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Home My WebLink About2001 03-12 EDAP EDA MEETING City of Brooklyn Center March 12, 2001 AGENDA i 1. Call to Order 2. Roll Call 3. Approval of Agenda and Consent Agenda -The following items are considered to be routine by the Economic Development Authority and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes - Commissioners not present at meetings will be recorded as abstaining from the vote on the minutes. l . Regular Session — February 26, 2001 4. Commission Consideration Item a. Resolution Approving Amended and Restated Development Agreement and Assignment of the Same (Tabled at the January 22, 2001, meeting.) • Requested Commission Action: - Motion to adopt resolution. 5. Adjournment e MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION FEBRUARY 26, 2001 CITY HALL 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in regular session and was called to order by President Myrna Kragness at 8:29 p.m. 2. ROLL CALL President Myrna Kragness, Commissioners Kay Lasman and Ed Nelson. Commissioner Bob Peppe was absent and excused. Also present: Executive Director Michael J. McCauley, Assistant City Manager Jane Chambers, Planning and Zoning Specialist Ron Warren, Public Works Director Diane Spector, City Attorney Charlie LeFevere, and Deputy City Clerk Maria Rosenbaum. 3. APPROVAL OF AGENDA AND CONSENT AGENDA A motion by Commissioner Lasman, seconded by Commissioner Nelson to approve the agenda and consent agenda. Motion passed unanimously. 3a. APPROVAL OF MINUTES A motion by Commissioner Lasman, seconded by Commissioner Nelson to approve the February 12, 2001, regular session. Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. 69 AND BROOKLYN BOULEVARD REDEVELOPMENT Executive Director Michael McCauley advised the EDA had received two proposals for a neighborhood retail center for consideration at the corner of 69 h Avenue North and Brooklyn Boulevard. The first proposal is from Christenson Corporation. The second proposal is from Westbrook Development. Both developers are experienced and have indicated they have financing available. • 02/26/01 -1- DRAFT Member introduced the following resolution and moved its . adoption: EDA RESOLUTION NO. 2001-06 RESOLUTION APPROVING AMENDED AND RESTATED DEVELOPMENT AGREEMENT AND ASSIGNMENT OF THE SAME WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the "EDA ") has heretofore entered into a Development Agreement dated February 22, 2000 (the "Original Development Agreement "), by and between the EDA and Talisman Brookdale, LLC, a Delaware limited liability company (the "Developer ") with respect to the renovation of the Brookdale Mall (the "Project "); and WHEREAS, the Developer has requested certain changes to the Original Development Agreement, which changes are necessary to accommodate the Developer in obtaining financing for the Project, which changes are more particularly set forth in an Amended and Restated Development Agreement approved by the EDA on December 21, 2000 (the "Restated Development Agreement "); and WHEREAS, the Developer has also requested that the EDA consent to the assignment of its interest in the Restated Development Agreement to Talisman Brookdale ® Associates, LLC, a Delaware limited liability company (the "New Developer ") (the "Developer Assignment "), and the New Developer's assignment of its interest in the Restated Development Agreement to Fleet National Bank, (the "Lender "), which is making a mortgage loan to finance the Project (the "Lender Assignment "). NOW THEREFORE, BE IT RESOLVED by the EDA in and for the City of Brooklyn Center as follows: 1. The above referenced Restated Development Agreement, in substantially the form submitted on December 21, 2000, with the changes set forth in Exhibit A attached hereto and incorporated by reference, is hereby approved and the President and Executive Director are hereby authorized to execute the same. 2. The Developer Assignment and Lender Assignment are hereby approved and the Executive Director is hereby authorized to execute the Estoppel Certificate acknowledging the Developer Assignment and Lender Assignment in substantially the form as set forth in Exhibit B attached hereto and incorporated by reference, all on behalf of the EDA. i EDA RESOLUTION NO. 2001-06 • Date President The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. CERTIFICATE • STATE OF MINNESOTA COUNTY OF HENNEPIN I, the undersigned, being the duly qualified Secretary of the Economic Development Authority of Brooklyn Center, Minnesota, hereby certify that the above resolution is a true and correct copy of the resolution as adopted by the Board of Commissioners of the Economic Development Authority of the City of Brooklyn Center on March 12, 2001. WITNESS my hand officially as the Secretary of the Economic Development Authority of Brooklyn Center this 13 day of March, 2001. Secretary • EXMBIT A f Developer means Talisman Brookdale, LLC, a Delaware limited liability company, its successors and assigns; Development Property means the land legally described on Exhibit B attached hereto; Eliaibl,e tmnrovements means the acquisition of parcels containing buildings which are structurally substandard, and any . adjacent parcels necessary to provide a site of sufficient size to permit development, relocation of utilities, construction of parking improvements, soil correction, demolition, and • rehabilitation of structures, and site preparation undertaken on the Development Property in connection with the Minimum Improvements as further described on Exhibit C attached hereto, but only to the extent the Developer provides evidence satisfactory to the Authority that such activities satisfy the requirements of Minnesota Statutes, Section 469.176, subd. 4; Eliaible Tenants mean the retail businesses listed on Exhibit F attached hereto, or retail business of the same or similar quality acceptable to the Authority as evidenced by a written acceptance executed by the Authority; Event of Default means any of the events described* in Section 8.1; Final Pavment Date means. the earlier of (a) the date all principal and accrued interest is paid on the Note, or (b) 4& day= after "te -"ty reeeives- per. the ga ".ty th seeen a t l _... t=es --€sr t'�� taa_�s rafa` -1 sa_ C9$&; =_s �. 3�:. - ef - pe ar a_ ..; the NnfiP Paymant_., which is the tenth Note Payment Date after s uanne f he Note; provided that Final Note Pa vment the i.. s ._. _ �. t .. t _......._ Date shall nr.nur not later than a date in calendar year 20.09; Minimum Improvements means the reconfiguration of the Brookdale Mall and the creation of open spaces and other improvements as more particularly described on Exhibit D attached hereto; Note Pavment Date means 45 days after the City receives the 'property. tax settlements from the County, commencing with the first property tax settlement is thrc taxas pryable year 23$4 after the date of issuance of the Note and continuing through the Final Payment Date_provided that the i r.st Note payment Date shall nit occu earIA or t han a_ dat e- i n calendar y ear 2004; Protect means the buildings and improvements is located on the Development Property, including the Minimum Improvements to be constructed thereon; '. State means the State of Minnesota; 988289.RED V9 to vs; 1/18/01 4 EXHIBIT A ARTICLE VI TAX INCREMENT ASSISTANCE; PAYMENTS TO AUTHORITY Section 6.1. Preconditions to Issuance of Tax Increment Note The Developer will undertake and construct the Eligible Improvements on the Development 'Property at a cost of not less than $2,900,000. In order to assist with the costs of the Eligible Improvements, 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) $2,900,000, or (b) the capital costs of the Eligible Improvements. The tax increment assistance shall be paid on the terms and conditions set forth in Section 6.2 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 provided a copy-to the Authority of 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 and the Adjacent Development Property will, upon ' substantial completion of the Daytons Minimum Improvements, have a total aggregate market value of at least $75,000,000; (d) -The Developer has paid all of the Legal and Administrative Expenses; (e) The Developer shall be in material compliance with all the terms and provisions of this Agreement; (f) The construction of the Minimum Improvements is completed,' and the Authority has issued the Certificate of Completion pursuant to Section 3.4 hereof; (g) T-be At the time of iss of the Note, the ment Property Develo P ert is at least 75% leased to Eligible Tenants at the tir.0 ci i ssuanee ef the K and the Adjacent Property a "cll be is occupied with eper :tin g department stores oy erated by Dayton's, Penny's, Sears, Kohls, and or another Mervyn ! s at the time of s suanee- ei tk� Note, , nationally recognized retailer acceptable to the Authority; 988288.PM V9 to V8; 1/18/01 1 5 EXHIBIT A (h) The Developer shall have spent at least $13, 000,000 of its equity to pay the costs of the Minimum Improvements; (i) The Assessment Agreement is recorded in the Hennepin County Recorder's office; (j) The City has a;; awed a Minimum Improvements are in compliance with the planned unit development for the Development Property and rr eeelved ev idenee aee tak a t o —r4 that pie a'_eie : h-_e !, ` c fc— a ar?se—n fir the Pre =d(the "PIID "), ineludinct but not limited to the nark.inc reguirements set forth in the PIID: and (k).The Davtons Minimum Improvements are completed and the Authority has received an MAI appraisal from a nationally recognized expert in regional mall valuation showing the combined market value of the Development Property and the Adjacent Development Property at not less than $75,000,000; and • (1) The Developer shall have closed on the financing outlined in the financing commitment attached hereto as Exhibit L. The Developer acknowledges that these. condi t ions must, he satisfied ,on or before August 1. 2003, Section 6.2. Tax Increment Revenue Note. (1) Upon satisfaction of the conditions in Section 6.1 hereof, the Authority will reimburse the Developer for the lesser of $2.,900,000•or the costs of the Eligible Improvements through the issuance of the Authority's Tax Increment Revenue Note in substantially the form attached to this Agreement as Exhibit I. (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 8.00% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. (3) The principal of the Note and interest thereon shall be payable solely from Tax Increments. On each Note Payment Date, and subject to the provisions of the Note, the City shall pay, against the accrued and unpaid interest then due on the Note and then principal of the Note then to reduce t p p , the lesser of (a) 80% 988288.RED v9� to vs 1 /2.8 /01 16 EXHIBIT A ARTICLE VII J PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 7.1. Status of Developer; Transfer of Substantiallv All Assets,. As security for the obligations of the Developer under this Agreement, the Developer represents and agrees that prior to the Termination Date, the Developer will maintain its existence as a Delaware entity and shall not consolidate with or merge into another entity and shall not dissolve or otherwise dispose of all or substantially all of its assets; provided that the Developer may consolidate with or merge into another corporation or sell or otherwise transfer to a partnership. limited liabilit co=anv corporation organized under the laws of one of the United States, or an individual, all or' substantially all:of its assets as an entirety and thereafter dissolve and be discharged from liability hereunder if the transferee partnership, corporation or individual assumes in writing all of the obligations of the Developer under this Agreement and the Assessment Agreement. Section 7.2. Prohibition Aaainst Transfer of Property and Assignment of Agr eement. For the foregoing reasons the Developer represents and agrees that prior to the Termination Date: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority. (b) The Authority shall be entitled to require, except as otherwise provided in Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the -reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer.. 988288.8= V9 to V8; 1/18/01 21 i EXHIBIT A i filing thereof; or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. (g) The Holder of any mortgage on the Development Property, or any improvements thereon, or any portion thereof, commences foreclosure proceedings or accepts a deed in lieu of foreclosure as a result of any default under the applicable mortgage - documents. (h) On any date on or after January 2, 2004, the combined Market Value of the Development Property and Adjacent Development Property is less than $75,000,000; (i) An Anchor Tenant vacates the Adjacent Development Property and is not replaced by another nationally recognized retailer acceptable to the Authority within 12 months; '(j) More than 20% of the Development Property is leased or otherwise occupied by any businesses which is not an Eligible Tenant; (k) any AAy part of the Development Property is leased in violation of the covenant in Section 2.2, clause (14) hereof; o The precond set forth in Sectio 6.1 hereof to -the iss the Note are .fort h on or before April 1. 2003. Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 occurs and is continuing, the Authority may take any one or more of the following' actions after the giving of thirty (30) .days' written notice to the Developer, but only if the Event of Default has not been cured within said thirty (30) days, or, if said Event of Default cannot reasonably be cured within the time, the Developer fails to give assurances reasonably satisfactory to the Authority that the Event of Default will be cured within period of time reasonably acceptable to the Authority, but in any event not to exceed 90 days; (a) The Authority may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the Authority, that the • Developer will cure its default and continue its performance under this Agreement. 988288 V9 to V8; 1/18/01 25 I EXHIBIT A i ARTICLE IX NS ADDITIONAL PROVISIONS _ Section 9.1. Restrictions on Use. The Developer agrees for itself, its successors and.assigns and every successor in interest to the Development Property, or any part. thereof, that the Developer and such successors and assigns shall use the Development Property as a retail shopping mall. Section 9.2. Conflicts of Interest.• No member of the governing body or other official of the Authority or the City shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, 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 or the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 9.3 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 9.4. 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 (a) in the case of the Developer is addressed to or delivered personally to: Talisman Brookdale, LLC 1500 San Reno Avenue Suite 135 _ Coral Gables, Florida 33146 The Authorit ag rees to provide a coW of anv notice.sent to the Devel r t 1pi.4e11ty Inveqtme st the a ddress set forth below prov ided that, failure t copy Fidelity Investments on any,, p i - p - • notice to the nPVelo ehale nn L%C -qde or delay the Authority -- : - r s - - r - -; - - --- from exer cisin g any o f its remedies under this Agreement: 988288.RM V9 to V8; 1/18/01 2 ti EX WIT A a. Fidelity Investments (b) in the case of the Authority is addressed to or delivered personally to the Authority at: Economic Development Authority of Brooklyn Center, Minnesota •6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 ATTN: 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 5.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.6. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 9.7. Expiration. This Agreement shall expire on the Termination Date unless earlier terminated or rescinded in accordance with its terms. Section 9.8. Provisions Survivina Rescission or Expiration. Sections 8.5 and 8.6 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 9.9. Supercedina Effect. The provisions of this. Amended and Restated Development Ag shall supercede and, re pla,cek the rravisions of the Devel_opM nt Agreement dated January 22. 2000. by and between the Authority and the Developer as of the date of this Agreement. 988288.RED V9 to V8; 1/18/01 29 EXHIBIT B ESTOPPEL CERTIFICATE TO: Fleet National Bank (hereinafter, the "Agent "), as agent for itself, Morgan Guaranty Trust Company of New York, and any other existing or future co- lenders thereof (hereinafter, individually and collectively referred to as the "Lenders "), in anticipation of, and in connection with, the establishment of the Loan (as defined herein); and [INSERT ADDRESS[ Talisman Brookdale Associates LLC (hereinafter, the "Developer ") 1500 San Remo Avenue Suite 135 Coral Gables, Florida 13546 "Loan" by Fleet National Bank as Agent for itself, Morgan Guaranty Trust Company of New York, and the other Lenders to Developer, as "Borrower ", as such Loan is to be evidenced by, amongst other documents, instruments, and agreements a certain Construction and Interim Loan Agreement (hereinafter, the "Loan Agreement ") by and among the Developer, the Agent and the Lenders and certain Promissory Notes (hereinafter, the "Notes ") payable to the Lenders in the aggregate principal amount of Sixty Million ($60,000,000.00) Dollars, and such Loan is to be secured by a certain Construction Mortgage and Security Agreement (hereinafter, the "Mortgage ") whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, the Development Property (as defined hereunder), a certain Collateral Assignment of Leases and Rents (hereinafter, the "Assignment of Leases ") whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, all leases, subleases, rental agreements or other occupancy agreements of the Development Property, and a certain Collateral Assignment and Security Agreement (hereinafter, the "Collateral Assignment ") whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, all licenses, permits, approvals and contracts relating to the Developer and the Development Property (hereinafter, the Mortgage, the Assignment of Leases, the Collateral Assignment, together with any other documents and agreements granting the Agent, on behalf of the Lenders, a security interest in and to the Development Property, the "Security Documents ")(hereinafter, the Loan Agreement, the Notes and the Security Documents, together with any and all documents executed in connection therewith, the "Loan Documents "). " Amended a Restat Development Agreement '-' dated Febru ", 2nnn December 21_, 2001, by and between Broo Economic Development Authority of Brooklyn Center (hereinafter, the "Authority") and Developer, as successor in interest to Talisman Brookdale LL C, as amended by car'�in . Jm try and l,g Developer. (the "Development Ag reement"). RE: Brookdale Shopping Center Brooklyn Center, Minnesota (hereinafter, the "Development Property") Ladies and Gentlemen: This estoppel certificate and agreement (hereinafter, the "Agreement ") is furnished by the Authority to Developer, Agent and the Lenders in anticipation of, and in conjunction with, the establishment of the Loan. The Authority understands that Developer, Agent and the Lenders are relying upon the Authority's statements and agreements in connection with the establishment of, and maintaining of, the Loan. 1248957vR; V2 to V 1; 1/17/01 I EXHIBIT B The Authority hereby represents and certifies to, and agrees with, Developer, Agent and Lenders as set forth below. 1. The Development Agreement has not been assigned, amended, supplemented or modified b_y_the Au thorit v in any way. 2. A true and complete copy of the Development Agreement, including, all amendments and modifications, is attached hereto as Exhibit A. There are no side letters or other arrangements by and between the Authority and the Developer. 3. The Development Agreement is presently in full force and effect according to its terms and is the valid and binding obligation of the Authority. 4. The Authority hereby acknowledges and consents to the transfer of the entire interest in and to the Development Agreement from Talisman Brookdale, LLC to Talisman Brookdale Associates LLC p ursuant to t he assignment and assumption ag reement in the for attached hereto as Exhibit B. 5. To the actual knowledge of the undersi c To t h e h e8t r*ho Authority's v,,,,. ledge there does not exist any default under the Development Agreement, nor does there exist any state of facts which with the passage of time or the giving of notice, or both, could constitute a default under the Development Agreement. 6. The Authority has received, reviewed and approved the Construction Plans (as defined in the Development Agreement) in accordance with the terms and provisions of the Development Agreement. Barring any material change in the Construction Plans ' as provided by the terms and provisions of the Development Agreement, the Authority hereby acknowledges that no further receipt, review or approval of any of the Construction Plans is required by the Authority. The ® approva given b y the Au thority d oes not relieve th Devel oper,of its obligat approva_I_of a other City de or to c with an o ther_fe d_ e ral� state o local la_ws or4inan or re gulations. 7. T the actu knowledge of the undersi all 7 A 11 conditions under the Development Agreement to be satisfied by the Developer as of the date hereof, have been satisfied, including, without limitation, the timely commencement of construction of the Minimum Improvements (as defined in the Development Agreement). 8. The Authority hereby acknowledges and consents to the establishment of the Loan with the Agent, on behalf of the Lenders, including, without limitation, the Security Documents executed in connection therewith pursuant to which the Development Property, and all rights and privileges associated therewith, and all proceeds thereof, shall be granted to the Agent, on behalf of the Lenders, as security for the Loan. 9. The Authority hereby acknowledges and agrees that upon the receipt of written notice from the Agent of the occurrence of an event of default under the Loan Documents, the Authority shall make payments under the Tax Increment Note (as defined in the Development Agreement) directly to the Agent, at such place as designated, in the Agent's notice. 10. Notwithstanding the terms and provisions of the Development Agreement, the Authority hereby acknowledges and agrees that exercise of the Agent's and the Lenders' rights and remedies under the Loan Documents, including, the foreclosure of the Development Property and subsequent assignment thereof, shall not constitute a default under the Development Agreement. In addition, the Authority hereby acknowledges and agrees that Authority will attorn to any such third party successor to the Agent, and shall recognize such third party successor, thereafter as the "Developer" under the Development Agreement to the extent such party assumes the obligations of the Developer ther-waidgr. under. the D A greement a nd ag rees to be bound by the ter of the related Assessm A greement. 1248957vR; V2 to V1; 1/17/01 -2- EXMBIT B II. The Authority hereby acknowledges and agrees that notwithstanding the terms and provisions of the Development Agreement, to the extent the Development Property is destroyed by fire or other casualty, and the insurance proceeds thereof are not used to restore the Development Property, the Authority's rights in and to such insurance proceeds shall be limited to those insurance proceeds not otherwise applied by the Agent, on behalf of the Lenders, to payoff the outstanding Loan. 12. The Authority hereby acknowledges and agrees that the Authority shall promptly forward to Agent as holder of the Security Documents relating to the Development Property, at Agent's address designated above or such other address as Agent may from time to time designate to the Authority in writing ( "Agent's Address "), copies of all notices given by the Authority to the Developer pursuant to the Development Agreement. The Authority agrees that no notice from the Authority to Developer under the Development Agreement shall be effective unless and until a copy of the same is given to Agent at Agent's Address. The Authority further agrees that the curing of any Developer default by the Agent, any Lender or any successor thereof, within obtain possession and title, to the Pavelopmel# Pr-epeny, if Agent, e� behalf Af the I andaps, @!eGts to do th time periods specified in the Dev ellom ent A greement shall be treated as performance by the Developer; provided however, that if suc Developer default cannot reasonably_ be cured _by the Lender without the Lender obtaining-possession and tale to the Development Property_, then_the.cure perio set fo in the Developme_nt_A shall be extended_by such number of days as is reasonably necess for the L ender to ac- uire possession and titl _to th e_Dey_elopment Property_. 13. The Authority hereby agrees to provide the Agent, on behalf of the Lenders, with an estoppel certificate or certificates, in similar form and substance to this Agreement, as such may be reasonably requested by the Agent from time to time. 14. This Agreement shall inure to the benefit of the Developer, the Agent and the Lenders, their successors and assigns (including, without limitation, a purchaser at or after foreclosure), and shall be binding upon the Authority, and the Authority's successors and assigns. DATED: as of , 2001 and executed as an instrument under seal. WITNESSED AUTHORITY: ECONOMIC DEVELOPMENT AUT1ORITY OF BROOKLYN CENTER By: Name: Its: Hereunto Duly Authorized 1248957vR; V2 to V1; 1/17/01 -3- EXHIBIT B The undersigned, the Developer designated above: (i) hereby ratifies and confirms, to the best of its knowledge, all of the certifications and representations of the Authority set forth in the foregoing Agreement; (ii) agrees that Authority shall have the right to rely on any notice or request from Agent without any obligation to inquire as to whether or not a default exists and notwithstanding any notice from or claim of Developer to the contrary. (iii) confirms, to the best the Developer's knowledge, there does not exist any default under the Development Agreement nor does there exist any state of facts which with the passage of time or the giving of notice, or both, could constitute a default under the Development Agreement; and (iv) consents to, and agrees to be bound by, this Agreement. Executed and delivered as a sealed instrument as of the day of , 2001. WITNESSED: BORROWER: TALISMAN BROOKDALE ASSOCIATES LLC By: TALISMAN BROOKDALE, LLC, its Managing Member, By: CS BROOKDALE REALTY CORP., a . Managing Member By: James A. Schlesinger, President By: BZA BROOKDALE MALL CORP., a Managing Member By: Robert W. Claeson, Vice-President • I248957vR; V2 to V 1; 1/17/01 4- EXHIBIT B EXHIBIT A Copy of Development Agreement (including all amendments) • 1248957vR; V2 to V1; 1/17/01 -5- City of Brooklyn Center A Millennium Community To: Mayor Kragness and Council Members Las5 and Peppe From: Michael J. McCauley City Manager Date: January 19, 2001 Re: Talisman Amendments and Estoppel Certificate Attached please find a copy of a letter dated January 16, 2001 from James A. Schlesinger requesting additional changes to the Restated Development Agreement - a letter dated January 16, 2001 to Mary Dyrseth of Briggs & Morgan regarding the requested changes - a letter dated January 19, 2001 from Mary Dyrseth i - red -lined copy of Amended and Restated Development Agreement showing changes - estoppel certificate - just those pages with changes, other than dates of signature - full test of current Exhibit E (Dayton's Improvements). i Some of the changes are technical. However, as indicated in Mr. Schlesinger's letter, Talisman is requesting a significant change to allow them to have the note issued even if } all 5 anchor stores were not in place. In the alternative, Mr. Schlesinger requested an extension of time before the issuance of the note to allow finding a replacement anchor within 12 months. Ms. Dyrseth has reviewed these requests and indicated that issuing the note without having all anchors occupied did not appear reasonable. She has drafted an alternate for the Authority's consideration that extends the time period in which the note can be issued without increasing the number of total years of increment available to pay the note. Having a completed project with all anchor stores occupied has been a key element of the j agreement. Mr. Schlesinger is correct that a subsequent loss of an anchor store does not become a default suspending payment under the note unless such vacancy continues for a period in excess on 12 months. The Council only recently revised the language in the Restated Development Agreement to remove the requirement that the anchor stores have minimum terms left on operating agreements at the time that the note is issued. To summarize what is required under the Restated Development Agreement before the tax increment note is issued: mall and anchors must have minimum value of.$75,000,000 compliance with all terms of agreement 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 construction of all specified minimum improvements and a certificate of completion 75% of property leased to eligible tenants developer expended $13,000,000 of its own equity Dayton's, Penny's, Sears, Kohls, and Mervyn's must be operating stores at the time of the note's issuance. After the note is issued, it is, as mentioned above, not a default if an anchor store is vacated unless the developer is unable to replace the anchor with another nationally recognized retailer acceptable to the Authority within 12 months of the vacation. The issue before the Authority is whether you would accept the issuance of the tax increment note if one of the anchor tenants was vacant at the time the note was issued or would extend the time for issuance of the note until a new anchor tenant was found or 12 months, whichever was shorter. This would not change the nature of the note: pay as you go and would not extend the number of years of increment available: 5 years. Talisman is also requesting approval of Talisman Brookdale Associates LLC as the developer instead of Talisman Brookdale LLC. Mr. Schlesinger has indicated that this is for purposes of his loan. I have not yet seen documentation on Talisman Brookdale Associates LLC. Assuming it is the same conglomeration of partnerships and limited liability corporations, there should be no problem with that change. Another change requested by Talisman would remove the requirement in Exhibit `B" that the ceiling be replaced at Dayton's. Mr. Schlesinger has advised that asbestos may impact whether the ceiling could be changed. The required level of improvement expenditures would be unaffected. Before an agreement can be finalized Talisman will have to: - provide a new agreement with Dayton's; - demonstrate that Talisman Brookdale Associates LLC and Talisman Brookdale LLC are essentially the same entities; and - demonstrate that the assignment is for the purpose of obtaining financing. As indicated, the specific issues being presented to the Authority are the requests from Talisman to: - either issue the note whether the anchors are occupied or not at the conclusion of the project or allow until 'August 2003 for the note to be issued, with increment available 2004 -2008 or 2005 -2009 - assignment from Talisman Brookdale LLC to Talisman Brookdale Associates LLC. TALISMAN COMPANIES, L.L.C. f COMMERCIAL DEVELOPMENT, LEASING & MANAGEMENT January 16, 2001 Mr. Michael J. McCauley City Manager City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2199 Re: Brookdale Center Development Agreement Dear Mike: Pursuant to our conversation, my lenders and tenants request the following changes to the Development Agreement: 1) Section VI, 1(g). My lender has requested that the clause requiring the department stores be occupied and operating at the time of issuance of the note allow for a 12 month replacement provision. Such a provision is currently provided for in the Default section of the agreement, Art. VIII, (f) (i). Talisman cannot control bankruptcy and the like and would request it be allowed to replace a department store by a nationally recognized retailer in your reasonable discretion. 2) Removal from Exhibit `B" the two minimum improvement clauses to the Dayton's store. (a) "new ceiling, layouts and materials" and (2) "new ceiling layouts ". Dayton's may not need to remove all the ceiling to achieve their desired "look" and may need to revise lighting in certain areas only. The layout and feel of the store needs to rest in the hands of Dayton's and its designers — I certainly don't feel qualified to tell them how to re- design their store. The commitment to spend $8.1 million remains intact, as does their enthusiasm to create a first rate department store. Thank you for your help and cooperation. Yours very truly, Talisman Brookdale, LLC *siden?t e nger 1500 SAN REMO AVENUE, SUITE 135 • CORAL GABLES, FLORIDA 33146 • (305) 662 -9559 • Fax (305) 662 -9616 Office of the City Manager City of Brooklyn Center A Millennium Community Michael J. McCauley City Manager January 16, 2001 Ms. Mary Dyrseth Attorney at Law Briggs and Morgan 2200 First National Bank Building - 332 Minnesota Street St. Paul, MN 55101 Dear Ms. Dyrseth: Today I spoke with Jim Schlesinger who requested several changes in the restated development agreement. Several of the requests appear to be rather simple and not impacting the terms of the agreement. Two other requests are substantial and would require approval by the Economic Development Authority (EDA), since they affect substantive terms. The requests to correctly identify Talisman as a Delaware, rather than a Minnesota, entity in Section VII.1 and changing Section VI.10) to reference the already approve planned unit development would appear to be changes that could be undertaken. �. Please review the request to add Fidelity Investments on the notification list in Section IX.4 on page 23 to see if that would be creating any burdens or liability on the part of the Authority or whether insertion of notice to Fidelity Investments should be couched in language having disclaimers. The proposed change to Exhibit E may be insubstantial, but I would submit this to the EDA for their review even though the minimum dollar amount is not changed. The requested change to Section VI.1 giving Talisman 12 months to find a replacement anchor at the time of the issuance of the note or extending the time for issuing the note to find a replacement anchor are substantial changes. I would appreciate your review of that request and advice with respect to what implications it would have for other provisions, if any, in the development agreement and how that request would be accommodated, should the EDA find the request acceptable. Thank you for your assistance in this matter. I plan to submit Mr. Schlesinger's request to the EDA on Monday, January 22nd and would appreciate your response by the morning of January 18th for inclusion in the EDA meeting packet. S* 1 Michael J. Mc a ey ' City Manager 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 Jan 16 200 telephone conversation with Jim Schlesinger Schlesin January 1 t p g ment Mr. Schlesinger requested the following changes in the Restated Development Agreement: 1. p. 13 Section VI.l. (g) language that would either give him 12 months to find replacement anchor at time on note issuance if one of the anchors was not occupied or a 12 month extension on the issuance of the note to find a replacement anchor. 2. p. 14. Section VI. 1. 0.) requested removal: I suggested we could reference the planned unit development that was approved and make it a condition that he be in compliance with the planned unit development dated and the parking requirements identified in that approval 3. p. 18 Section VII.1. requested insertion of limited liability corporation in 9 0 ' line for transferees, also requested change in P line to "Delaware entity" NOT "Minnesota", they are Delaware corporation 4. p. 23 Section IX.4. requested addition of Fidelity Investments on notification list 5. Exhibit E, he will send proposed new Exhibit "E" to remove references to new . ceiling for Dayton's, but will not change minimum amount that has to be expended by Talisman to Dayton's 2200 FIRST NATIONAL BANK BUILDING 332 MINNESOTA STREET SAINT PAUL, MN 55101.1396 TELEPHONE 651- 223 -6600 BRIGGS AND MORGAN FACSIMILE 651- 223 -6450 PROFESSIONAL ASSOCIATION WRITER'S DIRECT DIAL (651) 223 -6625 WRITER'S E -MAIL mdyrseth @briggs.com January 19, 2001 VIA EMAIL Mr. Michael McCauley City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Re: Economic Development Authority of Brooklyn Center - Development Agreement with Talisman Brookdale, LLC Dear Mike: Enclosed is an underscored copy of the Amended and Restated Development Agreement for consideration by the Economic Development Authority on Monday, January 22. I have made the changes identified in your letter of January 16, 2001. However, rather than give the Developer 12 months to locate a replacement anchor tenant, I have provided that the Tax Increment Note will be not be issued until the "Adjacent Property" is anchored by operating department stores acceptable to the Authority. I have also provided that failure to satisfy the preconditions to the issuance of the Note by August 1, 2003, is an event of default. This avoids the EDA having to declare a default after the Note has been issued and the EDA has been making payments to Talisman. If you have any questions, please give me a call. Very truly yours, /s/ Mary Dyrseth i Mary M. Dyrseth MMD:mw 1072235.7 MINNEAPOLIS OFFICE • 2400 IDS CENTER • WWW.BPIGGS.COM MEMBER - LEX MUNDI, A GLOBAL ASSOCIATION OF INDEPENDENT LAW FIRMS .Pages of Development Agreement with � changes other than dates of signature: I Developer means Talisman Brookdale, LLC, a Delaware limited liability company, its successors and assigns; Development Property means the land legally described on Exhibit B attached hereto; Eliaible Improvements means the acquisition of parcels containing buildings which are structurally substandard, and any adjacent parcels necessary to provide a site of sufficient size to permit development, relocation of utilities, construction of parking improvements, soil correction, demolition, and rehabilitation of structures, and site preparation undertaken on the Development Property in connection with the Minimum Improvements as further described on Exhibit C attached hereto, but only to the extent the Developer provides evidence satisfactory to the Authority that such activities satisfy the requirements of Minnesota Statutes, Section 469 subd. 4; Eliaible Tenants mean the retail businesses listed on Exhibit F attached hereto, or retail business of the same or similar quality acceptable to the Authority as evidenced by a written acceptance executed by the Authority; Event of Default means any of the events described in Section 8.1; Final Payment Date means the earlier of (a) the date all principal and accrued interest is paid on the Note, or (b) 4& dGCfv a G the L1'Gy rF.Ge2:ve.7Z'svi. f C tha�seeenQ 3 -Ft s`. a l imant ef p r eperty ta fe -r tha `awes p yah a 1Ta 2 n 0 o p the Note Pavne Date which is the tenth Note Payment Date after the i ssuan ce of th e Note vrovided, tha the Final Note Pa yment Date shall nnrttr no t later than a date in calendar vear 2009; Minimum Improvements means the reconfiguration of the Brookdale Mall and the creation of open spaces and other improvements as more particularly described on Exhibit D attached hereto; Note Pavment Date means 45 days after the City receives the property tax settlements from the County, commencing with the first property tax settlement in the taxes• - payable r ear 2994, after the d ate of issuance of the Note and continuing through the Final Payment Date, vrovided that the first Note Pa•,rment Date shall not oc.cztir par 7.ier_, than a_.. d,afiP in calen vear 2004;` Prolect means the buildings and improvements located on the Development Property, including the Minimum Improvements to be constructed thereon; State means the State of Minnesota; 988288.RED V9 to v8 1 /18 /01 4 ARTICLE VI TAX INCREMENT ASSISTANCE; PAYMENTS TO AUTHORITY Section 6.1. Preconditions to Issuance of Tax Increment Note The Developer will undertake and construct the Eligible Improvements on the Development Property at a cost of not less than $2,900,000. In order to assist with the costs of the Eligible Improvements, 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) $2,900,000, or (b) the capital costs of the Eligible Improvements. The tax increment assistance shall be paid on the terms and conditions set forth in Section 6.2 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 provided a copy to the Authority of 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 and the Adjacent Development Property will, upon substantial completion of the Daytons Minimum Improvements, have a total aggregate market value of at least $75,000,000; (d) The Developer has paid all of the Legal and Administrative Expenses; (e) The Developer shall be in material compliance with all the terms and provisions of this Agreement; (f) The construction of the Minimum Improvements is completed, and the Authority has issued the Certificate of Completion pursuant to Section 3.4 hereof; (g) Vve- At the time of issli,ance of the Note, the Development Property is at least 75% leased to Eligible Tenants at th.— SRC- o fssua=ee—ef the to and the Adjacent Property •sha 3 be is occupied with eperating department stores o perated by Dayton's, Penny's, Sears, Kohls, and r w �- *T,.�� or another, Mervyn ! s ��r��e -oi : „ ,,, , .... ,. e e � t �; • _ nationally recocnized retailer aar.P, tale to the Authority; 988288.RED V9 to V8; 1 /18 /01 15 v (h) The Developer shall have spent at least $13,000,000 of its equity to pay the costs of the Minimum Improvements; (i) The Assessment Agreement is recorded in the Hennepin County Recorder's office; (j) The ha3 agprevcd -a Minimum Improvements are in compliance with the planned unit development for the Development Property and reee 3 c-& evidenee _ ec ptahlc is it that p-y&;A h as b ,a e fe adeq-aate parlsieg f 9i - E the Prj{ � eta ( the "PUD ") , including but not limited to the parkins reauirements set forth in the PUD; and -He) The W The Davtons Minimum Improvements are completed and the Authority has received an MAI appraisal from a nationally recognized expert in regional mall valuation showing the combined market value of the Development Property and the Adjacent Development Property at not less than $75,000,000; and (1) The Developer shall have closed on the financing • outlined in the financing commitment attached hereto as Exhibit L. The Developer acknowledges that these conditions must be sai Rfi Pfd on, or before Auaust 1. 2003. Section 6.2. Tax Increment Revenue Note (1) Upon satisfaction of the conditions in Section 6:1 hereof, the Authority will reimburse the Developer for the lesser of $2,900,OOO the costs of the Eligible Improvements through the issuance of the Authority's Tax Increment Revenue Note in substantially the form attached to this Agreement as Exhibit I. (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 8.00% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. (3) The principal of the Note and interest thereon shall be payable solely from Tax Increments. On each Note Payment Date, and subject to the provisions of the Note, the City shall pay, against the accrued and unpaid interest then due on the Note and then to reduce the principal of the Note, the lesser of (a) 80% 988288.RED V9 to V8; 1/18/01 16 ARTICLE VII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 7.1. Status of Developer; Transfer of Substantiallv All Assets. As security for the obligations of the Developer under this Agreement, the Developer represents and agrees that prior to the Termination Date, the Developer will maintain its existence as a Minneset Delaware entity and shall not consolidate with or merge into another entity and shall not dissolve or otherwise dispose of all or substantially all of its assets; provided that the Developer may consolidate with or merge into another corporation or sell or otherwise transfer to a partnership, limited liabilitv comnanv or corporation organized under the laws of one of the United States, or an individual, all or substantially all.of its assets as an entirety and thereafter dissolve and be discharged from liability hereunder if the transferee partnership, corporation or individual assumes in writing all of the obligations of the Developer under this Agreement and the Assessment Agreement. Section 7.2. Prohibition Aaainst Transfer of Property and Assicmment of Agreement. For the foregoing reasons the Developer represents and agrees that prior to the Termination Date: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority. (b) The Authority shall be entitled to require, except as otherwise provided in Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and_ adequate to fulfill the obligations undertaken in this Agreement by the Developer. 988288.R= V9 to V8; 1 /18 /01 21 filing thereof; or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if the Developer, shall consent to or acquiesce in such appointment. (g) The Holder of any mortgage on the Development Property, or any improvements thereon, or any portion thereof, commences foreclosure proceedings or accepts a deed in lieu of foreclosure as a result of any default under the applicable mortgage-documents. (h) On any date on or after January 2, 2 - 004, the combined Market Value of the Development Property and Adjacent Development Property is less than $75,000,000; (i) An Anchor Tenant vacates the Adjacent Development Property and is not replaced by another nationally recognized retailer acceptable to the Authority within 12 months; (j) More than 20% of the Development Property is leased or otherwise occupied by any businesses which is not an Eligible Tenant; ' (k) arny A�gy part of the Development Property is leased in violation of the covenant in Section 2.2, clause (14) hereof; or The precondition set forth in Section 6.1 hereof, to the issuance of the Note are not satisfied on or before, April 1. 2003. Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 occurs and is continuing, the Authority may take any one or more of the following actions after the giving of thirty (30) days' written notice to the Developer, but only if the Event of Default has not been cured within said thirty (30) days, or, if said Event of Default cannot reasonably be cured within the time, the Developer fails to give assurances reasonably satisfactory to the Authority that the Event of Default will be cured within period of time reasonably acceptable to the Authority, but in any event not to exceed 90 days; (a) The Authority may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the Authority, that the Developer will cure its default and continue its performance under this Agreement. 988288.RM V9 to v8 1/18/01 25 ARTICLE IX ADDITIONAL PROVISIONS Section 9.1. Restrictions on Use. The Developer agrees for itself, its successors and - assigns and every successor in interest to the Development Property, or any part, thereof, that the Developer and such successors and assigns shall use the Development Property as a retail shopping mall. Section 9.2. Conflicts of Interest,. No member of the governing body or other official of the Authority or the City shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, 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 association in which he or she is directly or. , P or ass o the ember, official or indirectly interested. No m employee of P Authority or the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. ' Section 9.3. 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 9.4. 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 (a) in the case of the Developer is addressed to or delivered personally to: Talisman Brookdale, LLC 1500 San Reno Avenue Suite 135 Coral Gables, Florida 33146 The Authority agrees to provide a. covv of anv notice sent to the Develope to _ Fi delit y Investments at the address set forth below. provi that failure to S01 Fide Investments on any notice to fine neyelo _e_r shall no t p rerI nd e or delav the Authoritv from ex ercising an of it remedies under fihi,s Agreement:, 988288.PM V9 to V8; 1/18/01 28 Fidelitv Investments f (b) in the case of the Authority is addressed to or delivered personally to the Authority at: Economic Development Authority of Brooklyn.Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 ATTN: 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 9.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.6. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State. Section 9.7. Expiration. This Agreement shall expire on the Termination Date unless earlier terminated or rescinded in accordance with its terms. Section 9.8. Provisions Survivina Rescission or Expiration. Sections 8.5 and 8.6 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, 9.9. Sunercedina Effect. The provisions of _this. Amended an ResvrRt.Pd De velopment Agreement shall suvercede and re place th.o provisions of the Dev elopmen t Agreement dated January 22, 2000 anti b etween the Authnraty and the Developer as of, the date of this Agreement., 988288.RED V9 to vs ; 1/18/01 29 i ESTOPPEL CERTIFICATE TO: Fleet National Bank (hereinafter, the "Agent "), as agent for itself, Morgan Guaranty Trust Company of New York, and any other existing or future co- lenders thereof (hereinafter, individually and collectively referred to as the "Lenders "), in anticipation of, and in connection with, the establishment of the Loan (as defined herein); and JINSERT ADDRESSI Talisman Brookdale Associates LLC (hereinafter, the "Developer ") 1500 San Remo Avenue Suite 135 Coral Gables, Florida 13546 , "Loan" by Fleet National Bank as Agent for itself, Morgan Guaranty Trust Company of New York, and the other Lenders to Developer, as 'Borrower ", as such Loan is to be evidenced by, amongst other documents, instruments, and agreements a certain Construction and Interim Loan Agreement (hereinafter, the "Loan Agreement ") by and among the Developer, the Agent and the Lenders and certain Promissory Notes (hereinafter, the "Notes ") payable to the Lenders in the aggregate principal amount of.Sixty Million ($60,000,000.00) Dollars, and such Loan is to be secured by a certain Construction Mortgage and Security Agreement (hereinafter, the "Mortgage ") whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, the Development Property (as defined hereunder), a certain Collateral Assignment of Leases and Rents (hereinafter, the "Assignment of Leases ") whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, all leases, subleases, rental agreements or other occupancy agreements of the Development Property, and a certain Collateral Assignment and Security Agreement (hereinafter, the "Collateral Assignment ") whereby the Developer shall grant to the Agent, on behalf of the Lenders, a first priority security interest in, and to, all licenses, permits, approvals and contracts relating to the Developer and the Development Property (hereinafter, the Mortgage, the Assignment of Leases, the Collateral Assignment, together with any other documents and agreements granting the Agent, on behalf of the Lenders, a security interest in and to the Development Property, the "Security Documents ")(hereinafter, the Loan Agreement, the Notes and the Security Documents, together with any and all documents executed in connection therewith, the "Loan Documents "). 11 Amended and Rest Development Agreement! dated Fabm -y 2 2, 2 December 21, 2001 by and between 14, — -Gem' Economic Development Authority of Brooklyn Cent (hereinafter, the "Authority ") and Developer, as successor in interest to Talisman Brookdale LL stein , 1r.l id by x^ Developen (the "bevel m reement "1 RE: Brookdale Shopping Center Brooklyn Center, Minnesota (hereinafter, the "Development Property") Ladies and Gentlemen: This estoppel certificate and agreement (hereinafter, the "Agreement ") is furnished by the Authority to Developer, Agent and the Lenders in anticipation of, and in conjunction with, the establishment of the Loan. The Authority understands that Developer, Agent and the Lenders are relying upon the Authority's statements and agreements in connection with the establishment of, and maintaining of, the Loan. ® '^ 1248957vR; V2 to VI; 1/17/01 -1- The Authority hereby represents and certifies to, and agrees with, Developer, Agent and Lenders as set forth below. 1. The Development Agreement has not been assigned, amended, supplemented or modified by the Authority in any way. 2. A true and complete copy of the Development Agreement, including, all amendments and modifications, is attached hereto as Exhibit A. There are no side letters or other arrangements by and between the Authority and the Developer. 3. The Development Agreement is presently in full force and effect according to its terms and is the valid and binding obligation of the Authority. 4. The Authority hereby acknowledges and consents to the transfer of the entire interest in and to the Development Agreement from Talisman Brookdale, LLC to Talisman Brookdale Associates LLC pursuant to.the assignm and_assumvtion Pureement in the form a hereto as Exhibit B. 5 jo the actual knowledge of the unde ,there does not exist any default under the Development Agreement, nor does there exist any state of facts which with the passage of time or the giving of notice, or both, could constitute a default under the Development Agreement. 6. The Authority has received, reviewed and approved the Construction Plans (as defined in the Development Agreement) in accordance with the terms and provisions of the Development Agreement. Barring any material change in the Construction Plans ' as orov _ide_ d_ hy the terms and provisions of the Development Agreement, the Authority hereby acknowledges that no further receipt, review or approval of any of the Construction Plans is required by th e Authoritv The approval eiy_en _bv_theA.uthority does not relieve the Develoner of its obli gation to receive approv of • _- - — - any other Ci 1 -egulations y deuartmen o r to comnlY with anv other federal. state qr loca l_j@w$. ordinances or , . To t he actual knowledge of the under gned. all 7 A11 conditions under the Development Agreement to be satisfied by the Developer as of the date hereof; have been satisfied, including, without limitation, the timely commencement of construction of the Minimum Improvements (as defined in the Development Agreement). 8. The Authority hereby acknowledges and consents to the establishment of the Loan with the Agent, on behalf of the Lenders, including, without limitation, the Security Documents executed in connection therewith pursuant to which the Development Property, and all rights and privileges associated therewith, and all proceeds thereof, shall be granted to the Agent, on behalf of the Lenders, as security for the Loan. 9. The Authority hereby acknowledges and agrees that upon the receipt of written notice from the Agent of the occurrence of an event of default under the Loan Documents, the Authority shall make payments under the Tax Increment Note (as defined in the Development Agreement) directly to the Agent, at such place as designated in the Agent's notice. 10. Notwithstanding the terms and provisions of the Development Agreement, the Authority hereby acknowledges and agrees that exercise of the Agent's and the Lenders' rights and remedies under the Loan Documents, including, the foreclosure of the Development Property and subsequent assignment thereof; shall not constitute a default under the Development Agreement. In addition, the Authority hereby acknowledges and agrees that Authority will attorn to any such third party successor to the Agent, and shall recognize such third party successor, thereafter as the "Developer" under the Development Agreement to the extent such party assumes the obligations of the Developer dwmundw. under the De agreement and agrees to be bound by the terms of the related Assessment Agreement. �'` 1248957vR; V2 to V1; 1/17/01 -2- 11. The Authority hereby acknowledges and agrees that notwithstanding the terms and provisions of the Development Agreement, to the extent the Development Property is destroyed by fire or other casualty, and the insurance proceeds thereof are not used to restore the Development Property, the Authority's rights in and to such insurance proceeds shall be limited to those insurance proceeds not otherwise applied by the Agent, on behalf of the Lenders, to payoff the outstanding Loan. 12. The Authority hereby acknowledges and agrees that the Authority shall promptly forward to Agent as holder of the Security Documents relating to the Development Property, at Agent's address designated above or such th�er address as Agent may from time to time designate to the Authority in writing ( "Agent's Address "), copies of all notices given by the Authority to the Developer pursuant to the Development Agreement. The Authority agrees that no notice from the Authority to Developer under the Development Agreement shall be effective unless and until a copy of the same is given to Agent at Agent's Address. The Authority further agrees that the curing of any Developer default by the Agent, any Lender or any successor thereof, within a ma sona le taco aft-ff suGh negge (ifiGludiBg a NaseRabla'pe99d -eftime to the time periods specifi in the Development Agreemenj shall be treated as performance by the Developer iprovided however, tha if such Develoner default cannot reasonabl be cured by the Lender w ithout the Lender obtaining possession a nd title to the Deve lonment Pro perty. t hen the cure periods set forth in t Develonment ALyreement shall be ex tended by such nu mber of d as is reas onablv necessar for the Lender to acouire_possession_ and title to the De velopment Property 13. The Authority hereby agrees to provide the Agent, on behalf of the Lenders, with an estoppel certificate or certificates, in similar form and substance to this Agreement, as such may be reasonably requested by the Agent from time to time. 14. This Agreement shall inure to the benefit of the Developer, the Agent and the Lenders, their successors and assigns (including, without limitation, a purchaser at or after foreclosure), and shall be binding upon the Authority, and the Authority's successors and assigns. DATED: as of , 2001 and executed as an instrument under seal. WITNESSED AUTHORITY: ECONOMIC DEVELOPMENT AUTHORITY OF AROOIKLYN CE By: Name: Its: Hereunto Duly Authorized 1248957vR; V2 to VI; 1/17/01 -3- The undersigned, the Developer designated above: (i) hereby ratifies and confirms, to the best of its knowledge, all of the certifications and representations of the Authority set forth in the foregoing Agreement; (ii) agrees that Authority shall have the right to rely on any notice or request from Agent without any obligation to inquire as to whether or not a default exists and notwithstanding any notice from or claim of Developer to the contrary. (iii) confirms, to the best the Developer's knowledge, there does not exist any default under the Development Agreement nor does there exist any state of facts which with the passage of time or the giving of notice, or both, could constitute a default under the Development Agreement; and (iv) consents to, and agrees to be bound by, this Agreement. Executed and delivered as a sealed instrument as of the day of , 2001. WITNESSED: BORROWER: TALISMAN BROOKDALE ASSOCIATES LLC By: TALISMAN BROOKDALE, LLC, its Managing Member, By: CS BROOKDALE REALTY CORP., a Managing Member • By: James A. Schlesinger, President By: BZA BROOKDALE MALL CORP., a Managing Member By: Robert W. Claeson, Vice - President "" ` 1248957vR; V2 to VI; 1/17/01 -4- EXHIBIT A Copy of Development Agreement (including all amendments) �, 1248957vR; V2 to VI; 1/17/01 -5- AMENDED AND RESTATED DEVELOPMENT AGREEMENT BY AND BETWEEN ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA AND TALISMAN BROOKDALE, LLC This document drafted by: BRIGGS AND MORGAN (MMD) Professional Association 2200 West First National Bank Building St. Paul, Minnesota 55101 I 988288.RED V9 to V8; 1/18/01 . TABLE OF CONTENTS Page RECITALS...................... ............................... 1 ARTICLE I - DEFINITIONS ......... ............................... 2 Section 1.1. Definitions ... ..............................2 ARTICLE II - REPRESENTATIONS AND WARRANTIES ....................5 Section 2.1. Representations and Warranties of the Authority:.... ..............................5 Section 2.2. Representations and Warranties of the Developer .... ............................... 5 ARTICLE III - CONSTRUCTION OF MINIMUM IMPROVEMENTS .............8 Section 3.1. Construction of Minimum Improvements ........ 8 Section 3.2. Construction Plans ..........................8 Section 3.3. Commencement and Completion of Construction . 9 Section 3.4. Certificate of Completion ...................9 Section 3.5. Daytons Minimum Improvement ................ 10 ARTICLE IV - ASSESSMENT AGREEMENT ............................. 11 Section 4.1. Execution of Assessment Agreement .......... 11 Section 4.2. Real Property Taxes ........................ 11 ARTICLE .. DAMAGE VDAMAGE, DESTRUCTION OR CONDEMNATION....... 13 Section 5.1. Damage, Destruction or Condemnation........ 13 ARTICLE VI - TAX INCREMENT ASSISTANCE; PAYMENTS TO AUTHORITY ..14 Section 6.1. Preconditions to Issuance of Tax Increment T.. ... t Note.......... ............................. Section 6.2. Tax Increment Revenue Note ................. 15 Section 6.3. Use of Tax Increments ............. ....... 16 Section 6.4. Business Subsidy Act . ...................... 17 Section 6.5. Payments to Authority ..................... 18 Section 6.6. Tax Deferrals or Abatements ................18 ARTICLE VII - PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION .. ............................... 20 Section 7.1. Status of Developer; Transfer of Substantially All Assets ...................20 Section 7.2. Prohibition Against Transfer of Property and Assignment of Agreement ................ 20 Section 7.3. Approvals ... ............................... 21 ARTICLE VIII - EVENTS OF DEFAULT . .............................23 Section 8.1. Events of Default Defined ..................23 Section 8.2. Remedies on Default ........................ 24 Section 8.3. No Remedy Exclusive ........................25 Section 8.4. No Implied Waiver ..........................25 988288.RED V9 to V8; 1 /18 /01 Section 8.5. Agreement to Pay Attorney's Fees and a Expenses ............. ..................25 Section 8.6. Indemnification of Authority and City ......25 ARTICLE IX - ADDITIONAL PROVISIONS ............................27 Section 9.1. Restrictions on Use ........................27 Section 9.2. Conflicts of Interest .......................27 Section 9.3. Titles of Articles and Sections ............ 27 Section 9.4. Notices and Demands ........................27 Section 9.5. Counterparts .. .............................28 Section 9.6. Law Governing ................. ............28 Section 9.7. Expiratiori ................................. 28 Section 9.8. Provisions Surviving Rescission or e� Expiration ............................... 28 988288.RM V9 to V8; 1/18/01 EXHIBIT A - Parcel Identification Numbers of Property in Tax Increment Financing District No. 03 .......... A -1 EXHIBIT B - Legal Description of Development Property ........ B -1 EXHIBIT C - Description of Eligible Improvements ............. C -1 EXHIBIT D - Description of Minimum Improvements .............. D -1 EXHIBIT E - Description of Daytons Minimum Improvements...... E -1 EXHIBIT F - List of Eligible' Tenants .........................F -1 EXHIBIT G - Certificate of Completion ........................ G -1 EXHIBIT H - Assessment Agreement ............................. H -1 EXHIBIT I - Form of Tax Increment Note ....................... I -1 EXHIBIT J - Legal Description of Adjacent Development Property.......... ............................... J -1 EXHIBIT K - Daytons Lease ..... ............................... K -1 EXHIBIT L - Financing Commitment ............................. L -1 AMENDED AND RESTATED DEVELOPMENT AGREEMENT THIS AGREEMENT, made as of the Est 22nd day of Dceembei- 2009 Januarv, 2001, by and between the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority "), a body corporate and politic organized and existing under the laws of the State of Minnesota and Talisman Brookdale, LLC, a Delaware limited liability company (the "Developer "), WITNESSETH: WHEREAS, pursuant to Minnesota Statutes, Sections 469.001 to 469.047, the Authority has formed Redevelopment Project No. 1 (the "Redevelopment Project ") and has adopted a redevelopment plan therefor (the "Redevelopment Plan "); and WHEREAS, pursuant to the provisions of Minnesota Statutes, Section 469.174 through 469.179, as amended, (hereinafter the "Tax Increment Act "), the Authority has created Tax Increment Financing District No. 03 as a redevelopment district (the "Tax Increment District "), the legal description of which is attached hereto as Exhibit A, and has adopted a tax increment financing 988288.RED V9 to V8; 1/18/01 plan therefor (the "Tax Increment Plan ") which provides for the S 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 and particularly to make the land in the Redevelopment Project available for development by private enterprise in conformance with the Redevelopment Plan, the Authority has determined to assist the Developer with the public cost of the Minimum Improvements (as hereinafter defined) to be constructed on certain property within the Tax Increment District as more particularly set forth in this Agreement; and WHEREAS, the Authority believes that the Minimum Improvements, and fulfillment of this Agreement are in the best interests of the City of Brooklyn Center, and in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Minimum Improvements have been undertaken. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: • 988288.RED V9 to V8; 1/18/01 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: Agreement means this Agreement, as the same may be from time to time modified, amended or supplemented; Adjacent Development Prooerty means the land legally described on Exhibit J attached hereto; Anchor Tenant means Daytons, Penny's, Mervyn's, Sears and Kohls; Assessment Agreement means the agreement substantially in the form attached hereto as Exhibit F and made a part of this Agreement, among the Developer, the City and the Assessor for the City, entered into pursuant to Article IV of this Agreement; Assessor's Minimum Market Value means the agreed minimum market value of the Development Property for calculation of real property taxes as determined by the assessor for the City pursuant to the Assessment Agreement; • Authority means the Economic Development Authority of Brooklyn Center, Minnesota; Certificate of Completion means the certification in substantially the form attached hereto as Exhibit G and made a part of this Agreement to be provided by the Authority to the Developer pursuant to Section 3.4 of this Agreement; City means the City of Brooklyn Center, Minnesota; Construction Plans means the plans, specifications, drawings and related documents of the construction work to be performed by. the Developer on the Development Property. The plans (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City, and (b) shall include at least the following: (1) site plan; (2) site grading and drainage plans; (3) foundation plan; (4 ) basement plans, if any; ( 5 ) floor plan for each floor; ( 6 ) cross sections of each (length and width); (7) elevations (all sides) and (8) landscape plan; i County means Hennepin County, Minnesota; Davtons Minimum Improvements means the remodeling of the existing Dayton's located on the Adjacent Development Property as more particularly described on Exhibit E attached hereto; 988288.RED V9 to V8; 1/18/01 3 "S Developer means Talisman Brookdale, LLC, a Delaware limited* liability company, its successors and assigns; Development Property means the lap all described _ d legally bed on Exhibit B attached hereto; Eligible Improvements means the acquisition of parcels containing buildings which are structurally substandard, and any adjacent parcels necessary to provide a site of sufficient size to permit development, relocation of utilities, construction of parking improvements, soil correction, demolition, and rehabilitation of structures, and site preparation undertaken on the Development Property in Connection with the Minimum Improvements as further described on Exhibit C attached hereto, but only to the extent the Developer provides evidence satisfactory to the Authority that such activities satisfy the requirements of Minnesota Statutes, Section 469.176, subd. 4; Eligible Tenants mean the retail businesses listed on Exhibit F attached hereto, or retail business of the same or similar quality acceptable to the Authority as evidenced by a written acceptance executed by the Authority; Event of Default means any of the events described in Section 8.1; Final Payment Date means the earlier of (a) the date all principal and accrued interest is paid on the Note, or (b) 4-S days fter the --Gity receives he rose-- clim e u p, rzty taxas for the tuxes payal:1e year 29981 the Note Pavment_ Date which is the tenth Note Pavment Date after the issuance of the Note: provided that the Final Note Pavment Date shall occur not later than a date in calendar near 2009; Minimum Improvements means the reconfiguration of the Brookdale Mall and the creation of open spaces and other improvements as more particularly described on Exhibit D attached hereto; Note Pavment Date means 45 days after the City receives the property tax settlements from the County, commencing with the first property tax settlement in t he - -r.3Ecs payahia year 2994, after the date of issuance of the Note and continuing through the Final Payment Date,, provided that the first Note Pavment Date shall not oc cur earlier, than, a_, date in ra1 Pndar vear 2004; Proiect means the buildings and improvements located on the Development Property, including the Minimum Improvements to be constructed thereon; State means the State of Minnesota; 988288.RED V9 to V8; 1/18/01 4 Tax Increment Act means Minnesota Statutes, Sections 469.174 through 469.179, as amended; Tax Increment District means Tax Increment Financing District No. 03 the P arcel identification numbers of the property which is included therein are set forth in Exhibit A attached hereto and qualified as a redevelopment district under the Tax Increment Act; Tax Increment Financina Plan means the plan approved for the Tax Increment District; Tax Increment Note or Note means the tax increment note in substantially the form attached hereto as Exhibit I; Tax Increments means any tax increments derived from the Development Property and Adjacent 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; Termination Date means the Final Payment Date; Unavoidable Delays means delays, outside the control of the party claiming its occurrence, which are the direct result of. strikes, other labor troubles, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Project, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority or the City) which directly result in delays. 988288.RED V9 to V8; 1/18/01 5 ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties of the Authoritv. The Authority makes the following representations and warranties: (1) The Authority is a body corporate and politic of the State of Minnesota and has the power to enter into this Agreement and carry out its obligations hereunder. (2) The Tax Increment District is a "redevelopment district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 10 and was created, adopted and approved in accordance with the terms of the Tax Increment Act. (3) The development contemplated by this Agreement is in conformance with the objectives set forth in the Redevelopment Plan. (4) 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 Tax Increments, among other things, to reimburse the Developer for a ® portion of the costs of the Eligible Improvements. (5) The Authority has requested Hennepin County to certify the original tax capacity of the Tax Increment District. Section 2.2. Representations and Warranties of the, Developer. The Developer makes the following representations and warranties: (1) The Developer is a limited liability company duly organized under the laws of the State of Delaware, is in good standing and duly authorized to conduct its business in the State of Minnesota and all other states where its activities require such authorization, has the power to enter into this Agreement, and to use the Project for the purpose set forth in this Agreement and by proper corporate action has authorized the execution and delivery of this Agreement. (2) The Developer will construct the Minimum Improvements, and will operate and maintain the Project in accordance with the terms of this Agreement, the Development Program and all local, state and federal laws and regulations (including, but not limited.to, environmental, zoning, energy conservation, building code and public health laws and regulations), except for variances necessary to construction the Minimum Improvements contemplated in the Construction Plans approved by the City. 988288.RED V9 to V8; 1/18/01 6 (3) 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. (4) The Developer will obtain, or cause to be obtained, 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. (5) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provision of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. 1 (6) The Developer will provide and maintain or cause to be maintained at all times and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on insurance of amounts and coverages normally held by businesses engaged in activities similar to those of the Developer. (7) The Developer has not received any notice from any local, state or federal official that the activities of the Developer, or that the Development Property may or will be in violation of any environmental law or regulation. The Developer is not aware of any state or federal claim filed or planned to be filed by any party relating to any violation of any local, state or federal environmental law, regulation or review procedure, and the Developer is not aware of any violation of any local, state or federal law, regulation or review procedure which would give any person a valid claim under the Minnesota Environmental Rights Act or other state or federal environmental statute. (8) The Developer will cooperate fully with the City and the Authority with respect to any litigation commenced with, respect to the Project. (9) The financing commitments which the Developer has obtained to finance construction of the Minimum Improvements, together with financing provided by the Authority pursuant to this Agreement, will be sufficient to enable the Developer to successfully complete the Minimum Improvements in conformance with the Construction Plans. 988288.RED V9 to V8; 1/18/01 7 (10) The Developer will cooperate fully with the City and the Authority in resolution of any traffic, parking, public nuisance, or public safety problems which may arise in connection with the construction and operation of the'Project. (11) The Developer will expend at least $50,000,000 on the capital costs of construction of the Minimum.Improvements, payments to the owners of the Anchor Tenants for remodeling costs, acquisition of the Penny's store, and demolition costs of Development Property or Adjacent Property, which costs are exclusive of equipment or other personal property and any "soft costs" such as architectural, engineering, management, administrative overhead, financing and legal costs. (12) The construction of the Minimum Improvements has commenced on or before March 1, 2000, and barring Unavoidable Delays, the Minimum Improvements will be substantially completed by August 15, 2002. Notwithstanding the foregoing, the Developer represents that the Development Property will have a market value of at least $45,000,000 as of January 2, 2003. (13) The Developer has received assurances from the owner of the Daytons store located on the Adjacent Development Property that the construction of the Daytons Minimum Improvements will commence on or before March 1, 2002, and barring Unavoidable Delays, the Daytons Minimum Improvements will be substantially ® completed by March 30, 2003. Notwithstanding the foregoing, the Developer represents that the Adjacent Development Property will have a market value of at least $30,000,000 as of January 2, 2004. (14) No part of the Development Property shall be leased or used as for an adults -only entertainment center, adults only bookstore, adults -only motion picture theater, massage parlor, rap parlor or sauna, and the Developer covenants and agrees that its objective in developing the Development Property include the preservation of a wholesome and first class, quality image for the Development Property and Developer shall not cause the Development Property to be used for any event or other purpose which is inconsistent with decency and good taste. 988288.RED V9 to VB; 1 /18 /01 8 ARTICLE III CONSTRUCTION OF MINIMUM IMPROVEMENTS Section 3.1. Construction of Minimum Improvements. The Developer agrees that it will construct the Minimum Improvements on the Development Property in conformance with the approved Construction Plans. The Developer agrees that the scope and scale of the Minimum Improvements to be constructed shall not be significantly less than the scope and scale of the Minimum Improvements as detailed and outlined in the Construction Plans and Exhibit D hereof. Section 3.2. Construction Plans. The Developer shall provide the Authority with Construction Plans, which shall be subject to approval by the Authority as provided in this Section 3.2. The Construction Plans shall provide for the Minimum Improvements to be constructed on the Development Property, and shall be in substantial conformity with the Redevelopment Plan, this Agreement, and all applicable state and local laws and regulations. The Authority shall approve the Construction Plans in writing if: (a) the Construction Plans conform to the terms and conditions of this Agreement; (b) the Construction Plans substantially conform to the terms and conditions of the Redevelopment Plan; (c) .the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (d) the Construction Plans are adequate for purposes of this Agreement to provide for the construction of the Minimum Improvements; and (e) no Event of Default under the terms of this Agreement has occurred; provided, however, that any such approval of the Construction Plans pursuant to this Section 3.2 shall constitute approval for the purposes of this Agreement only and shall not be deemed to constitute approval or waiver by the Authority or the City with respect to any building, zoning or other ordinances or regulation of the City, and shall not be deemed to be sufficient plans to serve as the basis for the issuance of a building permit if the Construction Plans are not as detailed or complete as the plans otherwise required for the issuance of a building permit. Such Construction Plans must be rejected in writing by the Authority within fifteen (15) days of submission or shall be deemed to have been approved by the Authority. If the Authority rejects the Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within thirty (30) days after receipt by the Developer of written notification of the rejection, accompanied by a written statement of the Authority specifying the respects in which the Construction Plans submitted by the Developer fail j to conform to the requirements of this Section 3.2. The provisions of this Section 3.2 relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority; provided, however, that in any event the Developer ' shall submit Construction Plans which are approved by the 988288.RED V9 to V8; 1/18/01 9 Authority prior to commencement of construction of the Minimum Improvements. Approval of the Construction Plans by the Authority shall not relieve the Developer of any obligation to comply with the terms and provisions of this Agreement, or the provision of applicable federal, state and local laws, ordinances and regulations, nor shall approval of the Construction Plans by the Authority be deemed to constitute a waiver of any Event of Default. If the Developer desires to make any material change in the Construction Plans after their approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the approval criteria listed in this Section 3.2 with respect to the original Construction Plans and do not constitute a material modification to the scope, size, materials or use of the Minimum Improvements or to the site plan therefor, the Authority shall approve the proposed change. Such change in the Construction Plans shall be deemed approved by the Authority unless rejected in writing within ten (10) days by the Authority with a statement of the Authority's reasons for such rejection. Section 3.3. Commencement and Completion of Construction.. The Developer has commenced the construction of the Minimum Improvements. Subject to Unavoidable Delays, the Developer shall have substantially completed the construction of Minimum Improvements by August 15, 2002. Time lost as a result of Unavoidable Delays shall be added to extend this date beyond August 15, 2002, a number of days equal to the number of days lost as a result of Unavoidable Delays. All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the Development Property shall be in conformity with the Construction Plans as submitted by the Developer and approved by the Authority. Section 3.4. Certificate of Completion,. Promptly after the Developer has demonstrated to the reasonable satisfaction of the Authority that the Minimum Improvements have been completed in accordance with the provisions of this Agreement, including the Construction Plans approved by the Authority, the Authority will furnish the Developer with a Certificate of Completion, in substantially the form set forth in Exhibit G attached hereto. Such Certificate of Completion shall be a conclusive determination of satisfaction of the agreements and covenants in er this Agreement with respect to the obligations of the Developer to construct the Minimum Improvements. If the Authority shall refuse or fail to provide a Certificate of Completion in accordance with the provisions of this Section 3.4, the Authority shall, within ten (10) days after written request by the Developer, provide the Developer with a written statement indicating in adequate detail in what respects 988288.RED V9 to V8; 1/18/01 10 the Developer has failed to complete the Minimum Improvements in • accordance with the provisions of this Agreement, or is otherwise in default under the terms of this Agreement, and what,measures or acts it will be necessary, in the opinion of the Authority, for the Developer to take or perform in order to obtain such Certificate of Completion. The Authority shall have the right to inspect all of the books and records of the Developer to verify the accuracy of the representations made by the Developer in Section 2.2(11) and 6.1 hereof. Section 3.5. Davtons Minimum Improvement The Developer represents to the Authority that it has received assurances from the owner of the Daytons store located on the Adjacent Development Property that the owner of the Dayton's store will construct the Daytons Minimum Improvements on the Adjacent Development Property by March 30, 2003, at a cost of at least $8,000,000, and that as a result thereof the combined market value of the Development Property and the Adjacent Development Property will be at least $75,000,000 as of January 2, 2004. The Developer understands that the Authority will not issue the Tax Increment Note unless and until the Authority receives evidence satisfactory to the Authority that the Daytons Minimum Improvements have been completed and that the Development Property and the Adjacent Development Property have a combined market value of at least $75,000,000. 988288.RED V9 to V8; 1/18/01 1 1 ARTICLE IV ASSESSMENT AGREEMENT Section 4.1. Execution of Assessment Agreement. The Developer agrees to, and with the Authority shall execute an Assessment Agreement in substantially the form attached hereto as Exhibit H as authorized by Minnesota Statutes, Section 469.177, Subdivision 8, which specifies the Assessor's Minimum Market Value for the Development Property and the improvements located thereon and the Minimum Improvements for calculation of real property taxes. Specifically, the Developer shall agree to a market value for the Development Property which will result in an assessed value as of January 2, 2003), of not less than $45,000,000 (the Assessor's Minimum Market Value). Nothing in the Assessment Agreement shall limit the discretion of the assessor to assign a market value to the Development Property in excess of such Assessor's Minimum Market Value nor prohibit the Developer from seeking through the exercise of legal or administrative remedies a reduction in such market value for property tax purposes, provided however, that the Developer shall not seek a reduction of such market value below the Assessor's Minimum Market Value in any year so long as the Assessment Agreement shall remain in effect. The Assessment Agreement shall remain in effect until December 31, 2007, for taxes payable through the year 2007 (the "Termination Date "). The Assessment Agreement • shall be certified by the Assessor for the City as provided in Minnesota Statutes, Section 469.177, Subdivision 8, upon a finding by the Assessor that the Assessor's Minimum Market Value represents a reasonable estimate based upon the plans and .specifications for the Minimum Improvements to be constructed on the Development Property and the market value previously assigned to the Development Property. Pursuant to Minnesota Statutes, Section 469.177, Subdivision 8, the Assessment Agreement shall be filed for record in the office of the county recorder or registrar of titles of Hennepin County, and such filing shall constitute notice to any subsequent encumbrancer or purchaser of the Development Property, whether voluntary or involuntary, and such Assessment Agreement shall be binding and enforceable in its entirety against any such subsequent purchaser or encumbrancer, including the holder of the any mortgage of the Development Property. Section 4.2. Real Property Taxes. (1) The Developer acknowledges that it is obligated under law to pay all real property taxes payable with respect to the Development Property and pursuant to the provisions of the Assessment Agreement and any other statutory or contractual duty that shall accrue subsequent to the date of its acquisition of title to the Development Property and until the Developer's obligations have been assumed by any other person with the • 988288.RED V9 to VB; 1 /18 /01 12 written consent of the Authority and pursuant to -the provisions of this Agreement. (2) The Developer agrees that -prior to the Termination Date: (a) It will not seek administrative review or judicial review of the applicability of any tax statute relating to the taxation of real property constituting the Development Property determined by any tax official to be applicable to the Development Property or the Developer or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; (b) It will not seek administrative review-or judicial review of the constitutionality of any tax statute relating to the taxation of real property contained on the Development Property determined by any tax official to be applicable to the Development Property or the Developer or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; (c) It will not seek any tax deferral or abatement, either presently or prospectively authorized under Minnesota Statutes, Section 273.86, or any other state or federal law, of the taxation of real property constituting the Development Property between the date of.execution of this Agreement and the Termination Date. (3) The Developer agrees that the provisions set forth in paragraph (2) above shall be included in every lease or operating agreement covering any portion of the Development Property, which provisions will bind the tenant or operator with respect to such provisions. 988288.RED V9 to v8; 1/18/01 13 ARTICLE V • DAMAGE, DESTRUCTION OR CONDEMNATION Section 5.1. Damaqe, Destruction or Condemnation. In the event that title to and possession of the Development Property or any material part thereof shall be taken in condemnation or by the exercise of the power of eminent domain by any governmental body or other person (except the City) or in the event that the portion of the Project located in the Development Property is damaged or destroyed by fire or other casualty, the Developer shall, with reasonable promptness after such taking or damage, notify the Authority as to the nature and extent of such taking or damage. Upon receipt of any condemnation award or insurance proceeds the Developer shall elect to either: (a) use the condemnation proceeds or insurance proceeds to reconstruct the improvements located on the Development*Property to substantially the same condition as they existed prior to such damage, destruction or condemnation; or (b) pay to the Authority out of such proceeds the present value of the sum of the real property taxes which would have been assessed upon the Development Property between the date of such condemnation or destruction and the Termination Date, such sum to be discounted to the date of payment to the Authority at a discount rate of 8.00 per annum. i 988288.RED V9 to ve ; 1 /18 /01 14 ARTICLE VI • TAX INCREMENT ASSISTANCE; PAYMENTS TO AUTHORITY Section 6.1. Preconditions to Issuance of Tax Increment Note The Developer will undertake and construct the Eligible Improvements on the Development Property at a cost of not less than $2,900,000. In order to assist with the costs of the Eligible Improvements, 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) $2,900,000, or (b) the capital costs of the Eligible Improvements. The tax increment assistance shall be paid on the terms and conditions set forth in Section 6.2 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 provided a copy to the Authority of 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 and the Adjacent Development Property will, upon substantial completion of the Daytons Minimum Improvements, have a total aggregate market value of at least $75,000,000; (d) The Developer has paid all of the Legal and Administrative Expenses; (e) The Developer shall be in material compliance with all the terms and provisions of this Agreement; (f) The construction of the Minimum Improvements is completed, and the Authority has issued the Certificate of Completion pursuant to Section 3.4 hereof; (g) Vi-e At the time of issi1ance of the Note, the Development Property is at least 75% leased to Eligible { Tenants at the tiFr- of issuaRee -ef the - ete and the Adjacent Property shall be is occupied with epsrat -ing department stores operated by Dayton's, Penny's, Sears, Kohls, and Mervyn' s at th a- time - sf the -Nete i , or another nationally recocLniz accepta to the Authorit 988288.RED V9 to vs ; 1 /18 /01 15 ® (h) The Developer shall have spent at least $13,000,000 of its equity to pay the costs of the Minimum Improvements; (i) The Assessment Agreement is recorded in the Hennepin County Recorder's office; (j) The City ras app raved Minimum Improvements are in compliance with the planned unit development for the Development Property and reee evi d ence assc abie - ae--it that pre�slen eta -s been faade —€-e -r a r arki _g fer the -Pre}ee }; and(the "PUD"), includina but not limited to the parking reauire..men•ts set forth in the PUD; and The (k) The Davtons Minimum Improvements are completed and the Authority has received an MAI appraisal from a nationally recognized expert in regional mall valuation showing the combined market value of the Development Property and the Adjacent Development Property at not less than $75,000,000; and (1) The Developer shall have closed on the financing outlined in the financing commitment attached hereto as Exhibit L. The Developer acknowledges that these conditions must be satisfied on or before Auaust 1. 2003. Section 6.2. Tax Increment Revenue Note. (1) Upon satisfaction of the conditions in Section 6:1 hereof, the Authority will reimburse the Developer for the lesser of $2,900,000 or the costs of the Eligible Improvements ` through the issuance of the Authority's Tax Increment Revenue Note in substantially the form attached to this Agreement as Exhibit I. (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 8.00% P er annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. '(3) The principal of the Note and interest thereon shall be payable solely from Tax Increments. On each Note Payment Date, and subject to the provisions of the Note, the City shall pay, against the accrued and unpaid interest then due on the Note and then to reduce the principal of the Note, the lesser of (a) 80% 988288.R= V9 to V8; 1/18/01 16 of any Tax Increments received by the Authority during the preceding 6 months; or (b) $650,000. (4) Notwithstanding anything herein in the Note to the contrary, the Authority shall be under no obligation to apply or pay the Tax Increments to the payment of the Note any earlier than 30 days after it has received the Developer's statement required by paragraph (3) above: Any interest accruing on Tax Increments held by the Authority pending the Note Payment Dates or receipt of such statement from the Developer shall accrue to the benefit of the Authority. (5) 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. (6) 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 8.2(b). (7) The Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit I. In the event of any conflict between the terms of the Note and the terms of this Section 6.2, the terms of the Note shall govern. The issuance of the Note pursuant and subject to the terms 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 6.3. 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 6.2 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. Any utility ` relocation, street improvements or other improvements which are not included as Eligible Improvements, the costs of which may be reimbursed, in whole or in part, with Tax Increments, shall be solely at the expense of the Developer. 988288.RED V9 to V8; 1/18/01 17 Section 6.4. Business Subsidv Act. • (1) In order to satisfy the provisions of Minnesota Statutes, Sections 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 $2,900,000 and that the Business Subsidy is needed because the Project is not sufficiently feasible for the Developer to undertake without the Business Subsidy. The Tax Increment District is a "redevelopment" district and the public purpose of the Business Subsidy is to encourage the construction of necessary public improvements and to redevelop blighted areas and replace structurally substandard buildings. The Developer agrees that it will meet the following goals (the "Goals "): It will create at least 93 full time jobs in connection with the development of the Development Property at an hourly wage of at least $7.00 per hour within two years from the "Benefit Date ", which is the earlier of (a) the date on which the Eligible Improvements are completed, or (b) the date on which a business occupies the Development Property, as improved by the Minimum Improvements; (2) If the Goals are not met, the Developer agrees to repay all or a part of the Business Subsidy to the Authority, plus interest ( "Interest ") set at the implicit price deflator defined in Minnesota Statutes, Section 275.70, Subdivision 2k accruing ® from and after the Benefit Date, compounded semiannually. If the Goals are met in part, the Developer will repay a portion of the Business Subsidy (plus Interest) determined by multiplying the Business Subsidy by a fraction, the numerator of which is the number of jobs in the Goals which were not created at the wage level set forth above and the denominator of which is 93 (i.e., number of jobs set forth in the Goals). The Developer agrees to continue its operations on the Development Property for at least five years after the Benefit Date. (3) The Developer agrees to (i) report its progress on achieving the Goals to the Authority until the Goals are met, or the Business Subsidy is repaid, whichever occurs earlier, (ii) include in the report the information required in Subdivision 7 of the Business Subsidy Act on forms developed by the Minnesota Department of Trade and Economic Development, and (iii) send completed reports to the Commission of the Department of Trade and Economic Development and to the Authority.. The Developer agrees to file these reports no later than March 1 of each year commencing March 1, 2000, and within 30 days after the deadline for meeting the Goals. The Authority agrees that if it does not receive the reports, it will mail the Developer a warning within one week of the required filing date. If within 14 days of the post marked date of the warning the reports are not made, the Developer agrees to pay to the Authority a penalty of $100 for each subsequent day until the report is filed up to a maximum of $1,000. 988288.RED V9 to V8; 1/18/01 18 . Section 6.5. Pavments to Authoritv. In consideration of the assistance given to the Developer pursuant to this Agreement, the Developer agrees to pay the Authority within 10 days of receipt, the first $50,000 plus one half of any amount over $50,000 of any percentage rents received by the Developer or any of its affiliates in each calendar year pursuant to Section 6 of the agreement attached hereto as Exhibit K (the " Daytons Agreement "). The Developer further agrees that, without the prior written consent of the Authority, it will not amend the Daytons Agreement or take any other action which would reduce the amount of the percentage rent set forth in the Daytons Agreement or take any other action that would reduce the likelihood of such percentage rents being paid to the Developer. Section 6.6. Tax Deferrals or Abatements. (1) The Developer agrees as follows: (a) It will not seek administrative review or judicial review of the applicability of any tax statute relating to the taxation of real property contained on the Development Property determined by any tax official to be applicable to the Development Property or the Developer or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, • however, "tax statute" does not include any local ordinance or resolution levying a tax; (b) It will not seek administrative review or judicial review of the constitutionality of any tax statute relating to the taxation of the Development' Property determined by any tax official to be applicable to the Development Property or the Developer, or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, however, "tax statute" does not include any local ordinance or resolution levying a tax; (c) It will not seek any tax deferral or abatement, either presently or prospectively authorized under Minnesota Statutes, Section 469.181, or any other State or federal law, of the taxation of the Development Property between the date of execution of this Agreement and the Termination Date. (2) The Developer agrees that if any owner or tenant of the Adjacent Property takes any of the actions set forth in paragraph (1) above with respect to the Adjacent Property, the Authority may suspend its payment of Tax Increments to the Developer under the Note and escrow all or any part of the Tax Increments until such matters are finally resolved. Any suspension or escrow of 988288.8= V9 to V8; 1/18/01 19 the Tax Increments pursuant to this clause (2) will only occur if (a) the Authority determines that the proceedings could reduce the annual collection of Tax Increment to less than $650,000, or (b) it could require the Authority or the City to abate or refund amounts which, when deducted from the Tax Increment received during the year in question, would result in less than $650,000. The amount suspended or escrowed shall be only the amount necessary to preserve the annual collection of Tax Increments, after reduction by any amount in dispute, to $650,000. Any escrowed Tax Increments may be used to pay any amounts required to be abated and shall be deemed to be a payment of principal under the Note. 988288.RED V9 to V8; 1/18/01 20 ARTICLE VII PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 7.1. Status of Developer; Transfer of Substantiallv All Assets. As security for the obligations of the Developer under this Agreement, the Developer represents and agrees that prior to the Termination Date, the Developer will maintain its existence as a Mi-nnesta Delaware entity and shall not consolidate with or merge into another entity and shall not dissolve or otherwise dispose of all or substantially all of its assets; provided that the Developer may consolidate with or merge into another corporation or sell or otherwise transfer to a partnership, limited liabilitv company or corporation organized under the laws of one of the United States, or an individual, all or substantially all of its assets as an entirety and thereafter dissolve and be discharged from liability hereunder if the transferee partnership, corporation or individual assumes in writing all of the obligations of the Developer under this Agreement and the Assessment Agreement. Section 7.2. Prohibition Against Transfer of Property and Assianment of Aareement. For the foregoing reasons the Developer represents and agrees that prior to the Termination Date: (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Development Property or any part thereof or any interest therein, or any contract or' agreement to do any of the same, without the prior written approval of the Authority. (b) The Authority shall be entitled to require, except as otherwise provided in Agreement, as conditions to any such approval that: (i) Any proposed transferee shall have the i qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Developer. 988288.RED V9 to V8; 1/18/01 21 I Any proposed transferee, by instrument in writing satisfactory to the Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Developer under this Agreement and agreed to be subject to all the conditions and restrictions to which the Developer is subject (unless the Developer agrees to continue to fulfill those obligations, in which case the preceding provisions of this Section 7.2(b)(ii) shall not apply); provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Development Property or the construction of the Project; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however • consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Project that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Project, from any of its obligations with respect thereto. (iii) There shall be submitted to the Authority for review and prior written approval all instruments and other legal documents involved in effecting the transfer of any interest in this'Agreement or the Development Property governed by this Article IX. Section 7.3. Approvals. Any approval of a transfer of interest in the Developer, this Agreement, or the Development Property required to be given by the Authority under this Article VII may be denied only in the event that the Authority reasonably determines that the ability of the Developer to perform its obligations under this Agreement, or the overall financial security provided to the Authority under the terms of this 988288.RED V9 to V8; 1/18/01 22 Agreement, or the likelihood of the Minimum Improvements being successfully constructed and operated pursuant to the terms of this Agreement, will be materially impaired by the action for which approval is sought. 988288.RED V9 to V8; 1/18/01 23 ARTICLE VIII • ' EVENTS OF DEFAULT Section 8.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the following events: (a) Failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to the Development Property or to reimburse the Authority for Legal and Administrative Expenses; (b) Failure by the Developer to commence and complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article III; (c) Failure by the Developer to reconstruct the portion of the Project located on the Development Property when required pursuant to Section 5.1; (d) Transfer of any interest in the Developer or the portion of the Project located on the Development Property in violation of the provisions of Article VII; • (e) Subject to Unavoidable Delays, failure of the Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement, including but not limited to the provisions of Section 6.4 hereof; or (f) If the Developer shall (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act 1978, as amended or under any similar federal or state law; or (B) make a general assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; or (D) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the 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 sixty (60) days after the ' 988288.RED V9 to V8; 1 /18 /01 24 filing thereof; or a receiver, trustee or liquidator of the Developer, or of the Project, or part thereof, shall be appointed in any proceeding brought against the Developer, and shall not be discharged within sixty (60) days after such appointment, or if, the Developer, shall consent.to or acquiesce in such appointment. (g) The Holder of any mortgage on the Development Property, or any improvements thereon, or any portion thereof, commences foreclosure proceedings or accepts a deed in lieu of foreclosure as a result of any default under the applicable mortgage documents. (h) On any date on or after January 2, 2004, the combined Market Value of the Development Property and Adjacent Development Property is less than $75,000,000; (i) An Anchor Tenant vacates the Adjacent Development Property and is not replaced by another nationally recognized retailer acceptable to the Authority within 12 months; (j) More than 20% of the Development Property is leased or otherwise occupied'by any businesses which is not an Eligible Tenant; . (k) any Any part of the.Development Property is leased in violation of the covenant in Section 2.2, clause (14) hereof; or �Z The vrecondition set forth in Section 6.1 hereof to the issuance of the Note are not satisfied on or before Avril 1. 2003. Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 occurs and is continuing, the .Authority may take any one or more of the following actions after the giving of thirty (30) days' written notice to the Developer, but only if the Event of Default has not been cured within said thirty (30) days, or, if said Event of Default cannot reasonably be cured within the time, the Developer fails to give assurances reasonably satisfactory to the Authority that the Event of Default will be cured within'a period of time reasonably acceptable to the Authority, but in any event not to exceed 90 days; (a) The Authority may suspend its performance under this Agreement until it receives assurances from.the ! Developer, deemed adequate by the Authority, that the Developer will cure its default and continue its performance under this Agreement. r 988288.RED V9 to V8; 1/18/01 25 (b) The Authority may cancel and terminate the Agreement. (c) The Authority may take any action, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the Developer under this Agreement. Section 8.3. No Remedv Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law.or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 8.4. 'No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. . Section 8.5. Agreement to Pav Attornev's Fees and Expenses. Whenever any Event of Default occurs and the Authority or City shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the Developer herein contained, the Developer agrees that it shall, on demand therefor, pay to the Authority or City the reasonable fees of such attorneys and such other expenses so incurred by the Authority or City. Section 8.6. Indemnification of Authoritv and City. (1) 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 loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Project to the extent not attributable to the negligence of the Indemnified Parties. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Developer agrees to protect and defend the Indemnified Parties, now and 988288.RED V9 to V8; 1/18/01 26 forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from 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, and operation of the Project; provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the City or Authority in this Agreement. (3) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority or the City, as the case may be. 988288.RED V9 to v8 ; 1/18/01 27 ARTICLE IX ` ADDITIONAL PROVISIONS Section 9.1. Restrictions on Use. The Developer agrees for itself, its successors and assigns and every successor in interest to the Development Property, or any part thereof, that the Developer and such successors and assigns shall use the Development Property as a retail shopping mall. Section 9.2. Conflicts of Interest. No member of the governing body or other official of the Authority or the City shall have any financial interest, direct or indirect, in this Agreement, the Development Property or the Project, 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 or the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. Section 9.3. 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 9.4. 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 (a) in the case of the Developer is addressed to or delivered personally to: Talisman Brookdale, LLC 1500 San Reno Avenue Suite 135 Coral Gables, Florida 33146 The Authoritv agrees to vrovide a coflv of anv notice sent to the Developer to_F.ld_el i tv Ines_ tmenta e t the address set forth below. - Dr ovided ' that failure tn.rony Fidelit Investments on any notice to the npvelo shall n. prerliide or delav the Authority from exercisina anv of its remedies under this Agreement: 988288.RED V9 to V8; 1/18/01 28 Fidelity Investments (b) in the case of the Authority is addressed to or delivered personally to the Authority at: Economic Development Authority of Brooklyn Center, Minnesota 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 ATTN: 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 9.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.6. Law Governina. This Agreement will be governed and construed in accordance with the laws of the State. • Section 9.7. Expiration. This Agreement shall expire on the Termination Date unless earlier terminated or rescinded in accordance with its terms. Section 9.8. Provisions Survivinq Rescission or Expiration. Sections 8.5 and 8.6 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. Sectio 9.9. S»pe rcedina EffPrt. The provisions of this Amended and . _R Patat,Pd D evelopment . A_ sh all suvercede and replace t n rovisinns of th Develo p ment' Aareement dated January 22. 2000 ' by and between the Authorit and the Developer as of the date of this Agreement. i 988288.RED V9 to V8; 1/18/01 29 • IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and on its behalf and the Developer has caused this Agreement to be duly executed in its name and on its behalf, on or as of the date first above written. BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director This is a signature page to the Amended and Restated Development Agreement dated $cecFJD--r 21, 29$8 January 22. 2001, by and between the Economic Development Authority of Brooklyn Center, Minnesota and Talisman Brookdale, LLC. 988288.RED V9 to v8 1/18/01 30 •• l TALISMAN BROOKDALE, LLC By Its general partner By Its This is a signature page to the Amended and Restated Development Agreement dated Deecmher 21, 2-94)-G January 22, 2001, by and between the Economic Development Authority of Brooklyn Center, Minnesota and Talisman Brookdale, LLC.' 988288.RED V9 to V8; 1/18/01 31 STATE OF MINNESOTA ) ) : ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2099 2001 by and the President and the Executive Director respectively, of the Economic Development Authority of Brooklyn Center, Minnesota. Notary Public • 988288.RED V9 to V8; 1/18/01 32 STATE OF MINNESOTA } ): ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2000 2001 by , the of , the general partner of Talisman Brookdale, LLC, a Delaware limited liability company. Notary Public 988288.RED V9 to v8; 1/18/01 33 . EXHIBIT A Parcel Identification Numbers of Property in Tax Increment Financing District No. 03 SITE A (Brooklyn Boulevard /69th Area) 27- 119 -21 -33 -0005 27- 119 -21 -33 -0007 27- 119 -21 -33 -0008 27- 119 -21 -33 -0010 27- 119 -21 -33 -0011 27- 119 -21 -33 -0012 27- 119 -21 -33 -0013 27- 119 -21 -33 -0014 27- 119- 2.1 -33 -0016 27- 119 -21 -33 -0017 27- 119 -21 -33 -0018 27- 119 -21 -33 -0019 27- 119 -21 -33 -0020 27- 119 -21 -33 -0021 27- 119 -21 -33 -0022 27- 119 -21 -33 -0023 27- 119 -21 -33 -0024 27- 119 -21 -33 -0025 ® 27- 119 -21 -33 -0026 27- 119 -21 -33 -0027 27- 119 -21 -33 -0028 27- 119 -21 -33 -0046 27- 119 -21 -33 -0047 27- 119 -21 -33 -0048 27- 119 -21 -33 -0049 27- 119 -21 -33 -0050 27- 119 -21 -33 -0051 27- 119 -21 -33 -0052 27- 119 -21 -33 -0053 27- 119 -21 -33 -0054 27- 119 -21 -33 -0056 27- 119 -21 -33 -0057 27- 119 -21 -33 -0058 27- 119 -21 -33 -0059 27- 119 -21 -33 -0060 27- 119 -21 -33 -0061 27- 119- 21 -.33 -0062 27- 119 -21 -33 -0063 27- 119 -21 -33 -0064 27- 119 -21 -33 -0065 27- 119 -21 -33 -0066 27- 119 -21 -33 -0067 27- 119 -21 -33 -0069 27- 119 -21 -33 -0080 27- 119 -21 -33 -0099 988288.RED V9 to VS 1/18/01 A- 1 i 27- 119 -21 -34 -0008 • 28- 119 -21 -41 -0124 28- 119 -21 -41 -0125 28- 119 -21 -44 -0001 34- 119 -21 -21 -0003 34- 119 -21 -21 -0004 34- 119 -21 -21 -0005 34- 119 -21 -21 -0006 34- 119 -21 -21 -0007 34- 119 -21 -21 -0008 34- 119 -21 -21 -0009 34- 119 -21 -21 -0020 34- 119 -21 -21 -0021 34- 119 -21 -21 -0022 34- 119 -21 -21 -0023 34- 119 -21 -21 -0027 34- 119 -21 -21 -0028 34- 119 -21 -21 -0029 34- 119 -21 -21 -0030 34- 119 -21 -21 -0031 34- 119 -21 -22 -0007 34- 119 -21 -22 -0008 34- 119 -21 -22 -0009 34- 119 -21 -22 -0010 34- 119 -21 -22 -0011 34- 119 -21 -22 -0012 34- 119 -21 -22 -0015 34- 119 -21 -22 -0016 34- 119 -21 -22 -0017 34- 119 -21 -22 -0018 SITE B (Brookdale Area) 02- 118 -21 -13 -0024 02- 118 -21 -13 -0025 02- 118 -21 -23 -0015 02- 118 -21 -13 -0026 02- 118 -21 -23 -0016 02- 118 -21 -13 -0027 02- 118 -21 -23 -0017 02- 118 -21 -13 -0028 02- 118 -21 -23 -0019 02- 118 -21 -23 -0021 02- 118 -21 -41 -0015 02- 118 -21 -23 -0022 02- 118 -21 -41 -0016 02- 118 -21 -24 -0019 02- 118 -21 -41 -0017 02- 118 -21 -31 -0055 02- 118 -21 -41 -0018 02- 118 -21 -31 -0056 02- 118 -21 -41 -0019 02- 118 -21 -32 -0008 02- 118 -21 -41 -0020 02- 118 -21 -32 -0009 02- 11.8 -21 -41 -0021 02- 118 -21 -32 -0010 02- 118 -21 -41 -0022 02- 118 -21 -32 -0011 02- 118 -21 -44 -0026 02- 118 -21 -32 -0012 02- 118 -21 -44 -0030 02- 118- 21 -42- 000402 - 118 -21- 02- 118 -21 -44 -0032 42 -0031 02- 118 -21 -44 -0033 02- 118 -21 -42 -0032 02- 118 -21 -44 -0034 02- 118 -21 -42 -0033 10- 118 -21 -11 -0010 02- 118 -21 -42 -0034 10- 118 -21 -11 -0011 988288.RED V9 to v8 1/18/01 A-2 I 02- 118 -21 -42 -0035 10- 118 -21 -12 -0056 ® 02- 118 -21 -13 -0011 10- 118 -21 -12 -0057 02- 118 -21 -14 -0001 10- 118 -21 -13 -0003 02- 118 -21 -14 -0019 10- 118 -21 -13 -0006 02- 118 -21 -14 -0021 10- 118 -21 -13 -0042 02- 118 -21 -14 -0022 10- 118 -21 -13 -0051 02- 118 -21 -14 -0024 10- 118 -21 -13 -0059 02- 118 -21 -14 -0026 10- 118 -21 -13 -0060 02- 118 -21 -14 -0030 10- 118 -21 -13 -0061 02- 118 -21 -14 -0032 10- 118 -21 -13 -0062 02- 118 -21 -14 -0034 10- 118 -21 -13 -0063 02- 118 -21 -41 -0001 10- 118 -21 -13 -0064 02- 118 -21 -41 -0002 10- 118 -21 -13 -0065 02- 118 -21 -41 -0013 10- 118 -21 -13 -0066 02- 118 -21 -41 -0014 10- 118 -21 -13 -0067 02- 118 -21 -13 -0029 10- 118 -21 -13 -0068 SITE C (Willow Lane /252 Area) 35- 119 -21 -13 -0006 35- 119 -21 -22 -0010 35- 119 -21 -13 -0011 35- 119 -21 -22 -0011 35- 119 -21 -13 -0012 35- 119 -21 -22 -0051 35- 119 -21 -13 -0013 35- 119 -21 -22 -0052 • 35- 119 -21 -13 -0019 35- 119 -21 -23 -0001 35- 119 -21 -13 -0020 35- 119 -21 -23 -0002 35- 119 -21 -14 -0008 35- 119 -21 -24 -0003 35- 119 -21 -14 -0011 35- 119 -21 -24 -0004 35- 119 -21 -22 -0005 35- 119 -21 -24 -0005 35- 119 -21 -22 -0007 35- 119 -21 -41 -0003 35- 119 -21 -22 -0008 35- 119 -21 -41 -0008 35- 119 -21 -41 -0014 36- 119 -21 -24 -0046 35- 119 -21 -41 -0015 36- 119 -21 -24 -0047 35- 119 -21 -41 -0018 36- 119 -21 -31 -0011 35- 119 -21 -41 -0019 36- 119 -21 -31 -0014 35- 119 -21 -42 -0003 36- 119 -21 -31 -0016 35- 119 -21 -42 -0006 36- 119 -21 -31 -0017 35- 119 -21 -42 -0010 36- 119 -21 -31 -0045 988288.RED V9 to v8 1/18/01 A-3 36- 119 -21 -13 -0008 36- 119 -21 -32 -0002 36- 119 -21 -13 -0009 36- 119 -21 -32 -0006 36- 119 -21 -13 -0010 36- 119 -21 -32 -0010 36- 119 -21 -13 -0011 36- 119 -21 -32 -0013 36- 119 -21 -13 -0026 36- 119 -21 -32 -0056 36- 119 -21 -13 -0027 36- 119 -21 -32 -0059 36- 119 -21 -13 -0029 36- 119 -21 -32 -0065 36- 119 -21 -13 -0030 36- 119 -21 -32 -0056 36- 119 -21 -13 -0031 36- 119 -21 -42 -0007 36- 119 -21 -13 -0032 36- 119 -21 -42 -0008 36- 119 -21 -13 -0033 36- 119 -21 -42 -0009 36- 119 -21 -13 -0079 36- 119 -21 -42 -0010 36- 119 -21 -13 -0080 36- 119 -21 -42 -0011 36- 119 -21 -13 -0106 36- 119 -21 -42 -0012 36- 119 -21 -13 -0107 36- 119 -21 -42 -0013 • 36- 119 -21 -13 -0108 36- 119 -21 -42 -0015 36- 119 -21 -13 -0110 36- 119 -21 -42 -0016 36- 119 -21 -13 -0111 36- 119 -21 -42 -0017 36- 119 -21 -13 -0112 36- 119 -21 -42 -0018 988288.RED V9 to V8; 1/18/01 B-2 EXHIBIT B Legal Description of Development Property [Insert legal description of the Center Mall Property] Brookdale Mall - Registered Land Survey No. 1469 Tract A as on file with the Registrar of Titles in Hennepin County Brookdale Mall - Registered Land Survey No. 1469 Tract B as on file with the Registrar of Titles in Hennepin County Brookdale Mall - Registered Land Survey No. 1614 Tract A as on file with the Registrar of Titles in Hennepin County Penney's TBA - Registered Land Survey No. 1469 Tract D' as on file with the Registrar of Titles in Hennepin County 988288.RED V9 to v8 ; 1/18/01 B-3 EXHIBIT C Description of Eligible Improvements • 988288.RED V9 to V8; 1/18/01 C-1 ` EXHIBIT D Description of Minimum Improvements P P Reconfiguration of the existing space and improvements in the Brookdale Mall, including the - creation of open space and other improvements as described and depicted below: • 988288.RED V9 to v8 1118 /01 D-1 EXHIBIT E Description of Da tons Minimum Improvements P Y P Remodeling of the Existing Daytons Store located in the Brookdale Mall, -such remodeling to include at a minimum the following components: 988288.MD V9 to VB; 1/18/01 E-1 EXHIBIT F i List of Eligible Tenants 988288.RED V9 to v8; 1/18/01 F-1 Ff \' EXHIBIT G • Certificate of Completion This is to certify that the Economic Development Authority of Brooklyn Center, Minnesota (the "Authority "), a public body corporate and politic, has determined that all construction and other physical improvements specified to be done as the Minimum Improvements by Talisman Brookdale, LLC (the "Developer ") pursuant to that certain Amended and Restated Development Agreement dated as of Deeemb 21, 2-9-94 January 22, 2001, have been completed. ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA By Its Executive Director i 98B288.RED V9 to V8; 1 /18 /01 G-1 0111 FRI 16:91 FAX 005 6629616 TALISMAN COMPANIES LLC IMO24 w A r� M r�TT �i • DESCRip'DION OF DAYM?(3 bZiD UM D=0VEME M DMB26 The follomiog arc the munnruas improvemwts tbat are ecpected to be pe&raa d by Daytona in that m=deling of the stare The Daytoas intent is to redesign the entire stare for the rNmesdmWising and won of their Wore in orda to update the afore to the Daytoas maw standards. New cefiimg b and m ftnab • New gy m& bred . 5gbt fccarres to co>afotm to the new WTog &igtr, New.drywari partitions and mainp.to the new design. • New acoustical coM8 systems and trle to tha new design. Painting and wall covering of walls and cohmros as required by the new stare design Remove and replace the Wsmg goa* mateemb and intend rAw to the new store design, Re -wire the store to the new conuntcdm regcunm=L - - Lms new cabiaesa and faaurea to tbo new store design, Revise the HVAC system to suit the teem c ulbg and wd configuration Revise the bm*k%g to comply va& the antesu code requiranents as applied to tba work required by the re- nao&bg of the store.