The URL can be used to link to this page

08-29-2017 Special Complete AgendaS P E C IAL H O U S IN G AN D R E D EV E L O P ME N T AU TH O R ITY R IC H F IE L D MU N IC IPAL C EN TER, C O U N C IL C H AMB E R S AU G U S T 29, 2017 7:45 P M C all to order 1.S pecial Meeting Items C onsideration of the approval of a resolution approving a contract for private development with Inland D evelopment P artners for the C edar P oint S outh Redevelopment A rea. S taff Report No. 33 2.A djournment Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96 hours in advance to the C ity Clerk at 612-861-9738. AGENDA SECTION:Special Meeting Items AGENDA ITEM #1. STAFF REPORT NO. 33 CIT Y COUNCIL ME E T ING 8/29/2017 RE P O RT P RE PA RE D B Y: J ohn S tark, C ommunity D evelopment D i rector D E PA RTM E NT D IRE C TOR RE V IE W: J ohn S tark, C ommunity D evelopment D i rector 8/24/2017 O TH E R D E PA RTM E NT RE V IE W: N/A C ITY M A NA G E R RE V IE W: S teven L . D evich, C ity Manager 8/24/2017 I T E M F O R C O UNC I L C O NS I D E RAT IO N: Consideration of the approval of a resolution approving a contract for private development with Inland Development Partners for the Cedar Point South Redevelopment Area. E X E C UT IV E S UM M ARY: On October 19, 2015, the Richfield HRA entered into a preliminary development agreement with I nland Development Partners L L C (the "Developer") for the redevelopment of the Cedar Point South area. That area is identified in the attached map. That preliminary agreement called for: A redevelopment projec t c onsisting of a new apartment community including approximately 300 units; The HRA and/or C ity to contemplate c onveyanc e of vac ant land it owns to the Developer for the project; The HRA and/or City to contemplate modification of the existing Redevelopment TI F D istrict or the creation of a new Housing TI F District to provide financ ial assistance to the development, if suc h assistance was ultimately deemed appropriate; The Developer to pay all the HRA's legal and c onsultant fees incurred in pursuing the development. Sinc e the preliminary agreement was approved, a number of events/items have transpired, including: Four open houses and neighborhood meetings; A revision to Ric hfield's Comprehensive Plan which, for the most part, is c onsistent with the proposed development (a small area needs to be reguided); Based on a number of public meetings, the alignment of Ric hfield Parkway was shifted from a Cedar Avenue alignment to an 18th Avenue alignment; A $1.4 million grant was provided by the Metropolitan C ounc il for construction of Ric hfield Parkway within the boundaries of this proposal; The Developer took on an equity and construction partner in Kraus Anderson; The Developer has a purchase agreement for the 3 existing buildings at 6720, 6730, and 6744 Cedar Ave S. and has purchased and demolished the one remaining single-family home in this area; The Developer has received preliminary financing approvals for a mortgage through the U.S . Department of Housing and Urban Development; On J uly 24, 2017, the D eveloper submitted their land use applications requesting a Comprehensive Plan amendment, rezoning to a Planned Unit Development Distric t, and Final Development Plans/C onditional Use Permit. HRA staff, legal c ounsel (J ulie Eddington from Kennedy and Graven) and financial consultants (Ehlers, I nc .) have worked with the D eveloper and their team to prepare a contract for private development to be c onsidered by the Richfield HRA . Some of the most notable points from this c ontract inc lude: The construction of approximately 283 units of new rental housing; The rehabilitation of 33 units of existing rental housing in a manner that preserves the current affordability of those units; The c onstruc tion of approximately two bloc ks of Richfield Parkway by the Developer with reimbursement from the C ity via its grant from the Metropolitan Counc il; Commenc ement of construction by Marc h 1, 2018; The HRA will endeavor to establish a Housing TI F Distric t for this area prior to Marc h 1, 2018; The purc hase pric e of the HRA owned property (as determined by a May 2017 appraisal) of $1,711,445. The Developer will pay the HRA $300,000 at closing; I n the event that the Developer sells any adjacent property not needed for the project to the HRA , the HRA's c osts for acquiring suc h property would be deducted from the $300,000 up-front pay ment; The remainder of the sale price of the property ($1,411,445) shall be reimbursed to the HRA through Tax I nc rement Financ ing (TI F) beginning in year 5 of the TI F District (2025) and ending in 2046; An annual interest rate of 2.0% shall be applied to the repayment of the remaining sale price of the land; The HRA and the Developer agree to enter into a Minimum Market Value A greement with the Hennepin County A ssessor to assure the adequate generation of taxes/TI F; The prec ise amount of TI F that would be made available to the developer has not yet been determined. That determination will be made as part of the creation of the new Housing TI F District that the HRA and City Council would need to approve. I t is presumed, however, that the developer would receive the remainder of the tax inc rement (after deducting the HRA's 10% plus the land pay ment) to reimburse them for qualified c osts as deemed necessary to result in the project meeting affordability guidelines required in a Housing TI F District. RE C O M M E ND E D AC T IO N: By motion: Approve a resolution approving a contract for private development with Inland Development Partners. B AS IS O F RE C O M M E ND AT IO N: A.H IS TOR IC AL C ON TEXT A 1999/2000 study, commissioned by the City of Richfield and the Metropolitan Airports Commission, conc luded that many of the structures in this area, inc luding all single-family homes, were not c apable of withstanding the negative impacts of low frequency noise. As a result of the study, this area was identified as a Redevelopment A rea in 2000. I n 2002, federal funding was secured to ac quire the homes in this area - at which time, 28 single- family homes and 1 business in the area were purchased and eventually deeded to the HRA. I n 2004, the Minnesota Legislature approved the creation of a special Redevelopment TI F District to provide a funding mec hanism for redevelopment of the area. During the "Great Rec ession" of 2007-11, there was very little interest in developing this area due to weak market conditions. Upon the c onclusion of the recession, HRA staff conc entrated their development efforts on the Cedar Point I I area (to the north) for which there have been several proposals. I n 2015, The Anderson Companies (the principals of which later formed I nland Development Partners) expressed interest in this area and submitted a proposal for development that has remained fairly consistent since. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): None. C.C R IT IC AL T IMIN G ISSU E S: I n order to meet a September 1 deadline for their primary source of funding (the U.S. Department of Housing and Urban D evelopment), the contract for private development must be approved by that date. I f the developer fails to meet that deadline, it would impac t the project to suc h a degree that it would jeopardize c onstruc tion dates which would likely result in greater costs due to adding additional time for winter c onstruc tion. D.F IN AN C IAL IMPAC T: I n terms of the impact of the TI F D istrict, there is little to no negative effec t, sinc e the subject property is nearly all vac ant and tax exempt. The portion of the TI F that the HRA will receive (10%) will be greater than any loss of tax revenues to the City/HRA . The HRA will be paid in full for the sale of its real estate. Eight-two perc ent (82%) of this payment, though, will be made over a long period of time (2025-46). The interest rate to be paid on this portion is 2%. W hile this is greater than the average inflation rate for the previous decade, it is unknown whether that interest rate will keep pace with inflation. E.L E GAL C ON S ID E R AT ION : HRA legal staff drafted the c ontract for private development and play ed an integral role in negotiating the terms of the contrac t. ALT E R N AT IV E R E C O MME N D AT IO N(S): The C ommissioners may delay consideration of a resolution approving a contract for private development with I nland Development P artners; however, this would c ertainly result in a 2+ month delay in the projec t, and would likely result in inc reased projec t c osts. P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: J ames Lehnhoff, Financ ial Analy st, Ehlers, I nc . S teve Schwanke and Kent C arlson, I nland Development Partners AT TAC H ME N TS : D escripti on Type Resolution A pproving C ontract with Inland Resolution L etter Map of D evelopment S ite B ackup Materi al C ontract for P rivate D evelopment C ontract/A greement 492469v2 JAE RC125-348 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING CONTRACT FOR PRIVATE DEVELOPMENT WITH INLAND DEVELOPMENT PARTNERS, LLC WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) owns certain property (the “Authority Property”) located or to be located within one or more certain tax increment financing districts within the Richfield Redevelopment Project in the City of Richfield, Minnesota (the “City”); and WHEREAS, Inland Development Partners, LLC, a Minnesota limited liability company (the “Developer”), has proposed to acquire the Authority Property and certain additional parcels of real property in the City (together, the “Development Property”) and to construct thereon a multifamily housing development with approximately 280 apartment units, substantially rehabilitation three 11-unit apartment buildings, and construct underground parking (the “Minimum Improvements”); and WHEREAS, in order to promote the redevelopment of land that is underused and underutilized in the City, the Authority is considering conveying the Authority Property to the Developer for the purpose of constructing the Minimum Improvements thereon; and WHEREAS, there has been presented before this Board a Contract for Private Development (the “Agreement”) proposed to be entered into between the Authority and the Developer, pursuant to which the Developer will agree to purchase the Authority Property and construct the Minimum Improvements and the Authority will agree to reimburse the Developer for a portion of land acquisition costs and certain site improvement costs related thereto with tax increment generated from the Development Property; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Agreement is hereby in all respects authorized, approved, and confirmed, and the Chair and the Executive Director are hereby authorized and directed to execute the Agreement for and on behalf of the Authority in substantially the form now on file with the Community Development Director but with such modifications as shall be deemed necessary, desirable, or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all modifications therein. 2. The Chair and the Executive Director are hereby authorized to execute and deliver to the Developer any and all documents deemed necessary to carry out the intentions of this resolution and the Agreement. 2 492469v2 JAE RC125-348 Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 29th day of August, 2017. Mary Supple, Chair ATTEST: Doris Rubenstein, Secretary 17TH AVE SCEDAR AVE S6 6 T H S T E 68TH ST E 18TH AVE SRICHFIELD PKWY66TH ST E TO SB HWY7767TH ST E RI CHFI ELD PKWY18TH AVE SRICHFIELD PKWY6636 6733 6600 17001620 6700 6720 6730 6744 1717 1800 6607 42 6701 1840 6608 6609 661466146615 6621 66206620 662666276626 6633 66326632 6639 66386638 6644 6645 6644 67096708 6708 67156714 6714 6721 67206720 672667266727 6732 6733 6732 6738 6739 6738 67456744 6744 6721 6715 6727 6709 6739 6733 6745 670067016700 680068016800 680168006801 6809 66016600 680868096808 68086809 42 6745 6739 6801 6733 6727 6721 6715 6709 6645 6701 6639 6633 6627 6621 6809 6615 6609 6601 The Chamberlain - Development Site Boundary The Chamberlain site boundary 1840 0 100 200 300 40050Feet ¯ Error! Bookmark not defined. Fifth Draft August 24, 2016 CONTRACT FOR PRIVATE DEVELOPMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and CHAMBERLAIN LLC Dated: August ___, 2017 THIS INSTRUMENT DRAFTED BY: Kennedy & Graven, Chartered (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 i 480174v7 TABLE OF CONTENTS Page PREAMBLE 1 ARTICLE I Definitions Section 1.1. Definitions ................................................................................................................................. 2 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority .............................................................................................. 5 Section 2.2. Representations by the Developer ............................................................................................ 6 ARTICLE III Property Acquisition; Financing Section 3.1. Status of Development Property ............................................................................................... 7 Section 3.2. Conveyance of HRA Property .................................................................................................. 7 Section 3.3. Acquisition of Additional Property ........................................................................................... 8 Section 3.4. Relocation ................................................................................................................................. 9 Section 3.5. Issuance of Pay-As-You-Go TF Note ....................................................................................... 9 Section 3.6. Reimbursement of Authority for HRA Property Purchase Price ............................................. 9 Section 3.7. Termination of TIF District ....................................................................................................... 9 Section 3.8. Payment of Administrative Costs ........................................................................................... 10 Section 3.9. Records .................................................................................................................................... 10 Section 3.10. Purpose of Assistance ............................................................................................................. 10 Section 3.11. Construction of Richfield Parkway ......................................................................................... 10 Section 3.12. Public Art ................................................................................................................................ 10 Section 3.13. Hennepin County Grant .......................................................................................................... 10 Section 3.14. Metropolitan Grant .................................................................................................................. 10 Section 3.15. Developer Reimbursement from Grant Proceeds ................................................................... 10 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements ............................................................................................... 12 Section 4.2. Construction Plans .................................................................................................................. 12 Section 4.3. Commencement and Completion of Construction ................................................................. 13 Section 4.4. Certificates of Completion ...................................................................................................... 13 Section 4.5. Rental Housing Affordability Covenants ............................................................................... 13 Section 4.6. Disqualification of TIF District ............................................................................................... 14 Section 4.7 Affordable Housing Report ..................................................................................................... 14 ARTICLE V Insurance and Condemnation Section 5.1. Insurance ................................................................................................................................. 15 ii 480174v7 Section 5.2. Subordination .......................................................................................................................... 16 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes .......................................................................................... 17 Section 6.2. Reduction of Taxes ................................................................................................................. 17 Section 6.3. Qualifications .......................................................................................................................... 18 Section 6.4. Minimum Assessment Agreement .......................................................................................... 18 ARTICLE VII Financing Section 7.1. Mortgage Financing ................................................................................................................ 19 Section 7.2. Authority’s Option to Cure Default in Mortgage ................................................................... 19 Section 7.3. Modification; Subordination ................................................................................................... 19 Section 7.4. Termination ............................................................................................................................. 19 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development.......................................................................................... 20 Section 8.2. Prohibition Against Developer’s Transfer of Property and Assignment of Agreement ............................................................................................................................... 20 Section 8.3. Release and Indemnification Covenants ................................................................................. 21 ARTICLE IX Events of Default Section 9.1. Events of Default ..................................................................................................................... 23 Section 9.2. Remedies on Default ............................................................................................................... 23 Section 9.3. Termination or Suspension of TIF Note ................................................................................. 24 Section 9.4. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Developer ....................................................................................................... 24 Section 9.5. Resale of Reaquired Property; Disposition of Proceeds ........................................................ 24 Section 9.6. No Remedy Exclusive ............................................................................................................. 25 Section 9.7. No Additional Waiver Implied by One Waiver ...................................................................... 25 Section 9.8. Attorney Fees and Costs ......................................................................................................... 25 Section 9.9. Right of Purchase and Right of First Refusal Agreement ...................................................... 25 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable.............................. 27 Section 10.2. Equal Employment Opportunity ............................................................................................. 27 Section 10.3. Restrictions on Use ................................................................................................................. 27 Section 10.4. Provisions Not Merged With Deed ......................................................................................... 27 Section 10.5. Titles of Articles and Sections ................................................................................................ 27 Section 10.6. Notices and Demands ............................................................................................................. 27 Section 10.7. Counterparts ............................................................................................................................ 27 iii 480174v7 Section 10.8. Recording ................................................................................................................................ 28 Section 10.9. Amendment ............................................................................................................................. 28 Section 10.10. Preliminary Development Agreement .................................................................................... 28 TESTIMONIUM ............................................................................................................................................. S-1 SIGNATURES ................................................................................................................................................ S-1 EXHIBIT A Development Property EXHIBIT B Authorizing Resolution EXHIBIT C Form of Investment Letter EXHIBIT D Certificate of Completion EXHIBIT E Scheduled Payments for HRA Property Purchase Price EXHIBIT F Declaration of Restrictive Covenants EXHIBIT G Right of Purchase and Right of First Refusal Agreement EXHIBIT H Improvements by Developer to be Reimbursed with Grant Proceeds EXHIBIT I Substantial Rehabilitation EXHIBIT J Minimum Assessment Agreement 1 480174v7 JAE RC125-348 CONTRACT FOR PRIVATE DEVELOPMENT THIS CONTRACT FOR PRIVATE DEVELOPMENT (this “Agreement”), made as of the ___ day of August, 2017, by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State of Minnesota (the “Authority”), and CHAMBERLAIN LLC, a Delaware limited liability company (the “Developer”). WITNESSETH: WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.001 to 469.047, as amended (the “HRA Act”) and was authorized to transact business and exercise its powers by a resolution of the City Council of the City of Richfield (“City”); and WHEREAS, the Authority has undertaken a program to promote redevelopment and development of land that is underused or underutilized within the City, and in this connection the Authority administers a redevelopment project known as the Richfield Redevelopment Project (“Redevelopment Project”) pursuant to the HRA Act; and WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise and promote the development of housing within the City; and WHEREAS, the Authority plans to establish the Tax Increment Financing District No. 2017-1 (a housing district) (The Chamberlain) (the “TIF District”) within the Richfield Project pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the “TIF Act”) in order to facilitate redevelopment of certain property in the Redevelopment Project and promote the development of affordable housing within the City; and WHEREAS, the Developer proposes to acquire certain property from the Authority (the “HRA Property”) and certain other additional properties within the TIF District and construct a multifamily housing development with approximately 280 apartment units, substantially rehabilitate three 11-unit apartment buildings, and construct underground parking (the “Minimum Improvements”); and WHEREAS, in order to achieve the objectives of the Redevelopment Plan for the Redevelopment Project and make the Minimum Improvements economically feasible for the Developer to construct, the Authority is prepared to convey the HRA Property to the Developer and reimburse the Developer for a portion of the land acquisition costs and certain site improvement costs related to the Minimum Improvements; and WHEREAS, the Authority believes that the development of the TIF District 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 Redevelopment 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: 2 480174v7 JAE RC125-348 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: “Additional Property” means the property legally described under the subheading “Additional Property” in EXHIBIT A. “Agreement” means this Contract for Private Development, as the same may be from time to time modified, amended, or supplemented. “Authority” means the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. “Authority Representative” means the Executive Director of the Authority. “Authorizing Resolution” means the resolution of the Authority, substantially in the form of the attached EXHIBIT B to be adopted by the Board to authorize the issuance of the TIF Note. “Available Tax Increment,” means, on each Payment Date, the Tax Increment attributable to the Development Property and paid to the Authority by Hennepin County in the six months preceding the Payment Date after first deducting therefrom ten percent of the Tax Increment to be used to reimburse the Authority for administrative expenses and the promotion of redevelopment and affordable housing. Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this Agreement. “Board” means the Board of Commissioners of the Authority. “Certificate of Completion” means the certification provided to the Developer pursuant to Section 4.4 of this Agreement and set forth in EXHIBIT D. “City” means the City of Richfield, Minnesota. “Closing” has the meaning given such term in Section 3.2. “Construction Plans” means the plans, specifications, drawings and related documents on the construction work to be performed by the Developer on the Development Property, including the Minimum Improvements, 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: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4) cross sections of each (length and width); (5) elevations (all sides, including a building materials schedule); (6) landscape and grading plan; and (7) such other plans or supplements to the foregoing plans as the City may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. “County” means Hennepin County, Minnesota. “Developer” means Chamberlain LLC, a Delaware limited liability company, or its permitted successors and assigns. 3 480174v7 JAE RC125-348 “Development Property” means the real property described in EXHIBIT A of this Agreement, including the HRA Property and the Additional Property. “Event of Default” means an action by the Developer listed in Article IX of this Agreement. “Grant Proceeds” means the proceeds of the Hennepin County Grant and the Met Council Grant, as applicable. “Hennepin County Grant” means the Transportation Oriented Development grant to be obtained from Hennepin County in the amount of $450,000. “Holder” means the owner of a Mortgage. “HRA Act” means Minnesota Statutes, Sections 469.001 to 469.047, as amended. “HRA Property” means the property owned by the HRA on the date of this Agreement and legally described under the subheading “HRA Property” in EXBIHIT A. “HRA Property Purchase Price” means $1,711,445. “Material Change” means a change in construction plans that adversely affects generation of tax increment or changes the number of units of rental housing. “Maturity Date” means the later of the date that the (i) TIF Note has been paid in full or terminated, whichever is earlier, and (ii) the HRA Property Purchase Price is paid in full. “Met Council Grant” means the Livable Communities Grant to be obtained from the Metropolitan Council in the amount of $1,360,000. “Minimum Assessment Agreement” means the Minimum Assessment Agreement described in Section 6.4 and in substantially the form set forth in EXHIBIT J. “Minimum Improvements” means the construction in four distinct Phases of a multifamily housing development consisting of three buildings with approximately 280 apartment units, Substantial Rehabilitation of three 11-unit apartment buildings, construction of underground parking on the Development Property, and construction of a public roadway. “Minimum Market Value” has the meaning set forth in Section 4.2(a)(vi). “Mortgage” means any mortgage made by the Developer which is secured, in whole or in part, with the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. “Phases” means the phases of construction of the Minimum Improvements described in Section 4.3. “Project Area” means the real property located within the boundaries of the Redevelopment Project. “Public Redevelopment Costs” means costs related to the development of the Minimum Improvements and eligible to be reimbursed with Tax Increment, including but not limited to land acquisition 4 480174v7 JAE RC125-348 costs, site improvement costs, the costs of rehabilitating existing housing, and the costs of constructing housing. “Redevelopment Plan” means the Redevelopment Plan for the Redevelopment Project approved and adopted by the Authority and the City Council of the City. “Redevelopment Project” means the Richfield Redevelopment Project. “Right of Purchase and Right of First Refusal Agreement” means the Right of Purchase and Right of First Refusal Agreement, to be entered into between the Authority and the Developer as described in Sections 3.2(i) and 9.9 hereof and substantially in the form set forth in EXHIBIT G. “State” means the State of Minnesota. “Substantial Rehabilitation” means activities described in EXHIBIT I to be completed with respect to the three 11-unit apartment buildings as part of the Minimum Improvements. “Tax Increment” means that portion of the real property taxes which is paid with respect to the TIF District and which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. “Tax Increment Act” or “TIF Act” means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1794, as amended. “Tax Increment District” or “TIF District” means the Cedar Avenue Tax Increment Financing District, a redevelopment district. “Tax Increment Plan” or “TIF Plan” means the Tax Increment Financing Plan for Cedar Avenue Tax Increment Financing District, as approved by the City Council on September 26, 2006, as it may be amended and supplemented. “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. “TIF Note” means the Tax Increment Limited Revenue Note, substantially in the form contained in Schedule A attached to the Authorizing Resolution, to be delivered by the Authority to the Developer pursuant to Section 3.4(a) hereof and payable from Available Tax Increment received from the TIF District. “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 strikes, other labor troubles, prolonged adverse weather or 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 Authority in exercising its rights under this Agreement) which directly result in delays. (The remainder of this page is intentionally left blank.) 5 480174v7 JAE RC125-348 ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a housing and redevelopment authority organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder, and execution of this Agreement has been duly, properly and validly authorized by the Authority. (b) The Authority proposes to assist in financing certain land acquisition costs and site improvement costs necessary to facilitate the construction of the Minimum Improvements in accordance with the terms of this Agreement to further the objectives of the Redevelopment Plan. (c) The activities of the Authority undertaken pursuant to this Agreement are necessary to foster the redevelopment of certain real property which for a variety of reasons is presently underutilized, to eliminate current blighting factors and prevent the emergence of further blight at a critical location in the City, to create increased tax base in the City, to increase housing opportunities in the City, and to stimulate further development of the TIF District and Redevelopment Project as a whole. (d) The Authority has received no notice or communication from any local, state or federal official that the activities of the Developer or the Authority in or on the Development Property may be or will be in violation of any environmental law or regulation. The Authority is aware of no facts the existence of which would cause the Development Property or the proposed Minimum Improvements to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (e) The execution, delivery and performance of this Agreement and of any other documents or instruments required pursuant to this Agreement by the Authority, and consummation of the transactions contemplated therein and the fulfillment of the terms thereof, do not and will not conflict with or constitute a breach of or default under any existing (i) indenture, mortgage, deed of trust or other agreement or instrument to which the Authority is a party or by which the Authority or any of its property is or may be bound; or (ii) legislative act, constitution or other proceedings establishing or relating to the establishment of the Authority or its officers or its resolutions. (f) There is not pending, nor to the best of the Authority’s knowledge is there threatened, any suit, action or proceeding against the Authority before any court, arbitrator, administrative agency or other governmental authority that materially and adversely affects the validity of any of the transactions contemplated hereby, the ability of the Authority to perform its obligations hereunder, or the validity or enforcement of this Agreement. (g) No commissioner of the Board of the Authority or officer of the Authority has either a direct or indirect financial interest in this Agreement, nor will any commissioner or officer benefit financially form the Agreement within the meaning of Minnesota Statutes, Section 469.009. 6 480174v7 JAE RC125-348 Section 2.2. Representations by the Developer. The Developer represents and warrants that: (a) The Developer is a limited liability company duly organized and in good standing under the laws of the State, is duly authorized to transact business within the State, and has the power to enter into this Agreement. (b) The Developer will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Developer has received no notice or communication from any local, state or federal official that the activities of the Developer or the Authority in or on the Development Property may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Developer is aware of no facts the existence of which would cause it 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 Developer will use commercially reasonable efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) 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 Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) The proposed development by the Developer hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (g) The Developer shall promptly advise the Authority in writing of all litigation or claims affecting any part of the Minimum Improvements and all written complaints and charges made by any governmental authority materially affecting the Minimum Improvements or materially affecting Developer or its business which may delay or require changes in construction of the Minimum Improvements. (The remainder of this page is intentionally left blank.) 7 480174v7 JAE RC125-348 ARTICLE III Property Acquisition; Financing Section 3.1. Status of Development Property. The Authority currently owns the HRA Property and shall convey the Development Property to the Developer pursuant to the provisions of Section 3.2 hereof. The Developer is responsible for purchasing the Additional Property. Section 3.2. Conveyance of HRA Property. (a) The Authority will convey the HRA Property to the Developer via a quit claim deed. The conveyance of the HRA Property to the Developer is contingent on the Board of the Authority holding a public hearing and approving the sale of the HRA Property. The HRA Property will be conveyed “as-is” and “where-is” except for the representations of the Authority in this Agreement. Within 60 days following execution of this Agreement, the Authority will provide the Developer with a commitment for title insurance for the HRA Property from a title insurance company (the “Title Company”) acceptable to Developer. The Developer will be responsible for reimbursing the Authority for the cost of preparation of the commitment for title insurance. The Developer shall pay for the cost of obtaining a policy of title insurance. The Developer shall request and pay for an ALTA survey of the HRA Property. Upon execution of this Agreement, the Authority shall provide the Developer with all documents related to any and all environmental reviews of the HRA Property. (b) Within 60 days after the Developer’s receipt of the title commitment, the Developer may give the Authority written notice of any alleged defect(s) in the marketability of the Authority’s actual and/or record title to the HRA Property, or any portion thereof (“Objections”) and request that the Authority make the Authority’s title marketable or conforming. The Developer’s Objections may also be based on the ALTA Survey of the HRA Property. The Developer’s failure to object to defects in the marketability of Authority’s title to the Property, in writing, within the time period set forth above or at any time prior to Closing, shall be deemed a waiver of the Developer’s right to require the Authority to cure such defects. If the Developer notifies the Authority of Objections within the time period set forth above, the Authority shall use good faith efforts to make the Authority’s actual and record title to the Property marketable. The Authority shall have up to 45 days from the Authority’s receipt of the Developer’s Objections to use good faith efforts to make the Authority’s actual and record title to the Property marketable. In no event will the Authority be required to expend more than $1,000 in its good faith efforts to make the Authority’s actual and record title to the Property marketable. If the Authority makes the Authority’s title marketable within the 45 day period, the Authority shall notify the Developer, in writing, and the parties shall close pursuant to the terms of this Agreement. If the Authority is unable to make title marketable within the 45 day period, the Developer may either: (i) terminate this Agreement by delivering written notice of termination to the Authority; (ii) notify the Authority that the Developer waives Developer’s Objections; or (iii) delay Closing and cure the title issues at its own expense. If the Developer waives the Developer’s Objections, the matters giving rise to such Objections shall be deemed a permitted encumbrance and the parties shall otherwise perform their obligations under this Agreement. The Authority shall have no obligation to take any action to clear defects in the title to the Property other than the good faith efforts described above. (c) Without limitation, the Developer is responsible for satisfying itself as to matters such as contamination, soils conditions and soil stability, and survey. The Authority shall have no obligation to cure any defect or other matter regarding contamination, soils conditions and soil stability, and survey, but agrees to cooperate, at no cost or expense to it, in any efforts by Developer to achieve such a cure. 8 480174v7 JAE RC125-348 (d) On the date the HRA Property is conveyed to the Developer (the “Closing”), the Authority will execute and deliver to the Developer the following, in form and content reasonably acceptable to the Developer: i. A quit claim deed conveying the HRA Property to the Developer. ii. A non-foreign affidavit, properly executed, containing such information as is required by Internal Revenue Code section 1445(b)(2) and its regulations. iii. A standard form Seller’s Affidavit. iv. A well certificate in the form required by law. v. Any affidavit and disclosures required by law pertaining to private sewage treatment systems. vi. Any affidavits, certificates, or other documents that may be required under applicable law and/or that are reasonably determined by Developer or the Title Company to be necessary to transfer the HRA Property to Developer and to evidence that the Authority has duly authorized the transactions contemplated hereby. (e) The Developer acknowledges that the Authority will be conveying the HRA Property to the Developer for a purchase price of $1,711,445 (the “HRA Property Purchase Price”). On the date of Closing, the Developer shall pay a portion of the HRA Property Purchase Price to the Authority in the amount of $300,000. The remainder of the HRA Property Purchase Price will be paid from Available Tax Increment as described in Section 3.5 hereof. (f) The Authority may purchase one or more parcels of the Additional Property purchased by Developer in conjunction with the construction of the Minimum Improvements that the Developer will not need to own following the completion of the Minimum Improvements. The Authority will purchase such properties based on the appraised market value of such property. The portion of the HRA Property Purchase Price due at Closing shall be reduced by the appraised market value of the properties the Authority agrees to purchase from the Developer. (g) The Closing will not take place until the Developer has (i) obtained all necessary land use approvals from the City (including rezoning and a comprehensive plan amendment); (ii) acquired the Additional Property, as described in Section 3.3 hereof; (iii) executed the Declaration of Restrictive Covenants set forth in EXHIBIT E; (iv) submitted evidence to the Authority that it has paid relocation assistance to all renters (if any) occupying the Additional Property when Developer purchased the Additional Property and that it has obtained waivers of relocation assistance from the owners of the Additional Property, as described in Section 3.4; (v) obtained a commitment for financing the Minimum Improvements; and (vi) completed its due diligence regarding the Development Property. (h) In the event that the Closing has not taken place by March 1, 2018, and unless extended by mutual agreement of the parties, this Agreement will terminate and be of no further force and effect, and the parties will be relieved of any further obligations hereunder. Notwithstanding the foregoing, the deadline for the Closing may be postponed to July 1, 2018, if the Developer has completed the following actions: (i) submitted all paperwork necessary to the City to obtain all required building permits for the Minimum Improvements; and (ii) obtained a commitment from one or more lenders to provide financing for the Minimum Improvements. (i) The Developer shall grant the Authority the right to repurchase the HRA Property and purchase the Developer Property pursuant to the Right of Purchase and Right of First Refusal Agreement as described in Section 9.9 hereof and EXHIBIT G. 9 480174v7 JAE RC125-348 Section 3.3. Acquisition of Additional Property. The Developer has acquired one parcel of the Additional Property. The Developer will use commercially reasonable efforts to acquire the remaining Additional Property. If the Developer is unable to acquire all 4 parcels included in the Additional Property on or before March 1, 2018, the Authority may terminate this Agreement. The Authority has no obligation to acquire Additional Property, and has played no role in any of Developer’s acquisition activities. Section 3.4. Relocation. (a) For each parcel of the Additional Property acquired by the Developer, the Developer is responsible for complying with Minn. Stat. Sections 117.50 to 117.56 (the “Minnesota Uniform Relocation Act”) and providing evidence of such compliance to the Authority. The Developer was represented by legal counsel when negotiating this Agreement and has been advised of its responsibilities under the Minnesota Uniform Relocation Act. (b) Without limiting the Developer’s obligations under Section 8.3, the Developer will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, employees, agents, and contractors from any and all claims for benefits or payments arising out of the relocation or displacement of any person from the Additional Property as a result of the implementation of this Agreement and any and all damages, losses, or expenses of the Authority and the City, including reasonable attorneys’ fees, related to such claims that the Authority or the City may be held liable for. Section 3.5. Issuance of Pay-As-You-Go TIF Note. (a) To reimburse the Developer for certain Public Redevelopment Costs, the Authority shall issue and deliver to the Developer in the principal amount of $_________ in substantially the form set forth in Schedule A of the Authorizing Resolution attached as EXHIBIT B. The Authority and the Developer agree that the consideration from the Developer for the purchase of the TIF Note shall consist of the Developer’s payment of the Public Redevelopment Costs in at least the principal amount of the TIF Note. The Authority shall consider an Authorizing Resolution in the form attached hereto as EXHIBIT B and deliver the TIF Note upon delivery by the Developer of an investment letter in substantially the form attached to this Agreement as EXHIBIT C, together with evidence reasonably satisfactory to the Authority that the Developer has paid the Public Redevelopment Costs in at least the principal amount of the TIF Note. The principal of and interest on the TIF Note shall be payable each Payment Date solely with Available Tax Increment subject to the provisions of Section 3.6 hereof. (b) The Developer understands and acknowledges that the Authority makes no representations or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the TIF Note will be sufficient to pay the principal of and interest on the TIF Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Developer may rely. (c) The Authority acknowledges that the Developer may assign the TIF Note to one or more lenders that provides part of the financing or refinancing for the acquisition of the Development Property or the construction of the Minimum Improvements. Pursuant to the terms of the TIF Note, the TIF Note may be assigned if the assignee executes an investment letter in the form set forth in EXHIBIT C. Section 3.6. Reimbursement of Authority for HRA Property Purchase Price. The amount of the HRA Property Purchase Price due and owing to the Authority at Closing is $1,711,445. The Developer shall pay a portion of the HRA Property Purchase Price in the amount $300,000 to the Authority on the date of Closing. The remainder of the HRA Property Purchase Price ($1,411,445) will be paid from Available Tax Increment commencing in year 5 of the TIF District (2024) with interest at a rate of two percent (2.0%) per annum based on the schedule of payments set forth in EXHIBIT E. Payments to the Authority pursuant to 10 480174v7 JAE RC125-348 the schedule of payments set forth in EXHIBIT E shall be the first payments made from Available Tax Increment on each Payment Date. Section 3.7. Termination of TIF District. At anytime following the reimbursement of the Authority for the HRA Property Purchase Price and the payment in full of the principal of and interest on TIF Note, the Authority may use the remaining Tax Increment for any other authorized uses set forth in the TIF Plan or may terminate the TIF District. Section 3.8. Payment of Administrative Costs. Pursuant to a Preliminary Development Agreement, dated October 14, 2015, between the Authority, the City, and the Developer, the Developer has deposited with the Authority $5,000 to pay Administrative Costs. The Authority will use such deposit to pay “Administrative Costs,” which term means out of pocket costs incurred by the Authority, together with staff and consultant costs of the Authority, all attributable to or incurred in connection with the negotiation, preparation or modification of this Agreement, the TIF Plan, and other documents and agreements in connection with the establishment of the TIF District and development of the Development Property, and not previously paid by Developer. At the Developer’s request, but no more often than monthly, the Authority will provide the Developer with a written report including invoices, time sheets or other comparable evidence of expenditures for Administrative Costs and the outstanding balance of funds deposited. At any time the deposit drops below $1,000, the Developer shall replenish the deposit to the full $5,000 within 30 days after receipt of written notice thereof from the HRA. If at any time the Authority determines that the deposit is insufficient to pay Administrative Costs, the Developer is obligated to pay such shortfall within 15 days after receipt of a written notice from the Authority containing evidence of the unpaid costs. If Administrative Costs incurred, and reasonably anticipated to be incurred are less than the deposit by the Developer, the Authority shall return to the Developer any funds not anticipated to be needed. Section 3.9. Records. The Authority and its representatives shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of Developer relating to the Minimum Improvements and the costs for which the Developer has been reimbursed with Available Tax Increment. Section 3.10. Purpose of Assistance. The parties agree and understand that the purpose of the Authority’s financial assistance to the Developer is to facilitate development of housing, and is not a “business subsidy” within the meaning of Minnesota Statutes, Sections 116J.993 to 116J.995. Section 3.11. Construction of Richfield Parkway. In conjunction with the construction of the Minimum Improvements, the Developer has agreed to construct an extension of Richfield Parkway between 66th Street and 68th Street. The construction of the extension of Richfield Parkway will be memorialized in a development agreement between the City and the Developer. Section 3.12. Public Art. The Developer shall incorporate three or four pieces of public art within the Minimum Improvements that are visible to the general public and are mutually agreeable to both the Developer and the Authority. Examples of public art include a sculpture, a water fountain, an artistically styled play set, or a mural. Section 3.13. Hennepin County Grant. The Authority will apply for a Transportation Oriented Development grant from Hennepin County in the amount of $450,000 (the “Hennepin County Grant”) in the fall of 2017. The proposed uses of the proceeds of the Hennepin County Grant, if received, include reimbursement for acquisition of property and construction of a trail for the Three Rivers Park District. The Authority will also investigate additional sources of grant funding for these costs. 11 480174v7 JAE RC125-348 Section 3.14. Metropolitan Council Grant. The Authority has applied for and been awarded a Livable Communities grant from the Metropolitan Council in the amount of $1,360,000 (the “Met Council Grant”). The proceeds of the Met Council Grant may be used to acquire one single family home and demolish and construct a portion of the Richfield Parkway. Section 3.15. Developer Reimbursement from Grant Proceeds. The Developer has agreed to acquire certain property and construct the improvements described in EXHIBIT H. The Developer will be reimbursed by the Authority with Grant Proceeds for the improvements described in EXHIBIT H and constructed by the Developer. If the Developer does not meet the contingencies set forth in Section 3.2(g) necessary to buy the HRA Property, the Authority shall continue to have the obligation to reimburse the Developer for the costs it incurs with respect to constructing the improvements described in EXHIBIT H. This Authority’s obligation to reimburse the Developer for these costs shall continue even if additional grant funding for the reimbursement cannot be obtained. The Developer and the Authority agree to comply with all requirements of the agreements related to the Met Council Grant. The Developer and the Authority will work cooperatively to request disbursements of Grant Proceeds from the Metropolitan Council. (The remainder of this page is intentionally left blank.) 12 480174v7 JAE RC125-348 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Improvements. Following the conveyance of the HRA Property to the Developer, the Developer agrees that it will construct the Minimum Improvements on the Development Property substantially in accordance with the Construction Plans as approved pursuant to Section 4.2, and at all times prior to the Maturity Date, will operate and maintain, preserve and keep the Minimum Improvements or cause such improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. The Authority shall have no obligation to operate or maintain the Minimum Improvements. Section 4.2. Construction Plans. (a) Before commencement of construction of the Minimum Improvements, the Developer shall submit the Construction Plans to the Authority. The Authority Representative 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 Modified Redevelopment Plan; (iii) 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; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Developer from all sources (including Developer’s equity) for construction of the Minimum Improvements; (vi) the Construction Plans provide for the construction of Minimum Improvements having an estimated market value of at least $43,835,000 (the “Minimum Market Value”) and (vii) no uncured Event of Default has occurred. Approval may be based upon a review by the City’s Building Official of the Construction Plans. No approval by the Authority Representative shall relieve the Developer of the obligation to comply with the terms of this Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority Representative shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Developer in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority Representative, in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made within 30 days after the date of their receipt by the Authority. If the Authority Representative rejects any Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within 30 days after written notification to the Developer of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority Representative’s approval shall not be unreasonably withheld, delayed or conditioned. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements constructed in accordance with said plans) comply to the Authority’s satisfaction with the provisions of this Agreement relating thereto. (b) If the Developer desires to make any Material Change in the Construction Plans after their approval by the Authority, the Developer shall submit the proposed change to the Authority 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 to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within 30 days after receipt of the notice of such change. The Authority’s approval of any such change in the Construction Plans may be conditioned on amendment to provisions of this Agreement if such amendments will mitigate the materiality of such proposed changes. 13 480174v7 JAE RC125-348 Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Developer will commence the construction of the Minimum Improvements in phases as follows: Phase I (Roadway) Commenced by __________, 2018, and substantially completed by ________, 2018. Phase II (Substantial Rehabilitation of three 11 unit apartment buildings) Commenced by __________, 2018, and substantially completed by ____________. Phase III (construction of two multi-family buildings with approximately 180 units) Commenced by __________, 2018, and substantially completed by ____________. Phase IV (construction of one multi-family building with approximately 100 units) Commenced by __________, 20__, and substantially completed by ____________. Construction is considered to be commenced upon the beginning of physical improvements beyond grading. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Development Property shall be in substantial conformity with the Construction Plans as submitted by the Developer and approved by the Authority. If the Closing is postponed pursuant to Section 3.2(e), the Developer shall commence construction of the Minimum Improvements within sixty (60) days of the Closing. The Developer agrees for itself, its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Minimum Improvements. Section 4.4. Certificates of Completion. (a) Promptly after completion of each Phase of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Developer to construct each Phase of the Minimum Improvements (including the dates for beginning and completion thereof), the Authority Representative will furnish the Developer with a Certificate of Completion shown as EXHIBIT D. (b) If the Authority Representative shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the Authority Representative shall, within thirty (30) days after written request by the Developer, provide the Developer with a written statement, indicating in adequate detail in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for the Developer to take or perform in order to obtain such certification. (c) Regardless of whether a Certificate of Completion is issued by the Authority, the construction of the Minimum Improvements shall be deemed to be complete upon issuance of a certificate of occupancy by the City. Section 4.5. Rental Housing Affordability Covenants. The Developer agrees that at all times from initial occupancy of the Minimum Improvements constructed within the TIF District through the date that the TIF District is decertified, at least 20% of the units within the Minimum Improvements shall be reserved for occupancy by individuals whose income is 50% or less of the area’s median gross income constructed and satisfy the income requirements for a qualified residential rental project as defined in Section 142(d) of the Internal Revenue Code. The Developer and the Authority shall execute the Declaration of Restrictive 14 480174v7 JAE RC125-348 Covenants in substantially the form set forth in EXHIBIT E and record such agreement against the Development Property. Section 4.6. Disqualification of TIF District. If the Authority or the City receives notice from the State Department of Revenue, the State Auditor, any Tax Official or any court of competent jurisdiction that the TIF District does not qualify as a “housing district,” such event shall be deemed an Event of Default under this Agreement; provided, however, that the Authority may not exercise any remedy under this Agreement so long as such determination is being contested and has not been finally adjudicated. In addition to any remedies available to the Authority and the City under Article IX hereof, the Developer shall indemnify, defend and hold harmless the Authority and the City for any damages or costs resulting therefrom. Such indemnification and hold harmless will include the immediate payment to the Authority for any portion of the value of the Authority Property not already reimbursed from tax increment. Section 4.7. Affordable Housing Reporting. At least annually, no later than April 1 of each year commencing on the April 1 first following the issuance of the Certificate of Completion, the Developer shall provide a report to the Authority evidencing that the Developer complied with the income affordability covenants set forth in Section 4.5 hereof during the previous calendar year. The income affordability reporting shall be on the form entitled “Tenant Income Certification” from the Minnesota Housing Finance Agency (MHFA HTC Form 14), or if unavailable, any similar form. The Authority may require the Developer to provide additional information reasonably necessary to assess the accuracy of such certification. Unless earlier excused by the Authority, the Developer shall send affordable housing reports to the Authority until TIF Note is paid in full. (The remainder of this page is intentionally left blank.) 15 480174v7 JAE RC125-348 ARTICLE V Insurance Section 5.1. Insurance. (a) The Developer will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority 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 Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with a Protective Liability Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used). The Authority shall be listed as an additional insured on the policy; and (iii) Workers’ compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Maturity Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority 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 $2,000,000, and shall be endorsed to show the Authority as additional insured. (iii) Such other insurance, including workers’ compensation insurance respecting all employees, if any, of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self-insured with respect to all or any part of its liability for workers’ compensation. (c) All insurance required in this Article V shall be taken out and maintained in responsible insurance companies selected by the Developer which are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article 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 Developer and the Authority at least thirty (30) days before the cancellation or modification becomes effective or if not available from the insurance company, from the Developer. In lieu of separate policies, the Developer may maintain a 16 480174v7 JAE RC125-348 single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Developer agrees to notify the Authority immediately in the case of damage exceeding $500,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer will forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Developer will apply the Net Proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after completion of such repairs, construction and restoration shall be the property of the Developer. (e) Notwithstanding anything to the contrary contained in this Agreement, in the event of damage to the Minimum Improvements in excess of $500,000 and the Developer fails to complete any repair, reconstruction or restoration of the Minimum Improvements within twenty-four months from the date of damage, the Authority may, at its option, terminate the TIF Note as provided in Section 9.3(b) hereof. The Authority shall extend the twenty-four month time period for compliance an additional twelve months if the Developer is diligently pursuing the required repair, reconstruction or restoration of the Minimum Improvements. If the Authority terminates the TIF Note, such termination shall constitute the Authority’s sole remedy under this Agreement as a result of the Developer’s failure to repair, reconstruct or restore the Minimum Improvements. Thereafter, the Authority shall have no further obligations to make any payments under the TIF Note. (f) The Developer and the Authority 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 Authority 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. (The remainder of this page is intentionally left blank.) 17 480174v7 JAE RC125-348 ARTICLE VI Tax Increment; Taxes Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the Authority is providing substantial aid and assistance in furtherance of the redevelopment through issuance of the TIF Note. The Developer understands that the Tax Increments pledged to payment of the TIF Note are derived from real estate taxes on the Development Property, which taxes must be promptly and timely paid. To that end, the Developer agrees for itself, its successors and assigns, 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 all real estate taxes assessed against the Development Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a contractual right on behalf of the Authority to sue the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Reduction of Taxes. The Developer agrees that after the date of certification of the Tax Increment District and prior to completion of the Minimum Improvements, it will not cause a reduction in the real property taxes paid in respect of the Development Property through: (A) willful destruction of the Development Property or any part thereof (except for the demolition of structures required for construction of the Minimum Improvements); or (B) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement. The Developer also agrees that it will not, prior to the Maturity Date: (i) seek exemption from property tax for the Development Property; (ii) convey or transfer or allow conveyance or transfer of the Development Property to any entity that is exempt from payment of real property taxes under State law; or (iii) seek or agree to any reduction of the assessor’s estimated market value to below the Minimum Market Value described in Section 4.2(a)(vi). The Developer may, at any time following the issuance of the Certificate of Completion, seek through petition or other means to have the Assessors Estimated Market Value for the Development Property reduced to not less than the Minimum Market Value. Such activity must be preceded by written notice from the Developer to the Authority indicating its intention to do so. Upon receiving such notice, or otherwise learning of the Developer’s intentions, the Authority may suspend or reduce payments due under the TIF Note except for the portion of such payments from Available Tax Increment, as defined in the TIF Note, based on the Minimum Market Value, or the assessor’s estimated market value for the year in which the Minimum Improvements have been completed, if less than Minimum Market Value, until the actual amount of the reduction in market value is determined, whereupon the Authority will make the suspended payments less any amount that the Authority is required to repay the County as a result any retroactive reduction in market value of the Development Property. During the period that the payments are subject to suspension, the Authority may make partial payments on the TIF Note, from the amounts subject to suspension, if it determines, in its sole and absolute discretion, that the amount retained will be sufficient to cover any repayment which the County may require. The Authority’s suspension of payments on the TIF Note pursuant to this Section shall not be considered a default under Section 9.1 hereof. 18 480174v7 JAE RC125-348 Section 6.3. Qualifications. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that upon Transfer of the Development Property to another person or entity, the Developer will remain obligated under Sections 6.1 and 6.2 hereof, unless the Developer is released from such obligations in accordance with the terms and conditions of Section 8.2(b) or 8.3 hereof. Section 6.4. Minimum Assessment Agreement. (a) On or before Closing, the Developer shall execute the Minimum Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's minimum market value for the Development Property with the Minimum Improvements constructed thereon. (b) The Minimum Assessment Agreement shall be substantially in the form attached hereto as EXHIBIT J. Nothing in the Assessment Agreement shall limit the discretion of the assessor to assign a market value to the property in excess of such assessor's minimum market value nor prohibit the Developer from seeking through the exercise of legal or administrative remedies a reduction in such market value for property tax purposes, provided however, that the Developer shall not seek a reduction of such market value below the assessor's minimum market value in any year so long as such Minimum Assessment Agreement shall remain in effect. The Assessment Agreement shall remain in effect for the period described in EXHIBIT J. (The remainder of this page is intentionally left blank.) 19 480174v7 JAE RC125-348 ARTICLE VII Financing Section 7.1. Mortgage Financing. (a) Before commencement of construction of the Minimum Improvements, the Developer shall submit to the Authority evidence of one or more commitments for financing which, together with equity for such construction, is sufficient for payment of the Minimum Improvements. Such commitments may be submitted as short term financing, long term mortgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. (b) If the Authority finds that the financing is sufficiently committed and adequate in amount to pay the costs specified in paragraph (a) then the Authority shall notify the Developer in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within 30 days from the date when the Authority is provided the evidence of financing. A failure by the Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Developer shall submit adequate evidence of financing within 30 days after such rejection. Section 7.2. Authority’s Option to Cure Default in Mortgage. In the event that any portion of the Developer’s funds is provided through mortgage financing, and there occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the Developer shall cause the Authority to receive copies of any notice of default received by the Developer from the holder of such Mortgage. If the holder of such Mortgage is unwilling to provide such notice, the Developer will be required to give such notice. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Developer within such cure periods as are available to the Developer under the Mortgage documents. Section 7.3. Modification; Subordination. In order to facilitate the Developer obtaining financing for the development of the Minimum Improvements, the Authority agrees to subordinate its rights under this Agreement to the Holder of any Mortgage securing construction or permanent financing or subsequent refinancing, under terms and conditions reasonably acceptable to the Authority. An agreement to subordinate this Agreement must be approved by the Board of the Authority. Section 7.4. Termination. All the provisions of this Article VII shall terminate with respect to the Minimum Improvements, upon delivery of the Certificate of Completion for the Minimum Improvements. The Developer or any successor in interest to the Minimum Improvements or portion thereof, may sell or engage in financing or any other transaction creating a mortgage or encumbrance or lien on the Minimum Improvements or any portion thereof for which a Certificate of Completion has been obtained, without obtaining prior written approval of the Authority, provided that such sale, financing or other transaction creating a mortgage or encumbrance shall not be deemed as resulting in any subordination of the Authority’s rights under this Agreement unless the Authority expressly consents to such a subordination. (The remainder of this page is intentionally left blank.) 20 480174v7 JAE RC125-348 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Developer represents and agrees that its purchase of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Development Property and not for speculation in land holding. Section 8.2. Prohibition Against Developer’s Transfer of Property and Assignment of Agreement. The Developer represents and agrees that prior to issuance of the Certificate of Completion for the Minimum Improvements: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to 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 (except a lease to a residential occupant), without the prior written approval of the Authority unless the Developer remains liable and bound by this Agreement in which event the Authority’s approval is not required. Any such transfer shall be subject to the provisions of this Agreement. (b) In the event the Developer, upon transfer or assignment of the Development Property seeks to be released from its obligations under this Agreement, the Authority shall be entitled to require, except as otherwise provided in this 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 Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to all the conditions and restrictions to which the Developer is subject; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Development Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Developer or any other party bound in any 21 480174v7 JAE RC125-348 way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Development Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. In the event the foregoing conditions are satisfied, the Developer shall be released from its obligation under this Agreement. After issuance of the Certificate of Completion for the Minimum Improvements, the Developer may transfer or assign the Development Property or the Developer’s interest in this Agreement if it obtains the prior written consent of the Authority (which consent will not be unreasonably withheld) and the transferee or assignee is bound by all the Developer’s obligations hereunder. The Developer shall submit to the Authority written evidence of any such transfer or assignment, including the transferee or assignee’s express assumption of the Developer’s obligations under this Agreement. If the Developer fails to provide such evidence of transfer and assumption, the Developer shall remain bound by all its obligations under this Agreement. The Authority shall take action on the requested transfer or assignment within forty-five days of the request from the Developer. The Authority’s approval of such transfer or assignment shall not be unreasonably withheld if evidence is provided that the transferee or assignee is financially capable, experienced, and reputable. Section 8.3. Release and Indemnification Covenants. (a) Except for any willful misrepresentation, gross negligence or any willful or wanton misconduct of the Authority, or its board members, officers, agents or employees, the Developer releases from and covenants and agrees that the Authority and its governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and its respective governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (b) Except for any willful misrepresentation, gross negligence or any willful or wanton misconduct of the Authority, or its board members, officers, agents or employees, the Developer agrees to protect and defend the Authority and its governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, maintenance and operation of the Minimum Improvements. As to any willful misrepresentation, gross negligence or any willful or wanton misconduct of the Authority, or its board members, officers, agents or employees, the Authority agrees to protect and defend the Developer, its officers, agents, servants and employees and hold the same harmless from any such proceedings. (c) Except for any willful misrepresentation, gross negligence or any willful or wanton misconduct of the Authority, or its board members, officers, agents or employees, the Authority and its governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Developer or its officers, agents, servants or employees or any other person who may be about the Development Property or Minimum Improvements due to any act of negligence of any person. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the 22 480174v7 JAE RC125-348 Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 23 480174v7 JAE RC125-348 ARTICLE IX Events of Default Section 9.1. Events of Default. The following will be “Events of Default” under this Agreement and the term “Event of Default” means, whenever it is used in this Agreement, any one or more of the following events, after the non-defaulting party provides 30 days written notice to the defaulting party of the event, but only if the event has not been cured within said 30 days or, if the event is by its nature incurable within 30 days, the defaulting party does not, within the 30-day period, provide assurances reasonably satisfactory to the party providing notice of default that the event will be cured and will be cured as soon as reasonably possible: (a) Failure by the Developer or the Authority to observe or perform any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement; (b) The Developer: (i) files any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act or under any similar federal or State law; (ii) makes an assignment for benefit of its creditors; (iii) fails to pay real estate taxes on the Development Property or the Minimum Improvements as they become due; (iv) admits in writing its inability to pay its debts generally as they become due; or (iv) is adjudicated as bankrupt or insolvent. 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 days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature incurable within thirty 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, subject to the provisions of Section 9.3 hereof. (c) Upon a default by the Developer, the Authority may suspend payments under the TIF Note or terminate the TIF Note and the TIF District, subject to the provisions of Section 9.3 hereof. (d) 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. 24 480174v7 JAE RC125-348 Section 9.3. Termination or Suspension of TIF Note. After the Authority has issued its Certificate of Completion for the Minimum Improvements, the Authority and the City may exercise its rights under Section 9.2 only for the following Events of Default: (a) the Developer fails to pay real estate taxes or assessments on the Development Property or any part thereof when due, and such taxes or assessments shall not have been paid, or provision satisfactory to the Authority made for such payment, within thirty (30) days after written demand by the Authority to do so; or (b) the Developer fails to comply with Developer’s obligation to operate and maintain, preserve and keep the Minimum Improvements or cause such improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition, pursuant to Sections 4.1 and 5.1; provided that, upon Developer’s failure to comply with Developer’s obligations under Sections 4.1 or 5.1, if uncured after thirty days’ written notice to the Developer of such failure, the Authority may only suspend payments under the TIF Note until such time as Developer complies with said obligations. If the Developer fails to comply with said obligations for a period of eighteen months, the Authority may terminate the TIF Note and the TIF District. Section 9.4. Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Developer. In the event that subsequent to conveyance of the HRA Property to the Developer and prior to Developer satisfying the conditions for receipt by the Developer of the Certificate of Completion for the Minimum Improvements, the Developer, subject to Unavoidable Delays, fails to commence or complete construction of the Minimum Improvements by the dates specified in Section 4.3 hereof, and such failure to commence or complete is not cured within 90 days after written notice from the Authority to the Developer to do so; then the Authority shall have the right to re-enter and take possession of the HRA Property and to terminate and revest in the Authority the HRA Property, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the HRA Property to the Developer shall be made upon, and that the deeds shall contain a condition subsequent to the effect that in the event of any default on the part of the Developer in performance of the obligations specified in this Section 9.4 and failure on the part of the Developer to remedy, end, or abrogate such default within the period and in the manner stated in this Section, the Authority at its option may declare a termination in favor of the Authority of the title, and of all the rights and interests in and to the HRA Property and that such title and all rights and interests of the Developer, and any assigns or successors in interest to and in the HRA Property, shall revert to the Authority, as applicable, but only if the events stated in this Section have not been cured within the time periods provided above. Pursuant to Section 7.3, the Authority may subordinate its right of reverter. Section 9.5. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the Authority of title to and/or possession of the HRA Property, the Authority shall, pursuant to their responsibilities under law, use their best efforts to sell the HRA Property and in such manner as the Authority to a qualified and responsible party or parties (as determined by the Authority) who will assume the obligation of making or completing the Minimum Improvements or such other improvements in their stead as shall be satisfactory to the Authority in accordance with the uses specified for the HRA Property in this Agreement. During any time while the Authority has title to and/or possession of a parcel of property obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering such parcel. Upon resale of the HRA Property, the proceeds thereof shall be applied: (a) First, to reimburse the Authority for all costs and expenses incurred by them, including but not limited to salaries of personnel, in connection with the recapture, management, and resale of the HRA Property (but less any income derived by the Authority from the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the HRA Property or part thereof (or, in the event the HRA Property is exempt from taxation or assessment or such charge during 25 480174v7 JAE RC125-348 the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have been payable if the HRA Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the HRA Property, or part thereof at the time of revesting of title thereto in the Authority, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the subject improvements or any part thereof on the HRA Property; and any amounts otherwise owing the Authority by the Developer and its successor or transferee; and (b) Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the portion of the HRA Property Purchase Price paid by the Developer under Section 3.2 and the amount actually invested by it in making any of the subject improvements on the HRA Property or part thereof, less any gains or income withdrawn or made by it from the Agreement or the HRA Property. Any balance remaining after such reimbursements shall be retained by the Authority as its property. Section 9.6. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or the Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than the notices already required in Sections 9.2 and 9.3 hereof. Section 9.7. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.8. Attorney Fees and Costs. Whenever any Event of Default occurs and if the Authority employs attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Developer under this Agreement, and the Authority prevails in the action, the Developer agrees that it will, within ten days of written demand by the Authority, pay to the Authority the reasonable fees of the attorneys and the other expenses so incurred by the Authority. Section 9.9. Right of Purchase and Right of First Refusal Agreement. Following the conveyance of the HRA Property to the Developer, if the Developer, subject to Unavoidable Delays, fails to commence construction of the Minimum Improvements by the dates specified in Section 4.3 hereof, and such failure to commence is not cured within 90 days after written notice from the Authority to the Developer to do so, then the Authority shall have the right to repurchase the HRA Property for the price the Developer paid for the HRA Property or purchase all of the Development Property from the Developer for the price the Developer paid for the Development Property. In addition, prior to commencement of construction of the Minimum Improvements, if the Developer determines to sell all or any part of the Development Property, the Authority shall have the right to purchase the portion of the Development Property to be sold to a third party by the Developer for the lower of (i) the price the third party has agreed to pay for such property or (ii) the price the Developer paid for such property. For the avoidance of doubt, the purchase price paid for the HRA Property at Closing was $1,711,445. To memorialize the Authority’s right of purchase and right of first refusal, the Developer and the Authority shall enter into a Right of Purchase and Right of First Refusal Agreement in 26 480174v7 JAE RC125-348 substantially the form set forth in EXHIBIT G, which shall be recorded against the Development Property acquired by the Developer. (The remainder of this page is intentionally left blank.) 27 480174v7 JAE RC125-348 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority 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 Authority shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Authority or County or for any amount which may become due to the Developer or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. Section 10.3. Restrictions on Use. The Developer agrees that, prior to the Maturity Date, the Developer, and such successors and assigns, shall use the Development Property solely for the development of multifamily housing in accordance with the terms of this Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by 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 Developer, is addressed to or delivered personally to the Developer at 20505 Lakeview Ave., Deephaven, MN 55331, Attn: _______________; (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 6700 Portland Ave. So., Richfield, MN 55423, Attn: Community Development Director; 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. 28 480174v7 JAE RC125-348 Section 10.8. Recording. The Authority may record a memorandum of this Agreement and any amendments thereto with the Hennepin County recorder. The Developer shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Developer. Section 10.10. Preliminary Development Agreement. On the date of execution of this Agreement by both parties, the Preliminary Development Agreement, dated October 14, 2015, between the Authority, the City, and the Developer shall terminate. (The remainder of this page is intentionally left blank.) S-1 480174v7 JAE RC125-348 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly executed in its name and behalf as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chair STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this August ___, 2017, by Mary B. Supple, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this August ___, 2017, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public S-2 480174v7 JAE RC125-348 CHAMBERLAIN LLC By Its __________________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this _________________, 2017, by ________________, the _____________________________, on behalf of the company. Notary Public (Signature Page of Developer to the Contract for Private Development) A-1 480174v7 JAE RC125-348 EXHIBIT A DEVELOPMENT PROPERTY HRA Property Address Parcel Identification No. Legal Descriptions 6609 17th Avenue South 26-028-24-41-0078 Lot 15, Block 2, Wexler’s Addition 6601 17th Avenue South 26-028-24-41-0079 Lot 16, Block 2, Wexler’s Addition 6615 17th Avenue South 26-028-24-41-0077 Lot 14, Block 2, Wexler’s Addition 6621 17th Avenue South 26-028-24-41-0076 Lot 13, Block 2, Wexler’s Addition 6627 17th Avenue South 26-028-24-41-0075 Lot 12, Block 2, Wexler’s Addition 6633 17th Avenue South 26-028-24-41-0074 Lot 11, Block 2, Wexler’s Addition 6639 17th Avenue South 26-028-24-41-0073 Lot 10, Block 2, Wexler’s Addition 6645 17th Avenue South 26-028-24-41-0072 Lot 9, Block 2, Wexler’s Addition 6620 18th Avenue South 26-028-24-41-0067 Lot 4, Block 2, Wexler’s Addition 6626 18th Avenue South 26-028-24-41-0068 Lot 5, Block 2, Wexler’s Addition 6632 18th Avenue South 26-028-24-41-0069 Lot 6, Block 2, Wexler’s Addition 6638 18th Avenue South 26-028-24-41-0070 Lot 7, Block 2, Wexler’s Addition 6644 18th Avenue South 26-028-24-41-0071 Lot 8, Block 2, Wexler’s Addition 6700 18th Avenue South 26-028-24-41-0080 Lot 1, Block 3, Wexler’s Addition 6708 18th Avenue South 26-028-24-41-0081 Lot 2, Block 3, Wexler’s Addition 6714 18th Avenue South 26-028-24-41-0082 Lot 3, Block 3, Wexler’s Addition 6720 18th Avenue South 26-028-24-41-0083 Lot 4, Block 3, Wexler’s Addition 6726 18th Avenue South 26-028-24-41-0084 Lot 5, Block 3, Wexler’s Addition 6732 18th Avenue South 26-028-24-41-0085 Lot 6, Block 3, Wexler’s Addition 6738 18th Avenue South 26-028-24-41-0086 Lot 7, Block 3, Wexler’s Addition 6744 18th Avenue South 26-028-24-41-0087 Lot 8, Block 3, Wexler’s Addition 6701 18th Avenue South 26-028-24-41-0107 Lot 16, Block 4, Wexler’s Addition 6709 18th Avenue South 26-028-24-41-0106 Lot 15, Block 4, Wexler’s Addition 6721 18th Avenue South 26-028-24-41-0104 Lot 13, Block 4, Wexler’s Addition 6727 18th Avenue South 26-028-24-41-0103 Lot 12, Block 4, Wexler’s Addition 6733 18th Avenue South 26-028-24-41-0102 Lot 11, Block 4, Wexler’s Addition 6739 18th Avenue South 26-028-24-41-0101 Lot 10, Block 4, Wexler’s Addition 6745 18th Avenue South 26-028-24-41-0100 Lot 9, Block 4, Wexler’s Addition 6700 Cedar Avenue South 26-028-24-41-0096 Lots 1 and 2, Block 4, Wexler’s Addition A-2 480174v7 JAE RC125-348 Additional Property to be purchased by Developer Address Parcel Identification No. Legal Descriptions 6715 18th Avenue South 26-028-24-41-0105 Lot 14, Block 4, Wexler’s Addition 6720 Cedar Avenue South 26-028-24-41-0097 Lots 3 & 4, Block 4, Wexler’s Addition 6730 Cedar Avenue South 26-028-24-41-0098 Lots 5 & 6, Block 4, Wexler’s Addition 6744 Cedar Avenue South 26-028-24-41-0099 Lots 7 & 8, Block 4, Wexler’s Addition B-1 480174v7 JAE RC125-348 EXHIBIT B AUTHORIZING RESOLUTION HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING THE ISSUANCE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT LIMITED REVENUE NOTE, SERIES ________ IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $_________ BE IT RESOLVED BY the Board of Commissioners (“Board”) of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. The Authority has heretofore approved the establishment of Tax Increment Financing District No. 2017-__ (a housing district) (Cedar Point South Project) (the “TIF District”) within the Richfield Redevelopment Project (“Redevelopment Project”), and has adopted a tax increment financing plan for the purpose of financing certain improvements within the Redevelopment Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Redevelopment District. 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 Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Tax Increment Limited Revenue Note, Series _______ (the “TIF Note”), in the aggregate principal amount of up to $___________ for the purpose of financing certain public redevelopment costs of the Tax Increment Plan for the TIF District. 1.02. Issuance, Sale and Terms of the TIF Note. The Authority entered into a Contract for Private Development, dated ____________, 2017, between the Authority and the Owner (the “Agreement”). Pursuant to the Agreement, the TIF Note shall be sold to Chamberlain LLC (the “Owner”). The TIF Note shall be dated as of the date of delivery and shall bear interest at the rate of __% per annum to the earlier of maturity or prepayment. In exchange for the Authority’s issuance of the TIF Note to the Owner, the Owner shall pay certain public redevelopment costs related to the Minimum Improvements (as defined in the Agreement) pursuant to Section 3.3 of the Agreement. The TIF Note will be delivered in the principal amount of up to $___________ for reimbursement of public redevelopment costs in accordance with the terms of Section 3.4(a) of the Agreement. Section 2. Form of TIF Note. The TIF Note shall be in substantially the form set forth in Schedule A attached hereto, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue. B-2 480174v7 JAE RC125-348 Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The TIF Note shall be issued as a single typewritten note numbered R-1. The TIF Note shall be issuable only in fully registered form. Principal of and interest on the TIF Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Subjection to the provisions of the Agreement, principal of and interest on the TIF 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 Authority hereby appoints the Authority’s Executive Director to perform the functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the TIF Note and the registration of transfers and exchanges of the TIF Note. (b) Transfer of TIF Note. Upon surrender for transfer of the TIF Note, including any assignment or exchange thereof, 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, and the payment by the Owner of any tax, fee, or governmental charge required to be paid by or to the Authority with respect to such transfer or exchange, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. Notwithstanding the foregoing, the TIF Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an investment letter in a form substantially similar to the investment letter submitted by the Owner or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. The TIF Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an investment letter in a form substantially similar to the investment letter in EXHIBIT C of the Agreement or a certificate of the transferor, in a form satisfactory to the Executive Director of the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. The Owner may assign the TIF Note to a lender that provides all or part of the financing for the acquisition of the Development Property or the construction of the Minimum Improvements. The Authority hereby consents to such assignment, conditioned upon receipt of an investment letter from such lender in substantially the form attached in the Agreement as EXHIBIT C, or other form reasonably acceptable to the Executive Director of the Authority. The Authority also agrees that future assignments of the TIF Note may be approved by the Executive Director of the Authority without action of the Authority’s Board, upon the B-3 480174v7 JAE RC125-348 receipt of an investment letter in substantially the form of EXHIBIT C of the Agreement or other investment letter reasonably acceptable to the Authority from such assignees. (c) Cancellation. The TIF Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When a Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name a Note is at any time registered in the bond register as the absolute owner of the TIF Note, whether the TIF Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner’s order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of a Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in 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 TIF Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The TIF Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The TIF Note shall be prepared under the direction of the Executive Director of the Authority and shall be executed on behalf of the Authority by the signatures of its Chair and its Executive Director. In case any officer whose signature shall appear on the TIF Note shall cease to be such officer before the delivery of the TIF 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 TIF Note has been so executed, the TIF Note shall be delivered by the Authority to the Owner following the delivery of the necessary items delineated in Section 3.3 of the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the TIF Note Available Tax Increment as defined in the TIF Note. Available Tax Increment shall be applied to payment of the principal of and interest on the TIF Note in accordance with Section 3.3 of the Agreement and the terms of the form of TIF Note set forth in Schedule A attached to this resolution. 4.02. Bond Fund. Until the date the TIF 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 Authority B-4 480174v7 JAE RC125-348 shall maintain a separate and special “Bond Fund” to be used for no purpose other than the payment of the principal of and interest on the TIF Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority’s account for TIF District upon the payment of all principal and interest to be paid with respect to the TIF Note. Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the TIF Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the TIF 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 Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon full execution of the Agreement. Adopted by the Board of Commissioner the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, this ____ day of ________, 20__. Chair Executive Director B-5 480174v7 JAE RC125-348 Schedule A to Exhibit B FORM OF TIF NOTE UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTIES OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD No. R-1 $___________ TAX INCREMENT LIMITED REVENUE NOTE SERIES ________ Date Rate of Original Issue 4.6% __________ The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), for value received, certifies that it is indebted and hereby promises to pay to Chamberlain LLC, or registered assigns (the “Owner”), the principal sum of $__________ and to pay interest thereon at the rate of six and three quarters percent per annum, as and to the extent set forth herein. 1. Payments. Principal and interest (“Payments”) shall be paid on _________, 20__, and each ____________ and ___________ (each a “Payment Date”) and thereafter to and including ______________, 20___, 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 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall accrue on a simple basis and will not be added to principal. Interest shall be computed on the basis of a year of 360 days and 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 will mean, on each Payment Date, ninety percent (90%) of the Tax Increment (as defined in the Agreement) attributable to the Development Property (as defined in the Agreement) and paid to the Authority by Hennepin County in the six months preceding the Payment Date, all as the terms are defined in the Contract for Private Development between the Authority and Owner dated as of ___________ (the “Agreement”). The principal of and interest on this Note shall be payable each Payment Date solely from Available Tax Increment. Available Tax Increment will not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under the Agreement. B-6 480174v7 JAE RC125-348 The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment, and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the payment of Available Tax Increment from the last payment of Tax Increment the Authority is entitled to receive from Hennepin County with respect to the Development Property. 4. Optional Prepayment. The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority 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 Authority’s option, this Note shall terminate and the Authority’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 to aid in financing certain public development costs and administrative costs of a housing project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended, and is issued pursuant to an authorizing resolution (the “Resolution”) duly adopted by the Authority on ______________, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the Authority 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 Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Estimated Tax Increment Payments. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or the Agreement are for the benefit of the Authority, and are not intended as representations on which the Developer may rely. THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THIS NOTE. 8. Registration. This Note is issuable only as a fully registered note without coupons. 9. Transfer. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Clerk of the City of Richfield. Upon surrender for transfer of the TIF Note, including any assignment or exchange thereof, 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, and the payment by the Owner of any tax, fee, or governmental charge required to be paid by or to the Authority with respect to such transfer or exchange, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new B-7 480174v7 JAE RC125-348 Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. Notwithstanding the foregoing, the TIF Note shall not be transferred to any person other than an affiliate, or other related entity, of the Owner unless the Authority has been provided with an investment letter in a form substantially similar to the investment letter in EXHIBIT C of the Agreement or a certificate of the transferor, in a form satisfactory to the Executive Director of the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. The Owner may assign the TIF Note to a lender that provides all or part of the financing for the acquisition of the Development Property or the construction of the Minimum Improvements. The Authority hereby consents to such assignment, conditioned upon receipt of an investment letter from such lender in substantially the form attached in the Agreement as EXHIBIT C, or other form reasonably acceptable to the Executive Director of the Authority. The Authority also agrees that future assignments of the TIF Note may be approved by the Executive Director of the Authority without action of the Authority’s Board, upon the receipt of an investment letter in substantially the form of EXHIBIT C of the Agreement or other investment letter reasonably acceptable to the Authority from such assignees. This Note is issued pursuant to a resolution of the Board of the Authority and is entitled to the benefits thereof, which Resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, has caused this Note to be executed with the manual signatures of its Chair and Executive Director, all as of the Date of Original Issue specified above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA Executive Director Chair B-8 480174v7 JAE RC125-348 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the Authority’s Executive Director, in the name of the person last listed below. Date of Registration Registered Owner Signature of Executive Director CHAMBERLAIN LLC. Federal ID #_____________ [End of Form of TIF Note] 480174v7 JAE RC125-348 C-1 EXHIBIT C INVESTMENT LETTER To the Housing and Redevelopment Authority in and for the City of Richfield (the “Authority”) Attention: Executive Director Re: $____ Tax Increment Limited Revenue Note, Series 201___ The undersigned, as Owner of $_____ in principal amount of the above captioned Note (the “Note”) pursuant to a resolution of the Authority adopted on ___________, 20__ (the “Resolution”), hereby represents to you and to Kennedy & Graven, Chartered, Minneapolis, Minnesota, development counsel, as follows: 1. We understand and acknowledge that the TIF Note is delivered to the Owner as of this date pursuant to the Resolution and the Contract for Private Development between the Authority and the Owner, dated as of ________, 2017 ( the “Contract”). 2. We understand that the TIF Note is payable as to principal and interest solely from Available Tax Increment (as defined in the TIF Note). 3. We further understand that any estimates of Tax Increment (as defined in the Contract) prepared by the Authority or its financial advisors in connection with the TIF District (as defined in the Contract), the Contract or the TIF Note are for the benefit of the Authority, and are not intended as representations on which the Owner may rely. 4. We have sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal obligations, to be able to evaluate the risks and merits of the investment represented by the purchase of the above stated principal amount of the TIF Note. 5. We acknowledge that no offering statement, prospectus, offering circular or other comprehensive offering statement containing material information with respect to the Authority and the TIF Note has been issued or prepared by the Authority, and that, in due diligence, we have made our own inquiry and analysis with respect to the Authority, the TIF Note and the security therefor, and other material factors affecting the security and payment of the TIF Note. 6. We acknowledge that we have either been supplied with or have access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and we have had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Authority, the TIF Note and the security therefor, and that as a reasonable investor we have been able to make our decision to purchase the above stated principal amount of the TIF Note. 7. We have been informed that the TIF Note (i) is not being registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, or under federal securities laws or regulations, (ii) will not be listed on any stock or other securities exchange, and (iii) will carry no rating from any rating service. 8. We acknowledge that neither the Authority nor Kennedy & Graven, Chartered have made any representations as to the status of interest on the TIF Note for state or federal income tax purposes. 480174v7 JAE RC125-348 C-2 9. We represent to you that we are purchasing the TIF Note for our own accounts and not for resale or other distribution thereof, except to the extent otherwise provided in the TIF Note, the Resolution, or any other resolution adopted by the Authority. 10. All capitalized terms used herein have the meaning provided in the Contract unless the context clearly requires otherwise. 11. The Owner’s federal tax identification number is: __________________________. 12. We acknowledge receipt of the TIF Note as of the date hereof. (Remainder of this page intentionally left blank) 480174v7 JAE RC125-348 C-3 [OWNER] By Its Dated: __________________, 20__ 480174v7 JAE RC125-348 D-1 EXHIBIT D CERTIFICATE OF COMPLETION (To be provided for each Phase) The undersigned hereby certifies that Chamberlain LLC., a Delaware limited liability company (the “Developer”), has fully complied with its obligations under Articles III and IV of that document titled “Contract for Private Development,” dated ________________, 2017, between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and the Developer (“Agreement”), a memorandum of which was recorded on ______________________, as document no.______________________, with respect to construction of Phase ___ of the Minimum Improvements in accordance with Article IV of the Agreement, and that the Developer is released and forever discharged from its obligations with respect to construction of Phase ___ of the Minimum Improvements under Articles III and IV of the Agreement. Dated: _______________, 20___. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _______________, 20__, by _________________, the Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public 480174v7 JAE RC125-348 E-1 EXHIBIT E SCHEDULED PAYMENTS FOR HRA PROPERTY PURCHASE PRICE Commencing on August 1, 2024, and on each February 1 and August 1 thereafter, Authority will be paid $43,950 for the HRA Property Purchase Price due an owing after Closing (which includes the principal amount of the HRA Property Purchase Price, plus 2% interest accruing from the Closing). Such payments will be made from Available Tax Increment and shall be the first payment from Available Tax Increment. Such payments shall continue until the HRA Property Purchase Price, and all accrued interest, is paid in full. F-1 480174v7 JAE RC125-348 EXHIBIT F DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (this “Declaration”) dated as of ______________, by CHAMBERLAIN LLC, a Delaware limited liability company (the “Developer”), is given to the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State of Minnesota (the “Authority”). RECITALS WHEREAS, the Authority entered into that certain Contract for Private Development, dated _______________, filed _____________, 20____ in the Office of the Recorder for Hennepin County as Document No. _________ (the “Contract”), between the Authority and the Developer; and WHEREAS, pursuant to the Contract, the Developer is obligated to cause construction of ___ housing units of rental housing (the “Project”) on the property described in EXHIBIT A hereto (the “Property”), and to cause compliance with certain affordability covenants described in Section 4.5 of the Contract; and WHEREAS, Section 4.5 of the Contract requires that the Developer cause to be executed an instrument in recordable form substantially reflecting the covenants set forth in Section 4.5 of the Contract; and WHEREAS, the Developer intends, declares, and covenants that the restrictive covenants set forth herein will be and are covenants running with the Property for the term described herein and binding upon all subsequent owners of the Property for the term described herein, and are not merely personal covenants of the Developer; and WHEREAS, capitalized terms in this Declaration have the meaning provided in the Contract unless otherwise defined herein. NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Developer agrees as follows: 1. Term of Restrictions. (a) Occupancy and Rental Restrictions. The term of the Occupancy Restrictions set forth in Section 3 of this Declaration will commence on the date a certificate of occupancy is received from the City of Richfield, Minnesota (the “City”) for all rental units on the Property. The period from commencement to termination is the “Qualified Project Period.” (b) Termination of Declaration. This Declaration will terminate upon the date that is __ years after the commencement of the Qualified Project Period. (c) Removal from Real Estate Records. Upon termination of this Declaration, the Authority will, upon request by the Developer or its assigns, file any document appropriate to remove this Declaration from the real estate records of Hennepin County, Minnesota. 2. Project Restrictions. F-2 480174v7 JAE RC125-348 (a) the Developer represents, warrants, and covenants that: (i) All leases of units to Qualifying Tenants (as defined in Section 3(a)(i) hereof) will contain clauses, among others, wherein each individual lessee: (1) Certifies the accuracy of the statements made in its application and Eligibility Certification (as defined in Section 3(a)(ii) hereof); and (2) Agrees that the family income at the time the lease is executed will be deemed substantial and material obligation of the lessee’s tenancy; that the lessee will comply promptly with all requests for income and other information relevant to determining low or moderate income status from the Developer or the Authority, and that the lessee’s failure or refusal to comply with a request for information with respect thereto will be deemed a violation of a substantial obligation of the lessee’s tenancy. (ii) the Developer will permit any duly authorized representative of the Authority to inspect the books and records of the Developer pertaining to the income of Qualifying Tenants residing in the Project. 3. Occupancy Restrictions. (a) Tenant Income Provisions. The Developer represents, warrants, and covenants that: (i) Qualifying Tenants. From the commencement of the Qualified Project Period, at least __ Rental Housing Units will be occupied (or treated as occupied as provided herein) or held vacant and available for occupancy by Qualifying Tenants. Qualifying Tenants means those persons and families who are determined from time to time by the Developer to have combined adjusted income that does not exceed fifty percent (50%) [OR 60%] of the Minneapolis-St. Paul metropolitan statistical area (the “Metro Area”) median income for the applicable calendar year. For purposes of this definition, the occupants of a residential unit will not be deemed to be Qualifying Tenants if all the occupants of such residential unit at any time are “students,” as defined in Section 151(c)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), not entitled to an exemption under the Code. The determination of whether an individual or family is of low or moderate income will be made at the time the tenancy commences and on an ongoing basis thereafter, determined at least annually. If during their tenancy a Qualifying Tenant’s income exceeds 140 percent of the maximum income qualifying as low or moderate income for a family of its size, the next available unit (determined in accordance with the Code and applicable regulations) (the “Next Available Unit Rule”) must be leased to a Qualifying Tenant or held vacant and available for occupancy by a Qualifying Tenant. If the Next Available Unit Rule is violated, the Unit will not continue to be treated as a Qualifying Unit. (ii) Certification of Tenant Eligibility. As a condition to initial and continuing occupancy, each person who is intended to be a Qualifying Tenant will be required annually to sign and deliver to the Developer a Certification of Tenant Eligibility substantially in the form attached as EXHIBIT B hereto, or in any other form as may be approved by the Authority (the “Eligibility Certification”), in which the prospective Qualifying Tenant certifies as to qualifying as low or moderate income. In addition, the person will be required to provide whatever other information, documents, or certifications are deemed necessary by the Authority to substantiate the Eligibility Certification, on an ongoing annual basis, and to verify that the tenant continues to be a Qualifying Tenant within the meaning of Section 3(a) hereof. Eligibility Certifications will be maintained on file by the Developer with respect to each Qualifying Tenant who resides in a Project unit or resided therein during the immediately preceding calendar year. F-3 480174v7 JAE RC125-348 (iii) Lease. The form of lease to be utilized by the Developer in renting any units in the Project to any person who is intended to be a Qualifying Tenant will provide for termination of the lease and consent by the person to immediate eviction for failure to qualify as a Qualifying Tenant as a result of any material misrepresentation made by the person with respect to the Eligibility Certification. (iv) Annual Report. The Developer covenants and agrees that during the term of this Declaration, it will prepare and submit to the Authority on or before January 31 of each year, a certificate substantially in the form of EXHIBIT C hereto, executed by the Developer, (a) identifying the tenancies and the dates of occupancy (or vacancy) for all Qualifying Tenants in the Project, including the percentage of the dwelling units of the Project which were occupied by Qualifying Tenants (or held vacant and available for occupancy by Qualifying Tenants) at all times during the year preceding the date of the certificate; (b) describing all transfers or other changes in ownership of the Project or any interest therein; and (c) stating, that to the best knowledge of the person executing the certificate after due inquiry, all the units were rented or available for rental on a continuous basis during the year to members of the general public and that the Developer was not otherwise in default under this Declaration during the year. (v) Notice of Non-Compliance. The Developer will immediately notify the Authority if at any time during the term of this Declaration the dwelling units in the Project are not occupied or available for occupancy as required by the terms of this Declaration. 4. Transfer Restrictions. The Developer covenants and agrees that the Developer will cause or require as a condition precedent to any conveyance, transfer, assignment, or any other disposition of the Project prior to the termination of the Rental Restrictions and Occupancy Restrictions provided herein (the “Transfer”) that the transferee of the Project pursuant to the Transfer assume in writing, in a form acceptable to the Authority, all duties and obligations of the Developer under this Declaration, including this Section 4, in the event of a subsequent Transfer by the transferee prior to expiration of the Rental Restrictions and Occupancy Restrictions provided herein (the “Assumption Agreement”). The Developer will deliver the Assumption Agreement to the Authority prior to the Transfer. 5. Enforcement. (a) The Developer will permit, during normal business hours and upon reasonable notice, any duly authorized representative of the Authority to inspect any books and records of the Developer regarding the Project with respect to the incomes of Qualifying Tenants. (b) The Developer will submit any other information, documents or certifications requested by the Authority which the Authority deems reasonably necessary to substantial the Developer’s continuing compliance with the provisions specified in this Declaration. (c) The Developer acknowledges that the primary purpose for requiring compliance by the Developer with the restrictions provided in this Declaration is to ensure compliance of the property with the housing affordability covenants set forth in Section 4.5 of the Contract, and by reason thereof, the Developer, in consideration for assistance provided by the Authority under the Contract that makes possible the construction of the Minimum Improvements (as defined in the Contract) on the Property, hereby agrees and consents that the Authority will be entitled, for any breach of the provisions of this Declaration, and in addition to all other remedies provided by law or in equity, to enforce specific performance by the Developer of its obligations under this Declaration in a state court of competent jurisdiction. The Developer hereby further specifically acknowledges that the Authority cannot be adequately compensated by monetary damages in the event of any default hereunder. F-4 480174v7 JAE RC125-348 (d) The Developer understands and acknowledges that, in addition to any remedy set forth herein for failure to comply with the restrictions set forth in this Declaration, the Authority may exercise any remedy available to it under Article IX of the Contract. 6. Indemnification. The Developer hereby indemnifies, and agrees to defend and hold harmless, the Authority from and against all liabilities, losses, damages, costs, expenses (including attorneys’ fees and expenses), causes of action, suits, allegations, claims, demands, and judgments of any nature arising from the consequences of a legal or administrative proceeding or action brought against them, or any of them, on account of any failure by the Developer to comply with the terms of this Declaration, or on account of any representation or warranty of the Developer contained herein being untrue. 7. Agent of the Authority. The Authority will have the right to appoint an agent to carry out any of its duties and obligations hereunder, and will inform the Developer of any agency appointment by written notice. 8. Severability. The invalidity of any clause, part or provision of this Declaration will not affect the validity of the remaining portions thereof. 9. Notices. All notices to be given pursuant to this Declaration must be in writing and will be deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the addresses set forth below, or to any other place as a party may from time to time designate in writing. The Developer and the Authority may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, or other communications are sent. The initial addresses for notices and other communications are as follows: To the Authority: Housing and Redevelopment Authority in and for the City of Richfield, Minnesota 6700 Portland Ave. So. Richfield, MN 55423 Attn: Community Development Director; To the Developer: Chamberlain LLC 20505 Lakeview Ave. Deephaven, MN 55331 Attn: _______________; 10. Governing Law. This Declaration is governed by the laws of the State of Minnesota and, where applicable, the laws of the United States of America. 11. Attorneys’ Fees. In case any action at law or in equity, including an action for declaratory relief, is brought against the Developer to enforce the provisions of this Declaration, the Developer agrees to pay the reasonable attorneys’ fees and other reasonable expenses paid or incurred by the Authority in connection with the action. 12. Declaration Binding. This Declaration and the covenants contained herein will run with the real property comprising the Project and will bind the Developer and its successors and assigns and all subsequent owners of the Project or any interest therein, and the benefits will inure to the Authority and its successors and assigns for the term of this Declaration as provided in Section l(b). F-5 480174v7 JAE RC125-348 IN WITNESS WHEREOF, the Developer has caused this Declaration of Restrictive Covenants to be signed by its respective duly authorized representatives, as of the day and year first written above. CHAMBERLAIN LLC, a Delaware limited liability company By Its Chief Manager STATE OF MINNESOTA ) ) ss. COUNTY OF ____________ ) The foregoing instrument was acknowledged before me this ____ day of _______, 2017, by ________________, the Chief Manager of Chamberlain LLC, a Delaware limited liability company, on behalf of the Developer. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Kennedy & Graven, Chartered (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 F-6 480174v7 JAE RC125-348 This Declaration is acknowledged and consented to by: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____________, 2017, by _________________ and _________________, the Chair and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public F-7 480174v7 JAE RC125-348 EXHIBIT A Legal Description [insert] F-8 480174v7 JAE RC125-348 EXHIBIT B Certification of Tenant Eligibility (INCOME COMPUTATION AND CERTIFICATION) Project: [Address] Owner: Unit Type: ______ 1 BR _____ 1 BR + Den _____2 BR 1. I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully, frankly and personally each of the following questions for all persons (including minors) who are to occupy the unit in the above apartment development for which application is made, all of whom are listed below: Name of Members of the Household Relationship To Head of Household Age Place of Employment _____________ _____________ ___ _________________ _____________ _____________ ___ _________________ _____________ _____________ ___ _________________ _____________ _____________ ___ _________________ _____________ _____________ ___ _________________ Income Computation 2. The anticipated income of all the above persons during the 12-month period beginning this date, (a) including all wages and salaries, overtime pay, commissions, fees, tips and bonuses before payroll deductions; net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness); interest and dividends; the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay; the maximum amount of public assistance available to the above persons; periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; and all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; but (b) excluding casual, sporadic or irregular gifts; amounts which are specifically for or in reimbursement of medical expenses; lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen’s compensation), capital gains and settlement for personal or property losses; amounts of educational scholarships paid directly to the student or the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for these types of purposes; special pay to a serviceman head of a family who is away from home and exposed to hostile fire; relocation payments under Title II of the F-9 480174v7 JAE RC125-348 Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; foster child care payments; the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged for the allotments; and payments received pursuant to participation in ACTION volunteer programs, is as follows: $_____________. 3. If any of the persons described above (or whose income or contributions was included in item 2) has any savings, bonds, equity in real property or other form of capital investment, provide: (a) the total value of all such assets owned by all such persons: $____________; (b) the amount of income expected to be derived from such assets in the 12 month period commencing this date: $_______________; and (c) the amount of such income which is included in income listed in item 2: $__________. 4. (a) Will all of the persons listed in item 1 above be or have they been full-time students during five calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students? Yes _________________ No ________________ (b) Is any such person (other than nonresident aliens) married and eligible to file a joint federal income tax return? Yes _________________ No ________________ F-10 480174v7 JAE RC125-348 THE UNDERSIGNED HEREBY CERTIFY THAT THE INFORMATION SET FORTH ABOVE IS TRUE AND CORRECT. THE UNDERSIGNED ACKNOWLEDGE THAT THE LEASE FOR THE UNIT TO BE OCCUPIED BY THE UNDERSIGNED WILL BE CANCELLED UPON 10 DAYS WRITTEN NOTICE IF ANY OF THE INFORMATION ABOVE IS NOT TRUE AND CORRECT. Head of Household Spouse F-11 480174v7 JAE RC125-348 FOR COMPLETION BY OWNER (OR ITS MANAGER) ONLY 1. Calculation of Eligible Tenant Income: (a) Enter amount entered for entire household in 2 above: $__________ (b) If the amount entered in 3(a) above is greater than $5,000, enter the greater of (i) the amount entered in 3(b) less the amount entered in 3(c) or (ii) 10% of the amount entered in 3(a): $__________ (c) TOTAL ELIGIBLE INCOME (Line 1(a) plus Line 1(b)): $__________ 2. The amount entered in 1(c) is less than or equal to _______ 50% of median income for the area in which the Project is located, as defined in the Declaration. 50% is necessary for status as a “Qualifying Tenant” under Section 3(a) of the Declaration. 3. Number of apartment unit assigned: ___________. 4. This apartment unit was ____ was not ____ last occupied for a period of at least 31 consecutive days by persons whose aggregate anticipated annual income as certified in the above manner upon their initial occupancy of the apartment unit was less than or equal to 50% of Median Income in the area. 5. Check as applicable: _______ Applicant qualifies as a Qualifying Tenant (tenants of at least __ units must meet), or ____ Applicant otherwise qualifies to rent a unit. THE UNDERSIGNED HEREBY CERTIFIES THAT HE/SHE HAS NO KNOWLEDGE OF ANY FACTS WHICH WOULD CAUSE HIM/HER TO BELIEVE THAT ANY OF THE INFORMATION PROVIDED BY THE TENANT MAY BE UNTRUE OR INCORRECT. _________________________, a Delaware limited liability company, as Managing Agent for CHAMBERLAIN LLC, a Delaware limited liability company By Its F-12 480174v7 JAE RC125-348 EXHIBIT C Certificate of Continuing Program Compliance Date: ___________________ The following information with respect to the Project located at __________________, Richfield, Minnesota (the “Project”), is being provided by Chamberlain LLC (the “Owner”) to the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”), pursuant to that certain Declaration of Restrictive Covenants dated as of _______, 2017 (the “Declaration”), with respect to the Project: (A) The total number of residential units which are available for occupancy is 106. The total number of these units occupied is _________________. (B) The following residential units (identified by unit number) are currently occupied by “Qualifying Tenants,” as the term is defined in the Declaration (for a total of ____units): 1 BR Units: 1 BR + Den Units: 2 BR Units: (C) The following residential units which are included in (B) above, have been re- designated as units for Qualifying Tenants since _______________, 20___, the date on which the last “Certificate of Continuing Program Compliance” was filed with the Authority by the Owner: Unit Number Previous Designation of Unit (if any) Replacing Unit Number ___________ _________________ _________________ ___________ _________________ _________________ F-13 480174v7 JAE RC125-348 (D) The following residential units are considered to be occupied by Qualifying Tenants based on the information set forth below: Unit Number Name of Tenant Number of Persons Residing in the Unit Number of Bedrooms Total Adjusted Gross Income Date of Initial Occupancy Rent 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 (E) The Owner has obtained a “Certification of Tenant Eligibility,” in the form provided as EXHIBIT B to the Declaration, from each Tenant named in (D) above, and each such Certificate is being maintained by the Owner in its records with respect to the Project. Attached hereto is the most recent “Certification of Tenant Eligibility” for each Tenant named in (D) above who signed such a Certification since ______________, _____, the date on which the last “Certificate of Continuing Program Compliance” was filed with the Authority by the Owner. (F) In renting the residential units in the Project, the Owner has not given preference to any particular group or class of persons (except for persons who qualify as Qualifying Tenants); and none of the units listed in (D) above have been rented for occupancy entirely by students, no one of which is entitled to file a joint return for federal income tax purposes. All of the residential units in F-14 480174v7 JAE RC125-348 the Project have been rented pursuant to a written lease, and the term of each lease is at least twelve (12) months. (G) The information provided in this “Certificate of Continuing Program Compliance” is accurate and complete, and no matters have come to the attention of the Owner which would indicate that any of the information provided herein, or in any “Certification of Tenant Eligibility” obtained from the Tenants named herein, is inaccurate or incomplete in any respect. (H) The Project is in continuing compliance with the Declaration. (I) The Owner certifies that as of the date hereof at least __ of the residential dwelling units in the Project are occupied or held open for occupancy by Qualifying Tenants, as defined and provided in the Declaration. (J) The rental levels for each Qualifying Tenant comply with the maximum permitted under the Declaration. F-15 480174v7 JAE RC125-348 IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the Owner, on ____________________, 2017. CHAMBERLAIN LLC, a Delaware limited liability company By Its G-1 480174v7 JAE RC125-348 EXHIBIT G RIGHT OF PURCHASE AND RIGHT OF FIRST REFUSAL AGREEMENT THIS RIGHT OF PURCHASE AND RIGHT OF FIRST REFUSAL AGREEMENT (the “Agreement”) is given as of this ___ day of ____________, 20__ (the “Effective Date”), by the CHAMBERLAIN LLC, a Delaware limited liability company (the “Developer”), to HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State of Minnesota (the “Authority”). 1. Contract for Private Development. The Developer and the Authority have entered into a Contract for Private Development, dated __________ (the “Contract”), pursuant to which the Authority has conveyed certain real property to the Developer as legally described in SCHEDULE A (the “HRA Property”) and the Developer has obtained certain parcels adjacent to the HRA Property as legally described in SCHEDULE B (the “Developer Property”). Pursuant to the Contract, the Developer has agreed to construct a multifamily housing development consisting of three buildings with approximately 280 apartment units, substantially rehabilitate three 11-unit apartment buildings, construct underground parking, and construct a roadway on the HRA Property and the Developer Property. All terms capitalized herein and not defined herein shall have the meaning given such term in the Contract. 2. Grant. For valuable consideration, and subject to the conditions set forth below, the Developer hereby grants to the Authority the right to purchase and the right of first refusal pursuant to the provisions of this Agreement. 3. Right to Purchase. Following the conveyance of the HRA Property to the Developer, if the Developer, subject to Unavoidable Delays, fails to commence construction of Phase III or Phase IV of the Minimum Improvements by the dates specified in Section 4.3 of the Contract, and such failure to commence is not cured within 90 days after written notice from the Authority to the Developer to do so, then the Authority shall have the right to repurchase the HRA Property for the price the Developer paid for the HRA Property or purchase all of the HRA Property and the Developer Property from the Developer for the price the Developer paid for such property. If one Phase is commenced by the dates specified in Section 4.3 of the Contract and another Phase is not commenced by the dates specified in Section 4.3 of the Contract, the Authority shall have the right (after the cure period) to purchase the portion of the HRA Property and the Developer Property proposed to be used for such Phase from the Developer for the price the Developer paid for such property. The Authority shall have 60 days following the 90-day cure period set forth in this Section to notify the Developer of its intent to repurchase the HRA Property or purchase all of the HRA Property and the Developer Property. The Authority shall have 120 days to complete the purchase of the HRA Property and/or the Developer Property. 4. Right of First Refusal. Prior to commencement of construction of each Phase of the Minimum Improvements, if the Developer determines to sell all or any part of the HRA Property and the Developer Property, the Authority shall have the right to purchase the portion of the Development Property to be sold to a third party by the Developer for the lower of (i) the price the third party has agreed to pay for such property or (ii) the price the Developer paid for such property. 5. Notice of Acceptable Offer. If at any time or times during the term of this Agreement, the Developer receives an offer acceptable to the Developer for the purchase of all or any part of the HRA Property or the Developer Property, then the Developer shall forthwith forward a copy of such offer (the “Acceptable Offer”) to the Authority. 6. Exercise by Authority. The Authority shall have a period of 30 days after receiving such copy of the Acceptable Offer within which to notify the Developer that the Authority elects to purchase the Property (or the portion thereof covered by the Acceptable Offer) (the “Sale Property”) on the terms contained therein. G-2 480174v7 JAE RC125-348 Any such notice from the Authority shall be accompanied by any earnest money required under the terms of the Acceptable Offer, which shall then constitute a contract between the Developer and the Authority even though neither has signed it. 7. Waiver by Authority. If the Authority does not notify the Developer within the 30 day period described in Section 4 of the Authority’s election to purchase such Sale Property, the Developer shall be free to sell such Sale Property to the person who submitted the Acceptable Offer (or to such person’s permitted assigns) on the terms specified therein, and the Authority shall upon request execute and deliver an instrument in recordable form appropriate to evidence the Authority’s relinquishment of its rights under this Agreement with respect to such transaction. Notwithstanding any such relinquishment, the Authority’s rights under this Agreement shall remain in effect with respect to any part of the Property not covered by the Acceptable Offer, and, if the transaction contemplated by the Acceptable Offer fails for any reason to close, with respect to any subsequent offer to purchase all or any part of the Property covered by such Acceptable Offer. 8. Contract Restrictions on Transfer of Property. If the Authority determines to waive its right to purchase the Sale Property, the Developer remains obligated to comply with the requirements set forth in Section 8.2 of the Contract related to transfers of the Development Property and the assignment of the Contract. 9. Term. This Agreement shall commence on the date the HRA Property is conveyed to the Authority and shall terminate for the portion of the HRA Property and Developer Property proposed to be used for each Phase on the earlier of: (i) the date the Developer obtains a Certificate of Completion for such Phase of the Minimum Improvements; and (ii) upon sale of all of the HRA Property and the Developer Property pursuant to the terms of an Acceptable Offer for which the Authority has been provided notice and has not exercised its right to purchase such property in accordance with the provisions of this Agreement. Notwithstanding the foregoing, for any portion of the HRA Property or the Developer Property that is sold pursuant to an Acceptable Offer, this Agreement shall terminate with respect to such portion of HRA Property or the Developer Property at the end of the 30 day period described in Section 4 if the Authority does not notify the Developer of its election to purchase such portion of the Property. For any portion of the HRA Property or the Developer Property for which the Developer has received a Certificate of Completion for the Minimum Improvements to be constructed thereon this Agreement shall terminate with respect to such portion of HRA Property or the Developer Property on the date of receipt of the Certificate of Completion. 10. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed given upon personal delivery or on the second business day after mailing by registered or certified United States mail, postage prepaid, to the appropriate party at its address stated below: If to Developer: Chamberlain LLC 20505 Lakeview Ave. Deephaven, MN 55331 Attn: _______________; a. b. If to Authority: Housing and Redevelopment Authority in and for the City of Richfield 6700 Portland Ave. South Richfield, MN 55423 Attn: Community Development Director Either party may change its address for notices by notice to the other party as provided above. 11. Binding Effect and Transferability. The provisions of this Agreement shall bind and benefit the Developer and the Authority and their respective successors and assigns. G-3 480174v7 JAE RC125-348 12. Assignment. The Authority may assign this Agreement only to a wholly owned subsidiary of the Authority. 13. Miscellaneous. This Agreement may be executed in counterparts, all of which shall constitute an original of this Agreement. This Agreement may be recorded by the Authority with the Hennepin County Recorder’s Office and/or Hennepin County Registrar of Titles’ Office. All disputes related to this Agreement shall be governed by Minnesota law without application to its internal choice of law statutes or doctrines. All actions commenced relating to this Agreement shall only be brought before the courts located in Hennepin County, Minnesota. In any action to enforce the terms of this Agreement, the prevailing party shall be entitled to an award of all its reasonably expended costs and attorneys’ fees, including appeal and collection costs and fees. The Developer shall execute and deliver to the Authority all documents reasonably necessary to record this Agreement or to otherwise evidence the Authority’s rights as contained herein. (The remainder of this page is intentionally left blank.) G-4 480174v7 JAE RC125-348 IN WITNESS WHEREOF, the Developer has executed this Agreement on the date set forth in its acknowledgement, intending it to take effect as of the date first mentioned above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chair (SEAL) By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _______________, 2017, by _________________ and _________________, the Chair and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Kennedy & Graven, Chartered (JAE) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 G-5 480174v7 JAE RC125-348 Execution page of the Authority to this Agreement, dated as of the date and year first above written. CHAMBERLAIN LLC By Its ______________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this _________________, 2017, by ________________, the _____________________________, on behalf of the company. Notary Public G-6 480174v7 JAE RC125-348 SCHEDULE A HRA PROPERTY DESCRIPTION Development Property owned by HRA Address Parcel Identification No. Legal Descriptions 6609 17th Avenue South 26-028-24-41-0078 Lot 15, Block 2, Wexler’s Addition 6601 17th Avenue South 26-028-24-41-0079 Lot 16, Block 2, Wexler’s Addition 6615 17th Avenue South 26-028-24-41-0077 Lot 14, Block 2, Wexler’s Addition 6621 17th Avenue South 26-028-24-41-0076 Lot 13, Block 2, Wexler’s Addition 6627 17th Avenue South 26-028-24-41-0075 Lot 12, Block 2, Wexler’s Addition 6633 17th Avenue South 26-028-24-41-0074 Lot 11, Block 2, Wexler’s Addition 6639 17th Avenue South 26-028-24-41-0073 Lot 10, Block 2, Wexler’s Addition 6645 17th Avenue South 26-028-24-41-0072 Lot 9, Block 2, Wexler’s Addition 6620 18th Avenue South 26-028-24-41-0067 Lot 4, Block 2, Wexler’s Addition 6626 18th Avenue South 26-028-24-41-0068 Lot 5, Block 2, Wexler’s Addition 6632 18th Avenue South 26-028-24-41-0069 Lot 6, Block 2, Wexler’s Addition 6638 18th Avenue South 26-028-24-41-0070 Lot 7, Block 2, Wexler’s Addition 6644 18th Avenue South 26-028-24-41-0071 Lot 8, Block 2, Wexler’s Addition 6700 18th Avenue South 26-028-24-41-0080 Lot 1, Block 3, Wexler’s Addition 6708 18th Avenue South 26-028-24-41-0081 Lot 2, Block 3, Wexler’s Addition 6714 18th Avenue South 26-028-24-41-0082 Lot 3, Block 3, Wexler’s Addition 6720 18th Avenue South 26-028-24-41-0083 Lot 4, Block 3, Wexler’s Addition 6726 18th Avenue South 26-028-24-41-0084 Lot 5, Block 3, Wexler’s Addition 6732 18th Avenue South 26-028-24-41-0085 Lot 6, Block 3, Wexler’s Addition 6738 18th Avenue South 26-028-24-41-0086 Lot 7, Block 3, Wexler’s Addition 6744 18th Avenue South 26-028-24-41-0087 Lot 8, Block 3, Wexler’s Addition 6701 18th Avenue South 26-028-24-41-0107 Lot 16, Block 4, Wexler’s Addition 6709 18th Avenue South 26-028-24-41-0106 Lot 15, Block 4, Wexler’s Addition 6721 18th Avenue South 26-028-24-41-0104 Lot 13, Block 4, Wexler’s Addition 6727 18th Avenue South 26-028-24-41-0103 Lot 12, Block 4, Wexler’s Addition 6733 18th Avenue South 26-028-24-41-0102 Lot 11, Block 4, Wexler’s Addition 6739 18th Avenue South 26-028-24-41-0101 Lot 10, Block 4, Wexler’s Addition 6745 18th Avenue South 26-028-24-41-0100 Lot 9, Block 4, Wexler’s Addition 6700 Cedar Avenue South 26-028-24-41-0096 Lots 1 and 2, Block 4, Wexler’s Addition G-7 480174v7 JAE RC125-348 SCHEDULE B DEVELOPER PROPERTY DESCRIPTION Developer Property to be acquired by Developer Address Parcel Identification No. Legal Descriptions 6715 18th Avenue South 26-028-24-41-0105 Lot 14, Block 4, Wexler’s Addition 6720 Cedar Avenue South 26-028-24-41-0097 Lots 3 & 4, Block 4, Wexler’s Addition 6730 Cedar Avenue South 26-028-24-41-0098 Lots 5 & 6, Block 4, Wexler’s Addition 6744 Cedar Avenue South 26-028-24-41-0099 Lots 7 & 8, Block 4, Wexler’s Addition H-1 480174v7 JAE RC125-348 EXHIBIT H IMPROVEMENTS BY DEVELOPER TO BE REIMBURSED WITH GRANT PROCEEDS [insert detailed drawing of improvements to be done or detailed written explanation of improvements] I-1 480174v7 JAE RC125-348 EXHIBIT I SUBSTANTIAL REHABILITION The following activities constitute “Substantial Rehabilitation”: [insert] J-1 480174v7 JAE RC125-348 EXHIBIT J MINIMUM ASSESSMENT AGREEMENT THIS MINIMUM ASSESSMENT AGREEMENT, made on or as of the __ day of August, 2017 (the “Minimum Assessment Agreement”), is by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a public body corporate and politic under the laws of the State of Minnesota (the “Authority”), and CHAMBERLAIN LLC, a Delaware limited liability company (the “Developer”). WITNESSETH, WHEREAS, the Authority and the Developer have entered into that certain Contract for Private Development, dated August __, 2017 (the “Contract”), regarding the acquisition of property, the construction of a multifamily housing development with approximately 280 apartment units, the substantial rehabilitation of three 11-unit apartment buildings, and the construction of underground parking (the “Minimum Improvements”) to be constructed on property legally described in Exhibit A (the “Development Property”); and WHEREAS, the Authority and the Developer desire to establish a minimum market value for the Development Property and the Minimum Improvements to be constructed thereon, pursuant to Minnesota Statutes, Section 469.177, subdivision 8; and WHEREAS, the Authority and the County Assessor (the “Assessor”) have reviewed the preliminary plans and specifications for the Minimum Improvements and have inspected such improvements; NOW, THEREFORE, the parties to this Minimum Assessment Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 1. All capitalized terms used herein and not otherwise defined have the definition given such terms in the Contract. 2. The minimum market value which shall be assessed for ad valorem tax purposes for the Development Property, together with the Minimum Improvements constructed thereon, shall be $15,433,000 as of January 2, 2018, notwithstanding the progress of construction by such date, until January 2, 2019. 3. The minimum market value which shall be assessed for ad valorem tax purposes for the Development Property, together with the Minimum Improvements constructed thereon, shall be $38,401,000 as of January 2, 2019, notwithstanding the progress of construction by such date, and as of each January 2 thereafter until January 1, 2020. 4. The minimum market value which shall be assessed for ad valorem tax purposes for the Development Property, together with the Minimum Improvements constructed thereon, shall be $43,835,000 as of January 2, 2020, notwithstanding the progress of construction by such date, and as of each January 2 thereafter until termination of this Minimum Assessment Agreement under Section 4 hereof. J-2 480174v7 JAE RC125-348 5. The minimum market value herein established shall be of no further force and effect and this Minimum Assessment Agreement shall terminate on the Maturity Date. The Authority shall execute a certificate or affidavit upon the occurrence of a termination event referred to in this Section 5 and shall supply such certificate to the Developer for recording. Notwithstanding anything to the contrary in this Minimum Assessment Agreement or in the Contract, this Minimum Assessment Agreement shall not terminate prior to the payment in full of HRA Property Purchase Price. 6. This Minimum Assessment Agreement shall be promptly recorded by the Authority. The Developer shall pay all costs of recording. 7. Neither the preambles nor provisions of this Minimum Assessment Agreement are intended to, nor shall they be construed as, modifying the terms of the Contract. 8. This Minimum Assessment Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 9. Each of the parties has authority to enter into this Minimum Assessment Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Minimum Assessment Agreement. 10. In the event any provision of this Minimum Assessment Agreement shall be held invalid and unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 11. The parties hereto agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and modifications hereto, and such further instruments as may reasonably be required for correcting any inadequate, or incorrect, or amended description of the Development Property or the Minimum Improvements or for carrying out the expressed intention of this Minimum Assessment Agreement. 12. This Minimum Assessment Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 13. This Minimum Assessment Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 14. This Minimum Assessment Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. J-3 480174v7 JAE RC125-348 IN WITNESS WHEREOF, the Authority and the Developer have caused this Minimum Assessment Agreement to be executed in their respective corporate names by their duly authorized officers, all as of the date and year first written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chairperson STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this August ___, 2017, by Mary B. Supple, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this August ___, 2017, by Steven L. Devich, the Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, on behalf of the Authority. Notary Public J-4 480174v7 JAE RC125-348 Signature page of the Developer to the Minimum Assessment Agreement, dated as of the date and year first written above. CHAMBERLAIN LLC By Its __________________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this _________________, 2017, by ________________, the _____________________________, on behalf of the company. Notary Public J-5 480174v7 JAE RC125-348 CERTIFICATION BY CITY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, hereby certifies as follows: the undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the market values assigned to the land and improvements are reasonable. ASSESSOR FOR HENNEPIN COUNTY By STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of August, 2017, by _________________, the County Assessor of Hennepin County. Notary Public J-6 480174v7 JAE RC125-348 EXHIBIT A LEGAL DESCRIPTION [insert]