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2021-08-16 Private Development Contract'1 G� Doc. No. A1480449 OFFICE OF THE COUNTY RECORDER WRIGHT COUNTY, MINNESOTA Certified Filed and/or Recorded on August 17, 2021 10:36 AM Fee: $48.00 Tanva West, Countv Recorder CONTRACT FOR PRIVATE DEVELOPMENT between CITY OF ALBERTVILLE, MINNESOTA and ADVANCED VOLUMETRIC ALLIANCE, LLC Dated: August This document was drafted by: KENNEDY & GRAVEN, Chartered (MNI) 150 South 5th Street, Suite 700 Minneapolis, Minnesota 55402-1299 Telephone: 612-3 3 7-93 00 RETURN TO: Erin Carlson 313 Washington Ave S #1119 Minneapolis, MN 55415 16 92021 TABLE OF CONTENTS PREAMBLE............................................................................................................................I ARTICLE I Definitions Section1.1. Definitions.......................................................................................................... 2 ARTICLE II Representations and Warranties Section 2.1. Representations by City...................................................................................... 5 Section 2.2. Representations and Warranties by Developer ................................................... 5 ARTICLE III Public Development Costs; Financing Section 3.1. Status of Development Property......................................................................... 7 Section 3.2. Environmental Conditions.................................................................................. 7 Section 3.3. Public Development Costs.................................................................................. 7 Section3.4. Issuance of Note................................................................................................. 7 Section 3.5. Payment of Administrative Costs....................................................................... 8 Section3.6. Records............................................................................................................... Section 3.7. Business Subsidy Agreement............................................................................. 9 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements........................................................ 12 Section 4.2. Construction Plans 12 Section 4.3. ............................................................................................ Commencement and Completion of Construction ........................................... 13 Section 4.4. Certificate of Completion................................................................................. 13 ARTICLE V Insurance Section 5.1. Insurance........................................................................................................... 15 Section5.2. Subordination.................................................................................................... 16 ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes................................................................... 17 Section6.2. Review of Taxes............................................................................................... 17 698806v l AL 141-70 1 ARTICLE VII Financing Section7.1. Financing.......................................................................................................... 18 Section 7.2. City's Option to Cure Default on Mortgage ..................................................... 18 Section 7.3. Subordination and Modification for the Benefit of Mortgagee ........................ 18 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development................................................................... 19 Section 8.2. Prohibition Against Transfer of Property and Assignment of Agreement................................................................................ 19 Section 8.3. Release and Indemnification Covenants........................................................... 21 ARTICLE IX Events of Default Section 9.1. Events of Default Defined................................................................................ 22 Section 9.2. Remedies on Default........................................................................................ 22 Section 9.3. No Remedy Exclusive...................................................................................... 22 Section 9.4. No Additional Waiver Implied by One Waiver ................................................ 22 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; City Representatives Not Individually Liable ................ 23 Section 10.2. Equal Employment Opportunity....................................................................... 23 Section 10.3. Restrictions on Use........................................................................................... 23 Section 10.4. Provisions Not Merged With Deed.................................................................. 23 Section 10.5. Titles of Articles and Sections.......................................................................... 23 Section 10.6. Notices and Demands....................................................................................... 23 Section 10.7. Counterparts...................................................................................................... 24 Section10.8. Recording.......................................................................................................... 24 Section10.9. Amendment...................................................................................................... 24 Section10.10. City Approvals.................................................................................................. 24 Section10.11. Termination...................................................................................................... 24 Section 10.12. Choice of Law and Venue................................................................................ 24 Section 10.13. Good Faith........................................................................................................ 24 TESTIMONIUM....................................................................................................................... S-1 SIGNATURES......................................................................................................................... S-1 6988060AL 141-70 ' 11 SCHEDULE A Description of Development Property............................................................ A-1 SCHEDULE B Authorizing Resolution................................................................................... B-1 SCHEDULE C Certificate of Completion ............................................................................... C-1 698806v 1 AL 141-70 111 CONTRACT FOR PRIVATE DEVELOPMENT THIS CONTRACT FOR PRIVATE DEVELOPMENT (the "Agreement"), made on or as of the day of August, 2021, between the CITY OF ALBERTVILLE, MINNESOTA, a statutory city and political subdivision of the State of Minnesota (the "City"), and ADVANCED VOLUMETRIC ALLIANCE, LLC, a Minnesota limited liability company (the "Developer"). WITNESSETH: WHEREAS, the City has undertaken a program to promote economic development and job opportunities and to promote the development of land which is underutilized within the City (the "Development Program"), and in this connection created Municipal Development District No. 1 (the "Project") in an area (the "Prof ect Area") located in the City and has established Tax Increment Financing (Economic Development) District No. 18 (AVA Project) (the "TIF District"), an economic development district, within the Project Area, all pursuant to Minnesota Statutes, Sections 469.124 through 469.133, as amended (the "City Development Act"), and Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"); and WHEREAS, pursuant to the City Development Act, the City is authorized to undertake certain activities to facilitate the development of such underutilized land by private enterprise; and WHEREAS, the Developer proposes to acquire certain property in the Project Area (the "Development Property") and proposes to construct and develop an approximately 180,000 square -foot manufacturing and warehouse facility on the Development Property, inclusive of 20,000 square feet of supporting office and administration space (the "Minimum Improvements"); and WHEREAS, in order to achieve the objectives of the Development Program for the Project, the City is prepared to reimburse the Developer for certain site improvement and utility costs related to the Minimum Improvements in order to bring about development in accordance with the Development Program and this Agreement; and WHEREAS, the City believes that the development of the Project Area pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 698806v l AL ] 4 l -70 1 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Affiliate" means with respect to the Developer (a) any corporation, partnership, limited liability company or other business entity or person controlling, controlled by or under common control with the Developer; and (b) any successor to such party by merger, acquisition, reorganization or similar transaction involving all or substantially all of the assets of such party (or such Affiliate). For the purpose hereof, the words "controlling," "controlled by" and "under common control with" mean, with respect to any corporation, partnership, limited liability company or other business entity, the ownership of fifty percent (50%) or more of the voting interests in such entity possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether ownership of voting securities or by contract or otherwise. "Agreement" means this Contract for Private Development, as the same may be from time to time modified, amended, or supplemented. "Authorizing Resolution" means the resolution of the City, substantially in the form set forth in Schedule B attached hereto, approving this Agreement and authorizing the issuance of the Note. "Business Subsidy Act" means Minnesota Statutes, Sections 116J.993 to 116J.995, as amended. "Certificate of Completion" means the certification, in substantially the form set forth in Schedule C attached hereto, provided to the Developer, or the purchaser of any part, parcel or unit of the Development Property, pursuant to Section 4.4 hereof. "City" means the City of Albertville, Minnesota. "City Council" means the City Council of the City. "City Development Act" means Minnesota Statutes, Sections 469.124 through 469.133, as amended. "City Representative" means the City Administrator, or any person designated by the City Administrator to act as the City Representative for the purposes of this Agreement. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Developer on the Development Property to construct the Minimum Improvements which (a) shall be as detailed as the plans, specifications, 698806v 1 AL 141-70 2 drawings and related documents which are submitted to the appropriate building officials of the City; and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross -sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the City may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of Wright, Minnesota. "Developer" means Advanced Volumetric Alliance, LLC, a Minnesota limited liability company, or its permitted successors and assigns. "Development Program" means the City's Development Program for Municipal Development District No. 1 as most recently amended by Resolution No. 2015-025, adopted by the City Council on June 29, 2015, and as it may be further modified. hereto. "Development Property" means the real property so described in Schedule A attached "Event of Default" means an action by the Developer listed in Article IX hereof. "Holder" means the owner of a Mortgage. "Maturity Date" means the date that the Note has been paid in full or terminated, whichever is earlier. "Minimum Improvements" means the construction and development on the Development Property of an approximately 180,000 square -foot manufacturing and warehouse facility, inclusive of 20,000 square feet of supporting office and administration space, and associated site improvements. "Mortgage" means any mortgage made by the Developer which is secured, in whole or in part, by the Development Property, and any modification, supplement, extension, renewal or amendment thereof. "Note" means a pay-as-you-go tax increment revenue note, substantially in the form set forth in EXHIBIT A of the Authorizing Resolution, to be delivered by the City to the Developer in consideration for the Developer's payment of Public Development Costs related to the Minimum Improvements. "Project" means the City's Municipal Development District No. 1. "Project Area" means the real property located within the boundaries of the Project. "Public Development Costs" has the meaning provided in Section 3.3 hereof. 698806v 1 AL 141-70 3 "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the TIF District and which is remitted to the City as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 through 469.1794, as amended. "Tax Increment District" or "TIF District" means the City's Tax Increment Financing (Economic Development) District No. 18 (AVA Project), an economic development district. "Tax Increment Plan" or "TIF Plan" means the City's Tax Increment Financing Plan for the TIF District, as approved February 1, 2021, and as it may be amended. "Tax Official" means any County assessor; County auditor; County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Unavoidable Delays" means unexpected delays which are the direct result of: (i) adverse weather conditions; (ii) shortages of materials; (iii) strikes, other labor troubles; (iv) fire or other casualty to the Minimum Improvements; (v) litigation commenced by third parties which, by injunction or other judicial action, directly results in delays; (vi) acts of any federal or state governmental unit, including legislative and administrative acts; (vii) approved changes to the Construction Plans that result in delays; (viii) delays caused by the discovery of any adverse environmental condition on or within the Development Property to the extent reasonably necessary to comply with federal and state environmental laws, regulations, orders or agreements; (ix) delay in the issuance of any license or permit by any governmental entity, provided application therefor is timely made and diligently pursued by Developer; and (x) pandemic or other public health emergency, and related acts of any federal, State, or local government including, but not limited to, responsive legislation, states of emergency and executive orders; and (xi) any other cause or force ma j eure beyond the control of Developer which directly results in delays. (The remainder of this page is intentionally left blank.) 698806v l AL 141-70 4 ARTICLE II Representations and Warranties Section 2.1. Representations by City. The City makes the following representations as the basis for the undertaking on its part herein contained: (a) The City is a statutory city duly organized and existing under the laws of the State. Under the provisions of the City Development Act, the City has the power to enter into this Agreement and carry out its obligations hereunder, and execution of this Agreement has been duly, properly and validly authorized by the City. (b) Pursuant to the City Development Act, the City proposes to assist in financing certain Public Development Costs necessary to serve the Development Property and Minimum Improvements in accordance with the terms of this Agreement. (c) The activities of the City are undertaken to foster the development of certain real property which for a variety of reasons is presently underutilized, to create increased tax base in the City; increase net jobs in the City and to stimulate further development of the City as a whole. (d) The City will use its best efforts to facilitate development of the Minimum Improvements, including but not limited to cooperating with the Developer in obtaining necessary administrative and land use approvals. Section 2.2. Representations and Warranties by Developer. The Developer represents and warrants that: (a) The Developer is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its organizational documents or bylaws or, to the best of its knowledge, the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. (b) The Developer will construct, operate and maintain the Minimum Improvements, or cause the same to be constructed, operated and maintained, in accordance with the terms of this Agreement and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Developer has received no written notice or communication from any local, state or federal official that the activities of the Developer on the Development Property would be in violation of any environmental law or regulation (other than those notices or communications of which the City is aware). The Developer is aware of no facts the existence of which would cause the Development Property to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. 698806v1 AL141-70 5 (d) The Developer will construct, or cause to be constructed, the Minimum Improvements in accordance with all local, state or federal energy -conservation laws or regulations. (e) The Developer will timely apply for and diligently pursue all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (f) To the best of the Developer's knowledge and belief, neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any partnership or company restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (g) The Developer is not currently in default under any business subsidy agreement with any grantor, as such terms are defined in the Business Subsidy Act. (h) The proposed development by the Developer hereunder would not occur but for the tax increment financing assistance being provided by the City hereunder. (The remainder of this page is intentionally left blank.) 698806v1 AL141-70 6 ARTICLE III Public Development Costs; Financing Section 3.1. Status of Development Property. (a) As of the date of this Agreement, the Developer has entered into a contribution agreement to acquire the Development Property from an Affiliate. The City has no obligation to acquire the Development Property or any portion thereof. (b) The Developer shall obtain all planning approvals necessary to construct the Minimum Improvements. In addition, and as provided in Section 4.2 hereof, the Developer shall prepare its Construction Plans to meet the standards as required by the City. Section 3.2. Environmental Conditions. (a) The Developer acknowledges that the City makes no representations or warranties as to the condition of the soils on the Development Property or the fitness of the Development Property for construction of the Minimum Improvements or any other purpose for which the Developer may make use of such property, and that the assistance provided to the Developer under this Agreement neither implies any responsibility by the City for any contamination of the Development Property nor imposes any obligation on the City to participate in any cleanup of the Development Property. (b) Without limiting its obligations under Section 8.3 hereof, the Developer further agrees that it will indemnify, defend, and hold harmless the City and its governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Development Property (including without limitation any asbestos in any existing building), unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnitees. Nothing in this Section will be construed to limit or affect any limitations on liability of the City under State or federal law, including without limitation Minnesota Statutes, Sections 466.04 and 604.02. Section 3.3. Public Development Costs. In order to make development of the Minimum Improvements economically feasible, the City will reimburse the Developer for a portion of the actual costs of site improvements necessary for construction of the Minimum Improvements, including, without limitation, grading, footings and foundations, extension of utilities, and construction of a surface parking lot (the "Public Development Costs"). The total principal amount of Public Development Costs subject to reimbursement will not exceed $1,794,000. Public Development Costs in excess of $1,794,000 are the sole responsibility of the Developer. Section 3.4. Issuance of Note. (a) Terms. To finance a portion of the Public Development Costs paid by the Developer, the City shall issue and the Developer shall purchase the Note in the maximum principal amount of $1,794,000. The City shall issue and deliver the Note upon the Developer having: 698806v 1 AL 141-70 7 (i) delivered to the City written evidence satisfactory to the City that the Developer has incurred Public Development Costs for the Minimum Improvements in an amount at least equal to the principal amount of the Note, which evidence must include copies of the paid invoices or other comparable evidence for costs of allowable Public Development Costs, and a statement that no part of such cost has been included in any previous certification under this Section; (ii) submitted and obtained City approval of financing in accordance with Section 7.1 hereof; and (iii) delivered to the City an investment letter in a form reasonably satisfactory to the City. The terms of the Note will be substantially those set forth in the form of the note set forth in EXHIBIT A of the Authorizing Resolution, and the Note will be subject to all terms of the Authorizing Resolution, which are incorporated herein by reference. (b) Termination of Right to Note. In accordance with Section 469.1763, subdivision 3 of the TIF Act, conditions for delivery of the Note must be met within five (5) years after the date of certification of the TIF District by the County. If the conditions are not satisfied by such date, the City has no further obligations under this Section 3.4. (c) Assignment of Note. The City acknowledges that the Developer may assign the Note to a third party. The City consents to such an assignment, conditioned upon receipt of an investment letter from such third party in a form reasonably acceptable to the City. (d) Qualifications. The Developer understands and acknowledges that the City makes no representations or warranties regarding the amount of Tax Increment, or that revenues pledged to the Note will be sufficient to pay the principal of and interest on the Note. Any estimates of Tax Increment prepared by the City or its municipal advisors in connection with the TIF District or this Agreement are for the benefit of the City, and are not intended as representations on which the Developer may rely. Public Development Costs exceeding the principal amount of the Note are the sole responsibility of the Developer. Section 3.5. Payment of Administrative Costs. The Developer agrees that it will pay, within 30 days after written notice from the City, the out-of-pocket costs incurred by the City attributable to or incurred in connection with the establishment of the TIF District, the negotiation and preparation of this Agreement and other documents and agreements in connection with the development contemplated hereunder (the "Administrative Costs"). Administrative Costs shall be evidenced by invoices, statements or other reasonable written evidence of the costs incurred by the City and provided to the Developer. The City acknowledges that the Developer has deposited $25,000 with the City, which deposit shall be credited toward the Developer's obligations under this Section. Upon termination of this Agreement in accordance with its terms, the Developer remains obligated under this Section for Administrative Costs incurred through the effective date of termination. 698806v1AL141-70 8 Section 3.6. Records. The City and its representatives shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of the Developer relating to the Minimum Improvements and the Public Development Costs. Section 3.7. Business Subsidy Agreement. The provisions of this Section constitute the "business subsidy agreement" for the purposes of the Business Subsidy Act. (a) General Terms. The parties agree and represent to each other as follows: (1) The subsidy provided to the Developer consists of the principal amount of the Note described in Section 3.4 hereof. (2) The public purposes of the subsidy are to facilitate development of the Development Property, increase net jobs in the City and the State, and increase the tax base of the City and the State. (3) The goals for the subsidy are to secure development of the Minimum Improvements on the Development Property; to maintain such improvements as a manufacturing and warehouse facility for the time period described in clause (6) below; and to create the jobs and wage levels in accordance with Section 3.7(b) hereof. (4) If the goals described in clause (3) are not met, the Developer must make the payments to the City described in Section 3.7(c). (5) The subsidy is needed to induce Developer to locate its business at this site. (6) The Developer must continue operation of the Minimum Improvements as a "Qualified Facility" for at least five (5) years after the Benefit Date (defined hereinafter). The term Qualified Facility means a manufacturing and warehouse facility. The Minimum Improvements will be a Qualified Facility as long as the Minimum Improvements are operated by Developer or a tenant for the aforementioned qualified uses. During any period when the Minimum Improvements are vacant and not operated for the aforementioned qualified uses, the Minimum Improvements will not constitute a Qualified Facility. (7) The Developer does not have a parent corporation. (8) The City, on behalf of the Developer, intends to submit an application to the Minnesota Department of Employment and Economic Development to receive a $625,000 loan from the Minnesota Investment Fund to assist in financing the Minimum Improvements. The Developer has not received, and does not expect to receive, financial assistance from any other "grantor" as defined in the Business Subsidy Act, in connection with the Development Property or the Minimum Improvements. (b) Job and Wage Goals. The "Benefit Date" of the assistance provided in this Agreement is the earlier of the date of issuance of a certificate of completion for the Minimum 698806v1AL141-70 9 Improvements or the date the Minimum Improvements are occupied by the Developer or a tenant of the Developer. By a date within two (2) years after the Benefit Date (the "Compliance Date"), the Developer shall (i) create or cause to be created at least one hundred and ten (110) full-time equivalent jobs on the Development Property, and (ii) cause the hourly wage of such jobs to be at least $18.00, exclusive of benefits. Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph are met by the Compliance Date, those goals are deemed satisfied despite the Developer's continuing obligations under Sections 3.7(a)(6) and 3.7(d). The City may, after a public hearing, extend the Compliance Date by up to one year, provided that nothing in this section will be construed to limit the City's legislative discretion regarding this matter. (c) Remedies. (i) If the Developer fails to maintain the facility as a Qualified Facility in accordance with Section 3.7(a)(6) for at least five (5) years after the Benefit Date, the Developer shall repay to the City upon written demand from the City the entire subsidy provided to the Developer. (ii) If the Developer fails to maintain the facility as a Qualified Facility in accordance with Section 3.7(a)(6) after the date five (5) years after the Benefit Date, the Developer shall repay to the City upon written demand from the City a "pro rata share" of the Public Development Costs described in Section 3.3 together with interest on that amount at the implicit price deflator as defined in Section 116J.994, subdivision 6 of the Business Subsidy Act, accrued from the date of substantial completion of the Minimum Improvements to the date of payment. The term "pro rata share" means one hundred twenty (120) less the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least fifteen (15) days constitutes a month of operation), commencing on the date five (5) years after the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the City Representative, divided by one hundred twenty (120). (iii) If the Developer fails to meet the job and wage goals described in Section 3.7(a)(3) hereof, the Developer shall repay to the City upon written demand from the City a "pro rata share" of the Public Development Costs described in Section 3.3 hereof together with interest on that amount at the implicit price deflator as defined in Section I I6J.994, subdivision 6 of the Business Subsidy Act, accrued from the date of substantial completion of the Minimum Improvements to the date of payment. The term "pro rata share" means percentages calculated as follows: (A) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (B) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; and 698806v l AL141-70 10 (iv) if more than one of clauses (ii) and (iii) apply, the sum of the applicable percentages, not to exceed one hundred percent (100%). Nothing in this Section shall be construed to limit the City's remedies under Article IX hereof. In addition to the remedy described in this Section and any other remedy available to the City for failure to meet the goals stated in Section 3.7(a)(3) hereof, the Developer agrees and understands that it may not receive a business subsidy from the City or any grantor (as defined in the Business Subsidy Act) for a period of five (5) years from the date of the failure or until the Developer satisfies its repayment obligation under this Section, whichever occurs first. (d) Reports. The Developer must submit to the City a written report regarding business subsidy goals and results by no later than February 1 of each year, commencing February 1, 2023 and continuing until the latest of (i) the date the goals stated Section 3.7(a)(3) hereof are met; (ii) thirty (30) days after expiration of the period described in Section 3.7(a)(6) hereof; or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 3.7(c) hereof. The report must comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The City will provide information to the Developer regarding the required forms. If the Developer fails to timely file any report required under this Section, the City will mail the Developer a warning within one (1) week after the required filing date. If, after fourteen (14) days of the postmarked date of the warning, the Developer fails to provide a report, the Developer must pay to the City a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section is $1,000. (The remainder of this page is intentionally left blank.) 698806v 1 AL 141-70 11 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. Subject to all other terms and conditions of this Agreement, the Developer agrees that it will construct, or cause to be constructed, the Minimum Improvements on the Development Property in accordance with the approved Construction Plans and at all times prior to the Maturity Date will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be operated, maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before commencement of construction of the Minimum Improvements, Developer shall submit the Construction Plans to the City. The City will approve such Construction Plans in writing if: (i) such Construction Plans conform to the terms and conditions of the Development Program and this Agreement; (ii) such Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iii) such Construction Plans are adequate to provide for construction of the Minimum Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds available to the Developer (including Developer's equity) for construction of the Minimum Improvements; and (v) no Event of Default has occurred. No approval by the City shall relieve the Developer of the obligation to comply with the terms of the Development Program or of this Agreement or of applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the City shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Developer in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the City, in whole or in part. Such rejections shall set forth in detail the reasons therefor, and shall be made within thirty (30) days after the date of their receipt by the City. If the City rejects any Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within thirty (30) days after written notification to the Developer of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the City. The City's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the City's satisfaction with the provisions of this Agreement relating thereto. The Developer hereby waives any and all claims and causes of action whatsoever resulting from the review of the Construction Plans by the City and/or any changes in the Construction Plans requested by the City. Neither the City, nor any employee or official of the City shall be responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant to the Construction Plans, including changes requested by the City. 698806v 1 AL 141-70 12 (b) If the Developer desires to make any material change in the Construction Plans after their approval by the City, the Developer shall submit the proposed change to the City for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Construction Plans, the City shall approve the proposed change and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the City unless rejected, in whole or in part, by written notice by the City to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. The City's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Developer must commence construction of the Minimum Improvements by November 3 0, 2021, and substantially complete construction of the Minimum Improvements by December 31, 2022. All work with respect to the Minimum Improvements to be constructed on the Development Property shall substantially conform to the Construction Plans as submitted by the Developer and approved by the City. The Developer agrees for itself, its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Development Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced within the period specified in this Section. Subsequent to conveyance of the Development Property, or any part thereof, to the Developer, and until construction of the Minimum Improvements has been completed, the Developer shall make reports, in such detail and at such times as may reasonably be requested by the City, as to the actual progress of the Developer with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Developer to construct the Minimum Improvements (including the dates for commencement and completion thereof), the City will furnish the Developer with an appropriate instrument so certifying. Such certification by the City shall be (and it shall be so provided in the deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the deed with respect to the obligations of the Developer, and its successors and assigns, to construct the Minimum Improvements and the date for the completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The certificate provided for in this Section shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Development Property. If the City shall refuse or fail to provide any certification in 698806v 1 AL141-70 13 accordance with the provisions of this Section, the City shall, within thirty (30) days after written request by the Developer, provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or acts it will be necessary, in the opinion of the order to obtain such certification. or is otherwise in default, and what measures City, for the Developer to take or perform in (c) The construction of the Minimum Improvements shall be deemed to be commenced when a building permit is issued by the City, and shall be deemed to be substantially completed when the Developer has received a certificate of occupancy issued by the City for the Minimum Improvements. (The remainder of this page is intentionally left blank.) 698806v 1 AL 141-70 14 ARTICLE V Insurance Section 5.1. Insurance. The Developer will provide and maintain at all times during the process of constructing the Minimum Improvements an All -Risk Broad Form Basis Insurance Policy, or comparable coverage, and, from time to time during that period, at the request of the City, furnish the City with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the City shall be protected in accordance with a clause in form and content satisfactory to the City; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Maturity Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the City shall furnish proof of the payment of premiums on, insurance as follows: (i) a policy or businesses. Insurance against loss and/or damage to the Minimum Improvements under policies covering such risks as are ordinarily insured against by similar (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show the City as an additional insured. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self -insured with respect to all or any part of its liability for workers' compensation. 6988060AL 141-70 15 (c) All insurance required in this Article shall be taken out and maintained in responsible insurance companies selected by the Developer that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the City policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article each policy shall contain a provision that the insurer shall not cancel or modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Developer and the City at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Developer agrees to notify the City immediately in the case of damage exceeding $250,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Developer. (e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this Section, the Developer shall have the option of (i) if Developer has assigned the Note to a third party, paying to the City an amount that, in the opinion of the City and its fiscal consultant, is sufficient to pay or redeem the outstanding principal and accrued interest on the Note, or (ii) so long as the Developer is the owner of the Note, waiving its right to receive subsequent payments under the Note. (f) The Developer and the City agree that all of the insurance provisions set forth in this Article shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article, the rights of the City with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII hereof. 698806v l AL 141-70 16 ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the City is providing substantial aid and assistance in furtherance of the development through reimbursement of Public Development Costs. The Developer understands that the Tax Increment pledged to payment on the Note is derived from real estate taxes on the Development Property, which taxes must be promptly and timely paid. To that end, the Developer agrees for itself, its successors and assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Development Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a contractual right on behalf of the City to sue the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the City shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Reduction of Taxes. The Developer agrees that prior to the Maturity Date: (1) it will not seek through petition or other means to have the estimated market value for the Development Property reduced; (2) it will not seek administrative review or judicial review of the applicability of any real property tax statute determined by any Tax Official to be applicable to the Minimum Improvements or the Developer or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; (3) it will not seek administrative review or judicial review of the constitutionality of any real property tax statute determined by any Tax Official to be applicable to the Minimum Improvements or the Developer or raise the unconstitutionality of any such real property tax statute as a defense in any proceedings, including delinquent tax proceedings; and (4) it will not (A) cause willful destruction of the Minimum Improvements or any part thereof; (B) willfully refuse to reconstruct damaged or destroyed property pursuant to Section 5.1 hereof; (C) apply to the Commissioner of Revenue of the State requesting an abatement of real property taxes pursuant to Minnesota Statutes, Chapter 270; (D) transfer the Development Property or Minimum Improvements, or any part thereof, to an entity exempt from the payment of real property taxes under State law; or (E) engage in any other proceedings, whether administrative, legal or equitable, with any administrative body within the County or the State or with any court of the State or the federal government to reduce or defer the amount of real property taxes assessed against the Development Property and the Minimum Improvements, except that nothing in this Section shall prevent the Developer from taking any action it may choose with respect to any income tax matters. 698806v 1 AL141-70 17 ARTICLE VII Financing Section 7.1. Financing. (a) Before conveyance of the Development Property, the Developer shall submit to the City evidence of one or more commitments for mortgage financing which, together with committed equity for such construction, is sufficient for the construction of the Minimum Improvements. Such commitments may be submitted as short-term financing, long-term mortgage financing, a bridge loan with a long-term take-out financing commitment, or any combination of the foregoing. Such commitment or commitments for short-term or long-term mortgage financing shall be subject only to such conditions as are normal and customary in the mortgage banking industry. (b) If the City finds that the mortgage financing is sufficiently committed and adequate in amount to provide for the construction of the Minimum Improvements, then the City shall notify the Developer in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within thirty (30) days from the date when the City is provided the evidence of financing. A failure by the City to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the City rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Developer shall submit adequate evidence of financing within thirty (30) days after such rejection. Approval of any subordination agreement under Section 7.3 hereof will constitute approval of financing for the purposes of this Section. Section 7.2. City's Option to Cure Default on Mortgage. In the event that there occurs a default under any Mortgage, Developer shall cause the City to receive copies of any notice of default received by the Developer from the holder of such Mortgage. The Developer will use its reasonable efforts to include in any Mortgage a provision that the City shall have the right, but not the obligation, to cure any such default on behalf of the Developer within such cure periods as are available to the Developer under the Mortgage documents. In the event there is an event of default under this Agreement, the City will transmit to the Holder of any Mortgage a copy of any notice of default given by the City pursuant to Article IX hereof. Section 7.3. Subordination and Modification for the Benefit of Mortgayee. In order to facilitate the Developer obtaining financing for purchase of the Development Property and for construction according to the Construction Plans, the City agrees to subordinate its rights under this Agreement, provided that such subordination shall be subject to such reasonable terms and conditions as the City and Holder mutually agree in writing. 698806v 1 AL 141-70 18 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Developer represents and agrees that its acquisition of the Development Property or portions thereof, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Development Property and not for speculation in land holding. Section 8.2. Prohibition Against Transfer of Property and Assignment of Agreement. The Developer represents and agrees that until issuance of the Certificate of Completion for the Minimum Improvements: (a) The Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the City Council unless the Developer remains liable and bound by this Agreement, in which event, notwithstanding anything in this Agreement to the contrary, the City's approval is not required. The term "Transfer" does not include (1) encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to construct the Minimum Improvements, or (ii) any lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements. Prior approval by the City is not required for any Transfer: (1) to an Affiliate or the transfer of a member's interest in the Developer to an Affiliate of the member so long as the proposed transferee expressly assumes the obligations of the Developer or the original member; (2) that is involuntary resulting from the death or disability of parties in control of the members of the Developer. (b) If the Developer seeks to effect a Transfer which requires the approval of the City prior to issuance of the Certificate of Completion for the Minimum Improvements, the City shall be entitled to require as conditions to such Transfer that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer as to the portion of the Development Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the City and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the City, have expressly assumed all of the obligations of the Developer under this Agreement as to the portion of the Development Property to be transferred and agreed to be subject to all the conditions and restrictions to 698806v 1 AL l 4 l -70 19 which the Developer is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the City) deprive the City of any rights or remedies or controls with respect to the Development Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the City of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the City would have had, had there been no such transfer or change. In the absence of specific written agreement by the City to the contrary, no such transfer or approval by the City thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property governed by this Article, shall be in a form reasonably satisfactory to the City. (c) If the conditions described in paragraph (b) are satisfied with regard to any Transfer requiring the approval of the City then the Transfer will be approved and the Developer shall be released from its obligations under this Agreement, as to the portion of the Development Property that is transferred, assigned, or otherwise conveyed. The provisions of this paragraph (c) apply to all subsequent transferors, assuming compliance with the terms of this Article. (d) Upon issuance of the Certificate of Completion for the Minimum Improvements, the Developer may transfer or assign the Minimum Improvements and/or the Developer's rights and obligations under this Agreement with respect to such property without the prior written consent of the City; provided that: (i) Until the Maturity Date the transferee or assignee is bound by all of the Developer's obligations hereunder with respect to the property and rights transferred. The Developer shall submit to the City written evidence of any such transfer or assignment, including the transferee or assignee's express assumption of the Developer's obligations under this Agreement. If the Developer fails to provide such evidence of transfer and assumption, the Developer shall remain bound by all obligations with respect to the subject property under this Agreement. (ii) Upon compliance with clause (i) above (whether the transfer occurred before or after issuance of the Certificate of Completion), the Developer shall be released 698806v1 AL141.-70 20 from its obligations under this Agreement with respect to the property transferred assigned or otherwise conveyed. The provisions of this paragraph (d) apply to all subsequent transferors, assuming compliance with the terms of this Article. Section 8.3. Release and Indemnification Covenants. (a) The Developer releases from and covenants and agrees that the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the City and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (b) Except for any negligence of the following named parties and any claim as to the legal authority of the City to perform as required by this Agreement, the Developer agrees (if timely tendered by the City to the Developer) to protect and defend the City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever to the extent caused by the construction, installation, and operation of the Minimum Improvements. (c) The City and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Developer or its officers, agents, servants or employees or any other person who may be about the Development Property or Minimum Improvements due to any act of negligence of any person (other than the City). (d) All covenants, stipulations, promises, agreements and obligations of the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City and not of any governing body member, officer, agent, servant or employee of the City in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 698806v 1 AL 141-70 21 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any failure by any party, following notice and cure periods described in Section 9.2 hereof, to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement or under any other agreement entered into between the Developer and the City in connection with development of the Development Property. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 hereof occurs, the non -defaulting party may exercise its rights under this Section after providing thirty (30) days' written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable within thirty (30) days, the defaulting party does not provide assurances reasonably satisfactory to the non -defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Suspend its performance under the Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement. (b) Cancel and rescind or terminate the Agreement or the Note. (c) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City or the Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the City to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 698806vlAL141-70 22 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; City Representatives Not Individually Liable. The City and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the City shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Developer or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Developer agrees that until the Maturity Date, the Developer, and such successors and assigns, shall devote the Development Property to the operation of the Minimum Improvements for uses described in the definition of such term in this Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by any party to the others shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally: To the Developer: Advanced Volumetric Alliance, LLC 7535 River Rd NE Otsego, MN 55330 Attention: Casey Darkenwald, President 698806v 1 AL141-70 23 To the City: City of Albertville 5959 Main Ave NE Albertville, MN 55301 Attention: City Administrator or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the others as provided in this Section. Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which, shall constitute one and the same instrument. Section 10.8. Recording. The City may record this Agreement and any amendments thereto with the County Recorder or the Registrar of Titles of the County, as the case may be. Developer shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the City and the Developer. Section 10.10. City Approvals. Unless otherwise specified, any approval required by the City under this Agreement may be given by the City Representative. Section 10.11. Termination. This Agreement terminates on the Maturity Date. Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 10.13. Good Faith. Each party shall act in good faith and in a commercially reasonable manner with respect to any matter contemplated by this Agreement, including, without limitation, approving or disapproving any request, including any request for approval of plans. (The remainder of this page is intentionally left blank.) 698806v 1 AL 14 l -70 24 IN WITNESS WHEREOF, the City has caused this Contract for Private Development to be duly executed in its name and behalf and its seal to be hereunto duly affixed, and the Developer has caused this Contract for Private Development to be duly executed in its name and behalf on or as of the date first above written. CITY OF ALBERTVILLE, MINNESOTA By Its. r all , P, , 1[j ?,PA11 Its City Administ��br STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) i The foregoing instrument was acknowledged before me this taday of August, 2021, by Jillian Hendrickson, the Mayor of the City of Albertville, Minnesota, a Minnesota municipal corporation, on behalf of the City. �: w4 MICHAEL C. COURI ;I Notary Public, State of Minnesota My Commission Expires ��• January 31, 2025 STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) Notary Public The foregoing instrument was acknowledged before me this day of August, 2021, by Adam Nafstad, the City Administrator of the City of Albertville, Minnesota, a Minnesota municipal corporation, on behalf of the City. No Public ..,,. MICHAEL C. COURI Notary Public, State of Minnesota a My Commission Expires `�i�• January 31, 2025 698806v1AL141-70 S-1 Execution page of the Developer to the Contract for Private Development, dated as of the date and year first written above. LUMETRIC ALLIANCE, LLC Case�Barl�rwa1d - - Its President STATE OF MINNESOTA COUNTY OF W�A Gm The foregoing instrument was acknowledged by Casey Darkenwald, the President of Advanced limited liability company, on behalf of the Developer. Cove ERIN ADONA CARLSON Notary Public State of Minnesota My Commission Expires January 31, 2025 before me this y da of August, 2021, � Volumetric Alliance, LLC, a Minnesota Notary Public 698806v l AL 141-70 S-2 SCHEDULE A DESCRIPTION OF DEVELOPMENT PROPERTY Lot 1, Block 1, AVA Addition, according to the plat of record in the Wright County Recorder's Office, Wright County, Minnesota. 6988060AL141-70 A-1 SCHEDULE B AUTHORIZING RESOLUTION CITY OF ALBERTVILLE, MINNESOTA RESOLUTION NO. RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH ADVANCED VOLUMETRIC ALLIANCE, LLC AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE IN THE MAXIMUM PRINCIPAL AMOUNT OF $197949000 BE IT RESOLVED BY the City Council (the "Council") of the City of Albertville, Minnesota (the "City") as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. (a) The City has heretofore approved the establishment of Tax Increment Financing (Economic Development) District No. 18 (AVA Project) (the "TIF District"), an economic development district, within Municipal Development District No. 1 (the "Project") in the City, and has adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. (b) To facilitate the development of certain property within Project and the TIF District, the City and Advanced Volumetric Alliance, LLC, a Minnesota limited liability company (the "Owner"), have negotiated a Contract for Private Development (the "Agreement"), dated [March , 2021], which provides for the construction and development of an approximately 180,000 square -foot manufacturing and warehouse facility on the Development Property (as described in the Agreement), inclusive of 20,000 square feet of supporting office and administration space (the "Minimum Improvements"), and the issuance by the City of its Tax Increment Revenue Note (AVA Project) (the "Note") to the Developer. (c) Pursuant to Minnesota Statutes, Section 469.178, the City is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The City hereby finds and determines that it is in the best interests of the City that it issue and sell the Note in the maximum aggregate principal amount of $1,794,000, for the purpose of financing certain public costs of the Minimum Improvements. 698806v l AL 141-70 1.02. Agreement Approved; Issuance, Sale, and Terms of the Note. (a) The City on this date has considered the Agreement. The City hereby approves the Agreement and authorizes the Mayor and City Administrator to execute such Agreement in substantially the form on file with City, subject to modifications that do not alter the substance of the transaction and are approved by such officials, provided that execution of the Agreement by such officials is conclusive evidence of their approval. (b) Pursuant to the Agreement, the Note shall be sold to the Owner. The Note shall be dated as of the date of delivery and shall bear interest at the rate that is the lesser of 4.00% or the Owner's actual financing rate. The City shall receive in exchange for the sale of the Note the payment by the Owner of the Public Development Costs as defined in the Agreement. The Note will be delivered in accordance with the terms of Section 3.4 of the Agreement. Section 2. Form of Note. The Note shall be in substantially the form set forth in EXHIBIT A attached hereto, with the blanks to be properly filled in and the principal amount adjusted as of the date of issue. Section 3. Terms, Execution and Delivery. 3.01. Denomination, Pam. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The City hereby appoints the City Administrator to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person other than an Affiliate, or other related entity, of the Owner unless 698806vlAL141-70 the City has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the City, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable State securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (d) Improper or Unauthorized Transfer. when the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The City and the Registrar may treat the person in whose name the Note is at any time registered .in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the City upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case the Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note is lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the City and the Registrar shall be named as obliges. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the City Administrator and shall be executed on behalf of the City by the signatures of its Mayor and City Administrator. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and 698806v l AL l 41-70 sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the City Administrator to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The City hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. TIF Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the City shall maintain a separate and special "TIF Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The City irrevocably agrees to appropriate to the TIF Fund in each year Available Tax Increment. Any Available Tax Increment remaining in the TIF Fund shall be transferred to the City's account for TIF District No. 18 upon the payment of all principal and interest to be paid with respect to the Note. Section 5. Certification of Proceedings. The officers of the City are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the City, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. Section 6. Agreement. Effective Date. This resolution shall be effective upon full execution of the Adopted by the City Council of the City of Albertville, Minnesota, this Pt day of March, 2021. ATTEST: City Administrator Mayor IM 698806v1AL141-70 EXHIBIT A TO THE AUTHORIZING RESOLUTION UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF ALBERTVILLE No. R-1 $ TAX INCREMENT REVENUE NOTE (AVA PROJECT) Rate Date of Original Issue % , 20 The City of Albertville, Minnesota (the "City"), for value received, certifies that it is indebted and hereby promises to pay to Advanced Volumetric Alliance, LLC, a Minnesota limited liability company, or its registered assigns (the "Owner"), the principal sum of $ and to pay interest thereon at the annual rate set forth above, but solely from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in the Contract for Private Development, dated [March , 2021 ] (the "Agreement"), between the City and the Owner, unless the context requires otherwise. 1. Payments. Principal and interest (the "Payments") shall be paid on August 1, 2023 and each February 1 and August 1 thereafter (the "Payment Dates"), to and including the earliest of (i) February 1, 2032, (ii) such date (if any) as the City shall have terminated the Agreement pursuant to its terms, or (iii) such date the Developer has received the principal amount of the TIF Note plus accrued interest thereon (the "Final Payment Date"), in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon thirty (30) days' written notice to the City. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Simple, non -compounding interest at the rate stated herein shall accrue on the unpaid principal, commencing as of the date of issue. Interest shall be computed on the basis of a year of three hundred sixty (360) days consisting of twelve (12) thirty (30) day months, and shall be charged for actual days principal is unpaid. 3. Available Tax Increment. Payments on this Note are payable on each Payment Date in the amount of and solely payable from "Available Tax Increment," which shall mean, on each Payment Date, ninety-five percent (95%) of the Tax Increment attributable to the Minimum 698806v1AL141-70 Improvements on the Development Property and paid to the City by Wright County in the six (6) months preceding the Payment Date. Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under the Agreement. The City shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment, and the failure of the City to pay the entire amount of principal of or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the City pays principal of and interest hereon to the extent of Available Tax Increment. The City shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the Final Payment Date. 4. Optional Prepayment. The principal sum and all accrued interest payable under this Note are prepayable in whole or in part at any time by the City without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. 5. Termination. At the City's option, this Note shall terminate and the City's obligation to make any payments under this Note shall be discharged upon the occurrence of an Event of Default on the part of the Developer as defined in Section 9.1 of the Agreement, but only if the Event of Default has not been cured in accordance with Section 9.2 of the Agreement. 6. Nature of Obli ag tion. This Note is issued in the total principal amount of $ issued to aid in financing certain public development costs and administrative costs of a Project undertaken by the City pursuant to Minnesota Statutes, Sections 469.124 through 469.133, as amended, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the City on March 1, 2021, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 through 469.1794, as amended. This Note is a limited obligation of the City which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City. Neither the City, the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of and interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the City, the State of Minnesota, or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the City kept for that purpose at the principal office of the City Administrator of the City, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the City, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the City with respect to such transfer or exchange, there will be issued in the name of 698806v 1 AL l 41-70 the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the City according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the City Council of the City of Albertville, Minnesota has caused this Note to be executed with the manual signatures of its Mayor and City Administrator, all as of the Date of Original Issue specified above. Mayor CITY OF ALBERTVILLE, MINNESOTA City Administrator REGISTRATION PROVISIONS The ownership of the unpaid balance of the Note herein is registered in the bond register of the City Administrator of the City of Albertville, Minnesota, in the name of the person last listed below. Date of Registration Registered Owner Advanced Volumetric Alliance, LLC Federal Tax ID: 84-4867127 Signature of City Administrator 698806v 1 AL 141-70 ME SCHEDULE C CERTIFICATE OF COMPLETION The undersigned hereby certifies that Advanced Volumetric Alliance, LLC, a Minnesota limited liability company (the "Developer"), has fully complied with its obligations under Articles III and IV of that document titled "Contract for Private Development," dated [March , 2021 ] (the "Agreement"), between the City of Albertville, Minnesota and the Developer, with respect to construction of the Minimum Improvements in accordance with Article IV of the Agreement, and that the Developer is released and forever discharged from its obligations with respect to construction of the Minimum Improvements under Articles III and IV of the Agreement. Dated: , 20 CITY OF ALBERTVILLE, MINNESOTA By Its Authorized City Representative STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of 20 by , the of the City of Minnesota municipal corporation, on behalf of the City. Notary Public This document was drafted by: KENNEDY & GRAVEN, Chartered (MNI) 150 South 5th Street, Suite 700 Minneapolis, Minnesota 55402-1299 Telephone: 612-3 3 7-93 00 C-1 Albertville, a 698806v l AL 141-70 AL 141-70-698806.0