48th St $100.00 $100.00 1 Interest Charge 0.834% 11/11/2008-12121/2006 $0.63 1 Interest Charge 0.834% 12/21/2006-1/18/2007 $0.83 ~ . 1 Interest Charge 0.834% 1/1812007-2/26/2007 $0.83 -;9: 1 Interest Charge 0.834°~ 2/26/2007-3/23/2007 $0.83 _ . _ ~ SubTotal Tax Shipping Total 5103.32 $0.00 50.00 ~1~3.21~ • ~~ PLEASE MAKE PAYMENT T0; JO(~. UCH CITY OF ALBERTVILLE 5975 MAI N AVE N E POBOX9 ALBERTVILLE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT THE CITY OF ALBERTVILLE ~ 763-d97-3384 (111111 IIIV IIII IIlI IIIN ~IU IIII IIIN 1111 ill ThankYou ! 04-26-'07 14:37 FROM-Albertvi11e1City of +763-497-3210 ~,~ CI'I"Y OF ALBERNILLE 5959 MAIN AVE NE ~' ALBERNILLE MN 55301 763-497-3384 FAX 763-497-3210 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 UPON RECEIPT Strip EDINA DEVELOPMENT To: Attn~ Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 T-348 P012 F-647 Invoice _... _~ No. 02006251 Date 10/24/2006 ~ J 111 Weed Elimination 4985 Kama $100,00 $100.00 1 'Inf®rest Charge 0.834% 11/23/2006-12/2112006 $0.83 1 Interest Charg® 0.834°~ 12121/2006.111812007 $0.83 -~6:$~3, 1 Interesf Charge 0.834% 1/18/2007-2126/2007 _ $0,83 --$t1:89~ 1 Interest Charge 0.834% 2/26!2007-3/23/2007 50.83 --yi@;$3- ISubTotal 5103.32 Tax 50.00 Shipping $0.00 Total ~~ -$~t033~ PLEASE MAKE PAYMENT TO: ~ dj~ , C1~ CITY OF ALBERNILLE 5975 MAIN AVE NE POBOX9 ALBER7VILLE, MN 55301 IF YOU WAVE ANY QUESTJONS CONCERNING THIS INVOICE PLEASE CONTACT THE CITY OF ALBERNILLE @ 763-497-3384 ~~ ThankYou ! 04-26-'87 14:38 FROM-Albertville/City of +763-497-3218 T-340 Pt~13 F-647 y,\y\y~ CITY OF ALBERTVILLE /nV01C@ X,,,.~, ..,. ,; rtv~l E... P o Box s ... .L; ...-: '• ~~. ,~ 0200132134 .. ,, ~ ~ ~~ 5959 MAIN AVE NE Date 10/24/2006 ALB~RTVILLE MN 5530'1 ~... . ~ 763-497-3384 FAX 763-497-3210 To: EDINA OEVELOPMENT Ship EDINA DEVELOPMENT Attn: Charolette Gabler To: Attn: Gharolette Gabler 700 Bunker Lake 61vd 700 Bunker Lake Blvd Anoka MN 55303 Anoka MN 55303 5.251 Weed Elimination 10548 49th St - 09/06 $100.00 $525.00 1 Interest Cha a 4.834% 11/23/2006.12/21/2006 $4.38 1 Interest Charge 0.834% 1212112006-1/18/2007 _ $4.38 ~~38- 1 Interest Charge 0.834% 1/18/2007-2/26/2007 $4.38 -~$4'S$~ 1 Interest Charge 0.834% 2/26/2007-3123/2007 $4.38 -~$#-9ti- Sub7otal 5542.52 Tax ao•oo Shipping Eo.00 ....~ LYotal -- -.J PLEASE MAKE PAYMENT TO: ~02 ,S', CSC CITY OF ALBERTVILLE 5975 MAIN AVE NE P O BOX 9 ALBERTVILLE, MN 55301 IF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT THE CITY OF ALBERTVILLE @ 763-497-3384 ThankYou ! Y 04-26-'87 14:38 FBOCI-AlbertvillelCity of +763-497-321® y~y,\y~ CITY OF ALBERTVILLE V1~ £ P O BOX 9 ~ ~~ h ~• 5959 MAIN AVE NE ALBERTVILLE MN 55301 763-497-3384 FAX 763-497-32.10 To: EDINA DEVELOPMENT Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 UPON RECEIPT Shrp EDINA DEVELOPMENT To: Attn: Charolette Gabler 700 Bunker Lake Blvd Anoka MN 55303 1 1 eed Elimination 1 man hour plus mower 4929 Kama Ave_ 1 Interest Char a 0.834°~ 9/23/2006-10/24/2006 1 Interest Charge 0.834% 10/24/2006-11/28/2008 _ 1 Interest Chars 0.834% 11/29/2006-12/21/2006 _ 1 Inter®st Char a 0.834% 12/21/2006-1/18/2007 1 Interest Charge 0.834% 1/18/2007-2/26/2007 1 Interest Charge 0.834°~ 2/26/2007-3/23/2007 SubTolal Shipping T-340 P014 F-647 $0. Invoice No. 02006188 Date 8/24/2006 Lr .. J $100.00 3s:83~ $104.88 $0.00 $0.00 L.~.. .._ _ .. ~ Tvtel -..... ~-J PLEASE MAKE PAYMENT TO: t (JU ,. ~' 3 CITY OF ALBERTVILLE 5975 MAIN AVE NE POBOX9 ALBERTVILLE, MN 55301 tF YOU HAVE ANY QUESTIONS CONCERNING THIS INVOICE PLEASE CONTACT TINA CANNES ~ 763-497.3384 ~~~~,~~~~ ThankYou A. V I~ IVERSON REUVERS ATTORNEYS AT LAW April 30, 2007 HAND DELIVERED Clerk, U.S. Bankruptcy Court 30l U.S. Courthouse 300 South Fourth Street Minneapolis, MN 55415 In Re: Edina Development Corporation Case No. 06-42532 Dear Clerk of Court: Enclosed herein for filing find diskette containing Proof of Claim with supporting documents. A paper copy of the same is also enclosed. Yours truly, IVERSONR`EUVERS ~~ Jeffrey A. Egge JAE:bh Enclosure JEFFREY A. EGGE DIRECT: 952.548.7201 )EGGE@IVERSONLAW.COM JON K.IVERSON PAUL D.REUVERS JEFF M. ZALA$KY JASON J.KUBOUSHEK PAMELA J.F. WHITMORE JASON M. HIVELEY SUSAN M. TlNDAL JEFFREY A. EGGE AMBERS. LEE IVERSON REUVERS, LLC 19321 ENSIGN AVENUE SOUTH I BLOOMINGTON, MN 55438 ~ 952.548.7200 ~ FAX: 952.548.7210 ~ W WW.tVER50NLAW.COM