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2021-05-17 Contract for Private RedevelopmentRETURN TO: Title Specialists 12725 43rd St NE #102 St Michael, MN 55376 Doc. No. A1472358 OFFICE OF THE COUNTY RECORDER WRIGHT COUNTY, MINNESOTA Certified Filed and/or Recorded on June 02, 2021 4:00 PM Fee: $46.00 Tanva West. County Recorder CONTRACT FOR PRIVATE REDEVELOPMENT By and Between CITY OF ALBERTVILLE, MINNESOTA and BID PROPERTIES, LLC FEHN COMPANIES, INCORPORATED Dated as of: May 17, 2021 This document was drafted by: KENNEDY & GRAVEN, Chartered (MNI) 150 South 51" Street, Suite 700 Minneapolis, Minnesota 55402 Telephone: 3 3 7-93 00 AL l 41 \71 \711642.v5 TABLE OF CONTENTS PREAMBLE............................................................................................................................I ARTICLE I Definitions Section1.1. Definitions.......................................................................................................... 2 ARTICLE II Representations and Warranties Section 2.1. Representations by the City................................................................................ 5 Section 2.2. Representations and Warranties by the Redeveloper ......................................... 5 Section 2.3. Representations and Warranties by the Tenant .................................................. 6 ARTICLE III Public Redevelopment Costs; Issuance of Note Section 3.1. Status of Redevelopment Property..................................................................... 7 Section 3.2. Environmental Conditions.................................................................................. 7 Section 3.2. Public Redevelopment Costs.............................................................................. 7 Section 3.2. Issuance of Note................................................................................................. 8 Section 3.5. Payment of Administrative Costs....................................................................... 8 Section3.6. Records............................................................................................................... 9 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 Section 5.1. Section 5.2. ARTICLE V Insurance Insurance........................................................................................................... 15 Subordination.................................................................................................... 16 AL l 41 \71 \711642.v5 i ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes................................................................... 17 Section6.2. Review of Taxes............................................................................................... 17 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 Redeveloper's Transfer of Property and Assignment of Agreement................................................................................ 19 Section 8.3. Release and Indemnification Covenants........................................................... 20 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....... ....................... 0.0000000 ............................. #00 ............... 22 Section 9.4. No Additional Waiver Implied by One Waiver ................................................ 23 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; City Representatives Not Individually Liable ................ 24 Section 10.2. Equal Employment Opportunity....................................................................... 24 Section 10.3. Restrictions on Use........................................................................................... 24 Section 10.4. Provisions Not Merged With Deed.................................................................. 24 Section 10.5. Titles of Articles and Sections.......................................................................... 24 Section 10.6. Notices and Demands....................................................................................... 24 Section10.7. Counterparts...................................................................................................... 25 Section10.8. Recording.......................................................................................................... 25 Section10.9. Amendment...................................................................................................... 25 Section 10.10. City Approvals.................................................................................................. 25 Section10.11. Termination...................................................................................................... 25 Section 10.12. Choice of Law and Venue................................................................................ 25 TESTIMONIUM....................................................................................................................... S-1 11 AL l 41 \71 \711642.v5 SIGNATURES......................................................................................................................... S-1 SCHEDULE A Description of Redevelopment Property SCHEDULE B Form of Authorizing Resolution SCHEDULE C Certificate of Completion (The remainder of this page is intentionally left blank.) 111 AL 141 \71 \711642. 0 CONTRACT FOR PRIVATE REDEVELOPMENT This Contract for Private Redevelopment is made as of the 171h day of May, 2021, by and between THE CITY OF ALBERTVILLE, a Minnesota municipal corporation (the "City"), BID PROPERTIES, LLC, a Minnesota limited liability company (the "Redeveloper"), and FERN COMPANIES, INCORPORATED, a Minnesota corporation (the "Tenant"). WITNESSETH: WHEREAS, the City has undertaken a program to promote economic development and job opportunities and to promote the redevelopment of land which is underutilized within the City of Albertville (the "City"), and in this connection created Municipal Project No. 1 (the "Project") pursuant to Minnesota Statutes, Sections 469.124 to 469.134, as amended (the "Municipal Development Act") and approved a Development Program for the Project; and WHEREAS, pursuant to the Municipal Development Act, the City is authorized to undertake certain activities to facilitate the development or redevelopment of real property by private enterprise; and WHEREAS, the Developer proposes to acquire certain property in the Project (the "Redevelopment Property") and proposes to construct and develop approximately 49,200 square feet of storage, office, and shop space for the Tenant's operation of its earthwork and demolition services (the "Minimum Improvements") on the Redevelopment Property; and WHEREAS, the City has approved a Tax Increment Financing Plan for Tax Increment Financing (Redevelopment) District No. 19 (Fehn) (the "TIF District") pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "Tax Increment Act"), made up of the Redevelopment Property; 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 Redevelopment Property 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: 1 AL] 41 \71\711642.v5 Section 1.1. Definitions. from the context: ARTICLE I Definitions In this Agreement, unless a different meaning clearly appears "Affiliate" means with respect to the Redeveloper (a) any corporation, partnership, limited liability company or other business entity or person controlling, controlled by or under common control with the Redeveloper; 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 Redevelopment, 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, Section 116J.993 to 116J.995, as amended. "Certificate of Completion" means the certification substantially in the form attached hereto as Schedule C and made a part hereof, provided to the Redeveloper, pursuant to Section 4.4 of this Agreement. "City" means the City of Albertville, Minnesota. "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 Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, 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) floor plan for each floor; (4) elevations (all sides); (5) landscape plan; and (6) 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 to the extent agreed by the Redeveloper. "County" means the County of Wright, Minnesota. 2 AL 141 \71 \711642 . v 5 "Development Plan" means the City's Development Plan for the Project, as amended, as made known to the Redeveloper. "Event of Default" has the meaning provided in Section 9.1 hereof. "Holder" means the owner of a Mortgage. "Maturity Date" means the date that the Note has been paid in full or terminated pursuant to its terms, whichever is earlier. "Minimum Improvements" means the construction by Redeveloper of approximately 49,200 square feet of storage, office, and shop space, comprising approximately 8,468 square feet of office space ("Office Phase I"), 33,000 square feet of unheated shop and storage space ("Shop Phase I"), 1,763 square feet of office expansion ("Office Phase II"), and 6,000 square feet of heated shop expansion ("Shop Phase II"), to be leased and used by Tenant to operate its earthwork and demolition services. "Mortgage" means any mortgage made by the Redeveloper or Tenant which is secured, in whole or in part, with the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "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 Redeveloper in consideration for the Redeveloper's payment of Public Redevelopment Costs related to the Minimum Improvements. "Project" means the City's Municipal Development District No. 1. "Public Redevelopment Costs" has the meaning provided in Section 3.3 hereof. "Qualified Facility" has the meaning provided in Section 3.7(a)(6). "Redeveloper" means BID Properties, LLC, a Minnesota limited liability company or its permitted successors and assigns. "Redevelopment Property" means the real property described in Schedule A of this Agreement. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property and which is remitted to the City as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1794, as amended. "Tax Increment District" or "TIF District" means the City's Tax Increment Financing District No. 19 (Fehn). 3 AL141\71\711642.0 "Tax Increment Plan" or "TIF Plan" means the City's Tax Increment Financing Plan for Tax Increment Financing District No. 19 (Fehn), as approved by the City on May 17, 2021, and as it may be amended from time to time. "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. "Tenant" means Fehn Companies, Incorporated, a Minnesota corporation, or its permitted successors and assigns, which will operate the Minimum Improvements following the construction of the Minimum Improvements by the Redeveloper. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, inclement weather, earthquakes, tornados, flooding, acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the City in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays caused by the Redeveloper's failure to exercise reasonable efforts to obtain permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such approval and construction is required under Sections 4.2 and 4.3 of this Agreement. (The remainder of this page is intentionally left blank.) M AL 141 \71 \711642.v5 ARTICLE II Representations and Warranties Section 2.1. Representations by the City. The City makes the following representations as the basis for the undertaking on its part herein contained: (a) The City is a statutory city duly organized and existing under the laws of the State. Under the provisions of the Municipal Development Act, the City has the power to enter into this Agreement and carry out its obligations hereunder. (b) 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 prevent the emergence of blight, to create increased tax base and employment in the City, and to stimulate further development of the Project as a whole. (c) The Minimum Improvements conform with the permitted land uses allowed within the zoning classification of the Redevelopment Property. (d) The City will use its best efforts to facilitate development of the Minimum Improvements, including but not limited to cooperating with the Redeveloper in obtaining necessary administrative and land use approvals. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its 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 Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement, the Development Plan and all applicable local, state and federal laws, ordinances, and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no actual notice or communication from any local, state or federal official that the activities of the Redeveloper on the Redevelopment Property may be or will 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. (d) The Redeveloper will construct, or cause to be constructed, the Minimum Improvements in accordance with all applicable local, state or federal laws or regulations. 5 AL 141 \71 \711642.v5 (e) The Redeveloper will obtain or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet or cause to be satisfied, 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) 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 company restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. (g) The proposed development by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the City hereunder. (h) The Redeveloper is not currently in default under any business subsidy agreement with any grantor, as such terms are defined in the Business Subsidy Act. Section 2.3. Representations and Warranties by the Tenant. (a) The Tenant is a corporation, duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of incorporation and bylaws, 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 officers. (b) The Tenant will operate and maintain the Minimum Improvements in accordance with the terms of this Agreement and all applicable local, state and federal laws, ordinances, and regulations (including, but not limited to, environmental, zoning, building code, and public health laws and regulations). (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Tenant is now a party or by which it is bound, or constitutes a default under any of the foregoing, which default or breach might prevent the Tenant from performing its obligations under this Agreement. 31 AL 141 \71 \711642.v5 ARTICLE III Public Redevelopment Costs; Issuance of Note Section 3.1. Status of Redevelopment Property. (a) As of the date of this Agreement, the Redeveloper has entered into a purchase agreement to acquire the Redevelopment Property from third party. The City has no obligation to acquire the Redevelopment Property or any portion thereof. (b) The Redeveloper shall obtain all planning approvals necessary to construct the Minimum Improvements. In addition, and as provided in Section 4.2 hereof, the Redeveloper shall prepare its Construction Plans to meet the standards as required by the City. (c) The Redeveloper and the City shall enter into a Planned Unit Development Agreement, Fehn Industrial Park (the "PUD Agreement") for the Redevelopment Property concurrently with this Agreement. The Redeveloper and Tenant shall construct, operate, and maintain the Minimum Improvements on the Redevelopment Property in compliance with the terms and conditions of the PUD Agreement, which is incorporated herein by reference. Section 3.2. Environmental Conditions. (a) The Redeveloper acknowledges that the City makes no representations or warranties as to the condition of the soils on the Redevelopment Property or the fitness of the Redevelopment Property for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property, and that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the City for any contamination of the Redevelopment Property nor imposes any obligation on the City to participate in any cleanup of the Redevelopment Property. (b) without limiting its obligations under Section 8.3 hereof, the Redeveloper 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 Redevelopment 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 Redevelopment Costs. In order to make development of the Minimum Improvements economically feasible, the City will reimburse the Redeveloper for a portion of the actual costs of acquisition of the Redevelopment Property and 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 Redevelopment Costs"). The total principal amount of Public Redevelopment Costs subject to reimbursement will not exceed $1,3 77,817. Public Redevelopment Costs in excess of $1,3 77,817 are the sole responsibility of the Redeveloper. 7 AL 141 \71 \711642. v5 Section 3.4. Issuance of Note. (a) Terms. To finance a portion of the Public Redevelopment Costs paid by the Redeveloper, the City shall issue and the Redeveloper shall purchase the Note in the maximum principal amount of $1,377,817. The City shall issue and deliver the Note upon the Redeveloper having: (i) delivered to the City written evidence satisfactory to the City that the Redeveloper has incurred Public Redevelopment 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 Redevelopment 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 Redeveloper 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 Redeveloper 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 Redeveloper may rely. Public Redevelopment Costs exceeding the principal amount of the Note are the sole responsibility of the Redeveloper. Section 3.5. Payment of Administrative Costs. The Redeveloper 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 Redeveloper. The City acknowledges that the Redeveloper has deposited $25,000 with the City, which deposit shall be credited toward the Redeveloper's obligations under 0 AL141 \71 \7 l 1642.v5 this Section. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under this Section for Administrative Costs incurred through the effective date of termination. 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 Redeveloper relating to the Minimum Improvements and the Public Redevelopment 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 Redeveloper and the Tenant consists of principal amount of the Note described in Section 3.4 hereof. Although the subsidy will be provided directly to the Redeveloper, the subsidy will be passed to the Tenant in the form of lower rents. (2) The public purposes of the subsidy are to 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 Redevelopment Property; to maintain such improvements as an office and shop 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 Redeveloper and the Tenant, jointly and severally, must make the payments to the City described in Section 3.7(c). (5) The subsidy is needed to induce the Redeveloper to construct the Minimum Improvements and the Tenant to locate its business at this site, thus redeveloping substandard property and preserving and enhancing job and tax base growth for the City, all as determined by the City upon approval of the TIF Plan. (6) The Redeveloper or the Tenant must continue operation of the Minimum Improvements as a "Qualified Facility" for at least five years after the Benefit Date (defined hereinafter), subject to the continuing obligation described in Section 10.3 of this Agreement. The term Qualified Facility means a shop and storage facility and associated office space. The improvements will be a Qualified Facility as long as the Minimum Improvements are operated by Redeveloper or the 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) Neither the Redeveloper nor the Tenant have a parent corporation. 9 AL 14 l \71 \7 l 1642.v5 (8) Neither the Redeveloper nor the Tenant has received, nor do they expect to receive, financial assistance from any other "grantor" as defined in the Business Subsidy Act, in connection with the Redevelopment 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 the Certificate of Completion for the Minimum Improvements or the date the Minimum Improvements are occupied by the Redeveloper or the Tenant. Within two years after the Benefit Date (the "Compliance Date"), the Tenant shall (i) create at least two permanent full-time equivalent jobs and an additional two seasonal full-time equivalent jobs on the Redevelopment Property, and (ii) cause the average hourly wage of each of the two permanent and two seasonal jobs to be at least $20.00 per hour, 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 Tenant'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. If the Tenant fails to meet the goals described in Section 3.7(a)(3), the Tenant and the Redeveloper jointly and severally, shall repay to the City upon written demand from the City a "pro rata share" of the principal amount of the Business Subsidy together with interest on that amount at the implicit price deflator as referenced in Minnesota Statutes, Section 116J.994, subdivision 6, as amended, 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: (i) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (ii) 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 j obs required; (iii) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 3.7(a)(6), 601ess the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the City Representative, divided by 60; and (iv) if more than one of clauses (i) through (iii) apply, the average of the applicable percentages, not to exceed 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), the Tenant and the Redeveloper agree and understand that it may not a receive a business subsidy from the City or any grantor (as defined in the Business Subsidy Act) for a period of five years from the date of the failure or until the Redeveloper and/or the Tenant satisfy their repayment obligation under this Section, whichever occurs first. 10 AL 141 \71 \711642.v5 (d) Reports. The Tenant 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, 2022 and continuing until the later of (i) the date the goals stated Section 3.7(a)(3) are met; (ii) 30 days after expiration of the period described in Section 3.7(a)(6); or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 3.7(c). The report must comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The City will provide information to the Tenant regarding the required forms. If the Tenant fails to timely file any report required under this Section, the City will mail the Tenant a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Tenant fails to provide a report, the Tenant and the Redeveloper, jointly and severally, 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.) 11 AL 141 \71 \711642.v5 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in substantial compliance with the approved Construction Plans and the Tenant agrees that it will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans. (a) Before commencement of construction of the Minimum Improvements, the Redeveloper shall submit to the City completed Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with the Development Plan, the TIF Plan, this Agreement, and all applicable State and local laws and regulations. The City will approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Development Plan; (Ili) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; and (v) no Event of Default has occurred. No approval by the City shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or of the Development Plan, 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 Redeveloper 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 (except for any permits or approval required by the State) after the date of their receipt by the City. If the City rejects any Construction Plans in whole or in part, the Redeveloper may submit new or corrected Construction Plans within thirty (30) days after written notification to the Redeveloper 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 Redeveloper 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. (b) If the Redeveloper or Tenant, as the case may be, desires to make any material change in the Construction Plans after their approval by the City, the Redeveloper 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 4.2 of this Agreement with respect 12 AL141\71\711642.v5 to such previously approved Construction Plans, the City shall approve the proposed change and notify the Redeveloper 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 Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within thirty (30) 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 Redeveloper must construct the Minimum Improvements in accordance with the following table: Phase Office Phase I Shop Phase I Office Phase II Shop Phase II Date of Commencement July 1, 2021 July 1, 2022 April 1, 2027 April 1, 2027 Date of Completion December 31, 2022 December 31, 2023 December 31, 2027 December 31, 2028 All work with respect to each phase of the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in substantial compliance with the Construction Plans in all material respects as submitted by the Redeveloper and approved by the City. Upon approval of the Construction Plans, the Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the Development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the periods specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until construction of the Minimum Improvements has been completed, the Redeveloper 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 Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of each phase of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct such phase (including the dates for beginning and completion thereof), the City will furnish the Redeveloper with a Certificate of Completion in substantially the form provided in Schedule D and a certificate of occupancy for such phase of the Minimum Improvements. Such certification by the City shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement and in the deed with respect to the obligations of the Redeveloper, and its successors and assigns, to construct such phase of the Minimum Improvements and the dates for the beginning and completion thereof. 13 AL141\71\711642.v5 (b) Each certificate provided for in this Section 4.4 of this Agreement 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 Redevelopment Property. If the City shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the City shall, within thirty (30) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the City, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of each phase of the Minimum Improvements shall be deemed to be commenced upon beginning of excavation for the applicable building, and shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy issued by the City for such phase of the Minimum Improvements. (The remainder of this page is intentionally left blank.) 14 AL 141 \71 \711642.v5 ARTICLE V Insurance Section 5.1. Insurance. The Redeveloper or Tenant will provide and maintain (or cause to be provided and maintained) at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy 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 Redeveloper or Tenant shall maintain, or cause to be maintained, at their own 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) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (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 Tenant, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Tenant may be self -insured with respect to all or any part of its liability for workers' compensation. 15 AL 141 \71 \7 l 1642.v5 (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper or the Tenant that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper or Tenant will deposit annually with the City a certificate or certificates of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper or the Tenant and the City at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper or the Tenant may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper or the Tenant 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 Redeveloper or the Tenant agree 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 Redeveloper or the Tenant 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 Redeveloper or the Tenant will apply the net proceeds of any insurance relating to such damage received by the Redeveloper or the Tenant to the payment or reimbursement of the costs thereof. The Redeveloper or the Tenant shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper or the Tenant 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 Redeveloper or the Tenant. (e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this Section, the Redeveloper shall have the option of: (i) if Redeveloper 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 Redeveloper is the owner of the Note, waiving its right to receive subsequent payments under the Note. (f) The Redeveloper., the Tenant and the City agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V. 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 of this Agreement. r AL l 41 \71 \711642.v5 ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes. Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency, or cause Tenant to pay before delinquency, all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the City through the Maturity Date to sue the Redeveloper 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 in which the City is the prevailing party, the City shall also be entitled, to recover its costs, expenses and reasonable attorney fees. Section 6.2. Reduction of Taxes. Each of the Redeveloper and Tenant 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 Redeveloper or Tenant 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 Redevelopment 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 Redevelopment Property and the Minimum Improvements, except that nothing in this Section shall prevent the Redeveloper from taking any action it may choose with respect to any income tax matters. (The remainder of this page is intentionally left blank.) 17 AL 141 \71 \711642.0 ARTICLE VII Financing Section 7.1. Financing. (a) Before commencement of the Minimum Improvements, the Redeveloper shall submit to the City evidence of financing in the form of one or more loan commitments or Redeveloper's own funds for such construction, which is sufficient for the construction of the Minimum Improvements. Such evidence may be submitted as short term financing, long term mortgage financing, a bridge loan with a long-term take-out financing commitment, bank account statement, 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 such financing is sufficiently committed and adequate in amount to provide for the construction of the Minimum Improvements, then the City shall notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within 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 Redeveloper 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. (c) If the Redeveloper finances the construction of the Minimum Improvements internally, the Redeveloper shall provide the City with an instrument reasonably acceptable to the City, certifying as to the sufficiency of Redeveloper funds to construct the Minimum Improvements. Section 7.2. Citys Option to Cure Default on Morta . In the event that there occurs a default under any Mortgage authorized pursuant to this Article VII, the Redeveloper shall cause the City to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the City shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper 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 of this Agreement. Section 7.3. Subordination and Modification for the Benefit of Mortga ewe. In order to facilitate the Redeveloper obtaining financing for purchase of the Redevelopment Property and for construction of the Minimum Improvements 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. AL 141 \71 \711642.v5 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Redeveloper represents and agrees that its purchase of the Redevelopment Property or portions thereof, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to issuance of a Certificate of Completion for all phases of the Minimum Improvements: (a) The Redeveloper 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 Redevelopment Property, 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. The term "Transfer" does not include (i) 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 Redeveloper or any successor in interest to the Redevelopment Property or to construct the Minimum Improvements, (ii) any lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements, including, but not limited to, leasing of the Minimum Improvements to the Tenant, or (iii) any sale, conveyance, or transfer in any form to any Affiliate. Any such Transfer is subject to the provisions of this Section. It is expressly understood that any lease between the Redeveloper and the Tenant does not constitute a transfer for purposes of this Agreement. (b) In the event the Redeveloper, upon Transfer of the Redevelopment Property or any portion thereof before issuance of the final Certificate of Completion, seeks to be released from its obligations under this Agreement as to the portion of the Redevelopment Property that is transferred, the City shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release 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 Redeveloper as to the portion of the Redevelopment Property to be transferred. (ii) Any proposed transferee, by instrument in writing satisfactory to the City and in form recordable in the public land records of Wright County, Minnesota, 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 Redeveloper under this Agreement as to the portion of the Redevelopment Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment 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) 19 AL 141 \71 \71 1642. 0 deprive the City of any rights or remedies or controls with respect to the Redevelopment Property, the Minimum Improvements 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 Redevelopment 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 Redevelopment Property 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 Redeveloper or any other party bound in any way by this Agreement or otherwise with respect to the Redevelopment Property, 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 Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the City. In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned, or otherwise conveyed. Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper and the Tenant release from and covenant and agree that the City and the governing body members, officers, agents, servants and employees thereof (collectively, the "Protected Persons") shall not be liable for and agree, jointly and severally, to indemnify and hold harmless the Protected Persons 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 breach of a term or provision under this Agreement, negligence, willful misrepresentation, or any willful or wanton misconduct of or by any of the Protected Persons, the Redeveloper and Tenant agree, jointly and severally, to protect and defend the Protected Persons, now or forever, and further agree to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. (c) Except for any breach of a term or provision under this Agreement, negligence, willful misrepresentation, or any willful or wanton misconduct of or by any of the Protected Persons, the Protected Persons shall not be liable for any damage or injury to the persons or property of the Redeveloper, the Tenant, or their officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person other than any of the Protected Persons. 20 AL 14 1 \7 1 \711642. v 5 (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.) 21 AL l 4 l \71 \711642.v5 ARTICLE IX Events of Default; Termination 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 of the following event that remains uncured by such party beyond any applicable notice, cure and/or graced period set forth in Section 9.2 hereof: (a) any failure by any party 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 Redeveloper or the Tenant and the City in connection with development of the Redevelopment Property; and (b) any material default by Redeveloper or Tenant under a Mortgage, beyond any applicable notice, cure and/or grace period set forth therein. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non -defaulting party may exercise its rights under this Section 9.2 after providing thirty (30) days written notice to the defaulting party (and any other party to this Agreement) 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 and/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. (d) Notwithstanding anything to the contrary herein, in the case of defaults by Redeveloper or the Tenant described in Section 3.7, the City has the additional remedies specified therein, subject to the qualification described in Section 10.3. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City, Redeveloper or Tenant 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 22 AL 14 l \71 \71 l 642.v5 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 IX. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by the other parties, 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. (The remainder of this page is intentionally left blank.) 23 AL 141 \71 \711642.v5 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; City Representatives Not Individually Liable. The City, the Redeveloper, and the Tenant 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 Redeveloper, Tenant 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 Redeveloper, Tenant or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Redeveloper and Tenant agree that until the Maturity Date, the Redeveloper, the Tenant and such successors and assigns, shall use the Redevelopment Property and the Minimum Improvements thereon only as a Qualified Facility, provided that after expiration of the five-year period described in Section 3.7(a)(6), the repayment remedy described in Section 3.7(c) may not be imposed on Redeveloper or Tenant for default under this Section, and City is limited to any other remedies available under Article IX hereof. Further, until the Maturity Date the Redeveloper and Tenant 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 Redevelopment 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 Redevelopment 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 either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at BID Properties, LLC, 12301 50th Street NE, St. Michael, Minnesota 55376; 24 AL 141 \71 \711642.v5 (b) in the case of the Tenant, is addressed to or delivered personally to the Tenant at Fehn Companies, Incorporated, 5050 Barthel Industrial Drive, Albertville, Minnesota 55301; and (c) in the case of the City, is addressed to or delivered personally to the City at the City of Albertville, 5959 Main Avenue NE, P.O. Box 9, Albertville, Minnesota 55301, Attn: City Administrator; or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 10.7. 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. The Redeveloper shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the City, the Redeveloper, and the Tenant. 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. Within thirty (30) days after the Maturity Date, the City will deliver to Redeveloper a written release in recordable form satisfactory to Redeveloper, evidencing termination of this Agreement. Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. 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. (The remainder of this page is intentionally left blank.) 25 AL 141 \71 \711642.v5 IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper and Tenant has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. CITY OF ALBERTVILLE Its Mayor Its City Ado STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this 0) U day of g g g y 2021, by Jillian Hendrickson, the Mayor of the City of Albertville, Minnesota, a Mi esota municipal corporation, on behalf of the City. _ KRISTINE ANN LUEDKE I NOTARY PUBLIC - MINNESOTA My Commission Expires -. January 319 2023 STATE OF MINNESOTA ) SS. COUNTY OF WRIGHT ) Notary Public The foregoing instrument was acknowledged before me this qO day of 2021, by Adam Nafstad, the City Administrator of the City of Albertville, Minnesota, Is a Minnesota municipal corporation, on behalf of the City. KRISTINE ANN LUEDKE Notary Public NOTARY PUBLIC - MINNESOTA My Commission Expires January 31, 2023 S-1 AL 141 \71 \711642.v5 STATE OF MINNESOTA ) SS. COUNTY OF c, L4 The REDEVELOPER: BID PROPERTIES, LLC By Its foregoing instrument as acknowled before me tLb Lst',-ul�1� ,the Minnesota limited liability company, on behalf of the company. 2021 by 2021 by DEANNA L. SCHOEPKE Notary Public State of Minnesota My Commission Expires January 31, 2023 Notary Public this a( day of BID Properties, LLC, AL l 41 \71 \71 1642.v5 S-2 TENANT: FEHN COMPANIES, INCORPORATED By Its STATE OF MINNESOTA ) ) SS. COUNTY O � ) The forego in instrument was . knowledged before me this 2J day of 2021 by C-,c" P'� , th�S�C,�C'lt�-of Fehn Companies, Incorporated, a Minnesota corporation, on behalf of the corporation. DEANNA L. SCNQEPKE Notary Public State of Minnesota My Commission Expires -January 31, 2023 Notary Public AL 141 \71 \711642. v5 S-3 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY Lot I , Block I , Fehn Industrial Park according to the plat of record in the Wright County Recorder's Office, Wright County, Minnesota AL l 4 l \7 l \711642.v5 SCHEDULE B AUTHORIZING RESOLUTION CITY OF ALBERTVILLE, MINNESOTA RESOLUTION NO. RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH BID PROPERTIES, LLC AND FEHN COMPANIES INCORPORATED AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE (FERN PROJECT) IN THE MAXIMUM PRINCIPAL AMOUNT OF $193779817 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. 19 (Fehn) (the "TIF District"), a redevelopment district, within Municipal Development District No. 1 (the "Prof ect") in the City, and has adopted a tax increment financing plan for the purpose of financing certain improvements within the Proj ect. (b) To facilitate the development of certain property within Project and the TIF District, the City, BID Properties, LLC (the "Owner"), and Fehn Companies Incorporated (the "Tenant") have negotiated a Contract for Private Redevelopment (the "Agreement"), dated as of May 17, 2021, which provides for the construction and development of approximately 49,200 square feet of storage, office, and shop space for the Tenant's operation of its earthwork and demolition services (the "Minimum Improvements") on the Development Property (as described in the Agreement), and the issuance by the City of its Tax Increment Revenue Note (Fehn Project) (the "Note") to the Owner. (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 $1,377,817, for the purpose of financing certain public costs of the Minimum Improvements. 1.02. Agreement Approved; Issuance, Sale, and Terms of the Note. (a) The City Council on this date has considered the Agreement, and 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 B-1 AL l 41 \71 \711642 . v 5 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 mortgage financing rate. The City shall receive in exchange for the sale of the Note the payment by the Owner of the Public Redevelopment 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, Payment. 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 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. am AL 14 l \71 \71 l 642.v5 (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 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. AL 141 \71 \711642. 0 4.01. Pled e. 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 Exhibit A to 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. 19 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 17th day of May, 2021. Mayor ATTEST: City Administrator AL141\71\711642.v5 EXHIBIT A TO THE AUTHORIZING RESOLUTION UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF ALBERTVILLE No. R-1 $ TAX INCREMENT REVENUE NOTE (FERN 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 BID Properties, 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 Redevelopment, dated as of May 17, 2021 (the "Agreement"), between the City, the Owner, and Fehn Companies, Incorporated, unless the context requires otherwise. 1. Payments. Principal and interest (the "Payments") shall be paid on August 1, 2024 and each February 1 and August 1 thereafter (the "Payment Dates"), to and including the earliest of (i) February 1, 2050, (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 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. AL l 4 l \71 \711642.v5 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 Obligation. 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 May 17, 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 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. AL l 41 \71 \711642.v5 IN WITNESS WHEREOF, the City Council of the City of Albertville, caused this Note to be executed with the manual signatures of its Mayor and City all as of the Date of Original Issue specified above. Mayor CITY OF ALBERTVILLE, MINNESOTA City Administrator REGISTRATION PROVISIONS Minnesota has Administrator, 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 BID Properties, LLC Federal Tax ID: Signature of City Administrator AL 141 \7 1 \71 l 642.v5 IM SCHEDULE C FORM OF CERTIFICATE OF COMPLETION WHEREAS, the City of Albertville (the "City"), BID Properties, LLC, a Minnesota limited liability company (the "Redeveloper"), and Fehn Properties, Incorporated, a Minnesota corporation, entered into a certain Contract for Private Redevelopment, dated as of May 17, 2021 (the "Contract"), and filed in the Office of the County Recorder of Wright County, Minnesota, on , 2021, as Document No. ; and WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV thereof related to completing certain Minimum Improvements; and WHEREAS, the Redeveloper has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all construction and other physical improvements related to the Minimum Improvements specified to be done and made by the Redeveloper have been completed and the agreements and covenants in Articles III and IV of the Contract have been performed by the Redeveloper, and this Certificate is intended to be a conclusive determination of the satisfactory termination of the covenants and conditions of Articles III and IV of the Contract related to completion of the Minimum Improvements, but any other covenants in the Contract shall remain in full force and effect. (The remainder of this page is intentionally blank; signature follows.) C-1 AL 141 \71 \711642.v5 Dated: , 20 . STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) CITY OF ALBERTVILLE City Representative The foregoing instrument was acknowledged before me this day of , 20 by , the of the City of Albertville, Minnesota, a Minnesota municipal corporation, on behalf of the corporation. Notary Public This document drafted by: Kennedy & Graven, Chartered 150 South Fifth Street, Suite 700 Minneapolis, Minnesota 55402-1299 C-2 AL l 4 l \7 l \711642.0