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HomeMy WebLinkAbout2004-006 EDAR1 1 1 Member Kay Lasman introduced the following resolution and moved its adoption: EDA RESOLUTION NO. 2004 -06 RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT AGREEMENT A. WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority has caused to be prepared a Development Agreement (the "Development Agreement between the Authority and Brooklyn Hotel Partners, LLC, a Minnesota limited liability company (the "Developer in connection with a hotel development (the "Project to be constructed by the Developer within a tax increment financing district. B. WHEREAS, based on the representations and covenants made by the Developer in the Development Agreement, the Authority has agreed to give the Developer certain tax increment assistance in connection with the Project. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Brooklyn Center as follows: Section 1. The Board of Commissioners hereby approves the Development Agreement in substantially the form submitted, and the Executive Director is hereby authorized and directed to execute the Development Agreement on behalf of the Authority. August 23, 2004 Date `tAPt/A-N- PresidLnt The motion for the adoption of the foregoing resolution was duly seconded by member Kathleen Carmody and upon vote being taken thereon, the following voted in favor thereof: Myrna Kragness, Kathleen Carmody, Kay Lasman, Diane Niesen, and Bob Peppe; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. EDA RESOLUTION NO. 2004 -06 1278398v10 DEVELOPMENT AGREEMENT BY AND BETWEEN ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER AND BROOKLYN HOTEL PARTNERS, LLC 2004 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS 3 Section 1.1 Definitions 3 ARTICLE II REPRESENTATIONS AND WARRANTIES 7 Section 2.1 Representations and Warranties of the Authority 7 Section 2.2 Representations and Warranties by the Developer 8 ARTICLE III CONVEYANCE OF DEVELOPMENT PROPERTY 10 Section 3.1 Purchase and Sale of Development Property 10 Section 3.2 Conveyance of Development Property 10 Section 3.3 "As Is" Conveyance 10 Section 3.4 Deferred Purchase Price 10 Section 3.5 Title and Survey 10 Section 3.6 Environmental Matters 11 Section 3.7 Developer's Right to Inspect 11 Section 3.8 Contingencies to Closing on Development Property 11 Section 3.9 Closing on the Development Property 12 Section 3.10 Costs 13 Section 3.11 Acknowledgements by Developer 14 ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS 15 Section 4.1 Preliminary Plans 15 Section 4.2 Construction of Minimum Improvements 15 Section 4.3 Construction Plans 15 Section 4.4 Commencement and Completion of Construction 16 Section 4.5 Compliance with Environmental Requirements 16 Section 4.6 Hotel Center Operation 16 Section 4.7 Additional Responsibilities of the Developer 16 Section 4.8 Certificate of Release of Forfeiture 17 Section 4.9 Completion 17 Section 4.10 Certain Approvals 17 Section 4.11 Business Subsidy Agreement 18 Section 4.12 Construction of Water Park. 20 Section 4.13 Construction of the Connection 20 ARTICLE V TAX INCREMENT FINANCING; NO PUBLIC IMPROVEMENTS 21 Section 5.1 Preconditions to Issuance of Tax Increment Note 21 Section 5.2 Tax Increment Revenue Note 21 Section 5.3 Use of Tax Increments 22 Section 5.4 No Public Improvements 22 ARTICLE VI CERTAIN FINANCING PROVISIONS 23 Section 6.1 Encumbrance of the Development Property 23 Section 6.2 Copy of Notice of Default to Mortgagee 23 Section 6.3 Mortgagee's Option to Cure Events of Default 23 Section 6.4 Defaults Under Mortgage 23 1278398v10 1 EDA RESOLUTION NO. 2004 -06 Page Section 6.5 Subordination of Agreement 23 ARTICLE VII REAL PROPERTY TAXES AND ASSESSMENTS 24 Section 7.1 Real Property Taxes and Assessments 24 ARTICLE VIII INSURANCE AND CONDEMNATION 25 Section 8.1 Insurance 25 Section 8.2 Condemnation 26 ARTICLE IX DEVELOPER COVENANTS 27 Section 9.1 Maintenance and Operation of the Development 27 Section 9.2 Reciprocal Access and Parking Agreement 27 ARTICLE X TRANSFER LIMITATIONS AND INDEMNIFICATION 28 Section 10.1 Representation as to Development 28 Section 10.2 Limitations on Transfer 28 Section 10.3 Indemnification 29 Section 10.4 Limitation 29 ARTICLE XI EVENTS OF DEFAULT AND REMEDIES 30 Section 11.1 Developer Events of Default 30 Section 11.2 Authority Events of Default 30 Section 11.3 Authority Remedies on Default 30 Section 11.4 Revesting Title in the Authority 31 Section 11.5 Developer Remedies on Default 31 Section 11.6 No Remedy Exclusive 31 Section 11.7 No Additional Waiver Implied by One Waiver 31 Section 11.8 Reimbursement of Attorneys' Fees 31 ARTICLE XII ADDITIONAL PROVISIONS 33 Section 12.1 Conflicts of Interest 33 Section 12.2 Real Estate Agents 33 Section 12.3 Titles of Articles and Sections 33 Section 12.4 Notices and Demands 33 Section 12.5 Counterparts 33 Section 12.6 Law Governing 33 Section 12.7 Consents and Approvals 34 Section 12.8 Representatives 34 Section 12.9 Superseding Effect 34 Section 12.10 Relationship of Parties 34 Section 12.11 Mediation 34 Section 12.12 Venue 34 Section 12.13 Provisions Surviving Rescission or Expiration 34 Section 12.14 Time of Essence 34 1278398v1Q TABLE OF CONTENTS (continued) 1278398v10 TABLE OF CONTENTS (continued) Page EXHIBIT A LEGAL DESCRIPTION AND PID NUMBER OF DEVELOPMENT PROPERTY A -1 EXHIBIT B SOURCES AND USES B -1 EXHIBIT C CERTIFICATE OF RELEASE OF FORFEITURE C -1 EXHIBIT D QUIT CLAIM DEED D -1 EXHIBIT E PERMITTED ENCUMBRANCES E -1 EXHIBIT F MORTGAGE F -1 EXHIBIT G LAND SALE PROMISSORY NOTE FOR BROOKLYN HOTEL PARTNERS, LLC G -1 EXHIBIT H SITE PLAN H -1 EXHIBIT I BUSINESS SUBSIDY REPORT I -1 EXHIBIT J CONCEPT RENDERING OF WATER PARK J -1 EXHIBIT K TIMELINE K -1 EXHIBIT L RECIPROCAL ACCESS AND PARKING AGREEMENT L -1 EXHIBIT M INTENTIONALLY OMITTED M -1 EXHIBIT N FORM OF TAX INCREMENT NOTE N -1 EXHIBIT 0 DESCRIPTION OF ELIGIBLE COSTS 0-1 1 EDA RESOLUTION NO. 2004 -06 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT is made and entered into this day of 2004, by and between the ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the "Authority and BROOKLYN HOTEL PARTNERS, LLC, a Minnesota limited liability company (the "Developer 1278398v10 RECITALS WHEREAS, on December 19, 1994, the Authority and the City of Brooklyn Center (the "City adopted the Modified Redevelopment Plan (the "Redevelopment Plan for Housing Development and Redevelopment Project No. 1 (the "Redevelopment Project Area which set forth development objectives for the Redevelopment Project Area. WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469.1799, as amended (hereinafter the "Tax Increment Act the Authority has created Tax Increment Financing District No. 02 as a redevelopment district (the "Tax Increment District and has adopted a tax increment financing plan therefore (the "Tax Increment Plan which provides for the use of tax increment financing in connection with development within the Redevelopment Project; and WHEREAS, in order to achieve the objectives of the Redevelopment Plan, the Authority has acquired certain real property located in the Project Area more particularly described on Exhibit A attached hereto (which property as so described is hereinafter referred to as the "Development Property and has agreed to convey the Development Property to the Developer pursuant to the terms of this Agreement. WHEREAS, the Developer has agreed to construct a full service hotel containing at least 200 rooms on the Development Property as more particularly described in Section 4.1 hereof, a water park as more particularly described in Section 4.11 and a pedestrian connection as more particularly described in. Section 4.12 (collectively, the "Minimum Improvements WHEREAS, in order to achieve the objectives of the Redevelopment Plan, the Authority has determined to assist the Developer with certain of the public costs of the Minimum Improvements as more particularly set forth in this Agreement; and WHEREAS, as a condition to the Authority entering into the Development Agreement and conveying the Development Property to the Developer, the Authority has required that the Developer enter into this Agreement to establish the Developer's commitment to the Authority to construct the Minimum Improvements, to commit to operate or cause to be operated the Minimum Improvements as a hotel for an extended period of time, all as more fully set forth hereinafter; and WHEREAS, the Authority believes that the Development, as more fully set forth in this Agreement, is in the best interests of the residents of the City and will foster the redevelopment of blighted property and an increase in the tax base, increase the availability of hotel and restaurant facilities to residents of the City, and will otherwise benefit the health, safety, morals and welfare of the residents of the City, in accordance with the public purpose and provisions of the applicable State and local laws and requirements under the Redevelopment Plan. 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 others as follows: 1278398v10 2 1 1 1 EDA RESOLUTION NO. 2004 -06 ARTICLE I DEFINITIONS Section 1.1 Definitions. All capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.001 to 469.047 and 469.090 to 469.1082, both inclusive, as amended. "Agreement" means this Development Agreement, as the same may be from time to time modified, amended or supplemented. "Authority" means the Economic Development Authority of Brooklyn Center. "Authority Documents" means the documents to be executed and/or delivered by the Authority at the Closing pursuant to Section 3.9 of this Agreement. "Authority Mortgage" means the mortgage on the Development Property in substantially the form attached hereto as Exhibit F granted by the Developer to the Authority to secure payment of the Promissory Note. "Authority Representative" means the Executive Director of the Authority or his designee. "Authority Resolution" means Resolution of the Authority approving designation of the Developer as developer of the Development Property. "Board" means the Board of Commissioners of the Authority. "Certificate of Release of Forfeiture" means the certificate in substantially the fouu attached hereto as Exhibit C signed by the Authority Representative certifying that the conditions in Section 4.5 hereof have been satisfied. 1278398v10 "City" means the City of Brooklyn Center, Minnesota. "Closing" means the closing on the conveyance of the Development Parcel. "Closing Date" means the date on which the Development Property is conveyed by the Authority to the Developer, which date shall be such date as the parties mutually agree, but which date shall in no event be later than April 1, 2005. "Completion Date" means December 31, 2006. "Construction Plans" means the plans, specifications, drawings and related documents for the construction of the Minimum Improvements which shall be as detailed as the plans, 3 specifications, drawings and related documents which are submitted to the building official of the City. "Connection" means the physical connection between the hotel to be constructed on the Development Property as part of the Minimum Improvements and the Earle Brown Heritage Center, located adjacent to the Development Property. "Construction Lender" means the lender or lenders on the Construction Mortgage Loan. "Construction Mortgage Loan" means the construction mortgage loan or loans to be obtained by the Developer to provide construction and permanent financing for the construction of the Minimum Improvements. "County" means the County of Hennepin, Minnesota. "Deed" means the quit claim deed executed by the Authority conveying to the Developer the Development Property to the Developer, in the form attached hereto as Exhibit D. "Developer" means Brooklyn Hotel Partners, LLC, a limited liability company, its successors or permitted assigns. "Developer's Documents" means the documents to be executed and/or delivered by the Developer at the Closing pursuant to Section 3.9 of this Agreement. "Developer Event of Default" means the occurrence of an Event of Default set forth in Section 11.1 hereof. "Development" means the Development Property and the Minimum Improvements to be constructed thereon as provided in this Agreement. "Development Property" means the real property legally described on Exhibit A attached hereto. "Eligible Costs" means the costs described on Exhibit 0 attached hereto. "Final Payment Date" means the earlier of (a) the date all principal and accrued interest is paid on the Note, or (b) February 1, 2011. "Minimum Improvements" means the construction of a full- service hotel consisting of at least 200 rooms, an indoor water park consisting of at least 25,000 square feet and the connection which are more particularly described in Sections 4.1, 4.12 and 4.13 hereof. "Mortgage" means any mortgage loan to the Developer that is secured, in whole or in part, with the Minimum Improvements on the Development Property. "Net Proceeds" means any money paid by an insurer under a policy or policies of insurance required to be provided and maintained by the Developer under Section 8.1 of this Agreement. 1278398v10 4 1 1 1 1 EDA RESOLUTION NO. 2004 -06 "Note Payment Date" means February 1 and August 1 of each year commencing August 1, 2007 and continuing through the Final Payment Date. "Permitted Encumbrances" means the permitted encumbrances described in Exhibit E attached hereto. "Preliminary Plans" means the preliminary design, specification and architectural plans for the Minimum Improvements (including, without limitation, materials specifications) to be submitted by the Developer to the Authority. "Promissory Note" means the promissory note in substantially the form attached hereto as Exhibit G executed by the Developer to evidence the obligation to pay the deferred purchase price of the Development Property. "Redevelopment Plan" means the redevelopment plan for the Redevelopment Project Area approved by the City and the Authority. "State" means the State of Minnesota. "Suites" means a hotel room consisting of a minimum of two (2) separate and distinct rooms (at least one of which shall be a bedroom), and at least one (1) full bathroom. "Tax Increment Act" means Minnesota Statutes, Section 469.174 through 469.1799, as amended. "Tax Increment District" means Tax Increment Financing District No. 02, qualified as a redevelopment district under the Tax Increment Act. "Tax Increment Financing Plan" means the plan approved for the Tax Increment District. "Tax Increment Revenue Note" means the Note in substantially the form attached hereto as Exhibit N. "Tax Increments" means any tax increments derived from the Development Property which have been received and retained by the Authority in accordance with the provisions of Minnesota Statutes, Section 469.177, or otherwise pursuant to the Tax Increment Act. "Timeline" means the timeline attached hereto as Exhibit K. "Title Company" means Guaranty Title Company. "Unavoidable Delays" means delays outside the control of the party claiming its occurrence, which are the direct result of (a) unusually severe or prolonged bad weather, (b) acts of God, fire or other casualty to the Development, (c) litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, (d) the outbreak of war, acts of terrorism or insurrection, (e) acts of any Federal, State or local governmental unit 1278398v10 5 which directly result in delays, (f) strikes or walkouts, (g) delays in delivery of materials for the Minimum Improvements, or (h) soil conditions of the Development Property. 1278398v10 1 1 1 EDA RESOLUTION NO. 2004 -06 ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1 Representations and Warranties of the Authority. The Authority makes the following representations and warranties: (a) The Authority is a public body corporate and politic and a governmental subdivision of the State, duly organized and existing under the Act and the Authority has the authority to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has taken all action necessary to create the Redevelopment Project Area and to approve this Agreement and to authorize the execution and delivery of this Agreement and any other documents or instruments required to be executed and delivered by the Authority pursuant to this Agreement. (c) The execution, delivery and performance of this Agreement and any other documents or instruments required pursuant to this Agreement by the Authority does not, and consummation of the transactions contemplated therein and the fulfillment of the terms thereof will not, conflict with or constitute on the part of the Authority 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 proceeding establishing or relating to the, establishment of the Authority or its officers or its resolutions. (d) There is not pending, nor to the Authority's current actual 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 as contemplated hereby or thereby, or the validity or enforceability of this Agreement. (e) No member 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 of the Authority or officer of the Authority, benefit financially from this Agreement within the meaning of Minnesota Statutes, Section 471.87. (f) The Tax Increment District is a "redevelopment district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 10 and was created, adopted an approved in accordance with the terms of the Tax Increment Act. (g) The development contemplated by this Agreement is in conformance with the objectives set forth in the Redevelopment Plan. (h) To finance the costs of the activities to be undertaken on the Development Property, the Authority proposes to, subject to the further provisions of this Agreement, apply 1278398v10 7 Tax Increments, among other things, to reimburse the Developer for a portion of the costs of the Eligible Costs. Section 2.2 Representations and Warranties by the Developer. The Developer represents and warrants to the Authority that: (a) The Developer is a limited liability company organized and in good standing under the laws of Minnesota, is not in violation of any provisions of its articles of organization, member control agreement, or other organizational documents or the laws of said State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. (b) The execution and delivery of this Agreement, the consummation of the transactions contemplated thereby, and the fulfillment of the temns and conditions thereof do not and will not conflict with or result in a breach of any of the terms or conditions of the Developer's organizational documents, any restriction or any agreement or instrument to which the Developer is now a party or by which it is bound or to which any property of the Developer is subject, and do not and will not constitute a default under any of the foregoing or a violation of any order, decree, statute, rule or regulation of any court or of any state or Federal regulatory body having jurisdiction over Developer or its properties, including its interest in the Development, and do not and will not result in the creation or imposition of any lien, charge or encumbrance of any nature upon any of the property or assets of Developer contrary to the teinis of any instrument or agreement to which Developer is a party or by which it is bound. (c) The execution and delivery of this Agreement will not create a conflict of interest prohibited by Minnesota Statutes, Section 471.87. (d) There are no pending or threatened legal proceedings, of which the Developer has notice, contemplating the liquidation or dissolution of the Developer or threatening its existence, or seeking to restrain or enjoin the transactions contemplated by the Agreement, or questioning the authority of the Developer to execute and deliver this Agreement or the validity of this Agreement. (e) The construction of the Minimum Improvements would not be undertaken by the Developer, and in the opinion of the Developer would not be economically feasible within the reasonably foreseeable future, without the assistance and benefit to the Developer provided for in this Agreement. (f) The Developer has adequate financial capability, consisting of binding commitments for equity and financing, to construct and to complete each of the activities or tasks required by this Agreement including but not limited to, the completion of construction of the Minimum Improvements by the Completion Date. (g) The total construction cost for the Minimum Improvements, including furniture, fixtures and equipment, but excluding the capital costs of the Connection, will be at least $20,000,000. 1278398v10 8 1 EDA RESOLUTION NO. 2004 -06 (h) The Developer will cooperate with respect to the mutual marketing of the Earle Brown Heritage Center located adjacent to the Development Property. (i) The Developer has provided the Authority with true, correct and complete copies of the documents described in Section 3.9(c) to which the Authority is not a party. 1278398v10 9 Section 3.1 Purchase and Sale of Development Property. Subject to the terms of Section 3.4 and the terms of this Agreement generally, the Authority agrees to sell to the Developer, and Developer agrees to buy from the Authority, the Development Property. Section 3.2 Conveyance of Development Property. The Authority and the Developer agree that the Closing on the conveyance of the Development Property shall occur on the Closing Date. In the event that the Closing has not occurred within thirty (30) days of the Closing Date, then this Agreement shall automatically be terminated and neither party shall have any rights against, or obligations to, the other except the obligations of the Developer under Section 3.10 hereof, which obligations shall survive any such termination. Section 3.3 "As Is" Conveyance. In recognition of the inspection rights accorded the Developer, the Developer shall take the conveyance of Development Property on an "AS IS" "WHERE IS" basis, with all faults and defects, without any representations or warranties, express or implied, except those expressly stated in Section 2.1 of this Agreement, and the Developer waives and releases any claims against the Authority, the City and their respective members, boards, agents and employees, for indemnification, contribution, reimbursement or other payments arising under federal and state law, common law or any other theory relating to environmental or any other condition of the Development Property. Section 3.4 Deferred Purchase Price. The total purchase price to be paid by Developer to the Authority for the Development Property shall be $2,165,000 (the "Purchase Price however the payment of such Purchase Price, shall be deferred, without interest, until the earliest of: (1) twenty (20) years after the Closing Date; (2) the date the Developer sells the Development Property; (3) the occurrence of a Developer Event of Default; (4) the date the Developer refinances the permanent loan (not the Construction Loan) on the Development Property in excess of the original principal amount of the loan; or (5) the date any general or limited partnership interest in the Developer is transferred. The Developer shall execute the Promissory Note attached hereto as Exhibit G to memorialize its obligation to pay the Purchase Price. The Developer shall secure payment of the Promissory Note by execution and delivery of the Authority Mortgage. At Closing, the Developer shall be responsible for paying all costs and expenses (including mortgage registration tax) of recording the Authority Mortgage. Section 3.5 Title and Survey. The Authority will obtain a commitment for an owner's title insurance policy (subject to standard exceptions) issued by the Title Company naming Developer as the proposed owner- insured of the Development Property in the amount of the purchase price (the "Commitment together with copies of all documents referred to in the Commitment. The Developer shall make any objections to title in writing to the Authority within ten (10) days of receipt of the Commitment, or the same shall be deemed waived. The Authority and the Developer acknowledge and agree that if the Authority does not have good and marketable title to the Development Property on or before the Closing Date, the Authority shall not be obligated to make title marketable and the Developer's sole remedy shall be to 1278398v10 ARTICLE III CONVEYANCE OF DEVELOPMENT PROPERTY 10 1 1 1 1 EDA RESOLUTION NO. 2004 -06 terminate this Agreement. The Developer has obtained, or will obtain, at Developer's expense, a survey of the Development Property, prepared by a surveyor acceptable to Developer (the "Survey The Developer agrees to take title to the Development Property subject to the Permitted Encumbrances set forth on Exhibit E attached hereto and the same are hereby approved by the Developer and shall not be the basis of any title objection. Section 3.6 Environmental Matters. The Developer acknowledges that on August 14, 2003, the Authority provided the Developer a Phase I Report on the Development Property. It is understood that the Authority has delivered the Phase I Report as an accommodation to the Developer, and the Authority makes no representation or warranty as to the accuracy or completeness of the information contained therein. Neither the City nor the Authority shall have any responsibility or obligation to undertake any clean up or remediation of any environmental substance or condition on or near the Development Property. Section 3.7 Developer's Right to Inspect. Developer is hereby granted the right to enter upon and inspect, analyze, and test the Development Property for all reasonable purposes, including conducting soil tests. Developer shall pay for the cost of all investigations of the Development Property which are ordered by Developer for purposes of conducting its own investigations of the Development Property. Developer hereby agrees to indemnify and hold the Authority harmless from any claims, damage, costs, and liability (including, without limitation, reasonable attorney's fees) resulting from the entering upon the Development Property or the performing of any of the analyses, tests or inspections referred to in this Section. Section 3.8 Contingencies to Closing on Development Property. (a) Developer's Contingencies. Developer's obligation to close on the Development Property is expressly conditioned upon each of the following contingencies being satisfied or waived on or before the Closing Date: (i) Developer shall have closed on its financing of the construction of the Minimum Improvements as described in Article VI. (ii) Title to the Development Property shall have been found acceptable, or been made acceptable, in accordance with Section 3.5. (iii) Developer shall have determined that it is satisfied with the results of all matters disclosed by hazardous waste and environmental reviews of the Development Property. (iv) Developer shall have determined that it is satisfied with the results of all matters disclosed by Developer's inspection of the Development Property conducted under Section 3.7. (v) The Authority shall have performed all of the obligations required to be performed by Authority under this Agreement as of the Closing Date. (vi) The Authority shall have delivered to the Developer all of the Authority's Documents described in Section 3.9. 1278398v10 11 (b) Authority's Contingencies. The Authority's obligation to close on the sale of the Development Property is expressly conditioned upon each of the following contingencies being satisfied or waived in writing on or before the Closing Date: (i) Developer shall have delivered to the Authority copies of fully executed construction loan documents in the form, and subject to conditions, acceptable to the Authority, for the construction financing for the Minimum Improvements. (ii) Developer shall have delivered evidence, acceptable to the Authority, that the Developer has obtained cash or an irrevocable letter of credit from all equity investors of the entire amount of their required capital commitment. (iii) Developer shall have delivered a copy of a fully executed franchise agreement in form, and subject to conditions, acceptable to the Authority, for the Hotel and the restaurant to be located in the Hotel both with franchisors acceptable to the Authority. (iv) Developer shall have performed all of the obligations required to be performed by Developer under this Agreement as of the Closing Date. (v) The Developer shall have delivered to the Authority all of the Developer's Documents described in Section 3.9. (vi) The Developer shall have delivered to the Authority a copy of a fully executed fixed price or guaranteed maximum price construction contract for the Minimum Improvements, in form, subject to conditions, and with a general contractor, acceptable to the Authority, with a commencement date of no later than 30 days after the Closing Date. (vii) The Developer shall have obtained the approval of the Authority to the Construction Plans as required by Section 4.3 of this Agreement. (viii) Payment and performance bonds from the contractor or subcontractors in the amount of the applicable contract price for construction by the contractor and subcontractors of all of the improvements covered by their respective contract prior to commencement of the work covered by their respective contracts. (a) Time and Place. Subject to the teiius and conditions of this Agreement, the Closing on the purchase and sale of the Development Property shall take place on the Closing Date and shall take place at the Saint Paul offices of Briggs and Morgan or such other place which is mutually acceptable to the parties. The Authority shall deliver possession of the Development Property on the Closing Date. (b) Authority's Documents. At the Closing, the Authority shall execute, where appropriate, and deliver all of the following Authority's Documents: 1278398v10 Section 3.9 Closing on the Development Property 12 1 1 1 1 1 EDA RESOLUTION NO. 2004 -06 (i) The Deed properly executed on behalf of the Authority conveying the Development Property to the Developer subject to the Permitted Encumbrances and any other matters not objected to under Section 3.5 hereof. (ii) Any abstracts of title in the Authority's possession to any portion of the Development Property which is abstract property. (iii) An affidavit of the Authority indicating on the Closing Date that to its actual current knowledge, without duty of inquiry or investigation, there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving the Development Property; that there has been no labor or material furnished to the Development Property for which payment has not been made or for which mechanic's liens could be filed; and that there are no other unrecorded interests in the Development Property. (c) Developer's Documents. At the Closing, the Developer shall execute, where appropriate, and deliver all of the following Developer's Documents: (i) The Authority Mortgage properly executed on behalf of the Developer in substantially the form attached hereto as Exhibit F. (ii) The Promissory Note properly executed on behalf of the Developer in substantially the form attached hereto as Exhibit G. State of the State. 1278398v10 (iii) Proof of insurance required pursuant to this Agreement. (iv) To the extent required and obtainable as of the Closing Date, environmental clearances, subdivision approvals, permits, and any other required governmental approvals for the Minimum Improvements. (v) Funds sufficient for payment by the Developer at Closing of the recording charges or fees for all documents which are to be placed on record, the fee or charge imposed by any closing agent designated by the Title Company, and any other incidental or related closing costs. (vi) A certificate of good standing for Developer from the Secretary of Section 3.10 Costs. The Authority and the Developer each shall pay their own attorneys' fees. The Developer shall pay all costs of construction relating to the Minimum Improvements. The Developer shall pay, among other things, the Title Company's closing fee and any other fees related to the Commitment. The Authority shall pay the state deed tax and the fees of Title Company for its title work relating to the issuance of the Commitment. The Developer shall pay the cost of any surveys, the cost of any environmental audits or work, the premium for the title insurance policy, the mortgage registry tax and the cost of recording the Deed and the Authority Mortgage, the cost of Developer's inspection of the Development Property and any and all other closing costs related to the transfer of the Development Property to the Developer not specifically agreed to herein to be paid by the Authority. 13 Section 3.11 Acknowledgements by Developer: The Developer acknowledges and agrees that: (a) no promises or commitments of any type or kind have been made by the Authority with respect to providing financial assistance to the Minimum Improvements, whether by loan, grant, bond issuance of otherwise, except as expressly set forth in this Agreement; (b) the Developer will need to obtain all permits and approvals for the construction and operation of the Minimum Improvements required by applicable law, including all building and environmental permits and approvals, and that no promises have been made by the Authority with respect to waiving or modifying any applicable permitting requirements; (c) no promises or commitments have been made by the Authority with respect to the assessed valuation of the Minimum Improvements or any of the facilities ancillary thereto; and (d) the Authority shall have the right to support other projects and developments regardless of whether such projects and developments compete with the Minimum Improvements. 1278398v10 14 1 1 EDA RESOLUTION NO. 2004 -06 1278398v10 ARTICLE IV CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 4.1 Preliminary Plans. The Developer will submit to the Authority the Preliminary Plans for the Minimum Improvements. The Preliminary Plans must be consistent with the Redevelopment Plan, this Agreement, and all applicable State and local laws and regulations, insofar as said consistency may be determined at said preliminary stage. The Minimum Improvements shall consist of a full service hotel containing a minimum of 200 rooms, ten (10) percent of which shall be Suites (the "Hotel at least one, minimum 150 seat, full service restaurant with a liquor license and a 25,000 square foot indoor water park connected to the Hotel (the "Water Park The hotel "flag" shall be a Radisson or another franchise acceptable to the Authority and the Developer. The exterior of the Minimum Improvements must make significant use of glazed glass and be of a color compatible with the surrounding development as acceptable to the Authority in its sole discretion. All exterior designs and materials including the color palette must be approved by the Authority. The Minimum Improvements must be physically connected to the Earle Browne Heritage Center by an enclosed pedestrian Connection (the "Connection as more fully described in Section 4.13 hereto. The Connection shall be part of the Minimum Improvements. Section 4.2 Construction of Minimum Improvements. Subject to the terms and conditions of this Agreement, the Developer agrees to construct the Minimum Improvements (a Site Plan for which is attached hereto as Exhibit H) on the Development Property in conformance with the approved Construction Plans for the Minimum Improvements. No material changes shall be made to the Construction Plans for the Minimum Improvements without the Authority's prior written approval. In no event shall any of these changes (a) affect the quality of the Development as provided in the Construction Plans approved by the Authority, (b) materially affect the appearance of the exterior of the Minimum Improvements, (c) reduce the quality of the construction materials for the Minimum Improvements, or (d) delete or modify any of the required elements of the Minimum Improvements set forth in Section 4.1 hereof. Section 4.3 Construction Plans (a) The Developer shall deliver to the Authority no later than thirty (30) days prior to Closing the Construction Plans for the Minimum Improvements. The Authority shall review the Construction Plans and will deliver to the Developer before the Closing Date, a written statement approving the Construction Plans or a written statement rejecting the Construction Plans and specifying the deficiencies in the Construction Plans. The Authority shall approve the Construction Plans if: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans are consistent with the goals and objectives of the Redevelopment Plan; and (iii) the Construction Plans do not, to the knowledge of the Authority, violate any applicable Federal, State or local laws, ordinances, rules or regulations. If the Construction Plans are not approved by the Authority, then the Developer shall make such changes as the Authority may reasonably require. 15 (b) The approval of the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority does not constitute a representation or warranty by the Authority that the Construction Plans or the Minimum Improvements comply with any applicable building code, health or safety regulation, zoning regulation, environmental law or other law or regulation, or that the Minimum Improvements will meet the qualifications for issuance of a certificate of occupancy, or that the Minimum Improvements will meet the requirements of the Developer or any other users of the Minimum Improvements. Approval of the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority will not constitute a waiver of any Developer Event of Default. Section 4.4 Commencement and Completion of Construction. Subject to the teens and conditions of this Agreement and to Unavoidable Delays, the Developer will commence construction of the Minimum Improvements no later than May 1, 2005 and will complete construction of the Minimum Improvements no later than December 31, 2006. The Minimum Improvements will be constructed by the Developer on the Development Property in conformity with the Construction Plans approved by the Authority. At all times during construction, upon the request of the Authority, the Developer will provide the Authority reasonable access to the Development Property. "Reasonable access" means at least one site inspection per month during regular business hours. During construction and marketing of the Minimum Improvements, the Developer will deliver progress reports to the Authority from time to time as mutually agreed upon by the Authority and the Developer. Section 4.5 Compliance with Environmental Requirements. The Developer shall comply with all applicable local, State, and Federal environmental laws and regulations, and will obtain, and maintain compliance under, any and all necessary environmental permits, licenses, approvals or reviews. As of the date of this Agreement, the Developer has received no notice or communication from any local, State, or Federal official that the activities of the Developer, Authority under this Agreement may be or will be in violation of any environmental law or regulation. Section 4.6 Hotel Center Operation. (a) The Developer agrees to operate and maintain the Minimum Improvements as a first class full service hotel through December 31, 2023. Without limiting the generality of the preceding sentence, the Developer agrees that the Minimum Improvements will not, between the date of this Agreement and December 31, 2023, be put to any alternative residential or other use, such as an apartment house, a dormitory, or a rooming house. Section 4.7 Additional Responsibilities of the Developer. (a) The Developer will construct, operate and maintain, or cause to be operated and maintained, the Minimum Improvements in substantial accordance with the Willis of this Agreement, the Redevelopment Plan, and all local, State, and Federal laws and regulations (including, but not limited to zoning, building code and public health laws and regulations), except for variances necessary to construct the Minimum Improvements contemplated in the Construction Plans approved by the Authority. 1278398v10 16 1 1 1 1 EDA RESOLUTION NO. 2004 -06 (b) The Developer will 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. (c) The Developer will not construct any building or other structures on, over, or within the boundary lines of any public utility easement unless such construction is provided for in such easement or has been approved by the utility involved. (d) The Developer, at its own expense, will replace any public facilities and public utilities damaged during the construction of the Minimum Improvements, in accordance with the current technical specifications, standards and practices of the owner thereof. (e) The Developer will prepare, submit and receive approval from the City and its Planning Commission for the subdivision plat for any portion of the Minimum Improvements, as applicable and appropriate. (f) The Developer will comply with all applicable local, state and federal environmental laws and regulations, as they relate to the Minimum Improvements. (g) The Developer will meet all deadlines set forth on the Timeline. Section 4.8 Certificate of Release of Forfeiture. The Developer shall notify the Authority when the construction of the Minimum Improvements has commenced. The Authority shall promptly inspect the Minimum Improvements in order to determine whether construction on the same has been commenced. If the Authority determines that the Minimum Improvements have not been commenced, the Authority shall deliver a written statement to the Developer indicating as such and Developer shall promptly remedy such deficiency. Promptly upon determining that construction has commenced on said Minimum Improvements, the Authority will furnish to the Developer a Certificate of Release of Forfeiture in the form attached hereto as Exhibit C certifying commencement of construction on the Minimum Improvements. The Developer shall cause the Certificate of Release of Forfeiture to be recorded in the proper office for recordation of deeds and other instruments pertaining to the Development Property. Section 4.9 Completion. The Developer shall notify the Authority when the construction of the Minimum Improvements have been substantially completed; and, upon receipt of the Certificate of Occupancy, will provide the Authority with a copy thereof. Section 4.10 Certain Approvals. The Developer acknowledges and agrees that any approval by the Authority given pursuant to this Agreement does not constitute the consent or approval of the City or any other governmental body or entity to the Development, the subdivision of the Development Property, the plans for or the construction of the Minimum Improvements, or any other aspect thereof, including without limitation, use, zoning, building code and watershed requirements, and the Authority shall have no liability to the Developer for damages or otherwise for failure of the Developer to obtain any required consents, approvals, permits and licenses for the Development in accordance with all applicable laws and regulations. 1278398v10 17 Section 4.11 Business Subsidy Agreement. (a) In order to satisfy the provisions of Minnesota Statutes, Section 116J.994 (the "Business Subsidy Act the Developer acknowledges and agrees that the amount of the "Business Subsidy" granted to the Developer under this Agreement is $2,600,000 plus the interest to be paid on the Tax Increment Note plus the annual interest at the rate of five percent (5.00 not charged on the Promissory Note, and that the Business Subsidy is needed because the Project is not sufficiently feasible for the Developer to undertake without the Business Subsidy. (b) The public purpose of the Subsidy is to further provide additional commercial facilities in the City, increase the tax base and to create jobs. (c) For its "Job Goals" under this Section 4.11 the Developer covenants that it will provide or cause to be provided 30 full -time equivalent permanent employee positions within two years of the Benefit Date, with these jobs having wage levels of at least $7.00 per hour, exclusive of benefits. (d) For purposes of Section 116J.994, Subdivision 3, of the Subsidy Law, the goals of the Subsidy are the construction of the Minimum Improvements and ownership thereof by the Developer for at least five years after the "Benefit Date" of the Subsidy, as defined in the Subsidy Law, which is hereby determined to be the date of the issuance of a certificate of occupancy for the Minimum Improvements. (e) For purposes of the Subsidy Law, the Subsidy shall be considered to be a forgivable loan to the Developer from the Authority. It is agreed, as required by Section 116J.994, Subdivision 6, if the Developer is in default under this Section 4.11, subject to any remedial provisions of the Subsidy Law as may be applicable, the Developer shall be obligated to repay the Subsidy plus interest from the Closing Date on all such amounts at the implicit price deflator, as defined under Minnesota Statutes, Section 275.70, Subdivision 2. If the Developer meets some but not all of its Job Goals hereinafter defined, the Developer may request in writing, and Authority may agree in the absolute discretion of the Board of Commissioners, that the Subsidy be repaid by the Developer pro rata, e.g., if the Developer created only 15 of the 30 jobs at the Project, the Developer would repay 50% of the Subsidy paid to the Developer, plus accrued interest thereon. The Subsidy is needed in order to induce the Developer to construct and occupy the Project. The Developer covenants that it will continue to own and occupy the Project for at least five years after the Benefit Date. Grantor Grantor 1278398v10 (f) The Developer represents that it has no parent corporation. (g) The Developer represents that the following are all of the State of Minnesota and "local government agency" grants (other than the Subsidy hereunder) to the Minimum Improvements: 18 Value Value 1 1 1 1 1 EDA RESOLUTION NO. 2004 -06 (h) The Developer represents that it is not in default on the date hereof on any subsidy agreement entered into by the Developer under the Subsidy Law. (i) The Subsidy is needed to encourage the development of a hotel to provide accommodations for those utilizing the Earle Brown Heritage Center. (j) The Developer shall complete and file with the Authority from time to time the report in the form of the attached Exhibit I. The Subsidy Law provides that if the Developer does not make such reports, when due, the Authority must mail the Developer a warning within one week of the required filing date, and if, after 14 days after the postmark date of that warning, the Developer continues to fail to report, then the Developer is required to and shall pay the Authority a penalty of $100 for each subsequent day until the report is filed, up to a maximum of $1,000. The Developer shall file these reports with the Authority, in care of the Executive Director, (1) on March 1 of each year, beginning with the March 1 immediately following the Benefit Date, and (2) within 30 days after the "Compliance Date," hereby defined to be the date which is two years after the Benefit Date. Each March 1 report shall report on the prior calendar year, and each other report shall report on the period since the last reporting period. (k) This Section 4.11 is intended to be the "subsidy agreement" required by Section 116J.994, Subdivision 3, of the Subsidy Law. In the event that any provision of this Section 4.11 is inconsistent or in conflict with any provision of the Subsidy Law, and in the event that any provision of the Subsidy Law provides additional requirements, the provisions of the Subsidy Law shall apply and govern. In addition to all reporting obligations of the Developer under this Section 4.11 and Exhibit I, the Developer agrees to provide the Authority with any additional information which may be required in order for the Authority to comply with its reporting requirements, as they may exist or be amended from time to time, under the Subsidy Law. (1) Nothing in this Section 4.11 is intended to limit or otherwise amend the other terms of this Agreement; provided, however, that to the extent that provisions in this Section 4.11 are more extensive or restrictive than any related term elsewhere in this Agreement, the provisions hereof shall govern. The above commitment of the Developer to own the Minimum Improvements for at least five years from the Benefit Date is a requirement of the Subsidy Law (subject to procedures therein allowing relaxation or waiver of said requirement) and shall apply and govern. (m) If the Developer shall default under its agreement in this Section 4.11, the Developer shall then be required to repay the Subsidy to the Authority, plus interest at no less than the implicit price deflator, as defined under Minnesota Statutes, Section 275.70, Subdivision 2 from the date of issuance of the Tax Increment Note and Promissory Note through the date of said default and continue paying interest thereon at such rate until the Subsidy is paid in full. 1278398v10 19 Section 4.12 Construction of Water Park. (a) The Developer agrees to construct as part of the Minimum Improvements a 25,000 square foot water park connected to the Hotel, a concept rendering of which is attached hereto as Exhibit J. (b) The Developer shall be solely responsible for the operation and maintenance of the Water Park. Section 4.13 Construction of the Connection. (a) The Developer agrees to construct, as part of the Minimum Improvements, the Connection between the hotel located on the Development Property and the Earle Brown Heritage Center. The Parties acknowledge that a portion of the Connection will be located on the Development Property (the "Developer Portion of the Connection and a portion will be located on property owned by the City or the Authority (the "Authority Portion of the Connection ").The exterior and interior design of the Connection shall be subject to the Authority's approval, which approval may be granted or withheld in the Authority's sole and absolute discretion. The Connection shall be enclosed, heated, air conditioned and have magnetic security doors at the common property line between the Earle Brown Heritage Center and the Development Property. The Authority shall control the hours the security doors are open and closed. The Developer shall construct the Connection in compliance with all applicable local, state and federal rules and regulations, including, but not limited to, public bidding of the construction of the Connection. (b) The Authority shall pay all of the costs of construction of the Connection up to but not to exceed $1,000,000. Any construction costs of the Connection in excess of $1,000,000 shall be paid by the Developer. (c) The Developer shall pay and be responsible for all ongoing operation and maintenance costs associated with the Developer Portion of the Connection and the Authority shall pay and be responsible for all operation and maintenance costs of the Authority Portion of the Connection. 1278398v10 20 1 1 1 EDA RESOLUTION NO. 2004 -06 ARTICLE V TAX INCREMENT FINANCING; NO PUBLIC IMPROVEMENTS Section 5.1 Preconditions to Issuance of Tax Increment Note. The Developer will undertake and pay for the Eligible Costs of the Minimum Improvements at a cost of not less than $2,600,000. In order to assist with the Eligible Costs, the Authority agrees to provide tax increment assistance to the Developer as further set forth in this Agreement. The tax increment assistance shall be paid to the Developer on a pay -as- you -go basis and the principal amount shall be equal to the lesser of (a) $2,600,000, or (b) the amount of the Eligible Costs paid by the Developer as demonstrated to the satisfaction of the Authority pursuant to clause (e) below. The tax increment assistance shall be paid on the terms and conditions set forth in Section 5.2 below; provided however, that the Authority shall be under no obligation to provide any of the assistance contemplated in this Agreement or to issue the Tax Increment Note until satisfaction of the following conditions precedent: (a) The Developer has prepared and the Authority has approved the Construction Plans for the Minimum Improvements; (b) The Developer has obtained all necessary permits, licenses, and authorizations necessary to commence and complete the construction of the Minimum Improvements; (c) The Authority has received evidence satisfactory to it that, upon substantial completion of the Minimum Improvements, the Development Property will, upon substantial completion of the Minimum Improvements, have a market value of at least $20,000,000; (d) The Developer shall be in material compliance with all the terms and provisions of this Agreement; (e) The construction of the Minimum Improvements is completed to the satisfaction of the Authority, and the Developer has provided the Authority with invoices or cancelled checks evidencing the payment of Eligible Costs. (1) Upon satisfaction of the conditions in Section 5.1 hereof, the Authority will reimburse the Developer for the lesser of $2,600,000 or the amount of the Eligible Costs paid and incurred by the Developer through the issuance of the Authority's Tax Increment Revenue Note in substantially the form attached to this Agreement as Exhibit N. (2) The unpaid principal amount of the Note shall bear simple, non compounded interest from the date of issuance of the Note at the rate of 6.00% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. 1278398v10 Section 5.2 Tax Increment Revenue Note. 21 (3) The principal of the Note and interest thereon shall be payable solely from Tax Increments derived from the Development Property. On each Note Payment Date, and subject to the provisions of the Note, the Authority shall pay, against the accrued and unpaid interest then due on the Note and then to reduce the principal of the Note, 95% of any Tax Increments received by the Authority during the preceding 6 months. (4) The Note shall be a special and limited obligation of the Authority and not a general obligation of the Authority, and only Tax Increments shall be used to pay the principal of and interest on the Note. If, on any Note Payment Date, the Tax Increments for the payment of the accrued and unpaid interest on the Note are insufficient for such purposes, the difference shall be carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a future Note Payment Date there are Tax Increments in excess of the amounts needed to pay the accrued interest then due on the Note. (5) The Authority's obligation to make payments on the Note on any Note Payment Date or any date thereafter shall be conditioned upon the requirement that (A) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement and (B) this Agreement shall not have been terminated pursuant to Section 11.3. (6) The Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit N. In the event of any conflict between the terms of the Note and the terms of this Section 5.2, the terms of the Note shall govern. The issuance of the Note pursuant and subject to the teims of this Agreement, and the taking by the Authority of such additional actions as bond counsel for the Authority may require in connection therewith, are hereby authorized and approved by the Authority. Section 5.3 Use of Tax Increments. The Authority and the City shall be free to use the Tax Increments, other than those to which the Developer is entitled pursuant to the provisions of Section 5.2 hereof, for its administrative expenses and for any other purpose for which the Tax Increments may lawfully be used pursuant to applicable provisions of the Minnesota law. The City and Authority shall have no other financial participation in the Project other than as specifically set forth herein. Section 5.4 No Public Improvements. Neither the Authority nor the City shall have any obligation to construct, install, improve or modify any public improvements (including without limitation streets, sidewalks, curbs or utility services) in connection with the Development; the Developer acknowledging that all of such improvements or modifications, if any, shall be a part of the Minimum Improvements. 1278398v10 22 1 EDA RESOLUTION NO. 2004 -06 1278398v10 ARTICLE VI CERTAIN FINANCING PROVISIONS Section 6.1 Encumbrance of the Development Property. Until the Completion Date, neither the Developer nor any successor in interest to the Developer will engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Development Property, or portion thereof, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Development Property except for the purpose of obtaining funds only to the extent necessary for constructing the Minimum Improvements (including, but not limited to, land and building acquisition, labor and materials, professional fees, real estate taxes, construction interest, organization and other actual costs of development). Section 6.2 Copy of Notice of Default to Mortgagee. If the Authority delivers any notice or demand to the Developer with respect to a Developer Event of Default under this Agreement, the Authority will also deliver a copy of such notice or demand to the mortgagee of any Mortgage at the address of such mortgagee provided to the Authority in a written notice from the Developer or the mortgagee. Section 6.3 Mortgagee's Option to Cure Events of Default. Upon the occurrence of a Developer Event of Default, the mortgagee under any Mortgage will have the right within the time period required by this Agreement to cure or remedy such Developer Event of Default. Section 6.4 Defaults Under Mortgage. In the event the Developer is in default under any Mortgage, the mortgagee, within ten (10) days after it becomes aware of any default and prior to exercising any remedy available to it due to such default, shall notify the Authority in writing of (i) the fact of default; (ii) the elements of default; and (iii) the actions required to cure the default. If, within the time period required by the Mortgage, the Authority elects (at its sole option) to cure any default under the Mortgage, the mortgagee will pursue none of its remedies under the Mortgage based on such default. Section 6.5 Subordination of Agreement. In order to facilitate the obtaining of financing for the construction of the Minimum Improvements, the Authority agrees to subordinate the lien of the Authority Mortgage to the documents executed in connection with the Construction Loan Mortgage, provided that such subordination shall not deprive the Authority or otherwise limit any of the Authority's rights or remedies under this Agreement or the Note. 23 Section 7.1 Real Property Taxes and Assessments. The Authority shall pay any real estate taxes and installments of special assessments with respect to the Development Property payable prior to the year in which a Closing occurs. Any real estate taxes and installments of special assessments payable with respect to the Development Property in the year of the Closing shall be prorated on a calendar year basis between the Developer and the Authority as of the Closing Date. The Developer shall pay all real estate taxes and installments of special assessments due and payable with respect to the Development Property in the year following the year in which the Property is conveyed or otherwise transferred to the Developer and each year thereafter. 1278398v10 ARTICLE VII REAL PROPERTY TAXES AND ASSESSMENTS 24 1 1 1 EDA RESOLUTION NO. 2004 -06 1278398v10 ARTICLE VIII INSURANCE AND CONDEMNATION Section 8.1 Insurance. (a) The Developer will obtain and continuously maintain insurance on the entire Development Property (including the Minimum Improvements) and, from time to time at the request of the Authority, furnish proof to the Authority that the premiums for such insurance have been paid and the insurance is in effect. The insurance coverage described below is the minimum insurance coverage that the Developer must obtain and continuously maintain: (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, and with coverage available in nonreporting form on the so- called "all risk" form of policy. (ii) Comprehensive general liability insurance in amounts and coverages normally held by businesses engaged in activities similar to those of the Developer. (iii) Workers compensation insurance, with statutory coverage. (b) All insurance required in this Article shall be obtained and continuously maintained in responsible insurance companies selected by the Developer or its successor that are authorized under the laws of the State to assume the risks covered by such policies. The Developer shall deposit annually with the Authority a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article, each policy must contain a provision that the insurer will not cancel nor modify the policy without giving written notice to the insured and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Developer or its successor must furnish the Authority evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, or that there is no necessity for the policy under the terms of this Agreement. In lieu of separate policies, the Developer or its successor may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer or its successor will deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force. (c) The Developer agrees to notify the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Subject to the terms of any Mortgage, in the event that any such damage does not exceed $100,000, 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 or its 25 successor will apply the Net Proceeds of any insurance relating to such damage received by the Developer or its successor to the payment or reimbursement of the costs thereof. In the event the Minimum Improvements or any portion thereof is destroyed by fire or other casualty prior to the Completion Date, and the damage or destruction is estimated to equal or exceed $100,000, then the Developer, within one hundred fifty (150) days after such damage or destruction, subject to the terms of any Mortgage, will proceed forthwith to repair, reconstruct and restore the damaged Minimum Improvements to substantially the same condition or utility value as it existed prior to the event causing such damage or destruction 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 or destruction received by the Developer to the payment or reimbursement of the costs thereof. Developer shall pay the entire cost of repair, reconstruction and restoration if the net proceeds of the insurance are insufficient. Section 8.2 Condemnation. In the event that title to and/or possession of the Development Property and Minimum Improvements, or any material part thereof, is threatened with a taking through the exercise of the power of eminent domain, the Developer will notify the Authority of the threatened taking with reasonable promptness; and shall keep the Authority advised of the progress thereof. 1278398v10 26 1 EDA RESOLUTION NO. 2004 -06 1278398v10 ARTICLE IX DEVELOPER COVENANTS Section 9.1 Maintenance and Operation of the Development. In addition to other maintenance and operation obligations of the Developer under this Agreement, the Developer will, at all times during the term of this Agreement, maintain and operate the Development Property and the Minimum Improvements in a safe and secure way and in compliance with this Agreement and all federal, State and local laws, regulations, rulings and ordinances applicable thereto. The Developer shall pay all of the expenses of the operation and maintenance of the Development Property and the Minimum Improvements, subject to the provisions of Section 4.13(c) of this Agreement, including all premiums for insurance insuring against loss or damage thereto and adequate insurance against liability for injury to persons or property arising from the construction or operation of the Minimum Improvements as required pursuant to this Agreement. The Developer shall also pay all costs and expenses of capital improvements and replacements of the Minimum Improvements. During construction or operation of the Minimum Improvements, Developer shall not cause any person working in or attending the Development for any purpose, to be exposed to any hazardous or unsafe condition; and shall cause its contractors, employees or agents employed by Developer to work on the Development Property to take such precautions as may be available to protect the persons in and around the Development Property from hazards arising from the work, and shall further require each such contractor to obtain and maintain liability insurance protecting against liability to persons for injury arising from the work. The Developer shall also be solely responsible for the maintenance and any capital replacement and/or improvement of the storm water retention pond located adjacent to the Development Property, excluding maintenance related to the waterfall and water level maintenance well located on the adjacent property. Section 9.2 Reciprocal Access and Parking Agreement. The Developer will enter into the reciprocal access and parking agreement with the Authority attached hereto as Exhibit L upon execution of this Agreement to govern the Developer and Authority's common use of the driveway and roadway into the parking area for the Earle Brown Heritage Center, and the parties common use of the parking area currently existing for the Earle Brown Heritage Center and the proposed parking areas on the Development Property. 27 ARTICLE X TRANSFER LIMITATIONS AND INDEMNIFICATION Section 10.1 Representation as to Development. The Developer represents to the Authority that its purchase of the Development Property, and its other undertakings under this Agreement, are for the purpose of developing commercial properties, and not for the purpose of speculation in land holding. The Developer acknowledges that, in view of the importance of the development of the Development Property to the general welfare of the Authority and the City, the qualifications and identity of the Developer are of particular concern to the Authority. The Developer further acknowledges that the Authority is willing to enter into this Agreement with the Developer because of the qualifications and identity of the Developer; and in reliance on the limitations on transfer contained in Section 10.2 hereof Section 10.2 Limitations on Transfer. The Developer may, with prior written notice to the Authority, mortgage the Development Property and the Minimum Improvements to a lender providing construction or permanent financing for the Minimum Improvements. Except as otherwise provided in this Section, the Developer will not sell, assign, convey, lease, mortgage, transfer or otherwise encumber in any other mode or manner this Agreement, the Development Property or the Minimum Improvements, or any interest therein, without the express written approval of the Authority, which may be given or withheld in the Authority's sole discretion. In the event that the Authority elects to consent to any proposed transfer, the Authority shall be entitled to require, as conditions to any approval of any such transfer of this Development Agreement, the Development Property or the Minimum Improvements that: (a) Any proposed transferee shall have the qualifications and financial responsibility, as determined by the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer; (b) Any proposed transferee, by instrument in writing satisfactory to the Authority and the City and in form recordable among the land records shall, for itself and its successors and assigns, and expressly for the benefit of 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; (c) There shall be submitted to the Authority for review all instruments and other legal documents involved in effecting transfer, and if approved by Authority, its approval shall be indicated to the Developer in writing; (d) The Developer and its transferee shall comply with such other conditions as the Authority may find desirable, in its sole discretion, in order to achieve and safeguard the purposes of the Act, the Development Plan and the Developer Documents; and (e) In the absence of specific written agreement by the Authority and the City to the contrary, no such transfer or approval by the Authority and the City thereof shall be deemed to relieve the Developer or any other party bound in any way by this Agreement or 1278398v10 28 EDA RESOLUTION NO. 2004 -06 otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. Section 10.3 Indemnification (a) The Developer releases from and covenants and agrees that the Authority and the City, their governing body members, officers, agents, including the independent contractors, consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "Indemnified Parties shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any and all losses or damages to property or any injury to or death of any person occurring at or about or resulting from any defect in the Development to the extent not attributable to the gross negligence of the Indemnified Parties. (b) Except for gross negligence of the Indemnified Parties, the Developer agrees to indemnify the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claims, demands, suits, costs, expenses (including reasonable attorney's fees), actions or other proceedings whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Developer (or if other persons acting on its behalf or under its direction or control) under this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, operation and maintenance of the Development. Section 10.4 Limitation. All covenants, stipulations, promises, agreements and obligations of the Authority, or the Developer contained in this Agreement shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority or the Developer, respectively, and not of any governing body member, officer, agent, servant or employee of the Authority, the City or the Developer in the individual capacity thereof 1278398v10 29 ARTICLE XI EVENTS OF DEFAULT AND REMEDIES Section 11.1 Developer Events of Default. Any of the following shall be a Developer Event of Default: (a) A default shall occur under the Construction Loan Mortgage and is not cured within the time permitted therein; or (b) failure by the Developer to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, including but not limited to the failure of the Developer to accomplish the activities set forth in the Timeline attached hereto as Exhibit K, and the continuation of any such failure for a period of thirty (30) days after written notice of such failure from any party hereto; or (c) the Developer shall (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended, or under any similar Federal or State law; or (ii) make an assignment for the benefit of its creditors; or (ii) become insolvent or adjudicated a bankrupt; or if a petition or answer proposing the adjudication of Developer, as a bankrupt or its reorganization under any present or future Federal bankruptcy act or any similar Federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of Developer, or of the Development, or part thereof, shall be appointed in any proceeding brought against Developer, and shall not be discharged within ninety (90) days after such appointed, or if Developer shall consent to or acquiesce in such appointment. Section 11.2 Authority Events of Default. The failure of the Authority to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, and the continuation of such failure for a period of thirty (30) days after written notice of such failure from any party hereto shall be an Authority Event of Default. Section 11.3 Authority Remedies on Default. Whenever any Developer Event of Default occurs, the Authority may take any one or more of the following actions: (a) Accelerate the Note and, if the Note is not paid within twenty (20) days of acceleration, exercise remedies under the Authority Mortgage (including foreclosure). Note. (c) If the Developer Event of Default occurs prior to the Closing Date, the Authority may cancel and terminate this Agreement, pursuant to Minnesota Statutes, Section 559.21 upon thirty (30) days written notice of default. 1278398v10 (b) Suspend its performance under this Agreement and the Tax Increment 30 1 1 1 1 EDA RESOLUTION NO. 2004 -06 (d) If the Developer Event of Default occurs after the Closing Date, the Authority may withhold the Certificate of Release of Forfeiture and/or cancel and terminate this Agreement and the Note. (e) Take whatever action at law or in equity may appear necessary or desirable to the Authority to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Section 11.4 Revesting Title in the Authority. If, subsequent to conveyance of the Development Property to the Developer, and before issuance of any Certificate of Release of Forfeiture pursuant to Section 4.8, a Developer Event of Default occurs and is not cured within any cure period allowed, then the Authority shall have the right to re -enter and take possession of the Development Property and to terminate and revest in the Authority such portion of the estate conveyed by the Deed to the Developer, it being the intent of this Agreement that the conveyance or transfer of the Development Property to the Developer shall be conditioned on the Developer's performance hereunder, and that upon the occurrence of an Event of Default by the Developer, all Development Property for which all rights and interests of the Developer, and any assigns or successors in interest to and in the Development Property shall revert to the Authority. Section 11.5 Developer Remedies on Default. Whenever any Authority Event of Default occurs by the Authority, the Developer may take whatever action at law or in equity may appear necessary or desirable to the Developer to enforce specific performance and observance of any obligation, agreement, or covenant of the Authority under this Agreement, provided, however, that the Developer hereby waives any and all rights it may have under any theory of law or equity to make any claim against the Authority for any damages whatsoever regardless of the type of damages. Section 11.6 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies unless otherwise expressly stated, 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 Developer Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 11.7 No Additional Waiver Implied by One Waiver. If 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 11.8 Reimbursement of Attorneys' Fees. If the Developer shall default under any of the provisions of this Agreement, and the Authority shall employ attorneys or incur other reasonable expenses for the collection of payments due hereunder, or for the enforcement of performance or observance of any obligation or agreement on the part of the Developer 1278398v10 31 contained in this Agreement, the Developer will on demand therefor reimburse the Authority for the reasonable fees of such attorneys and such other reasonable expenses so incurred. 1278398v10 32 1 1 1 EDA RESOLUTION NO. 2004 -06 ARTICLE XII ADDITIONAL PROVISIONS Section 12.1 Conflicts of Interest. No member of the Board or other official of the Authority shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Minimum Improvements, or any contract, agreement or other transaction contemplated to occur or be undertaken thereunder or with respect thereto, nor shall any such member of the governing body or other official participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. No member, official or employee of the Authority shall be personally liable to the Authority in the event of any default or breach by Developer or successor or on any obligations under the terms of this Agreement. Section 12.2 Real Estate Agents. The Developer represents that it has retained Cambridge Commercial Realty as their broker in connection with the transactions contemplated hereby and will pay the broker commission for Cambridge Commercial Realty. The Developer hereby agrees to indemnify the Authority from any real estate or other sales commission or fee payable to any broker hired or engaged by the indemnifying party in respect of the transactions contemplated by this Agreement. Section 12.3 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 12.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand or other communication under this Agreement by any party to any 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 in the case of Developer, is addressed to or delivered personally to Developer at CAMBRIDGE Commercial Realty, 4530 West 77th Street, Suite 250, Edina, Minnesota 55435, Attention: John Sheehan and O -H Hospitality, 215 North Central Avenue, Duluth, Minnesota 55807, Attention: Kent Oliver, with a copy to Hanft Fride, A Professional Association, 1000 US Bank Place, 130 West Superior Street, Duluth, Minnesota 55807, Attention: Bill Burns, in the case of the Authority, is addressed to or delivered personally to the Economic Development Authority of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430 -2199, Attention: Executive Director, or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other, as provided in this Section. Section 12.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 12.6 Law Governing. This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. 1278398v10 33 Section 12.7 Consents and Approvals. In all cases where consents or approvals are required hereunder, such consents or approvals shall not be unreasonably conditioned, delayed or withheld. All consents or approvals shall be in writing in order to be effective. Section 12.8 Representatives. Except as otherwise provided herein, all approvals and other actions required of or taken by the Authority shall be effective upon action by the Authority Representative. All actions required of or taken by Developer shall be effective upon action by a duly authorized officer of the respective party. Section 12.9 Superseding Effect. This Agreement reflects the entire agreement of the parties with respect to the development of the Development, and supersedes in all respects all prior agreements of the parties, whether written or otherwise, with respect to the development of the Development. Section 12.10 Relationship of Parties. Nothing in this Agreement is intended, or shall be construed, to create a partnership or joint venture among or between the parties hereto, and the rights and remedies of the parties hereto shall be strictly as set forth in this Agreement. Section 12.11 Mediation. All claims, disputes or other matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof, shall be referred to non binding mediation before, and as a condition precedent to, the initiation of any legal action hereof, provided for herein. Each party agrees to participate in up to four hours of mediation. The mediator shall be selected by the parties, or if the parties are unable to agree on a mediator then any party can request the administrator of the Hennepin County District Court Civil ADR Program and/or similar person, to select a person from its list of qualified neutrals. The mediation shall be attended by employees or agents or each party having authority to settle the dispute. All expenses related to the mediation shall be borne by each party, including without limitation, the costs of any experts or legal counsel. All applicable statutes of limitations and all defense based on the passage of time are tolled while the mediation procedures are pending, and for a period of thirty (30) days thereafter. Section 12.12 Venue. All matters, whether sounding in tort or in contract, relating to the validity, construction, performance, or enforcement of this Agreement shall be controlled by and determined in accordance with the laws of the State of Minnesota, and the Developer agrees that all legal actions initiated by the Developer or Authority with respect to or arising from any provision contained in this Agreement shall be initiated, filed and venued exclusively in the State of Minnesota, Hennepin County, District Court and shall not be removed therefrom to any other federal or state court. Section 12.13 Provisions Surviving Rescission or Expiration. Sections 10.3 and 11.9 shall survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date thereof. Section 12.14 Time of Essence. Time is of the essence for the observance and performance of the parties' respective obligations and duties under this Agreement. 1278398v10 34 1 1 EDA RESOLUTION NO. 2004 -06 IN WITNESS WHEREOF, the Authority and Developer have caused this Agreement to be duly executed in their names and on their behalf, all on or as of the date first above written. 1278398 -v10 35 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER By Executive Director 1278398v10 36 BROOKLYN HOTEL PARTNERS, LLC By: Its: 1 EDA RESOLUTION NO. 2004 -06 EXHIBIT A LEGAL DESCRIPTIONS AND PID NUMBER OF DEVELOPMENT PROPERTY Legal Description: Lot 1, Block 1, Addition A, 3137, Brooklyn Farm PID Number: 35- 119 -21 -43 -0016 1278398v10 Total Sources EXHIBIT B SOURCES AND USES Construction Loan 19,063,200 Owner Equity 7099,800 Other 3,155,000 Total Sources 29,323,000 Total Development Costs Building Construction Construction Costs 22.600.000 Underground Parking Environmental Demolition Site Work Landscaping ROW Utilities Construction Contingency 650,000 Builders Risk Permits Sub -Total Building Construction Land Acquisition Soft Cost Construction City Fees Architectural 1,035,000 Engineering Plat Inspecting Architect Total Soft Construction Soft Cost Sales Broker Draws Broker Commissions Marketing Sales Office Marketing Advertising B -1 23,250,000 2,165,000 EDA RESOLUTION NO. 2004 -06 1278398v10 Sub -Total Soft Cost Sales Soft Cost Operations Legal Operations 478,000 Insurance Operations CLC Plat Other Soft Cost Bank Reimbursable Real Estate Taxes Developers FFE 2,400,000 Sub -Total Soft Cost Operations Construction Loan Interest Construction Loan Closing Costs Title Insurance Mortgage Registration Tax Financing Fee Financing Release Fee Legal Closing Survey Soil Test Land Appraisal Loan Appraisal Loan Disbursement Fee Unit Closing Cost Sub -Total Closing Costs Total Development Costs B -2 29,328,000 EXHIBIT C CERTIFICATE OF RELEASE OF FORFEITURE WHEREAS, the Economic Development Authority of Brooklyn Center (the "Grantor a public body corporate and politic, by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Document Number has conveyed to Brooklyn Hotel Partners, LLC (the "Grantee in the County of Hennepin and State of Minnesota, the following legally described property to wit: and WHEREAS, said Deed incorporated and contained certain covenants and restrictions, the breach of which by the Grantee, its successors and assigns, would result in a forfeiture and right of re -entry by the Grantor, its successors and assigns, said covenants and restrictions being set forth in said Deed and in a Development Agreement executed by and between the Grantor and the Grantee dated 2004 (the "Development Agreement and WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all the conditions required to be satisfied by the Grantee under Section 4.8 of the Development Agreement have been satisfied by the Grantee therein and that the provisions for forfeiture of title and right to reentry for breach of condition subsequent by the Grantor, contained therein, are hereby released absolutely and forever insofar as they apply to the land described herein, and the County Recorder or the Registrar of Titles in and for the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of the contract referred to herein which 1278398v10 C -1 1 EDA RESOLUTION NO. 2004 -06 would result in a forfeiture by the Grantee, its successors and assigns, and right of re -entry in the Grantor, its successors and assigns, as set forth in said Deed, and that said Deed shall otherwise remain in full force and effect. IN WITNESS WHEREOF, the Authority has caused this Certificate of Release of Forfeiture to be executed with by its duly authorized officer as of the day of 2004. 1278398v10 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER By: Its: Executive Director STATE OF MINNESOTA SS COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 2004, by the Executive Director of the Economic Development Authority of Brooklyn Center, a body corporate and politic organized and existing under the Constitution and laws of the State of Minnesota, on behalf of said Authority. Notary Public C -2 EXHIBIT D QUIT CLAIM DEED Corporation Partnership or Limited Liability Company to Corporation, Partnership or Limited Liability Company No delinquent taxes and transfer entered; Certificate of Real Estate Value filed not required Certificate of Real Estate Value No. By County Auditor Deputy STATE DEED TAX DUE HEREON: Date: 2004 (Reserved for recording data) FOR VALUABLE CONSIDERATION, the Economic Development Authority of Brooklyn Center, a public body corporate and politic (the "Grantor hereby conveys and quitclaims to Brooklyn Hotel Partners, LLC, a Minnesota limited liability company (the "Grantee the real property in Hennepin County, Minnesota, described as follows (the "Property 1278398v10 See attached Exhibit A together with all hereditaments and appurtenances belonging thereto (the "Property Grantor's delivery of this Deed and conveyance of title, and Grantee's acceptance of this Deed and title to the Property, are expressly subject to: (1) the terms and conditions and the rights of the Grantor and the obligations of the Grantee under that certain Development Agreement by and between Grantor and Grantee dated 2004 (the "Development Agreement including without limitation the reversionary provisions of Section 11.5; (2) reservation of minerals and mineral rights; (3) real estate taxes and special assessments due and payable in 2004 and subsequent years; (4) applicable zoning laws and ordinances and all other local, state, regional and federal laws and regulations; (5) all easements, covenants, conditions and restrictions of record, if any; and (6) all easements and rights -of -way shown in any recorded plat. Promptly after the conditions set forth in Section 4.8 of the Development Agreement have been satisfied, the Grantor will furnish the Grantee with a Certificate of Release of Forfeiture in the form attached to this Deed as Exhibit B. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction of the requirements of Section 4.8 of the Development Agreement of the Developer to construct the Minimum Improvements, it being the intention of the parties that upon the granting and filing of the Certificate of Release of Forfeiture that the right of reentry contained in this Deed, be forever released and terminated as to the Property. D -1 1 EDA RESOLUTION NO. 2004 -06 In the event that, prior to the execution and delivery of the Certificate of Release of Forfeiture, the Grantee herein shall default under Section 11.2 of the Development Agreement and fail to cure such default within the period and in the manner stated in Section 11.2, then the Grantor shall have the right to re -enter and take possession of the property and to teiuiinate and revest in the Grantor the estate conveyed by this Deed to the Grantee, its assigns or successors in interest, in accordance with the terms of the Agreement. Grantee covenants and agrees that no discrimination because of race or religion, political or other affiliation will be allowed or permitted to occur in the use, sale or rental of any portion of the Property. It is intended and agreed that the above and foregoing agreement and covenants shall be covenants running with the land, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor, its successors and assigns, and any successor in interest to the Property, or any part thereof against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. The Grantor does not know of any wells located on the described real property. 1278398v10 ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER By: Its: D -2 STATE OF MINNESOTA COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 2004, by the of the Economic Development Authority of Brooklyn Center, a public body corporate and politic, on behalf of said body. THIS INSTRUMENT WAS DRAFTED BY: Briggs and Morgan, P.A. (MMD) W2200 First National Bank Building 332 Minnesota Street St. Paul, MN 55101 1278398v10 ss D -3 Notary Public EXHIBIT E PERMITTED ENCUMBRANCES 1. Real estate taxes and special assessments due and payable in 2004 and subsequent years. 2. All easements, covenants, conditions and restrictions of record, if any. 3. All easements and rights -of -way shown in any recorded plat. 4. Reservation of minerals and mineral rights. 5. Applicable zoning laws and ordinances and all other local, state, regional and federal laws and regulations. 6. Those obligations, restrictions and conditions as provided in the Development Agreement. 1278398v10 E -1 1 1 EDA RESOLUTION NO. 2004 -06 1278398v10 EXHIBIT F MORTGAGE THIS MORTGAGE, (the "Mortgage is made as of the day of 2004 by Brooklyn Hotel Partners, LLC, a Minnesota limited liability company, with its principal place of business located at Minnesota, (hereinafter designated as the "Mortgagor in favor of the Economic Development Authority of Brooklyn Center, a public body corporate and politic whose address is 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota, 55430 (hereinafter designated as "Mortgagee" or "EDA WITNESSETH: I. Mortgage Property. That said Mortgagor hereby mortgages and conveys to said mortgagee those certain real property and improvements situated in the County of Ramsey, State of Minnesota, and legally described on Exhibit A attached hereto and made a part hereof, improvements and all personal property and equipment, and all products and proceeds thereof owned by Mortgagee and used in the operation of the Project, as defined below (herein, collectively the "property This Mortgage dated 2004, by and between Lender and Brooklyn Hotel Partners, LLC, is given in consideration of and as security for the payment of TWO MILLION ONE HUNDRED SIXTY -FIVE THOUSAND AND NO /100 DOLLARS ($2,165,000,00) (the "Land Sale Loan receipt of which is hereby acknowledged and which is made to enable Mortgagor to purchase the property to undertake construction of a full service hotel, full service restaurant and indoor water park on the Property located in Brooklyn Center, Minnesota (the 'Project The Loan is evidenced by a Promissory Note "the Note in the amount of TWO MILLION ONE HUNDRED SIXTY -FIVE THOUSAND AND NO /100 DOLLARS ($2,165,000.00) executed by Brooklyn Hotel Partners, LLC, to the order of the Mortgagee of even date herewith with a final maturity date of or such earlier date as is set forth in Section 3.4 of the Development Agreement dated 2004 by and between the Mortgagor and the EDA. II. Covenants. Mortgagor makes and includes in this Mortgage the Statutory Covenants and other provisions set forth in Minnesota Statutes Section 507.15, and, Mortgagor covenants with Mortgagee the following covenants: A. To warrant title to the Property, subject to those matters set forth in Exhibit B attached hereto; B. To pay the indebtedness as provided in the Note; C. To pay all real property taxes; F -1 D. That the Property shall be kept and maintained in good condition, repair, and operating condition free from any waste, misuse, or any hazardous substances or materials as defined in federal and state environmental laws (except for small quantities of substances used for normal household purposes); E. Mortgagor shall keep any buildings on the Property insured against loss by fire and other hazards for at least the sum of the full insurable value of the Property, for the protection of the Mortgagee; and all such policies shall name Mortgagee as loss payee, and provide for not less than thirty (30) days notice to Mortgagee of change in coverage or cancellation of said policy; F. That the whole of the principal sum evidenced by the Note shall become due after the occurrence of an Event of Default, as defined in the Development Agreement, at the option of the Mortgagee, as provided hereafter; G. To pay, when due, the principal on the Note and junior mortgages; H. That the Mortgagor shall not sell or otherwise transfer the Property during the term of the Mortgage without prior written consent of the Mortgagee; I. Failure to abide by this covenant shall result in acceleration of all sums due, foreclosure and direct sale of the Project, or any other remedy of the Mortgagee, legal or equitable; J. (Reserved) K. To comply with nondiscrimination, equal opportunity, affirmative marketing and minority and women's business enterprises set forth in 24 CFR 511.13; L. To comply with federal requirements regarding labor standards and handicapped accessibility (except that if any HUD (as hereafter defined) requirements are more restrictive, .HUD requirements shall apply); M. That each contractor, subcontractor and material supplier comply with all rules, regulations, ordinances and laws bearing on its conduct or work, including Federal Davis -Bacon Labor Standards. R. To comply with the requirements of the Americans With Disabilities Act and all other requirements established by any federal, state, or local governmental authorities. 1278398v10 N. (Reserved) 0. (Reserved) P. (Reserved) Q. (Reserved) F -2 1 1 1 1 EDA RESOLUTION NO. 2004 -06 In case of failure to pay said taxes and assessments, prior liens or encumbrances, expenses and attorney's fees as above described, or to insure said buildings, improvements, and fixtures and deliver the policies as aforementioned, Mortgagee may pay said taxes, assessments, prior liens, expenses and attorney's fees and interest thereon, or obtain insurance, and shall be impressed as an additional lien upon the Property and be immediately due and payable from Mortgagor to Mortgagee and this Mortgage shall from date thereof secure the repayment of such advances with interest. III. Default and Remedies. If a Developer Event of Default (as defined in the Development Agreement and as hereinafter defined) shall occur (and such default or Event of Default shall continue for a period of thirty (30) days (or such longer period as may be permitted pursuant to the terms of this Mortgage) after written notice to Mortgagor from Mortgagee specifying such default or Event of Default), then Mortgagee may (i) declare immediately due and payable the entire unpaid principal balance, and Mortgagee, and its successors and assigns, are hereby authorized and empowered to foreclose this Mortgage by action or advertisement, pursuant to the statutes of the State of Minnesota, in such case made and provided, power being expressly granted to sell the Property at public auction and convey the same to the purchaser in fee simple and, out of the proceeds arising from such sale, to pay the principal of the Note with interest, together with all legal costs and charges of such foreclosure and the maximum attorneys' fees permitted by law; and (ii) exercise any of the remedies available under the Minnesota Uniform Commercial Code. MORTGAGOR HEREBY: EXPRESSLY CONSENTS TO THE FORECLOSURE AND SALE OF THE PROPERTY BY ACTION PURSUANT TO MINNESOTA STATUTES CHAPTER 581 OR, AT THE OPTION OF MORTGAGEE, BY ADVERTISEMENT PURSUANT TO MINNESOTA STATUTES CHAPTER 580, WHICH PROVIDES FOR SALE AFTER SERVICE OF NOTICE THEREOF UPON THE OCCUPANT OF THE PROPERTY AND PUBLICATION OF SAID NOTICE FOR SIX WEEKS IN THE COUNTY IN MINNESOTA WHERE THE PROPERTY IS SITUATED; ACKNOWLEDGES THAT SERVICE NEED NOT BE MADE UPON MORTGAGOR PERSONALLY (UNLESS MORTGAGOR IS AN OCCUPANT) AND THAT NO HEARING OF ANY TYPE IS REQUIRED IN CONNECTION WITH THE SALE; AND EXCEPT AS MAY BE PROVIDED IN SAID STATUTES, EXPRESSLY WAIVES ANY AND ALL RIGHT TO PRIOR NOTICE OF SALE OF THE PROPERTY AND ANY AND ALL RIGHTS TO A PRIOR HEARING OF ANY TYPE IN CONNECTION WITH THE SALE OF THE PROPERTY. MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT BEFORE SIGNING THIS MORTGAGE, THIS SECTION AND MORTGAGOR'S CONSTITUTIONAL RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL; AND THAT MORTGAGOR UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE EFFECT OF SUCH WAIVER. Mortgagee, prior to acceleration, shall furnish written notice to Mortgagor at the address provided above, by Certified or Registered United States mail, postage prepaid, specifying: 1278398v10 1. The event of default; F -3 2. The action required to cure such default; 3. A date, not less than ten (10) days from the date the notice is mailed to Mortgagor, by which such default on or before the date specified in the notice may result in acceleration of the sums secured by this Mortgage and sale of the Property. The notice shall further inform Mortgagor of the right to reinstate after acceleration and the right to bring a court action to assert the non existence of a default or any other defense of Mortgagor to acceleration and sale. If the default is not cured on or before the date specified in the notice, Mortgagee at Mortgagee's option, may declare all of the sums secured by the Mortgage to be immediately due and payable without further demand and may invoke the power of sale hereby granted and any other remedy permitted by applicable law. Notwithstanding Mortgagee's acceleration of the sum secured by this Mortgage, Mortgagor shall have the right to have any proceedings begun by Mortgagee to enforce this Mortgage discontinued at any time prior to the earlier of: this Mortgage; or 1278398v10 a. A sale of the Property pursuant to the power of sale contained in b. A judgment enforcing this Mortgage if: (i) Mortgagor pays Mortgagee all sums constituting the default actually existing under this Mortgage and the Note at the commencement of foreclosure proceedings under this Mortgage and costs and attorneys' fees permitted by law to be recovered by Mortgagee; (ii) Mortgagor cures all breaches of any other covenants or agreements of Mortgagor contained in this Mortgage; and (iii) Mortgagor takes such action as Mortgagee may reasonably require to assure that the lien of this Mortgage, Mortgagee's interest in the Property, and Mortgagor's obligation to pay the sums secured by this Mortgage shall continue unimpaired. Upon such payment and cure by Mortgagor, this Mortgage and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. Any of the following events shall constitute an "Event of Default" under this Mortgage. (a) Mortgagor shall default in the payment of the principal sum of the Note when due and which default shall continue without cure for thirty (30) days following written notice thereof by Mortgagee. (b) Mortgagor shall default in any of the terms or conditions of the Permitted Encumbrances and such default shall not be cured in accordance with the provisions of applicable documents and which default shall continue without cure for thirty (30) days following written notice thereof by Mortgagee. F -4 1 1 EDA RESOLUTION NO. 2004 -06 1278398v10 (c) Mortgagor shall default in the performance or observance of any other agreements or conditions required to be performed or observed by Mortgagor under this Mortgage or the Note which default shall continue without cure for thirty (30) days following written notice thereof by Mortgagee. (d) Any representation or warranty made by a Mortgagor in this Mortgage or any collateral document shall prove untrue in any material respect or materially misleading as the time such representation or warranty was made. (e) Mortgagor shall become unable to pay its debts as the same become due, or shall make an assignment for the benefit of creditors or shall be adjudicated bankrupt; or shall file a voluntary petition in bankruptcy or to effect a plan or other arrangement with creditors, or to liquidate assets under court supervision, or shall have applied for or permitted the appointment of a receiver or trustee or custodian for any of the property or assets of Mortgagor or a trustee, receiver or custodian shall have been appointed for any property or assets of Mortgagor who shall not have been discharged within sixty (60) days after the date of such appointment, or shall have made application to a court of competent jurisdiction to become dissolved. (f) Execution shall have been levied against the Project or any lien creditor's suit to enforce a judgment against the Property shall have been brought and (in either case) shall continue unstayed and in effect for a period of more than sixty (60) days. (g) The Project is materially damaged or destroyed by fire or other casualty and the loss in the reasonable judgment of Mortgagee, is not adequately covered by additional owner equity or insurance proceeds actually collected or in the process of collection. (h) An occurrence of any Developer Event of Default under the Development Agreement. IV. (Reserved) V. (Reserved) VI. Additional Provisions. A. This Mortgage and the Note shall be construed according to the laws of the State of Minnesota. B. (Reserved) C. (Reserved) D. (Reserved) E. Subject to any of Borrower's first Mortgagee's requirements, in the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of F -5 the Project or any part hereof, Mortgagor shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the Loan in balance and rebuild the Project in a manner that provides adequate security to Mortgagee for repayment of the Loan or if such proceeds are insufficient then Mortgagor shall have funded any deficiency, and (b) Mortgagee shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement. If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Loan in a manner that provides adequate security to Mortgagee for repayment of the remaining balance of the Loan. F. Subject to any of Borrower's first Mortgagee's requirements, at the option of Mortgagee after the occurrence of an Event of Default and so long as such default continues, Mortgagor shall deposit with Mortgagee on the first day of each and every month after written notice from Mortgagee to Mortgagor an amount equal to one twelfth (1/12) of the annual taxes, assessments and insurance premiums (the "Charges due on or relating to the Property as estimated by Mortgagee. From time to time out of such deposits and to the extent such deposits are sufficient, Mortgagee will, upon presentation to Mortgagee by Mortgagor of bills therefor, pay the Charges so long as such Event of Default continues. G. The Mortgagor will peuuit the Mortgagee's authorized representatives to enter the Property at all times during normal business hours for the purpose of inspecting the same; provided the Mortgagee shall have no duty to make such inspections and shall not incur any liability or obligation for making or not making any such inspections. H. Mortgagor hereby agrees to defend, indemnify, and hold harmless Mortgagee from and against any and all claims, losses, damages, liabilities, costs, and expenses (including without limitation reasonable Attorneys fees) incurred by Mortgagee as a result of any hazardous materials or substances which are on the Property in violation of applicable environmental laws at any time during which Mortgagor shall be in custody or control of the Property; and this indemnification shall remain in full force and effect and shall survive the repayment of the Loan and the exercise of any remedy by the Mortgagee hereunder including a foreclosure of the Mortgage or the acceptance of a deed in lieu of foreclosure. I. Mortgagor shall have the right and privilege, but not the obligation, to borrow additional funds and to further encumber the security and collateral given and pledged to Mortgagee hereunder at any time, from time to time, and as often as Mortgagor shall deteiiuine, but only with the prior written consent of the Mortgagee, subject to the Permitted Encumbrances identified in Exhibit B. 1278398v10 J. (Reserved) K. If the Mortgagor fails to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which effects the Property or the interest of the Mortgagee therein, or the title thereto, then the Mortgagee, at Mortgagee's option, upon thirty (30) days advance written notice to Mortgagor, may perform such covenants and F -6 1 1 EDA RESOLUTION NO. 2004 -06 agreements defend against and/or investigate such action or proceeding, and take such other action as the Mortgagee deems necessary to protect the Mortgagee's interest. Mortgagee shall be the sole judge of the legality, validity, and priority of any claim, lien, encumbrance, tax assessment, charge and premium paid by it and of the amount necessary to be paid in satisfaction thereof Mortgagee is hereby given the irrevocable power of attorney (which power is coupled with an interest and is irrevocable) effective upon the occurrence of an Event of Default, to enter upon the Property as the Mortgage's agent in the Mortgagor's name to perform any and all covenants and agreement to be performed by the Mortgagor as herein provided. Any amounts disbursed or incurred by the Mortgagee pursuant to this paragraph shall become additional indebtedness of the Mortgagor secured by this Mortgage. Unless Mortgagor and Mortgagee agree in writing to other terms of repayment, such amounts shall be immediately due and payable. Mortgagee shall, at its option, be subrogated to the lien of any mortgage or other lien discharged in whole or in part by the indebtedness or by the Mortgagee under the provisions hereof, and any such subrogation rights shall require the Mortgagee to incur any expense or do any act hereunder, and the Mortgagee shall not be liable to the Mortgagor for any damages or claims arising out of action taken by the Mortgagee pursuant to this paragraph. 1278398v10 F -7 IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed as of the day and year first above written. STATE OF MINNESOTA ss. COUNTY OF RAMSEY "MORTGAGOR BROOKLYN HOTEL PARTNERS, LLC By: Its: The foregoing instrument was acknowledged before me this day of 2004, by the of Brooklyn Hotel Partners, LLC, a Minnesota limited liability company, on behalf of the Company. THIS INSTRUMENT WAS DRAFTED BY: Briggs and Morgan, P.A. 2200 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101 Telephone: (651) 808 -6600 Fax: (651) 808 -6450 1278398v10 F -8 Notary Public 1 1 1 EDA RESOLUTION NO. 2004 -06 DATE: 2003 PROJECT: Brooklyn Hotel Partners, LLC PLACE: Saint Paul, Minnesota AMOUNT: $2,165,000.00 1278398v10 EXHIBIT G LAND SALE PROMISSORY NOTE FOR BROOKLYN HOTEL PARTNERS, LLC FOR VALUE RECEIVED, the undersigned (herein the "Borrower promises to pay to the order of the Economic Development Authority of Brooklyn Center (herein the "EDA or its successors or assigns, the sum of TWO MILLION ONE HUNDRED SIXTY -FIVE THOUSAND AND NO /100 DOLLARS ($2,165,000.00) with no interest on the Maturity Date. The Maturity Date of the Note is the earliest of (1) 1; (2) the date the Borrower sells the Development Property (as such term is defined in the Development Agreement dated 2004 executed by and between the Borrower and the EDA (the "Development Agreement (3) the occurrence of a Developer Event of Default under the Development Agreement; (4) the date the Borrower refinances any permanent loan (not a construction loan) on the Development Property in excess of the original principal amount of the loan; or (5) the date any general or any limited partnership interest in the Borrower is transferred. Said sum was made available to Borrower to enable Borrower to purchase property to undertake the construction of a full service hotel and restaurant and an indoor water park, on certain property (the "Property located in the City of Brooklyn Center, Minnesota. The undersigned reserves the right to prepay at any time all or any part of the principal amount of this Note without the payment of penalties or premiums. IN THE EVENT the undersigned shall fail to pay the principal amount of this Note when due, and such failure shall continue without cure for 30 days following written notice thereof by the EDA, or the undersigned defaults in any term of the Mortgage, as herein defined, or upon the occurrence of a Developer Event of Default under the Development Agreement then the unpaid principal amount of this Note, shall immediately become due and payable in full, at the option of the EDA, without further notice to the undersigned. The EDA may exercise any or all of its rights and remedies to secure repayment of this Note. Failure of the EDA to exercise such rights or remedies shall not constitute a waiver of such default. If this Note be reduced to judgment, such judgment shall bear the lawful interest rate as set by and according to the Minnesota State Statutes. G -1 If the undersigned shall default in the payment of this Note and suit is instituted by the EDA to recover on this Note, the undersigned agrees to pay all costs of such collection, including specifically, but not limited to the EDA's reasonable attorneys fees and court costs. THIS NOTE is secured by a real estate mortgage dated evenly herewith "Mortgage on certain premises described therein located in the County of Hennepin, State of Minnesota, duly filed of record with Hennepin County in the offices of the County Recorder, Hennepin County, Minnesota, and reference is made thereto for additional rights of EDA under this Note. The undersigned agrees that at the option of the EDA, the unpaid principal and accrued interest herein may be declared due and payable in full, without notice, in the event of a voluntary or involuntary transfer or conveyance of the legal or equitable title of the premises secured by the Mortgage, or any part thereof, or the voluntary or involuntary transfer or conveyance of any general partnership interest in the undersigned Borrower, without the prior written consent of the EDA. DEMAND, protest and notice of demand and protest are hereby waived, and the undersigned hereby waives, to the extent authorized by law, any and all homestead and other exemption rights which otherwise would apply to the debt evidenced by this Note. THIS NOTE is made with reference to and is to be construed in accordance with the laws of the State of Minnesota. 1278398v10 G -2 1 1 EDA RESOLUTION NO. 2004 -06 date. 1278398v10 IN WITNESS WHEREOF, this Note has been duly executed by the undersigned as of its "BORROWER" BROOKLYN HOTEL PARTNERS, LLC By: G -3 Its: EDA RESOLUTION NO. 2004 -06 EXHIBIT I BUSINESS SUBSIDY REPORT Report of Brooklyn Hotel Partners, LLC, as Recipient of Business Subsidy This report is required by Section 4.10 of that certain Development Agreement, dated as of 2004 (the "Agreement among the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority and Brooklyn Hotel Partners, LLC (the "Developer and as required by Minnesota Statutes, Section 116J.994, Subdivision 7, as amended. Capitalized terms which are used but not otherwise defined in this report have the meanings given to those under the Agreement. The Authority has under the Agreement granted a certain business subsidy to the Developer. Under the Agreement, the Developer is required to file reports with the Executive Director (1) on March 1 of each year, beginning with the March 1 immediately following the date of the issuance of a Certificate of Occupancy for the Project, being referred to herein as the Benefit Date, and (2) within 30 days after the Compliance Date, namely the date which is two years after the Benefit Date. Each March 1 report is required to report on the prior calendar year, and each other report shall report on the period since the last reporting period. The Developer's Job Goals under Section 4.10 of the Agreement are to create at the Project 30 permanent full -time equivalent jobs within two years from the Benefit Date. These jobs are required to have a wage of at least $7.00 per hour, exclusive of benefits. The Developer hereby certifies to the Authority the following: (1) As provided in the Agreement, the total fair market value of the Subsidy is estimated to be the type of Subsidy is the principal amount of a pay -as- you -go tax increment revenue note, with interest. The public purposes of the subsidy are to further development of the City's commercial and tax base and to create jobs. (2) The hourly wage of each permanent full -time equivalent job which has been created by the Developer at the Project since the Benefit Date, with separate bands of wages, are as follows: 1278398v10 Number of Jobs I -1 Wage Levels Per Hour (3) The cost of health insurance provided by the Developer for the above referenced jobs, separated by bands of wages, is as follows: Number of Jobs (4) If the Developer has not already met the Job Goals, it reasonably expects that it will meet those goals on or before 200 and is taking the following steps to meet the Job Goals: (5) The Developer has no parent corporation. *(6) Other than the subsidy provided by the Authority under the Agreement, there are no other State of Minnesota or "local government agency" grants of subsidy to the Developer for the Project, except for: Grantor Value Grantor Value Verify 1278398v10 Wage Levels Per Hour (8) The Developer hereby agrees to provide upon request such other information as the Commissioner of the Department of Trade and Economic Development of the State of Minnesota may request the Authority or the Developer to provide or as may be required by the Subsidy Law. (9) The Developer represents that it has continuously occupied the Project since its completion, that the Developer has continuously used and occupied the Project, and the Developer expects said occupancy to continue for the foreseeable future. I -2 1 EDA RESOLUTION NO. 2004 -06 1278398v10 (10) The Developer is not in default on the date hereof of its obligations under any subsidy agreement under the Subsidy Law. BROOKLYN HOTEL PARTNERS, LLC By: Its: This report is to be filed with: Economic Development Authority of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2199 Attn: Executive Director I -3 1278398v10 EXHIBIT J CONCEPT RENDERING OF WATER PARK. J -1 1 1 EDA RESOLUTION NO. 2004 -06 Date Activity October 1, 2004 Preliminary Plans Delivered to Authority for Approval February 1, 2005 Construction Plans Delivered to Authority for Approval March 1, 2005 Evidence of Construction Financing Delivered to Authority April 1, 2005 Closing May 1, 2005 Commencement of Construction of Minimum Improvements December 31, 2006 Substantial Completion of Construction of Minimum Improvements 1278398v10 EXHIBIT K TIMELINE K -1 1278398v10 EXHIBIT L RECIPROCAL ACCESS AND PARKING AGREEMENT L -1 1 EDA RESOLUTION NO. 2004 -06 PARKING AND PEDESTRIAN LINK EASEMENT AGREEMENT This Agreement is entered into by ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, a Minnesota public body corporate and politic "EDA and BROOKLYN HOTEL PARTNERS, LLC, a Minnesota limited liability company "Developer as of 200_ (the "Execution Date RECITALS: A. EDA is the owner of certain land located in Hennepin County, Minnesota, which is improved and operated by the EDA as the Earle Brown Heritage Center, a conference and event center. B. Developer is the owner of certain land located in Hennepin County, Minnesota, located immediately adjacent to the Earle Brown Heritage Center which it acquired this date from the EDA and which it intends to develop and operate as a hotel and indoor water park facility. C. EDA and Developer desire to create common parking rights on their respective properties and to provide for the mutual use and enjoyment of an enclosed pedestrian link to be constructed on their properties by Developer. D. In order to encourage the common use and operation of their respective properties, EDA and Developer desire to enter into certain covenants and agreements as a part of a general plan, and to grant to each other certain reciprocal easements, in, to, over, and across their respective properties. EDA and Developer agree as follows: 1. Definitions 1657143v1 AGREEMENT: 1.1 Center. The "Center" shall mean the Earle Brown Heritage Center and the adjacent hotel/indoor waterpark facility, legally described as: Lot 1, Block 1, Brooklyn Farm, according to the plat thereof on file and of record in the office of the Hennepin County Registrar of Titles, Minnesota, and Tracts D and F, Registered Land Survey No. 1594, Hennepin County, Minnesota. 1.2 Conference Facility. The "Conference Facility" shall mean the buildings and improvements comprising the Earle Brown Heritage Center located on the EDA Tract. 1.3 Developer Tract. The "Developer Tract" shall mean the property which is legally described as: Lot 1, Block 1, Brooklyn Farm, according to the plat thereof on file and of record in the office of the Hennepin County Registrar of Titles, Minnesota. The boundaries of the Developer Tract are outlined and labeled "Developer Tract" on the Site Plan. On the Execution Date the Owner of the Developer Tract is Developer. 1.4 Development Agreement. The "Development Agreement" shall mean that certain Development Agreement dated 2004, by and between EDA and Developer relating to the acquisition and development of the Hotel/Waterpark Facility, as the same may be amended, supplemented and extended from time to time. 1.5 EDA Tract. The "EDA Tract" shall mean the property which is legally described as: Tracts D and F, Registered Land Survey No. 1594, Hennepin County, Minnesota. The boundaries of the EDA that are outlined and labeled "EDA Tract" on the Site Plan. On the Execution Date the Owner of the EDA Tract is EDA. 1.6 Facility or Facilities. A "Facility" or "Facilities" shall mean the Conference Facility and/or the Hotel/Waterpark Facility. 1.7 Hotel/Waterpark Facility. The "Hotel/Waterpark Facility" shall mean the buildings and improvements of the hotel and indoor waterpark facility to be constructed and located by Developer on the Developer Tract in accordance with and pursuant to the terms of the Development Agreement. 1.8 Occupant. "Occupant" shall mean any Person from time to time entitled to the use and occupancy of any portion of the land or a building in the Center under an ownership right or any lease, sublease, license, concession, or other similar agreement. 1.9 Owner. "Owner" shall mean each signatory hereto and, after compliance with the notice requirements set forth below, their respective successors and assigns who become owners of any portion of the Center. An Owner transferring all or any portion of its interest in the Center shall give notice to all other Owners of such transfer and shall include in such notice at least the following information: (a) the name and address of the transferee, and (b) a copy of the legal description of the portion of the Center transferred. No such transfer shall affect the existence, priority, validity or enforceability of any lien created under this Agreement or which is recorded against the transferred portion of the Center prior to receipt of 1657143v1 2 1 EDA RESOLUTION NO. 2004 -06 the notice. Until such notice requirement is complied with, the transferring Owner shall (for the purpose of this Agreement only) be the transferee's agent. Each Owner shall be liable for the performance of all covenants, obligations and undertakings set forth in this Agreement with respect to the portion of the Center owned by it which accrue during the period of such ownership, and such liability shall continue with respect to any portion transferred until the notice requirement set forth in this Section is complied with, at which time the transferring Owner's liability for future obligations shall terminate with respect to the portion transferred. The transferee Owner shall automatically become liable for all obligations, performance requirements and amounts which arise subsequent to compliance with the notice requirement. [Should we provide automatic release upon transfer, without notice requirement 1.10 Parking Lot Area. The "Parking Lot Area" shall mean the portions of the EDA Tract and the Developer Tract designated "Parking Lot Area" on Exhibit B. 1.11 Pedestrian Link. The "Pedestrian Link" shall mean the enclosed one story, ground level, climate controlled structure to be installed and constructed by Developer on the EDA Tract and the Developer Tract in accordance with and pursuant to the terms of the Development Agreement providing a pedestrian access corridor between the Conference Facility and the Hotel/Waterpark Facility (such Pedestrian Link being referred to as the "Connection" in the Development Agreement). 1.12 Pedestrian Link Corridor Area. The "Pedestrian Link Corridor Area" shall mean the portions of the EDA Tract and the Developer Tract located within the Pedestrian Link and designated "Pedestrian Link Corridor Area" on Exhibit C. 1.13 Permittee. "Permittee" shall mean all Occupants and the officers, directors, employees, agents, contractors, customers, vendors, suppliers, visitors, invitees, licensees, subtenants, and concessionaires of Occupants insofar as their activities relate to the intended use of the Center. Among others, Persons engaging in any of the following activities will not be considered to be Permittees: 1.13.1 Exhibiting any placard, signs or notice. 1.13.2 Distributing any circular, handbill, placard, or booklet. 1.13.3 Soliciting memberships or contributions. 1.13.4 Parading, picketing, or demonstrating. 1.13.5 Failing to follow regulations relating to the use of the Center. 1.14 Person. "Person" shall mean any individual, partnership, firm, association, corporation, trust, or any other form of business or government entity. 1657143v1 3 1.15 Site Plan. The "Site Plan" shall mean the site plan which is attached to this Agreement as Exhibit A. 1.16 Tract. "Tract" shall mean any portion of the Center owned by an Owner. 2. Term This Agreement shall be effective as of the Execution Date and shall continue in full force and effect until 11:59 p.m. on the date which is 30 years after the Execution Date; provided, however, that this Agreement, and all restrictions and covenants contained in this Agreement, shall be automatically extended on a year to year basis following such date which is 30 years after the Execution Date unless any Owner notifies all other Owners, by notice given at least 4 months prior to the end of any year, that it exercises its option to prevent this Agreement from being so extended; and provided further that, whether or not this Agreement is so extended, the easements referred to in Section 3 shall continue in force and effect in perpetuity as provided in Section 3, except as otherwise specifically provided in subsections 3.3 and 4.6. Upon expiration of this Agreement, all rights and privileges derived from and all duties and obligations created and imposed by the provisions of this Agreement, except as relates to the easements mentioned above, shall terminate and have no further force or effect: provided, however, that the expiration of this Agreement shall not limit or affect any remedy at law or in equity that an Owner may have against any other Owner with respect to any liability or obligation arising or to be performed under this Agreement prior to the date of such expiration. 3. Easements 3.1 Parking. Each Owner, for itself and its successors and assigns, hereby grants and conveys to each other Owner for its use and for the use of its Permittees, in common with others entitled to use the same, a perpetual, non exclusive easement for parking and the passage of vehicles and pedestrians over and across the Parking Lot Area of the grantor Owner's Tract. Such easement rights shall be subject to the following reservations and agreements as well as other provisions contained in this Agreement: 3.1.1 An Owner may at any time make changes to, close off, and/or construct buildings and improvements on, all or any portion of the Parking Lot Area on its Tract without the approval of any other Owner, so long as such change, closing or construction does not unreasonably interfere with any of the easements granted in subsections 3.2 through 3.5, inclusive, and further provided that all of the following conditions are met: 3.1.1.1 The accessibility of the Parking Lot Area for parking and pedestrian and vehicular traffic (as it relates to the remainder of the Parking Lot Area which is not subject to such change, closure or construction), is not unreasonably restricted or hindered. 1657143v1 4 EDA RESOLUTION NO. 2004 -06 3.1.1.2 No governmental rule, ordinance or regulation shall be violated as a result of such action, and such action shall not result in any other Owner being in violation of any governmental rule, ordinance or regulation. 3.1.1.3 The number of remaining parking spaces on such Tract shall be at least equal to the number required by applicable zoning and building ordinances, without regard to or reliance upon the number of parking spaces available on the other Owner's Tract. 3.1.1.4 No change shall be made in the access points between the Parking Lot Area and the public streets; provided, however that additional access points may be created. 3.1.1.5 At least 30 days prior to making any such change, modification or alteration, the Owner desiring to do such work shall deliver to each other Owner copies of the plans therefor. 3.1.2 Each Owner reserves the right to close off its portion of the Parking Lot Area for such reasonable period of time as may be necessary to make needed repairs or as may be legally necessary, in the opinion of such Owner's counsel, to prevent the acquisition of prescriptive rights by anyone; provided however, that prior to closing off any portion of the Parking Lot Area, such Owner shall give written notice to each other Owner of its intention to do so, and shall attempt to coordinate such closing with each other Owner so that no unreasonable interference shall occur. 3.1.3 Each Owner reserves the right at any time and from time to time to exclude and restrain any Person who is not a Permittee from using its Parking Lot Area. 3.1.4 No Permittee shall be charged for the right to use the Parking Lot Area, except pursuant to a lease or other agreement entered into between an Owner and a Permittee. 3.1.5 Parking in the Parking Lot Area shall be limited to automobiles, motorcycles and pickup trucks; no semitrailers, recreational vehicles, boats, trailers or large trucks will be permitted to park in the Parking Lot Area; there shall be no overnight parking, except that overnight parking shall be permitted on the Developer Tract by Permittees of the Developer. 3.1.6 Each Owner shall use good faith, commercially reasonable efforts to require that all employees of its Occupants park in the portion of the Parking Lot Area on its Tract. 3.2 Pedestrian Link. Each Owner, for itself and its successors and assigns, hereby grants and conveys to each other Owner for its use and the use of its Permittees, 1657143v1 5 in common with others entitled to use the same, a perpetual, non- exclusive easement for the passage of pedestrians over and across the Pedestrian Link Corridor Area of the grantor Owner's Tract. Such easement rights shall be subject to the following reservations and agreements as well as other provisions contained in this Agreement: 3.2.1 Once constructed, no Owner shall may any changes, modifications or alterations to the Pedestrian Link except as provided in subsection 4.2. 3.2.2 Each Owner reserves the right to close off its portion of the Pedestrian Link Corridor Area for such reasonable period of time as may be necessary to make needed repairs or as may be legally necessary, in the opinion of such Owner's counsel, to prevent the acquisition of prescriptive rights by anyone; provided however, that prior to closing off any portion of the Pedestrian Link Corridor Area, such Owner shall give written notice to each other Owner of its intention to do so, and shall attempt to coordinate such closing with each other Owner so that no unreasonable interference shall occur. 3.2.3 Each Owner reserves the right at any time and from time to time to exclude and restrain any Person who is not a Permittee from using the Pedestrian Link Corridor Area or its Tract. 3.2.4 No Permittee shall be charged for the right to use the Pedestrian Link Corridor Area. 3.2.5 The Pedestrian Link shall be used only as a pedestrian walkway. 3.3 Temporary Access for Construction. EDA, for itself, its successors and assigns, hereby grants and conveys to Developer, a temporary, non exclusive access easement over and across such portions of the EDA Tract as is reasonably necessary for Developer to construct the Pedestrian Link in accordance with and pursuant to the terms of the Development Agreement. Such temporary easement shall expire 1 year after the Execution Date. 3.4 General Access for Maintenance and Repairs. Each Owner, for itself and its successors and assigns, hereby grants and conveys to each other Owner a perpetual, non exclusive easement over the granting Owner's Tract(s) for the purpose of access to and repairing and/or maintaining any roads, parking areas, portions of the Pedestrian Link and/or other items which are located on the granting Owner's Tract but which, pursuant to the provisions of this Agreement, may be repaired and/or maintained by the grantee Owner. Nothing contained in this subsection shall prevent any granting Owner from at any time making changes to, closing off, and/or constructing buildings and improvements on any portion of its Tract not covered by the easements described in subsections 3.1 and 3.2 so long as (a) the other Owners continuously have reasonable access to the roads, parking areas, portions of the Pedestrian Link and/or other items which are 1657143v1 6 1 EDA RESOLUTION NO. 2004 -06 located on the granting Owner's Tract but which, pursuant to the provisions of this Agreement, may be repaired and/or maintained by the grantee Owner, and (b) such changes, closing and/or construction do not violate any other provisions of this Agreement. 3.5 Access to Certain Buildings. Each Owner, for itself and its successors and assigns, hereby grants and conveys to each other Owner a perpetual, non- exclusive easement over any portion of the granting Owner's Tract which is located within 10 feet of a building on the other Owner's Tract, if any, for the purpose of access to and repairing and/or maintaining the exterior of such building (including, without limitation, the Pedestrian Link); however, the existence of this easement shall not prohibit or restrict the granting Owner from constructing buildings, structures or other improvements within such 10 foot area, in which case the grantee Owner's easement shall not apply to the extent such 10 foot area is occupied by a building, above -grade structure or other improvement. 3.6 Restriction. No Owner shall grant any easement for any purpose set forth in this Section 3 for the benefit of any property not within the Center; provided however, that the foregoing shall not prohibit the granting or dedicating of utility easements by an Owner on its Tract to governmental or quasi governmental authorities or to public utilities; and provided further, that any Owner may grant a private utility easement to any Person so long as (a) the area of such easement is confined to the granting Owner's Tract and (b) such easement does not include any connection to any common utility lines. [Is EDA property subject to other easements for access or parking? Any shared utilities 4. Pedestrian Link 4.1 Design. The Pedestrian Link has been designed and is to be constructed in accordance with and pursuant to the plans and specifications approved by EDA under the Development Agreement. 4.2 Modifications. No change, modification or alteration in the Pedestrian Link or the location of the Pedestrian Link Corridor Area may be made by any Owner without the prior approval of the other Owner, provided that each Owner may make minor non structural changes to the Pedestrian Link on its Tract which do not affect the exterior physical appearance of the Pedestrian Link without the consent of each Owner, provided that all of the following conditions are met: 4.2.1 The accessibility of the Pedestrian Link Corridor Area for pedestrian access is not unreasonably restricted or hindered. 4.2.2 No governmental rule, ordinance or regulation shall be violated as a result of such action, and such action shall not result in any other Owner being in violation of any governmental rule, ordinance or regulation. 1657143v1 7 4.2.3 No change shall be made in the access points between the Pedestrian Link and the Conference Facility or the Pedestrian Link and the Hotel/Waterpark Facility. 4.2.4 At least 30 days prior to making any such change, modification or alteration, the Owner desiring to do such work shall deliver to each other Owner copies of the plans therefor. Notwithstanding the foregoing, the Owner of the EDA Tract, may, without the prior written consent of the other Owner, make changes, modifications or alterations to the Pedestrian Link on its Tract provided an enclosed pedestrian access shall be maintained between the Facilities. Each Owner shall have the right, subject to all applicable laws and the easements and agreements described in this Agreement, to design and construct or expand existing structures on its Tract (other than the Pedestrian Link); provided, however, that any structure so constructed or expanded shall, at a minimum, allow for the repair, maintenance and operation of the Pedestrian Link as contemplated hereby. In the event that an Owner constructs or expands such a structure on its Tract which necessitates an alteration in a previously constructed portion of the Pedestrian Link, any Pedestrian Link alteration shall be solely the expense of the Owner doing the construction or expansion. Any modifications, alterations or changes to the completed Pedestrian Link and connections to the Facilities shall be made in accordance with and subject to all applicable federal, state and local laws, codes and ordinances. 4.3 Certain Operations. The Owner of the EDA Tract shall be responsible for locking and unlocking the door located in the Pedestrian Link at the common boundary between the EDA Tract and the Developer Tract. Such door shall be locked at such times as EDA deems appropriate in its sole discretion. The Pedestrian Link shall have passage doors into the Conference Facility and the Hotel/Waterpark Facility. Said doors shall remain closed (other than to allow passage of pedestrians, or in the event of emergencies) to avoid interference with efficient and proper operation of the respective heating, ventilating and air conditioning systems located within and/or serving the Pedestrian Link from the EDA Tract and the Developer Tract. [specified temperatures for HVAC Each Owner shall be responsible for security in the portion of the Pedestrian Link located on its Tract. The use of the Pedestrian Link shall be subject to such reasonable rules, regulations and restrictions for the equitable use thereof by the Owners and their Permittees as the Owners may, in their reasonable discretion, determine, and such rules, regulations and restrictions shall be enforced in a nondiscriminatory manner. 4.4 Utilities. Any and all utilities and services, including electricity, heating, ventilation and air conditioning, and the equipment necessary for providing the same to the Pedestrian Link shall be installed and provided so that the supply of such utilities and services for the Pedestrian Link shall originate from the Tract on which the Pedestrian Link is located. In other words, each Owner shall provide 1657143v1 8 1 EDA RESOLUTION NO. 2004 -06 such utilities and services from its own Tract to the portion of the Pedestrian Link located on its Tract. The following utilities and systems will serve the Pedestrian Link: electricity, heating, ventilating and air conditioning systems and [Life safety systems Each Owner shall operate, maintain and repair all utilities, services and systems serving the Pedestrian Link that are located within its Tract, as well as all equipment used to monitor such utilities, services and systems, and the costs of such operation, maintenance and repair shall be paid by such Owner. Each Owner shall pay for all utilities serving the Pedestrian Link on its Tract. [Any need to address provision of emergency services from one Tract or the other 4.5 Ownership. Once the initial construction of the Pedestrian Link has been completed, title to the Pedestrian Link shall vest in the Owner, its successors and assigns, of the Tract on which the Pedestrian Link is located. In other words, each Owner shall own and have title to all of the improvements constituting the Pedestrian Link on its Tract, subject to the terms and conditions of this Agreement and subject to the easements created herein. 4.6 Casualty. In the event the Pedestrian Link or any part thereof is destroyed or partially destroyed by fire or any other casualty or occurrence, the Pedestrian Link shall be repaired and restored by the Owner thereof as soon as possible to the extent that upon the completion of the repair or restoration work, the Pedestrian Link, as so restored, shall be in substantially the same condition as immediately prior to the damage or destruction. Notwithstanding the foregoing sentence, in the event that either of the Facilities are destroyed or partially destroyed by fire or other casualty or occurrence and the Owner thereof does not rebuild or restore such Facility as provided in subsection 7.2 (c) (the "non- rebuilding Owner the Pedestrian Link need not be restored or repaired and the same shall be promptly demolished and removed and the ground area of the Pedestrian Link shall be restored to a clean, slightly and landscaped condition by and at the expense of the non rebuilding Owner. In such event the non rebuilding Owner shall also perform the same work (including removal of the Pedestrian Link and ground area restoration) on the Tract of the other Owner and restore the other Owner's Facility to a complete architectural unit at the non rebuilding Owner's sole cost and expense. [Does this seem fair to EDA If insurance proceeds are insufficient to cover the expense of such repairing and restoring as required herein, the non- rebuilding Owner shall, nonetheless, be responsible for the repair and restoration and costs thereof. The Pedestrian Link Corridor Area easement shall terminate only in the event of the demolition or substantial destruction of the Conference Facility or the Hotel/Waterpark Facility, provided, however, that if an Owner intends to replace its Facility and the same is rebuilt within two years of any such demolition or destruction, the easement over the Pedestrian Link Corridor Area created herein shall remain in full force and effect. The rebuilding or restoring Owner shall pay all construction and restoration costs related to (a) disconnecting the Pedestrian Link from any Facility to be demolished, (b) supporting and securing of the Pedestrian Link during demolition and/or restoration of the replacement Facility, (c) repair or replacement of all Pedestrian Link components 1657143v1 9 damaged by the demolition of a portion of the Pedestrian Link or the damaged Facility, and (d) repair and connection of the Pedestrian Link to the replacement Facility. The Pedestrian Link shall be supported and maintained in good and safe condition pending connection to the replacement Facility or restoration. If construction of a replacement Facility has not been commenced within two (2) years from the date of demolition or destruction, the easement granted herein over the Pedestrian Link Corridor Area shall terminate on the second anniversary of the demolition or destruction unless otherwise agreed to by the Owners. 5. Demolition and Construction 1657143v1 5.1 General Requirements. Each Owner agrees that all demolition and construction activities performed by it within the Center shall be performed in compliance with all laws, rules, regulations, orders, and ordinances of the city, county, state, and federal governments, or any department or agency of any of them, affecting improvements constructed within the Center. Each Owner further agrees that neither its demolition nor its construction activities shall do any of the following: 5.1.1 Unreasonably interfere with demolition or construction work being performed on any other part of the Center. 5.1.2 Unreasonably interfere with the use, occupancy or enjoyment of any part of the remainder of the Center by any other Owner or its Permittees. 5.1.3 Cause any other Owner to be in violation of any law, rule, regulation, order or ordinance applicable to its Tract of the city, county, state, federal government, or any department or agency of any of them. 5.2 Pedestrian Link Construction. Developer shall be solely responsible for the construction of the Pedestrian Link in accordance with and pursuant to the terms of the Development Agreement. However, EDA shall have the right to monitor and inspect the construction and construction methods performed on its Tract, and Developer shall use all reasonable efforts to insure that such construction does not unreasonably interfere with access to and the activities of EDA and its Permittees in the Conference Facility. Developer shall coordinate and cooperate with EDA in all construction activities on the EDA Tract to insure minimal interference and damage to the improvements on the EDA Tract. Developer shall be solely responsible for repairing and restoring any damage to the improvements located on the EDA Tract caused by or occurring during such construction. [Should cost of repair work be included in the $1MM to be paid by EDA Developer warrants to EDA that (a) the Pedestrian Link will be constructed and installed in a good and workmanlike manner without material defects and in accordance with all applicable federal, state and local laws, codes and ordinances and using only all new materials and equipment, and (b) the Pedestrian Link and restated facilities and improvements to be installed and/or constructed by or under Developer will be free from material defects for a period of one year beginning 30 days following the issuance of a certificate of occupancy for the Pedestrian Link. 10 1 EDA RESOLUTION NO. 2004 -06 6. Maintenance and Repair 1657143v1 If any work is found to be defective within said one year period, Developer shall correct, repair and restore such work at its sole cost and expense. Developer warrants to EDA that the construction of the Pedestrian Link shall not result in damage or injury to the improvements on the EDA tract, other than the work necessarily required for connection of the Pedestrian Link to the Conference Facility, which Conference Facility shall be restored to substantially the same condition they were in prior to the performance of said work. Notwithstanding the provisions of Section 9 hereof to the contrary, during the construction of the Pedestrian Link, Developer (and not EDA) shall procure and maintain builder's All -Risk casualty insurance on the improvements being constructed by Developer, and otherwise maintain in force and effect the insurance required to be obtained by it as provided in the Development Agreement. 5.3 Indemnity. Each Owner agrees to defend, indemnify and hold harmless each other Owner from all claims, actions, proceedings and costs incurred in connection therewith (including reasonable attorneys' fees and costs of suit) resulting from any personal injury, death or property damage whatsoever occurring to any Person or to the property of any Person arising out of or resulting from the performance of any demolition and/or construction activities performed or authorized by such indemnifying Owner, except to extent claims in respect thereto are waived or released herein. The indemnification contained in this subsection 5.3 shall not include an indemnity for any consequential damages. 6.1 General Responsibility for Maintenance. Except as may be expressly provided otherwise in this Section 6, each Owner shall repair and maintain all of the portions of the Parking Lot Area and the Pedestrian Link located on its Tract in good order, condition and repair, including capital repairs and any repairs necessitated by fire or other casualty. Such maintenance shall include keeping, and each Owner hereby covenants and agrees to keep, all of the portions of the Parking Lot Area and the Pedestrian Link located on its Tract fully illuminated each day from dusk until dawn, 7 days a week. All repairs and maintenance to be performed by an Owner pursuant to this subsection shall be performed at such Owner's sole expense, except as may be expressly provided otherwise in this Agreement. 6.2 Standards for Maintenance. The minimum standard of maintenance for the Parking Lot Area and the Pedestrian Link shall be comparable to the standard of maintenance followed in first -class retail developments of comparable size in the Minneapolis /St. Paul metropolitan area, and in any event in compliance with all applicable governmental laws, rules, regulations, orders and ordinances, and the provisions of this Agreement. The Parking Lot Area and Pedestrian Link improvements shall be repaired or replaced with materials at least equal to the original quality of the materials being repaired or replaced. The maintenance and repair obligation for the Parking Lot Area in any event shall include but not be limited to the following: 11 1657143v1 6.2.1 Road, Driveway and Access Areas. Maintaining all paved surfaces and curbs in a smooth and evenly covered condition which maintenance work shall include cleaning, sweeping, restriping, repairing, resurfacing and overlays. 6.2.2 Debris and refuse. Periodic removal of all papers, debris, filth, refuse, ice and snow to the extent necessary to keep the Parking Lot Area in a first class, clean and orderly condition. 6.2.3 Sign and markers. Placing, keeping in repair, replacing and repainting any appropriate directional signs or markers. 6.2.4 Lighting. Operating, keeping in repair, cleaning and replacing when necessary any lighting facilities in the Parking Lot Area. The maintenance and repair obligation for the Pedestrian Link in any event shall include but not be limited to the following: 6.2.5 Corridor. Maintaining all pedestrian ways and corridors in a smooth and evenly covered condition, which maintenance work shall include cleaning, sweeping, recarpeting, retiling and resurfacing. All corridors, doors and glass shall be periodically cleaned. 6.2.6 Signage and Exits. Maintaining, repairing and replacing all directorial signs and emergency exit signage. 6.2.7 Structure. Maintaining, repairing and replacing when necessary the Pedestrian Link, its structural components, roof, drainage facilities and access doors and windows. 6.2.8 HVAC. Maintaining, repairing and replacing when necessary all heating, ventilation and air conditioning systems. 6.2.9 Lighting and Security. Maintaining, repairing and replacing when necessary all lights in the Pedestrian Link, including emergency lighting, and all security systems. 6.3 Payment for Negligence. Notwithstanding the provisions of subsection 6.1 (entitled "General Responsibility for Maintenance but subject to the provisions of subsection 9.4 (entitled "Waiver of Subrogation in the event any Parking Lot Area or the Pedestrian Link located on an Owner's Tract are damaged or destroyed as a result of the negligence or willful misconduct by another Owner or its contractors, agents, servants, or employees, the Owner who (or whose contractors, agents, servants, or employees) caused such damage or destruction shall reimburse the Owner who owns the Tract on which the damage or destruction occurred for the reasonable cost of the repair of such damage or destruction. 12 1 EDA RESOLUTION NO. 2004 -06 7. Building Improvements 8. Developer Parking 1657143v1 6.4 General Easement Repair Provisions. In addition to any other provisions of this Agreement, any Owner entering another Owner's Tract to perform maintenance or repair pursuant to this Agreement shall comply with the following: (a) any such maintenance and repair shall be performed in such a manner as to cause as little disturbance in the use of the Tract where the repairs and maintenance are being performed as is practicable under the circumstances; (b) the Owner performing such repair and maintenance shall promptly pay all costs and expenses associated with any such repair and maintenance, subject to any provisions for reimbursement which may be expressly contained in this Agreement; (c) the Owner performing such repair and maintenance shall diligently complete such work as quickly as possible; and (d) the Owner performing such repair and maintenance shall promptly clean and restore the affected portion of the easement area to a condition equal to or better than the condition which existed prior to the commencement of such work. 7.1 Standards of Maintenance. After completion of construction, each Owner covenants and agrees to maintain and keep the building improvements, if any, located on its Tract in good condition and state of repair, in compliance with all governmental laws, rules, regulations, orders, and ordinances exercising jurisdiction thereover. 7.2 Casualty. In the event any of the building improvements, other than the Pedestrian Link, are damaged by fire or other casualty (whether insured or not), or if a building on a Tract is being torn down or demolished, the Owner upon whose Tract such building improvements are located immediately shall remove the debris resulting from such event and provide a sightly barrier and within a reasonable time thereafter shall either (a) repair or restore the building improvements so damaged or demolished, or (b) erect other building improvements or improvements in such location, or (c) demolish the damaged portion of such building improvements, remove all debris, and restore the area to an attractive condition. Such Owner shall have the option to choose which of the foregoing alternatives to perform, but such Owner shall be obligated to perform one of such alternatives. Notwithstanding the foregoing to the contrary, the Owner of the Developer Tract may not elect (c) unless such Owner shall pay to EDA all costs and expenses paid by EDA to Developer for the construction of the Pedestrian Link. If such payment is not paid to EDA, the Owner of the Developer Tract shall perform the work as described in either (a) or (b) of this subsection. Developer, for itself and its successors and assigns, agrees that the parking area contained on the Developer Tract shall contain sufficient parking spaces in order to comply with all governmental regulations, ordinances and similar orders relating to parking without reliance on the parking spaces that may be available on the EDA Tract. 13 9. Insurance 1657143v1 9.1 Liability Insurance. Each Owner shall maintain or cause to be maintained in full force and effect with respect to its Tract Commercial General Liability Insurance in the amount of at least $1,000,000 per occurrence, $2,000,000 aggregate for bodily or personal injury or death and for property damage, and umbrella liability in the amount of $5,000,000. Such insurance shall include a provision for severability of interests. [EDA to have its insurance carrier /agent review these specifications make appropriate adjustments for EDA insurance.] 9.2 Casualty Insurance. Each Owner shall maintain or cause to be maintained in full force and effect property insurance with All -Risk coverage including but not limited to casualty, loss or damage by fire, lightning, windstorm, hail, collapse, explosion, riot, vandalism, civil commotion, aircraft, vehicle, smoke and other such hazards covering the Pedestrian Link on the Owner's Tract in the amount of the full replacement value thereof, and with a demolition and increased cost of construction endorsement during any reconstruction period or during modifications, alterations or changes to the Pedestrian Link (hereinafter the "Property Insurance Policy During any period of Pedestrian Link reconstruction, alteration or modification activity, the constructing Owner shall carry such Property Insurance Policy in Builder's Risk form or comparable coverage written on a completed value basis, and shall include broad form contractual liability, products /completed operations, independent contracts, broad form property damage, personal injury, and with "X "C" and "U" exclusions deleted. 9.3 Indemnity Subject to the provisions of subsection 9.4 (entitled "Waiver of Subrogation each Owner "Indemnitor covenants and agrees to indemnify, defend and hold harmless each other Owner "Indemnitee from and against all claims, costs, expenses and liability (including reasonable attorneys' fees and cost of suit incurred in connection with all claims) arising from or as a result of the injury to or death of any Person, or damage to the property of any Person, which shall be caused by the negligence or willful act of such Indemnitor or its contractors, agents, servants, or employees. 9.4 Waiver of Subrogation. Notwithstanding anything to the contrary contained in this Agreement, each Owner (the "Releasing Owner hereby releases and waives for itself and on behalf of its insurer, any other Owner (the "Released Owner from any liability for any loss or damage to all property of such Releasing Owner located upon any portion of the Center, which loss or damage is of the type generally covered by property insurance provided under the Comprehensive Replacement Cost Form, irrespective either of any negligence on the part of the Released Owner which may have contributed to or caused such loss, or of the amount of such insurance required or actually carried. Each Owner agrees to use its best efforts to obtain, if needed, appropriate endorsements to its policies of insurance with respect to the foregoing release; provided, however, that failure to 14 1 EDA RESOLUTION NO. 2004 -06 10. Taxes and Assessments Each Owner shall be responsible for paying all taxes and assessments relating to its Tract, the buildings and improvements located thereon, and any personal property owned or leased by such Owner in the Center. 11. Liens 1657143v1 obtain such endorsements shall not affect any release given pursuant to this subsection. 9.5 General Requirements. The insurance required by this Section shall specifically extend to contractual obligations of the insured party arising out of the indemnification obligations set forth in this Agreement. Such insurance may be carried under a blanket policy or policies which includes other liabilities, properties and locations of such Owner. All insurance required by this Section shall be procured from financially responsible insurance companies licensed to do business in the state of Minnesota. In the event any mechanic's lien is filed against the Tract of one Owner as a result of services performed or materials furnished for the use of another Owner, the Owner for whose benefit such services were performed or materials were furnished agrees to cause such lien to be discharged prior to entry of final judgment (after all appeals) for the foreclosure of such lien and further agrees to indemnify, defend, and hold harmless the other Owner and its Tract against liability, loss, damage, costs or expenses (including reasonable attorneys' fees and cost of suit) on account of such claim of lien. Upon request of the Owner whose Tract is subject to such lien, the Owner for whose benefit such services were performed or materials were furnished agrees to cause such lien to be released and discharged of record within 14 days after the filing of such lien, either by paying the indebtedness which gave rise to such lien or by posting bond or other security as shall be required by law to obtain such release and discharge; if the Owner for whose benefit such services were performed or materials were furnished fails to obtain such release and discharge within such 14 day period, the Owner of the Tract against which such lien was recorded may cause such lien to be released and discharged of record, either by paying the indebtedness which gave rise to such lien or by posting bond or other security as shall be required by law to obtain such release and discharge, in which case the Owner for whose benefit such services were performed or materials were furnished shall immediately upon demand reimburse the Owner of such Tract for all costs and expenses incurred in connection with obtaining such release and discharge. Nothing in this Agreement shall prevent an Owner for whose benefit such services were performed or materials were furnished from contesting the validity of such lien in any manner such Owner chooses so long as such contest is pursued with reasonable diligence. In the event such contest is determined adversely (allowing for appeal to the highest appellate court), such Owner shall promptly pay in full the required amount, together with any interest, penalties, costs, or other charges necessary to release such lien. Notwithstanding anything herein to the contrary, the cost of the initial construction of the Pedestrian Link, and any liens resulting therefrom, shall be paid as provided in the Development 15 Agreement. Provided that EDA fulfills its obligations to pay Developer for certain costs of constructing the Pedestrian Link as provided in the Development Agreement, Developer shall indemnify, defend and hold harmless EDA and the EDA Tract from all mechanics' liens, claims, actions, proceedings and costs incurred in connection therewith (including reasonable attorneys' fees and costs of suit) resulting from the construction and installation of the Pedestrian Link, and any warranty work performed by or under Developer, on the EDA Tract. 12. Consents Unless expressly provided otherwise in this Agreement, whenever consent is required in this Agreement, such consent shall not be unreasonably withheld or delayed. Unless provision is made for a specific time period, consent shall be given or withheld within 30 days of the receipt of the request for consent. If a notice that consent will be refused is not given within the required time period, the requested Owner shall be deemed to have given its consent. If an Owner shall refuse consent, the reasons therefor shall be stated. Except with respect to a consent given by lapse of time, all consents and refusals to consent shall be in writing. Any right to consent contained in this Agreement shall be held by the Owner owning the Tract to which such right relates. Any purchaser of any Tract in the Center shall automatically acquire any right to consent at such time as such purchaser becomes an Owner, unless the selling Owner (a) conveys less than all of its ownership interest in the Center and (b) provides in writing, either in the deed conveying a portion of its ownership interest in the Center or in another agreement executed by the selling Owner and recorded in the Hennepin County Registrar of Title's office prior to or simultaneously with such deed, that such selling Owner retains the right or rights of consent described in such instrument. Until a purchaser becomes an Owner, and only to the extent the selling Owner does not so retain any right to consent, all rights to consent associated with such Tract shall remain with the selling Owner and its heirs, successors and assigns with respect to the non conveyed portion of the Tract. 13. Condemnation 1657143v1 In the event any portion of the Center shall be condemned, the award shall be paid to the Owner owning the land or the improvement taken, except that (a) if the taking includes improvements belonging to more than one Owner, such as utility lines, the portion of the award allocable thereto shall be used to relocate, replace or restore such jointly owned improvements to a useful condition, and (b) if the taking includes easement rights which are intended to extend beyond the term of the Agreement, the portion of the award allocable to each such easement right shall be paid to the respective grantee of such easement. In addition to the foregoing, if a separate claim can be filed for the taking of any other property interest existing pursuant to this Agreement which does not reduce or diminish the amount paid to the Owner owning the land or the improvement taken, then the owner of such other property interest shall have the right to seek an award for the taking of such interest. 16 1 1 EDA RESOLUTION NO. 2004 -06 14. Default 1657143v1 14.1 Force Majeure. The time within which any Owner to this Agreement is required to perform any act shall be extended to the extent that performance of such act is delayed by Force Majeure, but only if such delay was beyond that Owner's reasonable control and was not caused by its fault or negligence. "Force Majeure" shall mean acts of god, fire, abnormal weather, explosion, riot, war, labor disputes, governmental restrictions, inability to obtain necessary materials, or any other cause beyond such Owner's reasonable control. If a delay of performance occurs and such delay is excusable under this provision, the period for performance shall be extended for a time equal to the time lost because of the Force Majeure, but only if the Owner entitled to such extension give, prompt notice to all other Owners of the occurrence causing the delay and if the Owner so excused acts in good faith and uses due diligence to perform. The inability to obtain financing or lack of money shall not constitute Force Majeure. 14.2 Notice; Cure. If any Owner fails to comply with any provision of this Agreement (the "Defaulting Owner then any other Owner (the "Non- Defaulting Owner may upon 30 days' prior written notice to the Defaulting Owner, proceed to cure the default (and shall have a license to do so) by the payment of money or performance of some other action for the account of the Defaulting Owner. The foregoing right to cure shall not be exercised if within the 30 day notice period (a) the Defaulting Owner cures the default, or (b) if the default is curable, but cannot reasonably be cured within that time period, the Defaulting Owner begins to cure such default within such time period and diligently pursues such cure to completion. The 30 day notice period shall not be required if, using reasonable judgment, the Non- Defaulting Owner deems that an emergency exists which requires immediate attention. In the event of such an emergency, the Non- Defaulting Owner shall give whatever notice to the Defaulting Owner as is reasonable under the circumstances. The Defaulting Owner hereby grants to the Non- Defaulting Owner a nonexclusive easement over, across and under any and all parts of the Defaulting Owner's Tract for all purposes reasonably necessary to enable the Non Defaulting Owner (or its agents, contractors or subcontractors) to perform any of the terms, provisions, covenants or conditions of this Agreement that the Defaulting Owner is obligated to perform but has failed to perform after notice and the opportunity to cure pursuant to this subsection. 14.3 Reimbursement of Costs to Cure; Lien. Within 10 days after written demand (including providing copies of invoices reflecting costs) the Defaulting Owner shall reimburse the Non Defaulting Owner for any amount reasonably spent by the Non Defaulting Owner to cure the default, together with interest on such amount. The Non Defaulting Owner shall have a lien upon the Defaulting Owner's right, title, and interest in and to any portion of the Defaulting Owner's Tract to secure payment of all amounts due to the Non- Defaulting Owner under this subsection. The Non Defaulting Owner shall have the right, but not the obligation, to record its lien, but at all times its lien pursuant to this subsection shall be subject and subordinate to (a) the lien of any mortgage or deed of trust 17 15. Notices 1657143v1 held by any institutional lender, or any extension, renewal, modification or refinancing thereof, on the Defaulting Owner's Tract; (b) the leasehold estate created by any lease of all or any part of the Defaulting Owner's Tract; (c) any other lien of record against the Defaulting Owner's Tract as of the date that the Non Defaulting Owner's lien is recorded. The Defaulting Owner shall execute such instruments and documents as the Non Defaulting Owner may reasonably request to permit the recordation of such lien. The Non Defaulting Owner shall have the right to foreclose such lien in the manner provided by laws of the State of Minnesota governing mechanics liens. 14.4 Estoppel. Each Owner shall, within 15 days after written request from another Owner (but not more often than twice in any 12 month period), execute and deliver to the requesting party an estoppel letter certifying whether or not the certifying Owner has filed any liens, as provided in subsection 14.3, against any Tract, and whether or not any other Owner is delinquent in any payments required to be made to the certifying Owner pursuant to this Agreement. 14.5 Interest. Wherever and as often as one Owner shall not have paid any sum payable hereunder to another Owner within five days of the due date, such delinquent Owner shall pay interest on such amount from the due date, through and including the date such payment is received by the Owner entitled thereto, at the lesser of the following: (a) the highest rate permitted by law to be paid on such type of obligation by the Owner obligated to make such payment; or (b) three percent per annum in excess of the interest rate from time to time publicly announced by U.S. Bank National Association "U.S. Bank a national banking association having its main offices in Minneapolis, Minnesota, or its successor, as its reference rate (the "Reference Rate even though U.S. Bank, or its successor, may lend funds to its customers at interest rates that are at, above, or below the Reference Rate. 14.6 Minimization of Damages. In all situations arising out of this Agreement, all Owners shall attempt to avoid and minimize the damages resulting from the conduct of any other Owner. Each Owner shall take all reasonable measures to effectuate the provisions of this Agreement. 14.7 Agreement Shall Continue Notwithstanding Breach. It is expressly agreed that no breach of this Agreement shall (a) entitle any Owner to cancel, rescind, or otherwise terminate this Agreement, or (b) defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value as to any part of the Center; however, such limitation shall not affect in any manner any other rights or remedies which an Owner may have under this Agreement by reason of any such breach. All notices given under this Agreement shall be in writing and shall be sent postage prepaid by either (a) United States certified mail, return receipt requested, or (b) for delivery on 18 1 1 EDA RESOLUTION NO. 2004 -06 the next business day with a nationally- recognized express courier. All such notices shall be sent to the following addresses, until such addresses are changed by 30 days' notice: 1657143v1 To EDA: Economic Development Authority of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 -2199 Attn: Executive Director To Developer: Brooklyn Hotel Partners, LLC Attn: Notices shall be deemed given as of the date such notice is postmarked, if sent by certified mail, or is placed with an express courier, if sent by express courier. If the last day for giving any notice or taking any action required or permitted under this Agreement would otherwise fall on a Saturday, Sunday, or legal holiday, that last day shall be postponed until the next legal business day. 16. Miscellaneous 16.1 Liability Limitation. Notwithstanding any provisions of this Agreement to the contrary, including without limitation the indemnifications and agreements described in subsections 5.3, 6.3 and 9.3, and the requirements for insurance as described in Section 9, the liability of the EDA under this Agreement shall be limited as provided in Chapter 466 of Minnesota Statutes in effect from time to time, and nothing contained in this Agreement shall be deemed to constitute a waiver of such limitations or an agreement by the EDA to its increase or amend its limited liability as described in such statutes. 16.2 Confirmation of Easements. All easements granted under this Agreement shall exist by virtue of this Agreement, without the necessity of confirmation by any other document. Upon the request of any Owner, each other Owner will sign and acknowledge a document memorializing the existence (including the legal description, location and any conditions), or the termination (in whole or in part), or the release (in whole or in part), as the case may be and to the extent applicable, of any easement. 16.3 Negation of Partnership. None of the terms or provisions of this Agreement shall be deemed to create a partnership between or among the Owners in their respective businesses or otherwise, nor shall it cause them to be considered joint venturers or members of any joint enterprise. Each Owner shall be considered a separate Owner, and no Owner shall have the right to act as an agent for another Owner, unless expressly authorized to do so in this Agreement or by separate written instrument signed by the Owner to be charged. 19 1657143v1 16.4 Not a Public Dedication. Nothing contained in this Agreement shall be deemed to be a gift or dedication of any portion of the Center, or of any Tract, or of any portion of the Center or any Tract, to the general public or for any public use or purpose whatsoever. 16.5 Entire Agreement: Enforceability. This Agreement, including any Recitals and any attached Exhibits, all of which are made a part of this Agreement, and the Development Agreement contains the entire agreement of the Owners concerning this subject matter. This Agreement should be read carefully because only those terms in writing in this Agreement are enforceable. No other terms or oral promises which are not in this Agreement may be legally enforced, and no promises, projections, inducements or representations made before the Execution Date will change the terms of this Agreement or be binding on any Owner. No promises or other terms shall be implied in this Agreement. If there is a conflict between the terms of this Agreement and the Development Agreement, the terms of the Agreement will control. 16.6 Amendments. Except as provided otherwise in this Section, this Agreement may only be amended by a written agreement signed by all of the then current Owners, except that a provision of this Agreement which only affects specific Tracts may be amended by a written agreement signed by all of the then current Owners of the affected Tracts. Any amendment of this Agreement shall be effective only when recorded in the county and state where the Center is located. No consent to the amendment of this Agreement shall ever be required of any Occupant or Person other than the Owners whose consent is required pursuant to the provisions of this Section, nor shall any Occupant or Person other than the Owners whose consent is required pursuant to the provisions of this Section have any right to enforce any of the provisions of this Agreement. 16.7 Binding Effect: No Third Owner Beneficiaries. This Agreement shall both bind and benefit the parties to this Agreement and their respective heirs, personal representatives, successors and assigns who become Owners. The Owners do not intend that there be any third party or other beneficiaries of this Agreement. The easements, covenants, agreements, conditions, terms, obligations, limitations and undertakings in this Agreement shall be construed as covenants running with the land. This Agreement is not intended to supersede, modify, amend, or otherwise change the provisions of any prior instrument affecting the Center. 16.8 Waivers: Consents. An Owner shall not be deemed to have made a waiver or consent under this Agreement unless it does so in writing, and the mere failure of an Owner to act to enforce any provision of this Agreement shall not be considered a waiver or consent and shall not prevent that Owner from enforcing any provision of this Agreement in the future. Any waiver or consent under this Agreement shall apply only to the matter expressly waived or consented to, and shall not be deemed to be a waiver of or consent to any subsequent breach or of any other provision of this Agreement. 20 1 EDA RESOLUTION NO. 2004 -06 1657143v1 16.9 Time of the Essence. Time is of the essence with respect to all matters provided in This Agreement. 16.10 Severability. The invalidity or unenforceability of one provision of this Agreement will not affect the validity or enforceability of the other provisions. 16.11 Captions. The section numbers and captions are inserted only as a matter of convenience, and do not in any way define, limit, or describe the scope or intent of this Agreement. Any references in this Agreement to a Section or subsection shall refer to such Section or subsection of this Agreement, unless expressly provided otherwise. 16.12 Interpretation of "including" and "day Wherever the word "including" is used in this Agreement, or in any recital or exhibit to this. Agreement, it shall mean "including without limitation." Wherever the word "day[s]" is used in this Agreement, or in any recital or exhibit to this Agreement, and the word "business" does not appear immediately before such word, such word shall mean "calendar day[s]." 16.13 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 17. No Offer The submission of this Agreement for examination and negotiation does not constitute an offer to enter into an agreement, and this Agreement shall not be binding on any party until it is executed and delivered by each party to this Agreement. EDA and Developer have signed this Agreement below as of the Execution Date. 21 1657143v1 EDA: ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER By: Its: And By: Its: 22 1 EDA RESOLUTION NO. 2004 -06 1657143v1 DEVELOPER: BROOKLYN HOTEL PARTNERS, LLC By: Its: 23 STATE OF MINNESOTA )ss. COUNTY OF HENNEPIN STATE OF MINNESOTA )ss. COUNTY OF HENNEPIN My Commission Expires: This Instrument was Drafted By: Briggs and Morgan, P.A. 332 Minnesota Street W2200 First National Bank Building Saint Paul, MN 55101 1657143v1 ACKNOWLEDGEMENTS This instrument was acknowledged before me on 200_, by the and the of the Economic Development Authority of Brooklyn Center, a Minnesota public body corporate and politic, on behalf of the body. Notary Public This instrument was acknowledged before me on 200 by the of Brooklyn Hotel Partners, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 24 EDA RESOLUTION NO. 2004 -06 1657143v1 Exhibit C (Pedestrian Link Corridor Area) 1 1 EDA RESOLUTION NO. 2004 -06 1278398v10 EXHIBIT N FORM OF TAX INCREMENT NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA N -1 TAX INCREMENT REVENUE NOTE OF 200_ (BROOKLYN HOTEL PARTNERS PROJECT) The Economic Development Authority of Brooklyn Center, Minnesota (the "Authority hereby acknowledges itself to be indebted and, for value received, hereby promises to pay the amounts hereinafter described (the "Payment Amounts to Brooklyn Hotel Partners, LLC, a Minnesota limited liability company, or its registered assigns (the "Registered Owner but only in the manner, at the times, from the sources of revenue, and to the extent hereinafter provided. The principal amount of this Note shall equal from time to time the principal amount stated above, as reduced to the extent that such principal shall have been paid in whole or in part pursuant to the terms hereof. This Note is issued pursuant to that certain Development Agreement, dated as of 2004, as the same may be amended from time to time (the "Development Agreement by and between the Brooklyn Center Economic Development Authority, Minnesota (the "Authority and Brooklyn Hotel Partners, LLC, a Minnesota limited liability company (the "Company The unpaid principal amount hereof shall bear interest from the date of this Note at the simple, non compounded rate of [six percent (6.00) per annum. Interest shall be computed on the basis of a 360 -day year of twelve (12) 30 -day months. The amounts due under this Note shall be payable on each February 1 and August 1, commencing August 1, 2007 to and including February 1, 2011 (the "Final Note Payment Date (as defined in the Development Agreement) (the "Note Payment Dates On each Note Payment Date the Authority shall pay by check or draft mailed to the person that was the Registered Owner of this Note at the close of the last business day of the City preceding such Payment Date an amount equal to [95 of the Tax Increments (hereinafter defined) received by the Authority during the six month period preceding such Payment Date. The Payment Amounts due hereon shall be payable solely from tax increments (the "Tax Increments derived from the Development Property (as defined in the Development Agreement) which are paid to the Authority and which the Authority is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.1799, as the same maybe amended or supplemented from time to time (the "Tax Increment Act This Note shall terminate and be of no further force and effect following the Final Payment Date defined above, on any date upon which the Authority shall have terminated the Development Agreement under Section 11.3 thereof, or on the date that all principal and interest payable hereunder shall have been paid in full, whichever occurs earliest. The Authority makes no representation or covenant, express or implied, that the Tax Increments will be sufficient to pay, in whole or in part, the amounts which are or may become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that no Event of Default under the Development Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder, but such unpaid amounts shall become payable, without interest accruing thereon in the meantime, if said Event of Default shall thereafter have been cured; and, further, if pursuant to the occurrence of an Event of Default under the Development Agreement the Authority elects to cancel and rescind the Development Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to all of the provisions of the Development Agreement, including without limitation Section 11.3 thereof, for a fuller statement of the rights and obligations of the Authority to pay the principal of this Note and the interest thereon, and said provisions are hereby incorporated into this Note as though set out in full herein. This Note is a special, limited revenue obligation and not a general obligation of the Authority and is payable by the City only from the sources and subject to the qualifications stated or referenced herein. This Note is not a general obligation of the City of Brooklyn Center, Minnesota, and neither the full faith and credit nor the taxing powers of the Authority are pledged to the payment of the principal of or interest on this Note and no property or other asset of the Authority, save and except the above referenced Tax Increments, is or shall be a source of payment of the Authority's obligations hereunder. This Note is issued by the Authority in aid of financing a project pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including the Tax Increment Act. This Note may be assigned only with the prior written consent of the Authority. In order to assign the Note, the assignee shall surrender the same to the Authority either in exchange for a new fully registered note or for transfer of this Note on the registration records for the Note maintained by the City. Each permitted assignee shall take this Note subject to the foregoing conditions and subject to all provisions stated or referenced herein. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional statutory limitation thereon. 1278398v10 N -2 1 1 EDA RESOLUTION NO. 2004 -06 IN WITNESS WHEREOF, the Economic Development Authority of Brooklyn Center, Minnesota has caused this Note to be executed by the manual signatures of its Chair and Executive Director and has caused this Note to be issued on and dated 200 Chair Executive Director 1278398v10 N -3 NAME AND ADDRESS OF REGISTERED OWNER DATE OF REGISTRATION SIGNATURE OF EXECUTIVE DIRECTOR Brooklyn Hotel Partners, LLC 200 CERTIFICATION OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued on 200_, was on said date registered in the name of Brooklyn Hotel Partners, LLC, a and that, at the request of the Registered Owner of this Note, the undersigned has this day registered the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. 1278398v10 N -4 EDA RESOLUTION NO. 2004 -06 Parking Landscaping Lighting Signage SAC and WAC Storm Sewer Improvements Soil Corrections Handicap ed Accessibility Im rovements Building Sprinkler System Site Improvements Footing and Foundations 1278398v10 EXHIBIT 0 DESCRIPTION OF ELIGIBLE COSTS 0-1