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DEVELOPMENT AGREEMENT By and Between THE PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY And ENIVID RSADTY CORPORATION ...................... , a Minnesot'ii"'" Corporation This Agreement was drafted by: Briggs and Morqan Professional Association 2200 First National Bank Bldg. saint PaUl, Minnesota 55101 3062 TABLE OF CONTENTS (This Table of Contents is not part of the 1I~IIJ:llfi~mB!.~I!I Development Agreement and is only ............,......d................,......fOf....cOrivenience of reference.) ARTICLE I - DEFINITIONS ~ Section 1.1. Definitions . . . . . . . . . . . . . 1-1 ARTICLE II - REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1. Representations and Warranties by the EDA . . . . . . . . .. .... . 2-1 Section 2.2. Representations, Warranties and Covenants by the Company . . . . . . . . 2-1 ARTICLE III - PROJECT UNDERTAKINGS Section 3.1. Tax Increment Assistance: EDA Note . . . 3-1 ARTICLE IV - CONSTRUCTION OF MINIMUM IMPROVEMENTS: ASSESSMENT AGREEMENT Section 4.1. Construction of Minimum Improvements . . . . . . . . . . Section 4.2. Construction Plans . . . Section 4.3. Commencement and Completion of Construction . . . . . . . . . . Section 4.4. Certificate of Completion. . . . Section 4.5. Assessment Agreement . . . . . . . . . . 4-1 . 4-1 . . . . 4-2 . . . . 4-2 . . . . 4-3 ARTICLE V - PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 5.1. Prohibition Against Transfer of Property and Assignment of Agreement . . 5-1 Section 5.2. Release and Indemnification Covenants . . . . . . . . . . . . . . . . 5-2 ARTICLE VI - EVENTS OF DEFAULT Section 6.1. Events of Default Defined . . . . 6-1 Section 6.2. Remedies on Default . . . . . . . 6-1 Section 6.3. No Remedy Exclusive . . . . . . . . . 6-2 Section 6.4. No Additional Waiver Implied by One Waiver . . . . . . . . . . . . . . . . . 6-2 Section 6.5. Agreement to Pay Attorneys' Fees and Expenses . . . . . . . . . . . . . . . . 6-2 3062 ARTICLE VII - ADDITIONAL PROVISIONS Section 7.1. Titles of Articles and Sections ... 7-1 Section 7.2. Notices and Demands. . . . . .. .. 7-1 section 7.3. Counterparts . . . . . . . . .. .. 7-1 Section 7.4. Law Governing. . . . . . . . . . . . . .7-1 ARTICLE VIII - TERMINATION OF AGREEMENT; EXPIRATION Section 8.1. The EDA's Option to Terminate. Section 8.2. Expiration . . . . . . . . . Section 8.3. Effect of Termination or Expiration . . . . . . . . . . . . . 8-1 . . 8-1 . . . . SIGNATURES. . . . . . . . . . EXHIBIT A - Legal Description of Development Property EXHIBIT B - Certificate of Completion ....... EXHIBIT C - Form of Tax Increment Revenue Note . . . EXHIBIT D - Form of Assessment Agreement . . . . . . 3062 . 8-1 . . 8-2 . . A-1 B-1 . . C-1 D-1 DEVELOPMENT AGREEMENT THIS AGREEMENT is dated as of , 1990, is by and between the Prior Lake Economic Development Authority and ENIVID Ebir...ld.......................ltil Ct. M . t t .......aZb;Z.............E....lir..1id E9~~il~.li:i::::an~z:~~: i~~~' a: fOJ.l~~~~~ a corpora J.on, }:~\,',::,:;:,.,.)::::::I:I::::.,.,,:n::,.,::!L::::,:,., ARTICLE I Definitions Section 1.1. Definitions. As used in this Agreement, the following terms have the following respective meanings: "Aqreement" means this Development Agreement, as the same may be amended. "Assessment Agreement" means the agreement in the form of Exhibit D which is to be executed by the Company pursuant to Section 4.5. "Certificate of ComDletion" means the certificate, in the form attached as Exhibit B hereto, to be provided by the EDA to the Company pursuant this Agreement, upon satisfactory completion of the Minimum Improvements. ~~~~;:m:~~a.t~ i~~~~~~;~~~~sa o~i~~:~~~: "Construction Plans" means the plans, specifications, drawings and related documents on all construction work to be performed by the Company on the Development Property, including all on-site improvements to be performed, installed or constructed upon the Development Property pursuant to this Agreement. Such plans shall be prepared by a registered engineer or licensed architect and shall at a minimum include, for each building or other structure to be constructed on the Development Property, the following: (i) site plan (which shall without limitation include building and parking lot size and location, driveway and access points, sidewalks, and lighting location); (ii) foundation plan; (iii) basement plans; (iv) floor plan for each floor; (v) cross sections of each (length and width); (vi) elevations (all sides); and (vii) landscape plan, and shall include as well adequate plans, drawings and specifications relating to all driveways, walks, parking and other improvements to be constructed upon the Development Property by the Company. 3062 1-1 "Develo~ment Property" means the real property described in Exhibit A of this Agreement. "EI2A" means the Prior Lake Economic Development Authority. "EDA Note" means the obligation substantially in the form of the attached Exhibit C which is described in Section 3.1 and which is issuable by the EDA to the Company in satisfaction of the EDA's obligation to provide the Company the assistance described in section 3.1. "Event of Default" means an event of default defined in Section 6.1 of this Agreement. "Minimum Improvements" means the approximately 30,000 square foot supermarket and all other improvements, including driveways, walks, landscaping, parking facilities and fixtures and equipment, to be constructed or installed by the Company upon the Development Property pursuant to this Agreement, as such improvements are described and detailed in the Construction Plans. "Party" means either the Company or the EDA. "Parties" means the Company and the EDA. "proiect" means the Development Property and the Minimum Improvements. "Site ImDrovement Costs" those costs incurred by the Company in correcting the soil conditions of the Development Property, as described in Section 3.1. "State" means the state of Minnesota. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179, as the same may be amended. "Tax Increments" means those tax increments which the EDA shall be entitled to receive and retain, and which the EDA shall have actually received from Scott County, from time to time from its Tax Increment Financing District pursuant to the Tax Increment Act, and "Available Tax Increments" means, as further defined in section 3.1, the portion of the Tax Increments which shall be available to pay the EDA's obligations under the EDA Note. "Tax Increment Financina District" means the EDA's Tax Increment Financing District No. 2-1 within its Redevelopment Project No.2, as said Tax Increment District exists or is in the process of being established and certified as of the date of this 3062 1-2 Agreement. [Note: As of the date of this Aqreement, the Development Property and the property constituting the Tax Increment Financing District are the same.] "Unavoidable Delays" means any delay outside the control of the Party claiming its occurrence which is the direct result of strikes, other labor troubles, unusually severe or prolonged bad weather, 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 EDA) which directly result in delays. 3062 1-3 ARTICLE II Representations. Warranties and Covenants section 2.1. ReDresentations and Warranties by the EDA. The EDA represents and warrants that it is authorized to enter into and perform its obligations under this Agreement; however, no part of this Agreement shall be construed as a representation of the EDA as to the condition of the Development Property, including without limitation any soils or hazardous waste conditions, or as to its suitability for the Company's purposes and needs. Section 2.2. Representations. Warranties and Covenants by the Company. The Company represents and warrants that: (a) The Company is a corporation duly organized and in good standing under the laws of the State, is authorized to do busines~ in Minnesota and is in good standing under the laws of Minnesota, is not in violation of any provisions of its Articles of Incorporation or the laws of the State and is authorized to enter into and perform its obligations under this Agreement. (b) The Company is the sole owner of the Development Property and will take all actions as may be necessary in order to construct, operate and maintain the Minimum Improvements upon the Development Property in accordance with this Agreement and all local, state and federal laws and regulations (including without limitation environmental, zoning, building code and public health laws and regulations) . (c) The Minimum Improvements are expected to be constructed at a cost not less than approximately $900,000. (d) The Company has received no notice or communication from any local, state or federal official or body that the activities of the Company respecting the Development Property or the construction of the Minimum Improvements thereon may be or will be in violation of any law or regulation. (e) The Company will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and to meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed and operated. 3062 2-1 3062 (f) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented or limited by and will not conflict with or result in a breach of any provision or requirement applicable to the Company or of any provision of any evidence of indebtedness, agreement or instrument of whatever nature to which the Company is now a party or by which it is bound. (g) The construction of the Minimum Improvements would not be undertaken by the Company, and in the opinion of the Company would not be economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Company provided for in this Agreement. 2-2 ARTICLE III proiect Undertakings Section 3.1. Tax Increment Assistance; EDA Note. The Company hereby represents to the EDA that the Company will, in connection with completing the Project, incur costs in excess of approximately $240,000 for correcting soil deficiencies of the Development Property of the type which allow the designation of the Tax Increment Financing District as a "soils condition district" under Section 469.174, Subdivision 19, of the Tax Increment Act, including excavation, filling and grading costs, as applicable (collectively, the "site Improvement Costs"). The EDA agrees to defray all or a portion of the site Improvement Costs by issuing the EDA Note to the Company, as registered owner thereof, substantially in the form of Exhibit C to this Agreement, the issuance of which EDA Note is hereby authorized and approved, subject to the following conditions: (a) The EDA Note shall be dated, issued and delivered as soon as practicable following the execution and delivery of this Agreement, provided no Event of Default shall have occurred and be at the time continuing. (b) As conditions to such reimbursement of site Improvement Costs pursuant to the EDA Note, the Company shall (1) have received the Certificate of Completion, (2) demonstrate in writing to the reasonable satisfaction of the EDA the amount and nature of the site Improvement Costs and that the same have been paid and (3) provide a wri tten certification to the EDA stating that the applicable portion of the underlying soil corrections have been or are being made in accordance. with the terms of this Agreement and applicable laws and regulations, that the costs being certified are site Improvement Costs, as defined hereunder, and that no Event of Default has occurred which remains uncured. Upon such certifications of site Improvement Costs, which may occur from time to time prior to or in connection with the issuance of the Certificate of Completion, the EDA shall then add said amounts to the principal amount of the EDA Note by recording the same on the Principal Ledger attached to the EDA Note. The EDA Note shall be surrendered to the EDA for purposes of recording such amounts on the principal Ledger of the EDA Note from time to time. The aggregate principal amount of the EDA Note (the "Principal Amount") shall be the lesser of (1) $240,000 and (2) the sum of the amounts which shall have been entered on the Principal Ledger of the EDA Note pursuant to this subsection. 3062 3-1 3062 (c) The EDA shall have established the Development Property as a "soils condition" tax increment financing district pursuant to and as defined in section 469.174, Subdivision 19, of the Tax Increment Act, which actions the EDA shall use its best efforts to process and accomplish. (d) Subject to the provisions of the EDA Note, the principal of and interest on the EDA Note shall in the aggregate be payable on December 1 of the years 1992 through 2001, inclusive (the "Payment Dates"), in the respective amount or amounts described in this subsection. The sole source of funds available for payment of the EDA's obligations under this section and correspondingly under the EDA Note shall be the Available Tax Increments, hereby defined to be, for each of the property tax years starting with the payable 1992 and continuing through the payable 2001 property tax years, inclusive, the product derived by multiplying the following factors (1) and (2), factor (1) being the Principal Amount divided by $240,000 and factor (2) being the lesser of (i) $44,432 and (ii) the total of the Tax Increments generated by the Project with respect to the applicable tax year minus $3,000. Any amount of Tax Increments which may from year to year exceed the Available Tax Increments are not subject to this Agreement, and the EDA retains full discretion as to any authorized application thereof, regardless of whether the Available Tax Increments are sufficient to reimburse the Company in full for the above-described costs. (e) The Principal Amount of the EDA Note shall bear interest from the last date of entry on the Principal Ledger of the EDA Note and shall be determined as that rate of interest which, when the Available Tax Increments are present-valued (from their respective Payment Dates) to said date of entry and to said Principal Amount, will result in the sum of such present values equalling the principal Amount. (f) The EDA shall issue the EDA Note as a taxable and D2t as a tax-exempt obligation, and accordingly the interest on the EDA Note is not anticipated, represented or covenanted to be generally exempt from either state or federal income taxation. (g) The EDA Note shall be a special and limited obligation of the EDA and not a general obligation of the EDA, and only Available Tax Increments shall be used to pay the principal of and interest on the EDA Note. (h) The EDA's obligation to make payments on the EDA Note shall be conditioned upon the requirement that there 3-2 3062 shall not at the time have occurred and be continuing an Event of Default; provided, however, that if such Event of Default shall subsequently have been cured to the reasonable satisfaction of the EDA, such unpaid obligations shall thereupon be reinstated and thereby become due and payable. (i) The EDA Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit C. In the event of any conflict between the terms of the EDA Note and the terms of this Section 3.1, the terms of the EDA Note shall govern. (j) Following any termination of this Agreement by the EDA pursuant to Section 6.2(b) hereof, no further or unpaid amounts of the EDA Note shall then or thereafter be due and payable by the EDA under this Section or the EDA Note but shall thereupon ~e extinguished. (k) In no event shall the EDA pay to the Company more than $444,320 pursuant to the terms of the EDA Note or this Section. (1) The Company acknowledges that the Tax Increment Financing District is anticipated to be a "soils condition district" under the Tax Increment Act and is therefore subject to the restrictions provided for such types of tax increment financing districts as set out in said Act. 3-3 ARTICLE IV Construction of Minimum Improvements: Assessment Aareement Section 4.1. Construction of Minimum Imcrovements. The Company agrees that it will construct the Minimum Improvements on the Development Property in conformance with the approved Construction Plans. The Company agrees that the scope and scale of the Minimum Improvements to be constructed shall not be significantly less than the scope and scale of the Minimum Improvements as detailed and outlined in the Construction Plans. Section 4.2. Construction Plans. (a) Except for the execution and delivery of the Assessment Agreement and except for the issuance of the EDA Note, the EDA shall have no obligation to the Company to take any action pursuant to any provision of this Agreement until such time as the Company has submitted Construction Plans to the EDA, and the EDA has approved such Construction Plans. The EDA shall approve the Construction Plans if it determines that they conform to the applicable provisions of this Agreement; provided, however, that any such approval of the Construction Plans pursuant to this Section 4.2 shall constitute approval for the purposes of this Agreement only and shall not be deemed to constitute approval or waiver by the City of Prior Lake with respect to any building, zoning or other ordinances or regulation, and shall not be deemed to be sufficient plans to serve as the basis for the issuance of a building permit if the Construction Plans are not as detailed or complete as the plans otherwise required for the issuance of a building permit. Such Construction Plans must be rejected in writing by the EDA within 10 working days of submission or shall be deemed to have been approved by the EDA. If the EDA rejects the Construction Plans in whole or in part, the Company shall submit new or corrected Construction Plans wi thin 30 days after receipt by the Company of written notification of the rejection, accompanied by a written statement of the EDA specifying the respects in which the Construction Plans submi tted by the Company fail to conform to the requirements of this Section 4.2. The provisions of this Section 4.2 relating to approval, rejection and resubmission of Construction Plans shall continue to apply until the Construction Plans have been approved by the EDA. Approval of the Construction Plans by the EDA shall not relieve the Company of any obligation to comply with the provisions of this Agreement or the provisions of applicable federal, state and local laws, ordinances and regulations, nor 3062 4-1 shall approval of the Construction Plans by the EDA be deemed to constitute a waiver of any Event of Default. (b) If the Company desires to make any change in the Construction Plans after their approval by the EDA, the Company shall submit the proposed change to the EDA for its approval or rejection pursuant to this Section. A proposed change in the Construction Plans shall be deemed approved unless'rejected by the EDA in writing within 10 working days of submission thereof with a statement of the EDA's reasons for such rejection. The provisions of this subsection shall apply to changes which alter in any respect the landscape plan or the site plan or which individually or in the aggregate affect the cost of the Minimum Improvements by $25,000 or more. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Company shall commence construction of the Minimum Improvements on or before June 1, 1990, and shall have substantially completed the construction of the Minimum Improvements not later than December 31, 1990. Section 4.4. Certificate of Comoletion. (a) Promptly after completion of the Minimum Improvements in accordance with the provisions of this Agreement, and upon written request made by the Company, the EDA will furnish the Company with a certificate of Completion, in substantially the form set forth in Exhibit B attached hereto. Such certificate of Completion shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of the Company to construct the Minimum Improvements. The following shall be conditions precedent to the EDA's obligation to issue the certificate of Completion: (i) The Company shall certify to the EDA in writing that it has complied with the terms of this Agreement and that there exists no Event of Default hereunder: and (ii) The Company shall have received from the City of Prior Lake a Certificate of Occupancy for the Minimum Improvements. (b) If the EDA determines that it cannot issue the Certificate of Completion, it shall, within 10 working days after written request by the Company, provide the Company with a written statement indicating in adequate detail in what respects the Company has failed to complete the Minimum 3062 4-2 Improvements in accordance with the provisions of this Agreement or is otherwise in default under the terms of this Agreement (including without limitation an Event of Default hereunder), and what measures or acts it will be necessary for the Company to take or perform in order to obtain such Certificate of Completion. Section 4.5. Assessment Agreement. Contemporaneously with the execution and delivery of this Agreement, the Company and the EDA shall execute and deliver the Assessment Agreement for the Development Property. The Assessment Agreement shall provide that the minimum market values of the Development Property for real property taxation purposes as of January 1, 1991, and as of each January 1 thereafter to and including January 1, 2000, shall be $900,000. The Assessment Agreement shall terminate on December 31, 2001, to the effect that the Assessment Agreement shall apply to the 1991 payable 1992 through the 2000 payable 2001 property taxes for the Development Property. The Assessment Agreement shall be as much a part of this Agreement as though set forth in full herein. The Assessment Agreement shall be filed for record in the office of the County Recorder and/or Registrar of Titles of Scott County, as appropriate, and such filing shall constitute notice to any subsequent encumbrancer or purchaser of the Development Property, whether voluntary or involuntary, and the Assessment Agreement shall be binding and enforceable in its entirety against any such subsequent purchaser or encumbrancer. The Company shall pay all real property taxes, or taxes in lieu thereof pursuant to Minnesota statutes, Section 272.01, or any similar or successor statute, payable with respect to the Development Property and pursuant to the provisions of the Assessment Agreement and any other statutory or contractual duty which shall accrue subsequent to the date of execution of this Agreement. The Company agrees that prior to the termination of the Assessment Agreement: (a) It will not seek administrative review or judicial review of the applicability of any tax statute relating to the taxation of the Development Property in accordance with the Assessment Agreement or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings: (b) It will not seek administrative review or judicial review of the constitutionality of any tax statute relating to the taxation of the Development Property in accordance with the Assessment Agreement or raise the unconstitutionality of 3062 4-3 any such tax statute as a defense in any proceedings, including delinquent tax proceedings; and (c) Except as permitted in the last paragraph of this Section, it will not seek any tax deferral or abatement, either presently or prospectively authorized under any state or federal law, of the taxation of the Development Property, except that nothing in this Section or in the Assessment Agreement shall prohibit the Company from seeking through the exercise of legal or administrative remedies to reduce the market values assigned to the Development Property to amounts which are not less than the minimum market values prescribed in the Assessment Agreement. The Company agrees to payor cause to be paid, when due and before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, all real estate taxes, assessments, water and sewer rates and charges, any occupancy tax or similar tax, and other governmental levies and charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind and nature whatsoever, which are assessed, levied, confirmed, imposed or become payable with respect to the Development Property or any part thereof before the expiration of this Agreement (all of which are hereinafter referred to as "impositions") . The Company shall also be responsible for any charges or fees imposed for recording this Agreement or the Assessment Agreement. The Company agrees, upon request of the EDA, to furnish to the EDA, within 60 days after the date when any imposition is payable pursuant to any provision of this Section, official receipts of the appropriate taxing authority, or other proof satisfactory to the EDA, evidencing the payment thereof. The Company may, at its expense, in its own name and in good fai th, contest any such taxes, assessments and other charges; provided, however, that the rights of the Company to seek administrative or judicial review of the application of, or any determination made pursuant to, any tax statute relating to the taxation of the Development Property shall be strictly subject to the restrictions thereon contained in this Section and the Assessment Agreement, and in such regard, the Company specifically agrees to pay, when due and without protest or contest of any kind, all property taxes payable with respect to the minimum market values of the Development Property, as provided in the Assessment Agreement. In the event of any such permitted contest, the Company may permit the taxes, assessments or other charges or payments in lieu of taxes so contested to remain unpaid during the period of such contest and any appeal therefrom unless the EDA shall in its 3062 4-4 sole discretion notify the Company that, in the opinion of counsel and as reasonably demonstrated to the Company, by nonpayment of any such items the security afforded the EDA pursuant to the terms of this Agreement and the Assessment Agreement shall be materially affected, in which event such taxes, assessments or charges shall be paid forthwith. ~ 4-5 ARTICLE V Prohibitions Aqainst Assiqnment and Transfer: Indemnification Section 5.1. Prohibition Aqainst Transfer of Pro~ertv and Assiqnment of Agreement. The Company represents and agrees that prior to the issuance of the certificate of Completion: (a) Except only by way of security for the purpose of obtaining financing necessary to enable the Company or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Company (except as so authorized) 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 (except in the ordinary course of the Company's business of lessor of the Minimum Improvements), or any trust or power, or any transfer in any other mode or form, of or with respect to the Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the EDA. (b) The EDA shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the EDA, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Company. (ii) Any proposed transferee, by instrument in writing satisfactory to the EDA, shall, for itself and its successors and assigns, and expressly for the benefit of the EDA, have expressly assumed all of the obligations of the Company under this Agreement and agreed to be subject to all the conditions and restrictions to which the Company is subj ect unless the Company agrees to continue to fulfill those Obligations, in which case the preceding provisions of this Section 5.1(b) (ii) shall not apply. (iii) There shall be submitted to the EDA for review and prior written approval all instruments and 3062 5-1 3062 other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property. section 5.2. Release and Indemnification Covenants. (a) The Company releases from and covenants and agrees that the EDA and the governing body members, officers, agents, including its independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties 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 willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Company agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or enti ty 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, provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the EDA in this Agreement. (c) All covenants, stipulations, promises, agreements and obligations of the EDA contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the EDA and not of any governing body member, officer, agent, servant or employee of the EDA. The indemnifications provided in this Section shall include the reasonable attorneys' fees of the Indemnified Parties. 5-2 ARTICLE VI Events of Default Section 6.1. Events of Default Defined. The following are Events of Default under this Agreement: (a) Failure in the timely payment of all real property taxes assessed with respect to the Development Property. (b) Failure by the Company to commence and complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of this Agreement. (c) Failure by the Company to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. (d) The holder of any security interest in any part of the Development Property or Minimum Improvements takes action to enforce the same for satisfaction. (e) A petition in bankruptcy is filed naming the Company as debtor, and such petition is not dismissed within 90 days of the date of filing thereof. An Event of Default shall also include any occurrence which would with the passage of time or giving of notice become an Event of Default as defined hereinabove. Section 6.2. Remedies on Default. Whenever any Event of Default occurs, in addition to all other remedies available to the EDA at law or in equity, the EDA (1) may suspend its performance under the Agreement until it receives assurances from the Company, deemed adequate by the EDA, that the Company has cured its default and will continue its performance under this Agreement and (2) may take anyone or more of the following actions after provision of 30 days written notice to the Company of the Event of Default by the EDA, but only if the Event of Default has not been cured within said 30 days, or if the Event of Default cannot be cured within 30 days, the Company does not provide assurances to the EDA reasonably satisfactory to the EDA that the Event of Default will be cured as soon as reasonably possible: (a) The EDA may withhold the Certificate of Completion. 3062 6-1 (b) The EDA may terminate this Agreement, without further obligation whatsoever to the Company under this Agreement or the EDA Note. Section 6.3. No Remedv Exclusive. No remedy herein conferred upon or reserved to the EDA 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. 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. Section 6.4. No Additional Waiver ImDlied by One Waiver. If any agreement contained in this Agreement should be breached by any Party and thereafter waived by any other Party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 6.5. Aareement to Pay Attorneys' Fees and EXDenses. Whenever any Event of Default occurs and the EDA shall employ attorneys or incur other expenses for the enforcement, performance or observance of any obligations or agreement on the part of the Company herein contained, or for the identification and/or pursuit of any other remedies on possible work-outs of such default, the Company agrees that it shall, on demand therefor, pay to the EDA the reasonable fees of such attorneys and such other expenses so incurred by the EDA. 3062 6-2 ARTICLE VII Additional Provisions Section 7.1. Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of the provisions hereof. Section 7.2. 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 sent by registered or certified mail, postage prepaid, return receipt requested, or delivered personally;, and, (a) in the case of the Company, if mailed to or delivered personally to ENIVID EhlVld;~111 Corporation, c/o Boderman and Associates, cPA"'f';;';';';';';';';';'''Y2';ifo'<r;'''' Industrial Park Boulevard, Suite 100, Plymouth, Minnesota 55441, Attention: Neil Boderman; with a copy to Robert D. Schwartz, 450 International Centre, 900 2nd Avenue South, Minneapolis, Minnesota 55402; and (b) in the case of the EDA, if mailed to or delivered personally to the EDA at the Prior Lake City Hall, 4629 Dakota S.E., Prior Lake, Minnesota 55372, Attention: Prior Lake City Manager. 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 7.3. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original hereof. Section 7.4. Law Governina. The parties agree that this Agreement shall be governed and construed in accordance with the laws of Minnesota and acknowledge that this Agreement is of the type of agreement described in Minnesota Statutes, Section 469.176 Subdivision 5. 3062 7-1 3062 7-2 ARTICLE VIII Termination of Aareement: Exciration Section 8.1. The EDA's ODtion to Terminate. As provided in Section 6.2 hereof, the EDA may terminate this Agreement if an Event of Default shall have occurred hereunder and be continuing. Nothing in.this section shall affect the EDA's right, should the EDA not so elect to terminate this Agreement and as recourse against the Company, to insist on performance hereunder by the Company, including the Company's completion of the Minimum Improvements. Section 8.2. Exciration. This Agreement shall expire on the earlier of (i) December 31, 2001, and (ii) the date, if any, upon which the EDA's obligations under Section 3.1 shall have been paid in full. Section 8.3. Effect of Termination or Expiration. No termination or expiration of this Agreement pursuant to the terms hereof shall terminate (i) any rights or remedies arising hereunder due to an Event of Default occurring prior to such termination or expiration or (ii) the provisions of Sections 5.2 and 6.5 hereof. 3062 8-1 IN WITNESS WHEREOF, the EDA and the Company have caused this Agreement to be executed by their duly authorized repre-sentatives. PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY (SEAL) By Its President By Its Vice-President [Execution of this Agreement by ENIVID 1nlllljlll~lI Corporation appears on the following page.] 3062 8-2 ENIVID R!A.b19 CORPORATION ..................................,........ , A MINNES"()TA" 'CORPORATION By Its President [Execution Page to Development Agreement between the Prior Lake Economic Development Authority and the above-named corporation.] 3062 8-3 STATE OF MINNESOTA ) )ss. COUNTy OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 1990, by and , the President and Vice-President, respectively, of the Prior Lake Economic Development Authority, on behalf of said Authority. Notary Public ~ 8-4 STATE OF MINNESOTA ) ) SSe COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1990, by Patricia Divine, the President of ~~~::~~~~!!. ~f~~:~;:~__~W~ ~~;h=~~ Notary Public 3062 8-5 EXHIBIT A LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY This Development Property consists of the following properties located in the City of Prior Lake, Scott County, Minnesota: Lots 2 and 3, Block 1, Brooksville Center 2nd Addition 3062 A-1 EXHIBIT B CERTIFICATE OF COMPLETION WHEREAS, the Prior Lake Economic Development Authority (the ~~~~r:ti~_1k"I\J~!;~:;a%;:~m~~~~~~~: "Developmeri€..w....."A(free.m~iritny.;................d.iil::'ed as of , 1990, relating to certain property in the City of Prior Lake, Minnesota, and the issuance of this certificate was a contemplated occurrence under Section 4.4 of the Development Agreement; and WHEREAS, the Company has to the present date performed in a manner deemed sufficient under the Development Agreement by the EDA to permit the execution and delivery of this certification: NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified as the Minimum Improvements in the Development Agreement to be done and made by the Company have been completed and the above covenants and conditions in said Development Agreement have been performed by the Company. THE PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY By Its President (SEAL) By Its Vice-President [Note: At the request of the Company, this Certificate may be issued in recordable form.] 3062 B-1 EXHIBIT C FORM OF EDA NOTE No. R-1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF SCOTT PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT REVENUE NOTE OF 1990, SERIES A '!AJmNb!D:\AHtf::m:STATEb:)\ ;:\:::;:;:::::::::;:::;:;:::::;:;:::;:::;:::;:;:;:;:;:;:;:;:;:;:;:;:::::;:;:;:;:;:;:;:;:;:::::::::::::;:;:;:;::=::::::;;;::;;::=:;;:;::;;::::::::::::::::::.,,::: The Prior Lake Economic Development Authority (the "EDA") hereby acknowledges itself to be indebted and, for value received, hereby promises to pay to ENIVID "nitY~A:::::::::~illJ corporation, a Minnesota corporation, ::::::~*lzi:::::InJlKI~11::::'~9;pg#ll~gliror its registered assigns (the "Registeied"'OWrierJtT~'.but"orily""iii""'the manner, at the times, from the sources of revenue, and to the extent hereinafter provided, the principal amount hereof (the "Principal Amount") and interest thereon, as hereinafter described. The Principal Amount of this Note shall equal the lesser of (1) $240,000 and (2) the sum of the principal installments which shall have been entered on the attached Principal Ledger. Subject to the terms hereof, payments shall be due and payable on December 1 of each of the years 1992 through 2001, inclusive (the "Payment Dates"). The amounts due hereon on each Payment Date are payable solely from, to the extent, and at the times that the EDA shall have received certain amounts of tax increments from its Tax Increment Financing District No. 2-1 (the "Tax Increment District") within its Redevelopment Project NO.2, and as said amounts of such tax increments are defined and limited in Section 3.1 of that certain Development Agreement described below, such tax increments are hereinafter referred to as the "Available Tax Increments." As further provided in Section 3.1 of the Development Agreement, Available Tax Increments means, for each of the property tax years starting with the payable 1992 and continuing through the payable 3062 C-1 2001 property tax years, inclusive, the product derived by multiplying the following factors (1) and (2), factor (1) being the Principal Amount divided by $240,000 and factor (2) being the lesser of (i) $44,432 and (ii) the total of the Tax Increments generated by the Project with respect to the applicable tax year minus $3,000. Subject to the terms of this Note, the EDA shall pay to the Registered Owner the applicable amount of Available Tax Increments on the respective Payment Date. The Principal Amount of this Note shall bear interest from the last date of entry on the Principal Ledger and shall be determined as that rate of interest which, when the Available Tax Increments are present-valued (from their respective Payment Dates) to said date of last entry and to said Principal Amount, will result in the sum of such present values equalling the Principal Amount. The EDA' s payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under that certain giDQIg,i:i:ir:i:i:::i!g:::i:::::i:i:i:i:g@!~~I:::i::;:i:i:i:i::Development Agreement, dated as of . ...... .......................~....T9.90..."(the.......Development Agreement"), as the same may be amended from time to time, by and between the EDA and ENIVID 1llllllIi:r a~~:~~~~~~~', aifMi;~::~::t c~~~~:ti~;~!,!t!'::i:i~eFM~~ E:veiif.......ol.......t)e"t"aul t under the Development Agreement the EDA elects to terminate the Development Agreement, the EDA shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Development Agreement, including without limitation Section 3.1 thereof, for a fuller statement of the rights and obligations of the EDA respecting this Note, and said provisions are hereby incorporated by reference into this Note as though set out in full herein. This Note is not any obligation of any kind whatsoever of any public body, except that this Note is a special and limited revenue obligation but not a general obligation of the EDA and is payable by the EDA only from the sources and subject to the qualifications stated or referenced herein. Neither the full faith and credit nor the taxing powers of the EDA are pledged to the payment of the principal of or interest on this Note and no property or other asset of the EOA, save and except the above referenced Available Tax Increments, is or shall be a source of payment of the EDA's obligations hereunder. This Note is issued by the EDA in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act, Minnesota statutes, Sections 469.174 through 469.179. 3062 C-2 This Note may be assigned but upon such assignment the assignor shall promptly notify the EDA at the Prior Lake City offices by registered mail, and the assignee shall surrender the same to the EDA either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the EDA. Each such assignee shall take this Note subject to the foregoing condition and subject to all provisions stated or referenced herein. The EDA has elected to issue this Note as a non-tax exempt obligation and accordingly anticipates that the interest on this Note is not generally exempt from federal or state income taxes, and the EDA makes no representation or covenant with respect to any such exemption. 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 have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the EDA outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the EDA to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Prior Lake Economic Development Authority, by its Board of Commissioners, has caused this Note to be executed by the manual signatures of its President and Vice-President; has caused the official seal of the EDA to be omitted from this Note; and has caused this Note to be issued on and dated , 1990. Vice-President President 3062 C-3 CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued on , 1990, was on said date registered in the name of ENIVID *fi$YN.4.0~."iJ.1 corporation, a Minnesota corporation, !!'!:':!!:!I~g!!'fll'!'~~~ir' N~~~, t~~:, u::er:r;ne~e~~st th~~ ~~; registered the Bond as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. NAME OF REGISTERED OWNER DATE OF REGISTRATION SIGNATURE OF EDA OFFICIAL BNI\7ID I!I.I~I:I:I!II:I! Corporation , 1990 3062 C-4 PRINCIPAL LEDGER DATE OF ENTRY PRINCIPAL INSTALLMENT 3062 C-5 SIGNATURE OF EDA OFFICIAL PRINCIPAL LEDGER DATE OF ENTRY PRINCIPAL INSTALLMENT [Additional pages to this Ledger may be added as needed.] 3062 C-6 SIGNATURE OF EDA OFFICIAL EXHIBIT 0 ASSESSMENT AGREEMENT and ASSESSOR'S CERTIFICATION By and between THE PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY and ENIVID ~i1! CORPORATION This document drafted by: BRIGGS AND MORGAN 2200 First National Bank Building Saint Paul, Minnesota 55101 (612) 291-1215 3062 D-1 THIS AGREEMENT, dated as of this _ day of , 1990, by and between the Prior Lake Economic Development Authority ~~~o~~E~i~~njiiiz!~~i~~jl~llil!lII~1fIr~r(t~~rp,~~:~;~~~) ~ Minnesota WITNESSETH, that WHEREAS, on or before the date hereof the EDA and the Company -~ re~ir""pr'operty""located in the EDA' s Redevelopment proj ect NO.2, pursuant to which certain property, hereinafter referred to as the Development Property and legally described in Attachment A hereto, is to be developer to the Company; and WHEREAS, the EDA and the Company desire to establish minimum market values for the Development Property and the improvements to be constructed thereon by the Company pursuant to the Development Agreement (as such property and such improvements may exist from time to time, the "Assessed Property"), for the calculation of real property taxes, or taxes in lieu thereof pursuant to Minnesota Statutes, Section 272.01, or any successor statute, pursuant to the provisions of Minnesota Statutes, Section 469.177, Subdivision 8, a copy of which is attached hereto and made a part hereof as Attachment B: NOW, THEREFORE, the parties to this Agreement, in con- sideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. The minimum market values which shall be established for the Assessed Property as of January 1, 1991, and continuing for each January 1 thereafter to and including January 1, 2000, shall not be less than $900,000. 2. The minimum market values herein established shall be of no further force and effect and this Agreement shall terminate on December 31, 2001, to the effect that the 1991 payable 1992 through the 2000 payable 2001 property taxes shall be the property taxes subject to this Agreement. 3. Nothing in this Assessment Agreement (a) shall limit the discretion of the Assessor for Scott County to assign market values to the Assessed Property in excess of the minimum market values provided pursuant to paragraph 1 of this Agreement or (b) prohibit 3062 0-2 the Company from seeking through the exercise of legal or administrative remedies a reduction in such market values for property tax purposes; provided, however, that the Company shall not seek a reduction of the market values of the Assessed Property below the minimum market values provided pursuant to paragraph 1 of this Agreement so long as this Agreement shall remain in effect. 4. Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifying the terms of the Development Agreement. 5. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. THE PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Vice-President 3062 0-3 ENIVID RlAtmI CORPORATION ...................... , a Minnesc)"€"a......Corpora tion By Its President [Execution page of Company to Assessment Agreement between ENIVID 1ti1.J..MIiI1~ Corporation and the Prior Lake Economic Development AutJior'rty":'Ti~. 3062 0-4 STATE OF MINNESOTA ) ) SSe COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this ____ day of , 1990, by and , the President and Vice-President, respectively, of the Prior Lake Economic Development Authority, on behalf of said Authority. Notary Public 3062 0-5 STATE OF MINNESOTA) ) as. COUNTY OF ) The foregoing instrument was acknowledged before me this ____ day of , 1990, by patricia Divine, the President of g:I~lill\~.l'lllli~n C~~~f:t~~n~ai~ ~;~~;~~~on~Orporation'W1IZI6A Notary Public 3062 D-6 ATTACHMENT A TO ASSESSMENT AGREEMENT Development Property The Development Property is located in the City of Prior Lake, County of Scott, State of Minnesota, and is legally described as follows: Lots 2 and 3, Block 1, Brooksville Center 2nd Addition. 3062 D-7 ATTACHMENT B TO ASSESSMENT AGREEMENT Minnesota statutes, Section 469.177, Subdivision 8: An authority may, upon entering into a development or redevelopment agreement pursuant to section 469.176, subdivision 5, enter into a written assessment agreement in recordable form with the developer or redeveloper of property within the tax increment financing district which establishes a minimum market value of the land and completed improvements to be constructed thereon until a specified termination date, which date shall be not later than the date upon which tax increment will no longer be remitted to the Authority pursuant to section 469.176, Subdivision 1. The assessment agreement shall be presented to the county assessor, or city assessor having the powers of the county assessor, of the juriSdiction in which the tax increment financing district is located. The assessor shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the jUdgment of the assessor, to be a reasonable estimate, shall execute the following certification upon such agreement: The undersigned assessor, being legally responsible for the assessment of the above described property upon completion of the improvements to be constructed thereon, hereby certifies that the market value assigned to such land and improvements upon completion shall not be less than $ Upon transfer of title of the land to be developed or redeveloped from the authority to the developer or redeveloper, the assessment agreement, together with a copy of this subdivision, shall be filed for record and recorded in the office of the county recorder or filed in the office of the registrar of titles of the county where the real estate or any part thereof is situated. Upon completion of the improvements by the developer or redeveloper, the assessor shall value the property pursuant to section 273.11, except that the market value assigned thereto shall not be less than the minimum market value contained in the assessment agreement. Nothing herein shall limit the discretion of the assessor to assign a market value to the property in excess of the minimum market value contained in the assessment aqreement nor prohibit the developer or redeveloper from seeking, through the exercise of administrative and legal remedies, a reduction in market value for property tax purposes; provided, however, that the developer or redeveloper shall not seek, nor shall the city assessor, the county assessor, the county auditor, any board of review, any board of equalization, the commissioner of revenue, 3062 D-8 or any court of this state grant a reduction of the market value below the minimum market value contained in the assessment agreement during the term of the agreement filed of record regardless of actual market values which may result from incomplete construction of improvements, destruction, or diminution by any cause, insured or uninsured, except in the case of acquisition or reacquisition of the property by a public entity. Recording or filing of an assessment agreement complying with the terms of this subdivision shall constitute notice of the agreement to any subsequent purchaser or en- cumbrancer of the land or any part thereof, whether voluntary or involuntary, and shall be binding upon them. 3062 D-9 CERTIFICATION BY SCOTT COUNTY ASSESSOR The undersigned, having reviewed a certain Assessment Agreement (the "Assessment Agreement") between the Prior Lake Economic ~~~~~~~~~~, :u:r~~::~ta ~~~or:~~~:~::I:::I;I,:::::::.~i.m~:::g9.1'111"~I! "Company"), and being of the opinion...that....the.iii1riliiiiiiii...ma.rk~it....values contained in the Assessment Agreement appear reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the minimum market values assigned to such land and facility to be operated thereon, as of January 1 of the years 1991 through 2000, inclusive (and continuing until such time as the Assessment Agreement shall by its terms terminate), shall be not less than $900,000. Assessor for Scott County, Minnesota Dated: , 1990. 3062 D-10