HomeMy WebLinkAboutDevelopment Agreement relating to Orono Woods Apartments 4-30-01 i//30/0
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DEVELOPMENT AGREEMENT �t DyytAR-
Relating to
ORONO WOODS APARTMENTS
(Including Tax Increment Financing District No. 1-1)
Between
CITY OF ORONO
ORONO HOUSING AND REDEVELOPMENT AUTHORITY
DUNBAR DEVELOPMENT CORPORATION
and
ORONO SENIOR HOUSING, LLC
This Instrument Drafted by:
Faegre & Benson LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Telephone: (612) 336-3000
DEVELOPMENT AGREEMENT
THIS AGREEMENT, made and entered into as of this day of June, 2001,
by and among the CITY OF ORONO, a Minnesota municipal corporation having its
principal office at 2750 Kelley Parkway, Orono, Minnesota(the "City"), the ORONO
HOUSING AND REDEVELOPMENT AUTHORITY, a body corporate and politic
having its principal office at 2750 Kelley Parkway, Orono, Minnesota(the "HRA"),
DUNBAR DEVELOPMENT CORPORATION, a Minnesota corporation("Dunbar")
and ORONO SENIOR HOUSING, LLC, a Minnesota limited liability company(the
"Developer").
WITNESSETH:
WHEREAS, the Developer, the City, the HRA and Dunbar contemplate that
the Developer and Dunbar will develop the property described in Exhibit A hereto
(the "Development Property") as a 62-unit apartment building for seniors (the
"Project"); and
WHEREAS, Dunbar will acquire the Development Property and convey the
Development Property to the HRA under the terms and conditions of Section 3.3
hereof; and
WHEREAS, the HRA will lease the Development Property to the Developer
for use as senior housing pursuant to the Ground Lease attached hereto as Exhibit B
(the "Ground Lease"); and
WHEREAS, the HRA will issue its Tax Increment Revenue Note in the form
of Exhibit C hereto (the "TIF Note") in payment of a portion of the costs of acquiring
the Development Property; and
WHEREAS, the balance of the costs of the Project will be financed by the
issuance by the City of its Multifamily Housing Revenue Bonds [GNMA
Collateralized] [FHA Insured] Mortgage Loan-Orono Woods Project), Series 2001A
(the "Housing Bonds") and its Subordinate Multifamily Housing Revenue Note
(Orono Woods Project), Series 2001B (the "Subordinate Housing Note") to be issued
as described in Section 3.1 hereof; and
WHEREAS, the HRA has created and established Tax Increment Financing
District No. 1-1 as a housing tax increment financing district(the "TIF District") and
a coterminus Housing Project Area No. 1 pursuant to a development program and a
tax increment financing plan(the "TIF Plan") adopted pursuant to Minnesota Statutes,
Sections 469.001 through 469.047 and Sections 469.174 through 469.179
(collectively, the "Acts"); and
WHEREAS, the Project and the TIF Note are contemplated and authorized by
the TIF Plan; and
WHEREAS, the Project, the Housing Bonds and Subordinated Housing Note
are contemplated and authorized by a Senior Housing Program (the "Housing
Program") adopted by the City Council pursuant to Minnesota Statutes, Chapter
462C; and
WHEREAS, the Project is to be developed as a planned unit development
pursuant to the terms of a Agreement dated as of June_, 2001 between
the City and the Developer(the "PUD Agreement").
WHEREAS, the proposed Project qualifies as a"housing development
project" within the meaning of Minnesota Statutes, Sections 469.002, Subd. 15 and
469.017, and will promote and carry out the objectives of the Housing Program and
the TIF Plan, will be in the vital best interests of the City and will promote the health,
safety, morals and welfare of its residents, and are in accord with the public purposes
and provisions of the applicable state and local laws.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations of the HRA, the City and the Developer, the parties hereby represent,
covenant and agree as follows:
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ARTICLE I.
DEFINITIONS, EXHIBITS, RULES OF INTERPRETATION
Section 1.1 Definitions. In this Agreement, the following terms have the
following respective meanings unless the context hereof clearly requires otherwise:
(a) Acts. Minnesota Statutes, Sections 469.001 through 469.047 and
469.174 through 469.179.
(b) Certificate of Completion. The certificate of completion set forth in
Exhibit D hereto.
(c) City. The City of Orono, Hennepin County, Minnesota.
(d) Completion Year. The earlier of(1) the year 2002 and (2) the year (if
any) in which the Certificate of Completion for the Improvements is issued.
(e) Developer. Orono Senior Housing, LLC, a Minnesota limited liability
company, its successors and assigns.
(f) Development. The Development Property and the Improvements to be
constructed thereon by the Developer in accordance with the terms of this Agreement,
as they may at any time exist.
(g) Development Property. The real property which is the site of the
Improvements, as legally described in Exhibit A hereto.
(h) Event of Default. An Event of Default, as defined in Section 7.1.
(i) Financing Documents. The following documents to be executed and
delivered in connection with the issuance and sale of the Housing Bonds and the
Subordinate Housing Note:
(j) Ground Lease. The Ground Lease attached as Exhibit B hereto, as the
same may be amended from time to time.
(k) Housing Bonds. The Multifamily Housing Revenue Bonds [GNMA
Collateralized] [FHA Insured] Mortgage Loan - Orono Woods Project), Series 2001
to be issued pursuant to Section 3.1 hereof and the Financing Documents.
(1) Housing Plan. The development program for the HRA's Housing
Project Area No. 1, which contains the TIF District.
(m) HRA. The Orono Housing and Redevelopment Authority, and any
successor to its functions.
(n) Improvements. The 62-unit apartment building and appurtenant
facilities described in the PUD Agreement.
(o) Mortgage and Holder. The term "Mortgage" shall include the
mortgages referenced in Article V of this Agreement and any other instrument
creating an encumbrance or lien upon the Development or any part thereof as security
for a loan. The term "Holder" in reference to a Mortgage includes any insurer or
guarantor (other than the Developer) of any obligation or condition secured by such
Mortgage or deed of trust.
(p) Permitted Encumbrances. The encumbrances on the Development
Property which are permitted to exist and the time the Development Property is
conveyed to the HRA, which encumbrances shall consist only of
and such other encumbrances as the City and HRA
may approve in writing.
(q) Project. The Development Property and the Improvements to be
constructed thereon pursuant to this Agreement.
(r) Project Costs. Project Costs means:
(a) Costs incurred directly or indirectly for or in connection with the
acquisition, construction, installation or equipping of the Project, including
other costs incurred in respect of the Project for preliminary planning and
studies; architectural, legal, engineering, account, consulting, development,
supervisory and other services; land, labor, services and materials and
recording of documents and title work.
(b) Premiums attributable to any surety bonds and insurance
required to be taken out and maintained during the construction period with
respect to the Development Property and the Improvements.
(c) Taxes, assessments and other governmental charges in respect of
the Project that may become due and payable during the construction period.
(d) Costs incurred directly or indirectly in seeking to enforce any
remedy against any contractor or subcontractor in respect of any actual or
claimed default under any contract relating to the Improvements.
(e) Financial, legal, accounting, printing and engraving fees,
charges and expenses and all other such fees, charges and expenses incurred in
connection with the authorization, sale, issuance and delivery of the Housing
Bonds and Subordinate Housing Note including, without limitation, the fees
and expenses of the City and HRA and the fees and expenses of the trustee, the
paying agent, the registrar and the authenticating agent properly incurred under
the Financing Documents that may become due and payable during the
construction period.
(1) Any other costs, expenses, fees and charges properly chargeable
to the cost of acquisition, construction, installation and equipping of the
Project.
(s) PUD Agreement. The Agreement dated
, 2001 between the Developer and the City relating to development of the
Development Property and an adjacent parcel as a planned unit development.
(t) Subordinate Housing Note. The Subordinate Multifamily Housing
Note (Orono Woods Project), Series 2001 to be issued pursuant to Section 3.1 hereof
and the financing Documents.
(u) Tax Increment Financing District (TIF District). Tax Increment
Financing District No. 1-1 consisting of the Development Parcel, created by the HRA
pursuant to the TIF Act and described in the TIF Plan adopted therefor.
(v) Tax Increment Financing Plan (TIF Plan). The plan for development of
the TIF District adopted by the HRA pursuant to the TIF Act.
(w) Tax Increment Note or TIF Note. The Note to be issued by the HRA
pursuant to Section 6.1 hereof and which is substantially in the form of Exhibit G
hereto.
(x) Term. The period beginning on the date of this Agreement and ending
on the February 1, 2022; provided, however, that the Term shall not extend beyond
the termination date of the TIF District under the TIF Act or the date, if any, of
cancellation or recission of this Agreement under Section 7.2(a) hereof.
(y) TIF Act. Minnesota Statutes, Sections 469.174 through 469.179.
(z) Unavoidable Delays. Delays which are the direct result of strikes, fire,
war, material shortage, causes beyond the party's control or other casualty, or acts of
any federal, state or local government unit, except those acts anticipated or
contemplated under this Agreement.
Section 1.2 Exhibits. The following Exhibits are attached to and by reference
made a part of this Agreement:
A. Development Property
B. Ground Lease
C. Tax Increment Note
D. Certificate of Completion
E. Form of Income Certification
F. Investor Letter
Section 1.3 Rules of Interpretation.
(a) This Agreement shall be interpreted in accordance with and governed
by the laws of the state of Minnesota.
(b) The words "herein" and "hereof' and words of similar import, without
reference to any particular section or subdivision refer to this Agreement as a whole
rather than any particular section or subdivision hereof.
(c) References herein to any particular article, section or subdivision hereof
are to the article, section or subdivision of this Agreement as originally executed.
(d) Any titles of the several parts, articles and sections of this Agreement
are inserted for convenience and reference only and shall be disregarded in construing
or interpreting any of its provisions.
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ARTICLE II.
REPRESENTATIONS AND COVENANTS
Section 2.1 By the Developer. The Developer makes the following
representations and covenants:
(a) The Developer has the legal authority and power to enter into this
Agreement.
(b) The Developer reasonably expects to obtain financial resources which,
when combined with the assistance hereunder, will be sufficient to enable the
completion of the Improvements.
(c) The Developer will, subject to the provisions of Article IV hereof,
construct, operate and maintain the Improvements in accordance with the terms of this
Agreement, the PUD Agreement, the Housing Plan, the TIF Plan and all local, state
and federal laws and regulations, and will construct or pay the costs of construction of
any site improvements, utilities, parking facilities, or landscaping improvements
which are necessary in connection with the construction and operation of the
Improvements.
(d) At such time or times as may be required by law, the Developer will
have complied with all local, state and federal environmental laws and regulations,
will have obtained any and all necessary environmental reviews, licenses or
clearances under, and will be in compliance with the requirements of the National
Environmental Policy Act of 1969, the Minnesota Environmental Policy Act, and the
Critical Area Act of 1973.
(e) The Developer will obtain, in a timely manner, all required permits,
licenses and approvals, and will meet, in a timely manner, all requirements of all
local, state and federal laws and regulations which must be obtained or met before the
Improvements may be constructed.
(0 The Developer acknowledges that the TIF District is a"housing
district," as defined in Section 469.174, Subdivision 11, of the TIF Act and, as such,
is subject to the limitations provided in Minnesota Statutes, Section 469.174,
Subdivision 11 and Section 469.1761, Subdivision 3 (together, the "Restrictions").
The Developer covenants that it will, with respect to the Improvements, observe and
comply, and that it will cause and require any of its permitted successors and assigns
to observe and comply with such Restrictions. In particular, and without limitation,
the Developer covenants that at no time prior to the expiration of the Term shall the
fair market value (determined using cost of construction, capitalized income,or other
appropriate method of estimating market value) of any portion of the Improvements
which are, within the meaning of Section 469.174, Subdivision 11, constructed for
commercial uses or for uses other than low and moderate income housing constitute
more than 20% of the total fair market value of the Improvements. The Developer
represents and covenants that throughout the Term the TIF District shall continue to
qualify as "housing district" under the TIF Act; specifically, that not less than 20% of
the rental housing units of the Improvements shall be rented to persons/families that at
occupancy have annual income less than 50% of area median gross income. The
Developer further represents and covenants that throughout the Term the housing
units shall be rented only to persons 62 years of age or older. At least annually, the
Developer agrees to provide evidence reasonably satisfactory to the HRA of
compliance with the applicable income and age limitations, including without
limitation the total number of rental units during any reporting period and income and
age verifications substantially in the form of the attached Exhibit E respecting units
rented to tenants meeting those limits.
(g) It is intended and agreed that the covenants provided in this Section 2.1
shall remain in effect throughout the Term and shall be covenants running with the
land. Except as expressly set forth in Section 5.5 hereof, the obligations under such
provisions shall not be subordinated to the rights of any party having an interest in the
Development Property.
Section 2.2 By the City. The City makes the following representations as the
basis for the undertaking on its part herein contained:
(a) The City is authorized by law to enter into this Agreement and to carry
out its obligations hereunder.
(b) The City will, in a timely manner, subject to all notification
requirements, review and act upon all submittals and applications of the Developer
and will cooperate with the efforts of Developer to secure the granting of any permit,
license, or other approval required to construct and operate the Improvements;
provided, however, that nothing contained in this subparagraph 2.2(b) shall be
construed to limit in any way the reasonable and legitimate exercise of the City's
discretion in considering any submittal or application.
(c) The Development Property is zoned for purposes which include the
Development as proposed. The City has issued all necessary planned unit
development, conditional use permits and plat approval for the Development
Property.
Section 2.3 By the HRA. The HRA makes the following representations as
the basis of the undertakings on its part:
(a) The HRA is authorized by law to enter into this Agreement and to carry
out its obligations hereunder;
(b) The HRA shall cooperate with the City and the Developer with regard
to the issuance of any additional permits required by the Developer to construct the
Improvements.
(c) The HRA will issue the TIF Note in consideration of Dunbar's
conveyance of the Development Property in accordance with Section 3.03.
ARTICLE III.
CITY OBLIGATIONS FOR HOUSING BONDS AND
SUBORDINATED HOUSING NOTE; DEFERMENT OF
FEES: ACQUISITION OF DEVELOPMENT PROPERTY;
CONSTRUCTION OF PUBLIC IMPROVEMENTS
Section 3.1 Housing Bonds and Subordinated Housing Note. The City agrees
to issue the Housing Bonds and Subordinated Housing Note pursuant to the Housing
Act in an aggregate amount, not to exceed $ , sufficient to pay the estimated
Project Costs; provided, however, that the principal amount of the Housing Bonds
shall not exceed $ and the principal amount of the Subordinated Housing
Note shall not exceed $ . The obligation of the City to issue the Housing
Bonds and Subordinated Housing Note is subject to the following conditions:
(a) The Financing Documents, in form and substance satisfactory to
the City and the City Attorney, have been duly executed and delivered by the
Developer and the other parties thereto.
(b) The Developer shall have executed and delivered the Ground Lease
and the PUD Agreement.
(c) Faegre & Benson LLP, as bond counsel, shall have delivered its
opinion that the Housing Bonds and Subordinated Housing Note were validly
issued and that the interest thereon is exempt from federal income taxation.
(d) The City shall have received opinions of counsel to the Developer
and the other parties to the Financing Documents, in form and substance
satisfactory to it, to the effect that the Ground Lease and Financing Documents
are valid and binding obligations of such parties, enforceable in accordance
with their terms.
(e) The Developer shall have entered into a contract for construction of
the Improvements with , in form and substance satisfactory to the
City, and providing for a guaranteed maximum price of not more than
(f) All conditions precedent to the execution and delivery of the
Financing Documents shall have been satisfied without regard to any waivers
which the City has not approved.
Neither the City nor the HRA shall be responsible for the failure of the
Developer, Dunbar or any other person to satisfy the foregoing conditions and the
City and HRA make no representations or warranties that such conditions can or will
be met. The City and HRA have no obligation to issue any additional obligations to
refund the Housing Bonds or Subordinated Housing Note or to provide any additional
funds for completion of the Development or otherwise.
Section 3.2. Park Dedication and Utility Connection Charges. The City agrees
thatark dedication fees in the amount of$ and utilityconnection fees in
p
the amount of$ otherwise payable with respect to the Development are
deferred and shall be payable only in the event that the Developer permits the
Development to be occupied by tenants who are not 62 years of age or older. In that
event such fees shall be immediately due and payable together with interest on the
deferred amounts computed at the rate of 7.00% per annum from the date hereof.
Section 3.3. Conveyance of Development Property: Execution of Ground
Lease. On or prior to , 2001 Dunbar shall convey fee simple title to the
Development Property to the HRA by warranty deed, subject only to Permitted
Encumbrances. In consideration of such conveyance the HRA shall execute and
deliver the TIF Note to Dunbar. Upon execution and delivery of the Financing
Documents, the HRA shall execute and deliver the Ground Lease.
Section 3.4 Construction of Public Improvements. The City agrees to
construct the following public improvements serving the Development Property:
. Such public improvements will be completed on or prior to
, 2002.
Section 3.5 Reimbursement for Public Improvements. The City and HRA
acknowledge that neither the City nor the HRA shall be entitled to reimbursement for
the costs of the Public Improvements.
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ARTICLE IV.
CONSTRUCTION OF IMPROVEMENTS `
Section 4.1 Construction of Improvements. The Developer agrees to
construct the Improvements and complete the Project in accordance with the PUD
Agreement on or prior to , 2002. This covenant to construct the
Improvements shall run with the land. When the Project is completed, as evidenced
by a Certificate of Completion, the Development Property shall be released from the
requirements of this Article IV and shall no longer be encumbered by the obligations
imposed under this Article IV.
Section 4.2 Building Plans. When the Developer completes the design for the
Improvements, it may submit the plans and specifications to the City as part of its
application for a building permit. If the proposed Improvements for that phase are
substantially consistent with the definition of the Improvements set forth herein and
the Developer has complied with all other applicable requirements for the issuance of
a building permit, the permit shall be issued in accordance with standard City
practices. The City shall not be required to provide a building permit or otherwise
permit construction of any improvements on the Development Property if, in its
reasonable judgment, such improvements would interfere with the ability of the
Developer to complete the Improvements described herein within applicable land-use
regulations. Any change in the approved plans for a phase which substantially alters
the construction of the Improvements shall be subject to approval by the City.
Section 4.3 Completion of Construction. All construction shall be in
conformity with the plans. Periodically during construction, but at intervals of not
less than 30 days, the Developer shall make reports in such detail as may reasonably
be requested by the City concerning the actual progress of construction.
Section 4.4 Certificate of Completion. Promptly after notification by the
Developer of completion of the Improvements, the City shall inspect the construction
to determine whether it has been completed in accordance with the terms of this
Agreement. In the event that the City determines that the construction has been
completed in accordance with the plans and applicable regulations, the City shall
furnish the Developer with a Certificate of Completion in the form provided in
Exhibit D. Such certification by the City shall be a conclusive determination of
satisfaction and termination of the agreements and covenants in Article IV of this
Agreement with respect to the obligation of the Developer to construct the
Improvements.
The Certification of Completion provided for in this Section 4.4 shall be in
recordable form. If the City shall refuse or fail to provide certification in accordance
with the provisions of this Section 4.4, the City shall within 15 days of such
notification provide the Developer with a written statement, indicating in adequate
detail in what respects the Developer has failed to complete the Improvements in
accordance with the applicable plans and applicable regulations, or is otherwise in
default, and what measures or acts will be necessary, in the opinion of the City, for the
Developer to take or perform in order to obtain such certification. The City shall
issue the Completion Certificate the Improvements conform to the applicable plans
and applicable regulations.
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ARTICLE V.
LIMITATION UPON ENCUMBRANCE; PROHIBITIONS
AGAINST ASSIGNMENT AND TRANSFER; SUBORDINATION
Section 5.1 Limitation Upon Encumbrance of Development. Prior to the
issuance of the Certificate of Completion, neither the Developer nor any successor in
interest to the Development Property or any part thereof shall engage in any financing
or any other transaction creating any Mortgage or other encumbrance or lien upon the
Development Property, whether by express agreement or operation of law, or suffer
any encumbrance or lien to be made on or attached to the parcel of the Development
Property other than this Agreement, the PUD Agreement and the Financing
Documents.
Section 5.2 Representation as to Development. The Developer represents and
agrees that its undertakings pursuant to the Agreement are for the purpose of
implementation of the Development and not for speculation in landholding. The
Developer further recognizes that, in view of the importance of the Development to
the general welfare of the City and the substantial financing and other public aids that
have been made available by the HRA and the City for the purpose of making the
Development possible, the qualifications and identity of the Developer are of
particular concern to the HRA and the City. The Developer further recognizes that it
is because of such qualifications and identity that the HRA and City are entering into
this Agreement, and, in so doing, are further willing to rely on the representations and
undertakings of the Developer for the faithful performance of all undertakings and
covenants agreed by Developer to be performed.
Section 5.3 Prohibition Against Transfer of Property and Assignment of
Agreement. For the reasons set out in Section 5.2 of this Agreement, the Developer
represents and agrees that, prior to the issuance of the Certificate of Completion as
certified by the City:
(a) Except for leases and other tenancies in the rental units of the
Improvements, any other purpose authorized by this Agreement, the Developer,
except as so authorized, has not made or created, and will not make or create, or suffer
to be made or created, any total or partial sale, assignment, conveyance, or any trust or
power, or transfer in any other mode or form of or with respect to this 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 City;
and
(b) The City shall be entitled to require, except as otherwise provided in
this Agreement, as conditions to any such approval under this Section 5.3 that: (i)
Any proposed transferee shall have the qualifications and financial responsibility, as
reasonably determined by the City, necessary and adequate to fulfill the obligations
undertaken in this Agreement by the Developer or, in the event the transfer is of or
relates to part of the Development, such obligations to the extent that they relate to
such part. (ii)Any proposed transferee, by instrument in writing satisfactory to the
City and in form recordable among the land records, shall for itself and its successors
and assigns, and specifically for the benefit of the HRA and the City, have expressly
assumed all (or the applicable portion) of the obligations of the Developer under this
Agreement and agreed to be subject to such obligations, restrictions and conditions or,
in the event the transfer is, of, or relates to part of the Development, such obligations,
conditions, and restrictions to the extent that they relate to such part; provided, that
the fact that any transferee of, or any other successor in interest whatsoever to, the
Development or any part thereof, shall, for whatever reason, not have assumed such
obligations or agreed to do so, shall not, unless and only to the extent otherwise
specifically provided in this Agreement or agreed to in writing by the City, relieve or
except such transferee or successor from such obligations, conditions, or restrictions,
or deprive or limit the HRA and the City of or with respect to any rights or remedies
or controls with respect to the Development or the construction of the Improvements;
it being the intent of this Section 5.3, together with other provisions of this
Agreement, that to the fullest extent permitted by law and equity and excepting only
in the manner and to the extent specifically provided otherwise in the Agreement no
transfer of, or change with respect to, ownership in the Development or any part
thereof, or any interest therein, however consummated or occurring, whether
voluntary or involuntary, shall operate, legally or practically, to deprive or limit the
HRA or the City, of any rights or remedies or controls provided in or resulting from
this Agreement with respect to the Development and the construction of the
Improvements that the HRA and the City would have had, had there been no such
transfer or change. (iii) There shall be submitted to the City for review all instruments
and other legal documents involved in effecting transfers described herein, and if
approved by the City, their approval shall be indicated to the Developer in writing.
In the absence of specific written agreement by the City to the contrary, no
such transfer or approval by the City thereof shall be deemed to relieve the Developer
from any of its obligations with respect thereto.
Section 5.4 Approvals. Any approval required to be given by the City under
this Article V may be denied only in the event that the City reasonably determine that
the ability of the Developer to perform its obligations under this Agreement will be
materially impaired by the action for which approval is sought.
Section 5.5 Subordination and Modification for the Benefit of Mortgagees.
(a) In order to facilitate the obtaining of temporary or permanent financing
for the construction or purchase of the Development, or individual phases thereof, by
the Developer, the City agrees to subordinate its rights under this Agreement to the
Holder of any Mortgage entered into for the purpose of obtaining such financing, but
only provided that the Mortgage or subordination agreement provides that if the
Holder of the Mortgage shall foreclose on the Development Property or the
Improvements thereon, or on the Developer's interest in the Ground Lease, or any
portion thereof, or accept a deed to such property in lieu of foreclosure, it shall
consent to be bound by the provisions of Section 2.1(f).
(b) In order to facilitate the obtaining of financing for the acquisition and
construction of the Development, the City agrees that it shall agree to any reasonable
modification of this Article V or waiver of its rights hereunder to accommodate the
interests of the Holder of the Mortgage, provided, however, that the City determines,
in its reasonable judgment, that any such modification(s)will adequately protect the
legitimate interests and security of the HRA and the City with respect to the
Development.
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ARTICLE VI.
TAX INCREMENT NOTE
Section 6.1 Issuance of Tax Increment Note. Dunbar represents that it has
incurred and will incur significant costs in acquiring the Development Property which
are estimated to be at least $ . In consideration of this Agreement, the HRA
agrees to reimburse up to $900,000 of these costs, together with interest accruing
thereon at 7.00% per annum, as provided in and subject to the provisions of the TIF
Note substantially in the form of Exhibit C hereto. The HRA shall issue the TIF Note
and deliver the same to the Dunbar or Dunbar's designee, as registered owner of the
TIF Note, contemporaneously with the execution and delivery of a warranty deed
conveying the Development Property to the HRA
Dunbar covenants and agrees not to sell, transfer or convey the TIF Note
without the express written consent of the HRA, which consent shall not be
unreasonably withheld if the transferee executes and delivers to the HRA and the City
an investment letter substantially in the form of Exhibit F hereto; provided, however,
that Dunbar may, without such consent, pledge or grant a security interest in the TIF
Note to a lender as security for a loan. Dunbar acknowledges that neither the City nor
the HRA make any representations as to the adequacy of tax increments available to
pay the TIF Note.
The TIF Note shall be payable solely from tax increment from the TIF District
received by the HRA to the extent provided in Section 6.2 hereof and neither the City
nor the HRA shall be liable on the TIF Note, nor shall the TIF Note be payable out of
any funds or properties of the City or HRA except for said tax increment.
Section 6.2 Tax Increment Available for TIF Note. The Note shall be paid
solely from tax increment from the TIF District as set forth in the TIF Note. Only the
amounts specifically required to be paid thereon shall be due and payable, regardless
of whether the TIF Note has been paid in full.
ARTICLE VII.
EVENTS OF DEFAULT
Section 7.1 Events of Default Defined. The following shall be deemed Events
of Default under this Agreement and the term shall mean, whenever it is used in this
Agreement, unless the context otherwise provides, the failure by the Developer to
observe and substantially perform any covenant, condition, obligation or agreement
on its part to be observed or performed hereunder, after written notice to the
Developer as provided in this Agreement.
Section 7.2 Remedies on Default. Whenever any Event of Default occurs, the
HRA and the City may, in addition to any other remedies or rights given the HRA and
the City under this Agreement, (1) without notice suspend their performance under
m adequate Agreementthey until receive assurances from the Developer, deemed a q uate b y
the HRA and the City, that the Developer has cured its default(or will do so within a
reasonably acceptable period) and will continue its performance under this
Agreement, and(2) after provision of 60 days written notice to the Developer of the
Event of Default, but only if the Event of Default has not been cured within said 60
days, or if the Event of Default cannot be cured within 60 days, the Developer does
not provide assurances reasonably satisfactory to the City and the HRA that the Event
of Default will be cured as soon as reasonably possible, take any one or more of the
following actions:
(a) cancel or rescind this Agreement or the TIF Note, or both;
(b) withhold the Certificate of Completion; or
(c) take whatever action at law or in equity as may appear necessary or
desirable to the HRA or the City to enforce performance and observance of any
obligation, agreement, or covenant of Dunbar the Developer under this Agreement.
Section 7.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the HRA or the City is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall be
in addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any right
or power accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient. In order to entitle the HRA,
the City or the Developer to exercise any remedy reserved to it, it shall not be
necessary to give notice, other than such notice as may be required in this Article VII.
Section 7.4 No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by any party and
thereafter waived by another 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.
[The balance of this page intentionally left blank.]
•
ARTICLE VIII.
ADDITIONAL PROVISIONS
Section 8.1 Conflicts of Interest: Representatives Not Individually Liable. No
HRA or City officer who is authorized to take part in any manner in making this
Agreement in his or her official capacity shall voluntarily have a personal financial
interest in this Agreement or benefit financially therefrom. No member, official, or
employee of the HRA or the City shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach by the HRA or the City or
for any amount which may become due to the Developer or successor or on any
obligations under the terms of this Agreement.
Section 8.2 Notice of Status and Conformance. At such time as all of the
provisions of this Agreement have been fully performed by the Developer, the HRA
and the City upon not less than ten days prior written notice by Developer agree to
execute, acknowledge and deliver without charge to Developer or to any person
designated by Developer a statement in writing in recordable form certifying the
extent to which this Agreement has been fully performed and the obligations
hereunder fully satisfied.
Section 8.3 Notices and Demands. Except as otherwise expressly provided in
this Agreement, a notice, demand or other communication under this Agreement by
either party to the other shall be sufficiently given or delivered if it is sent by mail,
postage prepaid, return receipt requested or delivered personally:
(a) As to the City:
City of Orono
City Administrator
Orono, Minnesota
(b) As to the HRA:
Executive Director
Orono HRA
Orono, Minnesota
(c) As to the Developer:
(d) As to Dunbar:
or at such other address with respect to any party as that party may, from time to time,
designate in writing and forward to the others as provided in this Section 8.3.
Section 8.4 Counterparts. This Agreement may be simultaneously executed in
any number of counterparts, all of which shall constitute one and the same instrument.
[The balance of this page intentionally left blank.]
IN WITNESS WHEREOF, the HRA and the City have caused this Agreement
to be duly executed in their names and behalf and the Developer has caused this
Agreement to be duly executed as of the day and year first above written.
CITY OF ORONO, MINNESOTA
By
Mayor
By
City Clerk
ORONO HOUSING AND REDEVELOPMENT
AUTHORITY.
By
, Executive Director
By
, Chair
ORONO SENIOR HOUSING, LLC
By
Its
DUNBAR DEVELOPMENT CORPORATION
By
Its
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of June,
2001, by and , the Mayor and City
Clerk of the City of Orono, Minnesota, a municipal corporation under the laws of the
State of Minnesota, on behalf of the city.
Notary Public
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of June,
2001, by and , the Executive
Director and Chair of the Orono Housing and Redevelopment Authority, a public
body corporate and politic, on behalf of the HRA.
Notary Public
STATE OF MINNESOTA )
ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
, 2001, by , the of Orono
Senior Housing, LLC, a Minnesota limited liability company, on behalf of the
company.
Notary Public
Ml:745414.o1EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
, according to
the recorded plat thereof, Hennepin County, Minnesota.EXHIBIT D
CERTIFICATE OF COMPLETION AND PARTIAL RELEASE
The undersigned hereby certifies that Orono Senior Housing, LLC, a Minnesota
limited liability company, and/or permitted assigns (the "Developer") has fully and
completely complied with the Developer's obligations under Article IV of that
document entitled "Development Agreement," dated June , 2001 between the City
of Orono, the Orono Housing and Redevelopment Authority, Dunbar Development
Corporation and Orono Senior Housing, LLC, a Minnesota limited liability company,
and filed for record , 20 , as Document No. in the office of the
Hennepin County Recorder with respect to construction of that phase of the
Improvements (as defined in the Development Agreement) constructed on the real
property described in Exhibit A hereto. As to the real property described in Exhibit
A, the obligations of Article IV of the Development Agreement are terminated and
satisfied and released of record.
DATED:
CITY OF ORONO, MINNESOTA
By:
Its Mayor
By:
Its City Clerk
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
, by and
, the Mayor and City Clerk of the City of Orono,
Minnesota, a municipal corporation under the laws of the State of Minnesota, on
behalf of the city.
Notary Public
MI:745414.01
EXHIBIT B
GROUND LEASE
between
ORONO HOUSING AND REDEVELOMENT AUTHORITY,
as Landlord
and
ORONO SENIOR HOUSING, LLC,
as Tenant
Dated as of , 2001
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 11.IDefinitions.1
1.2 Exhibits. 3
ARTICLE 2 - LEASE AND TERM32.1 Grant.3
2.2 Covenants. 3
2.3 Quiet Enjoyment. 3
2.4 Term. 3
2.5 Purchase of Development Property 3
2.6 Title to Improvements 4
ARTICLE 3 - RENT 43.1 Rent.4
3.2 Net Lease. 4
3.3 Manner of Payment. 4
ARTICLE 4 - TENANT'S COVENANTS 54.1 Real Estate Taxes.5
4.2 Compliance with Laws. 5
4.3 Tenant's Equipment. 5
4.4 Maintenance. 5
4.5 Repairs. 6
4.6 Mechanics' Liens. 6
4.7 Nondiscrimination; Restrictions on Use. 6
4.8 Contests. 6
4.9 Review of Taxes. 7
4.10 Development Agreement 7
ARTICLE 5 - INSURANCE AND INDEMNITY75.11nsurance.7
5.2 Requirements. 8
5.3 Waiver. 8
5.4 Landlord Right to Purchase Insurance. 8
ARTICLE 6 - FINANCING 96.1 Mortgages.9
6.2 Notice. 9
6.3 Performance. 9
6.4 New Lease. 9
6.5 Further Assurances. 11
6.6 Termination of Lease. 11
ARTICLE 7 - ASSIGNMENT AND SUBLETTING117.lAssignments.11
7.2 Subleases. 11
7.3 Other Agreements. 11
ARTICLE 8 - END OF TERM 128.1 Surrender.12
8.2 Vesting. 12
8.3 Tenant's Equipment. 12
8.4 Acceptance. 12
8.5 Merger. 12
ARTICLE 9 - NOTICES AND ESTOPPELS129.1Notices.12
9.2 Estoppels. 13
ARTICLE 10 - DEFAULT 1410.1 Events of Default.14
10.2 Termination. 14
10.3 Payments. 14
10.4 Injunctive Relief. 15
10.5 Forbearance. 15
10.6 Costs. 15
10.7 Waiver of Default. 15
10.8 Tenant's Liability 16
ARTICLE 11 - MISCELLANEOUS 1611.1 Relationship.16
11.2 Number and Gender. 16
11.3 Captions. 16
11.4 Time. 16
11.6 Construction. 16
11.7 Law. 16
11.8 Binding. 16
11.9 Short Form. 16
11.10 Severability. 16
11.11 Counterparts. 17
11.12 Interest Rate. 17
EXHIBIT A Legal Description of the Development Property
EXHIBIT B Permitted Encumbrances
THIS GROUND LEASE, made on or as of the day of
2001, by and between ORONO HOUSING AND REDEVELOPMENT
AUTHORITY, a public body corporate and politic and a governmental subdivision
under Minnesota law, and ORONO SENIOR HOUSING, LLC ("ORONO SENIOR
HOUSING, LLC").
The Authority and Orono Senior Housing, LLC, in consideration of the
covenants herein contained, hereby agree as follows:
ARTICLE 1
DEFINITIONSARTICLE 1
DEFINITIONS
1.1 Definitions. In this Lease:
"City" means the City of Orono, Minnesota.
"Commencement Date" means that date upon which all of the parties
hereto have executed this Lease.
"Development" means the Development Property and the
Improvements to be constructed pursuant to the Development
Agreement.
"Development Agreement" means the Development Agreement dated
as of June_, 2001 between the City, the Landlord, the Tenant and
Dunbar Development Corporation.
"Development Property" means the real property that is the subject of
the Development Agreement, which is legally described in Exhibit A.
"Event of Default" means any one or more of the events listed under
Section 10.2.
"Financing Documents" means any of the following documents to be
executed and delivered in connection with the issuance and sale of the
Housing Bonds and the Subordinate Housing Note to be
as described in the Development Agreement.
"Holder" means the holder of any Mortgage.
"Improvements" means the 62-unit senior housing apartment building
to be constructed by Tenant upon and within the Development Property
pursuant to the Development Agreement.
"Landlord" means the Authority, its successors and assigns.
"Lease" means this lease agreement for the Development Property
entered into pursuant to the Development Agreement.
"Mortgage" means any mortgage or deed of trust on Tenant's interest in
this Lease, the Development Property and the Improvements permitted
under Article 6 of this Lease.
"Permitted Encumbrances" means the matters described in Exhibit C.
"Real Estate Taxes" means the aggregate of all taxes, assessments,
water, sewer or similar rents, rates, and charges, excises, levies, license
fees, permit fees, inspection fees, and other authorization fees and other
charges, whether general or special, ordinary or extraordinary, foreseen
or unforeseen, of every character (including all interest and penalties
thereon), which at any time during or in respect of the Term may be
assessed, levied, confirmed or imposed on or in respect of or be a lien
solely upon the Development or any part thereof, or any imposition of a
personal nature charged or levied against Landlord to the extent it is
levied in lieu of such taxes.
"Rent" means any amounts due from Tenant to Landlord under the
terms of this Lease.
"Tenant" means Orono Senior Housing, LLC and its permitted assigns.
"Tenant's Equipment" means all movable equipment, furniture and
other trade fixtures installed or placed in the Development by or for the
account of Tenant or any occupant of the Development.
"Term" means the period of time set out in Section 2.4.
"Termination Date" means , 20
"Unrelated Third Party" means an individual or entity that is not (i) an
individual ("Related Individual") who is an owner or officer of Tenant
or a Related Company, (ii) any subsidiary or parent of Tenant (each of
which is a"Related Company"), or(iii) a general partnership, limited
partnership or limited liability partnership ("Related Partnerships") in
which a Related Individual or Related Company is a partner, or (iv) a
corporation or limited liability corporation in which a Related
Individual, Related Company or Related Partnership is an owner,
shareholder, officer, member or manager.
1.2 Exhibits. The following exhibits are attached to and by this
reference made a part of this Lease:
(1) "Exhibit A" - Legal Description of the Development Property
(2) "Exhibit B" - Permitted Encumbrances
ARTICLE 2
LEASE AND TERM
2.1 Grant. Upon the terms and conditions of this Lease, Landlord demises
and leases the Development Property to Tenant and Tenant leases and accepts the
Development Property from Landlord subject to the Permitted Encumbrances.
2.2 Covenants. Landlord covenants to observe and perform all of the
covenants and conditions to be observed and performed by Landlord under this Lease.
Tenant covenants to pay the Rent when due under this Lease and to observe and
perform all of the terms and conditions and covenants to be observed and performed
by Tenant under this Lease.
2.3 Quiet Enjoyment. Landlord covenants that Tenant, on paying the Rent,
shall peacefully have, hold and enjoy the Development Property subject to the terms
of this Lease, subject only to the Permitted Encumbrances.
2.4 Term. The term of this Lease commences on the Commencement Date
and expires at 11:59 p.m. on the Termination Date, unless terminated earlier as
provided in this Lease.
[2.5 Purchase of Development Property. On the Termination Date, if there
is no uncured Event of Default by Tenant under this Lease at the time of exercise,
Tenant may purchase the Landlord's entire interest in the Development Property on
the following conditions:
(1) Tenant shall give Landlord not less than thirty (30) days prior
written notice exercising its right to purchase the Development
Property,
(2) the closing shall take place on a mutually convenient date at the
principal office of Landlord or such other location as the parties agree,
(3) the purchase price for the Landlord's entire interest in the
Development Property shall be One Dollar($1.00),
(4) at closing, Landlord shall convey fee title in the Development
Property to Tenant by quit claim deed, assignments and other
appropriate instruments of conveyance, such conveyance to be subject
only to (i) the Permitted Encumbrances, (ii) at Landlord's option, a
restriction running with the land for such period as the Landlord may
specify to the effect that the Development may be used only for
residential housing purposes available for occupancy by persons 62
years of age and older, and (iii) any liens and encumbrances created or
consented to by Tenant or arising from the failure of Tenant to perform
or observe by its agreements under this Lease,
(5) this Lease shall automatically terminate on closing,
(6) Tenant shall reimburse Landlord for all reasonable out of pocket
costs and expenses incurred by Landlord in connection with the
conveyance.]
2.6 Title to Improvements. Title to the Improvements hereafter erected or
located on the Development Property by or on behalf of the Tenant shall remain the
property of Tenant, except that if(1) Tenant does not purchase the Development
Property pursuant to Section 2.5 of this Lease, all Improvements located on the
Development Property on the Termination Date shall become the property of
Landlord, or (2) Landlord terminates this Lease pursuant to Section 10.2(1) hereof,
then Landlord may repossess the Development, as provided in said Section 10.2(1).
ARTICLE 3
RENT
3.1 Rent. Tenant shall pay Rent to Landlord on of each calendar
year until the Termination Date in the amount of$1.
3.2 Net Lease. It is the intention and purpose of Landlord and Tenant that
this Lease shall be a"Net Lease" to Landlord. All costs and expenses of whatever
character or kind, general and special, ordinary and extraordinary, foreseeable or
unforeseeable, and of every kind and nature whatsoever that may be necessary in or
about the operation of the Improvements shall be responsibility of Tenant.
3.3 Manner of Payment. Rent payable to Landlord shall be paid to
Landlord in immediately available funds of the United States of America at the office
of Landlord set out in Section 9.1 or at such place and to such party as Landlord may
from time to time designate. Except as otherwise provided, Rent that has accrued
prior to the expiration or earlier termination of this Lease shall be absolutely net to
Landlord throughout the Term without offset or deduction. Tenant's obligation to pay
Rent that has accrued prior to the expiration or earlier termination of this Lease shall
survive the expiration or earlier termination of this Lease.
ARTICLE 4
TENANT'S COVENANTS
4.1 Real Estate Taxes. Tenant shall payall Real Estate Taxes before
penalty attaches for non-payment thereof, provided:
(1) Landlord will pay any real estate taxes due and payable in the
year of commencement of this Lease and allprioryears includingthe
entire amount of all special assessments, including future installments
thereof, which are levied or pending as of the date of the date of this
Lease for completed public improvements,
(2) If bylaw anyReal Estate Tax mayat the option of the partyon
p
whom it is imposed be paid in installments, Tenant may exercise such
option and shall pay all such installments (and interest, if any)
becoming due during the Term as they become due and before any
further interest or any penalty, fine or cost may be added to them
(provided, however, if such Real Estate Tax arises out of a special
assessment for improvements, cannot be paid in installments and occurs
within the last ten(10) years of the Term of this Lease, then Tenant's
share of such assessment will be based upon the number of years
remaining in the Term divided by the useful life of the improvement,
except that Tenant shall pay the full amount of the assessment if Tenant
exercises its option to purchase the Redevelopment Property), and
(3) Any Real Estate Tax due and payable in a calendar year a part of
which is included in the Term and a part of which extends beyond the
Term shall be apportioned between Landlord and Tenant as of the
expiration of the Term.
4.2 Compliance with Laws. The Development shall be used and occupied
in a safe and legal manner and in compliance with all applicable legal requirements.
4.3 Tenant's Equipment. All Tenant's Equipment shall be the property of
Tenant, Tenant's tenants or any lessor of such equipment. Landlord shall have no
interest in Tenant's Equipment. Landlord shall not be responsible for any loss or
damage to Tenant's Equipment except to the extent caused by Landlord's wrongful act
or negligence.
4.4 Maintenance. Tenant shall at Tenant's expense maintain the
Improvements and, to the extent imposed by law on adjacent property owners, the
adjacent sidewalks and curbs in good order and condition, ordinary wear excepted,
and in compliance with legal requirements.
4.5 Repairs. Tenant shall make all necessary or appropriate capital and
operating repairs and replacements and renewals to the Improvements, interior and
exterior, structural and non-structural, ordinary and extraordinary, and foreseen and
unforeseen sufficient for proper operation thereof using materials of good quality.
The need for or appropriateness of such repairs, replacements and renewals and the
quality of the materials used in accomplishing the same shall be in accordance with
the reasonable standards of prudent operators of similar facilities.
4.6 Mechanics' Liens. Tenant shall not permit any mechanics', laborers',
materialmen's or other liens to stand against any part of the Development Property for
any unpaid labor, skill, material or equipment furnished or claimed to be furnished at
the request of or for the account of Tenant in connection with any work in or about
the Development. Tenant shall give notice to Landlord of the filing of any such lien
within thirty (30) days of Tenant's receipt of it and shall cause it to be discharged
within ninety (90) days of its filing, unless contested as permitted under Section 4.8.
4.7 Nondiscrimination: Restrictions on Use. Tenant covenants that during
the Term, (i) it shall permit the Development to be used only for residential housing
and may rent units in the Development only to persons who are 62 years of age or
older, and (ii) it shall not discriminate upon the basis of race, color, creed, religion,
ancestry, national origin or sex, affectional preference, disability, marital status or
status with regard to public assistance, in the sale, lease, or rental or in the use or
occupancy of the Development Property or any improvements erected or to be erected
thereof, or any part thereof.
4.8 Contests. Subject to the provisions of Section 4.9, Tenant, at Tenant's
expense, may contest by appropriate legal proceedings conducted in good faith and
with reasonable diligence the amount, validity, or application, in whole or in part, of
any Real Estate Tax or mechanic's lien referred to in Section 4.6, provided that
(1) Tenant shall pay any amount in dispute prior to the forfeiture,
sale or disturbance of Landlord's interest in any part of the
Development,
(2) upon final determination of any contest, Tenant shall
immediately pay and satisfy any amount found to be due, together with
costs, penalties and interest, and shall comply with any obligation of
Tenant found to be controlling,
(3) Tenant shall promptly give notice to Landlord of the
commencement of and the final determination of any such contest, and
(4) at Tenant's request, when required by law or where other good
cause appears, Landlord shall join in any such contest on condition that
Tenant shall hold harmless Landlord from and against any loss, cost,
including reasonable attorneys' fees, or damage Landlord shall suffer
by reason of such joinder.
4.9 Review of Taxes. Tenant shall have the right to contest real estate
taxes, levied or proposed to be levied against the Development or any portion thereof.
4.10 Development Agreement. Tenant shalll perform all of its obligations
under the Development Agreement in a timely manner.
ARTICLE 5
INSURANCE AND INDEMNITY
5.1 Insurance. During the Term, Tenant shall maintain at its own expense:
(1) Until the Improvements are substantially complete, and during
any construction, alteration, or repair by Tenant of any Improvements,
Builders Risk insurance, written on the so-called"Builders Risk-
Completed Value Basis" in an amount equal to one hundred percent
(100%) of the insurable value of the Improvements at the date of
completion, and with coverage available in non-reporting form on the
so-called"all risk" form of policy, but subject to customary exclusions.
(2) Comprehensive general public liability insurance (including
operations, contingent liability, operations of subcontractors, completed
operations and contractual liability insurance) with limits against bodily
injury and property damage of not less than $2,000,000 for each
occurrence, if possible on an occurrence basis, and an aggregate
limitation of$5,000,000 (to accomplish the above-required limits, an
umbrella excess liability policy may be used). The comprehensive
general public liability insurance shall name the Landlord as an
additional insured.
(3) at such time as the Improvements are substantially complete,
insurance against loss by fire and other hazards covered by the so-
called"all-risk" form of policy (including flood and earthquake)
without a co-insurance clause in an amount equal to the full insurable
replacement value of the Improvements.
(4) workers' compensation and employer's liability insurance with
statutory limits (or state-authorized self-insurance program).
5.2 Requirements. All insurance required in this Article 5 shall be taken
out and maintained in responsible insurance companies selected by the Tenant which
are authorized under the laws of the State to assume the risks covered thereby. The
Tenant will deposit annually with the Landlord policies evidencing all such insurance,
or a certificate or certificates or binders of respective insurers stating that such
insurance is in force and effect. Each policy shall contain a provision that the insurer
shall not cancel or modify it without giving written notice to the Tenant and the
Landlord at least thirty(30) days before the cancellation or modification becomes
effective. Not less than fifteen (15) days prior to the expiration of any policy, the
Tenant shall furnish the Landlord evidence satisfactory to the Landlord that the policy
has been renewed or replaced by another policy conforming to the provisions of this
Article 5, or that there is no necessity therefor under the terms of this Agreement. In
lieu of separate policies, the Tenant may maintain a single policy, blanket or umbrella
policies, or a combination thereof, having the coverage required in this Lease, in
which event the Tenant shall deposit with the Landlord a certificate or certificates of
the respective insurers as to the amount of coverage in force upon the Improvements.
All policies pursuant to this Lease shall be in form and content satisfactory to
Landlord and shall, to the extent reasonably requested by Landlord,name Landlord as
an additional insured and, in the case of property insurance policies, provide Landlord
with the benefits of a typical mortgagee clause, to the extent reasonably available.
5.3 Waiver. Landlord and Tenant hereby agree that Tenant will bear the
entire risk of loss, for losses covered by a commonly available "all risk" form of
insurance policy (including flood and earthquake), for the Improvements and any
contents and facilities of Tenant contained therein. Tenant further agrees that Tenant
on its own behalf and on behalf of anyone claiming through or under Tenant, by way
of subrogation or otherwise, waives any and all claims and rights of action Tenant
may have against Landlord and any of its agents, employees and contractors with
respect to any losses or claims arising out of any damage to the Improvements, by
losses covered by a commonly available "all risk" form of insurance policy (including
flood and earthquake), whether or not such damage was caused by the negligence or
other act or omission of Landlord or any of its agents, employees and contractors.
5.4 Landlord Right to Purchase Insurance. If Tenant shall fail to maintain
insurance as required herein, Landlord shall have the right, if Tenant shall fail to
obtain such insurance within 10 days after notice from Landlord, to purchase the same
and charge the cost thereof to Tenant. Tenant shall reimburse Landlord therefor
promptly upon receipt of an invoice, together with interest at the rate of 12%per
annum from the date paid by Landlord.
ARTICLE 6
FINANCING
6.1 Mortgages. Tenant's interest in this Lease, the Development Property,
the Improvements, or any combination thereof may be encumbered only as provided
by the Financing Documents and the Development Agreement.
6.2 Notice. If any Holder registers with Landlord its name and address in
writing by registered or certified mail, Landlord shall by registered or certified mail,
return receipt requested, addressed as registered with Landlord, give such Holder a
copy of any notice or other communication with respect to any claim that a default
exists or is about to exist under this Lease and a copy of any notice changing
Landlord's address. Any notice given to a Holder shall be deemed duly served when
personally delivered to an officer of Holder or mailed in accordance with Section 9.1.
6.3 Performance. If Tenant fails to make any payment or perform any act
required of Tenant under this Lease, then any Holder may(but shall not be obligated
to)to the extent permitted under its Mortgage make such payment or perform such act
with the same effect as if made or performed by Tenant. Entry by a Holder upon the
Development for such purpose or partial performance of the Mortgage shall not waive
or release Tenant from any obligation or default under this Lease except for an
obligation or default fully performed or cured by Holder.
6.4 New Lease.
(a) If(i)this Lease is rejected or disaffirmed pursuant to bankruptcy
law or other law affecting creditor's rights, (ii) Holder gives
written request to Landlord not later than 30 days after the
effective date of such rejection or disaffirmance, (iii) Holder
pays to Landlord all of Landlord's expenses (including
reasonable attorneys' fees) incidental thereto, and(iv) Holder
pays all Rent accrued as of the date of rejection or
disaffirmance, then Landlord shall execute and deliver a new
lease with Holder or its nominee, purchaser, assignee or
transferee, as the case may be, for the remainder of the Term
with the same terms as are contained herein except for charges
and encumbrances caused or suffered by Tenant.
b) Any new lease entered into pursuant to this
Section 6.4 shall be superior to all rights, liens and interest
intervening between the date of this Lease and the date of such
new lease. Upon the request of the new tenant, Landlord shall
execute and deliver a memorandum of the new lease in
recordable form so that notice of the new lease may be placed of
record by the new tenant.
b) The rights hereunder of Holders shall be
exercisable by such Holders in the order of the priority of lien or
other security interest of their respective Mortgages.
c) At Tenant's expense, upon written request of
Tenant, any Holder, or any prospective Holder, Landlord shall
deliver to them or any of them a separate written instrument
signed and acknowledged by Landlord setting forth and
confirming the provisions of this Section 6.4, and
acknowledging to them or any of them in writing the receipt by
Landlord of any notice or instrument given, sent or delivered to
Landlord pursuant to the provisions of this Section 6.4.
d) When a new lease is entered into such Holder or
(if reasonably approved by Landlord pursuant to the
Development Agreement) its designee (such holder or designee
the "Acquiring Holder," and the Mortgage of such Acquiring
Holder the "Acquiring Holder's Leasehold Mortgage"), the liens
on and estates and other interests in the Development Property
or this Lease of all persons holding directly or indirectly under
or through Tenant (including the Acquiring Holder's Leasehold
Mortgage), other than liens, estates and interests which are
subordinate to the Acquiring Holder's Leasehold Mortgage,
shall immediately and without documentation continue in effect,
attach to the new lease and be reinstated as to each other to the
same extent, and in the same manner, order and priority, as if(i)
the new lease were this Lease, (ii) this Lease had not been
terminated, and(iii)the Acquiring Holder had acquired the
leasehold estate under this Lease by assignment on the date the
term of the new lease commences. Each lien, estate or interest
which could have been extinguished by the foreclosure of the
Acquiring Holder's Leasehold Mortgage shall be deemed to be
subordinate to the Acquiring Holder's Leasehold Mortgage.
e) Notwithstanding any provision of this Section 6.4
apparently to the contrary, Landlord shall not be required to
provide any notice to any Holder under this Section 6.4 unless
such Holder has provided Landlord written notice of its
existence in accordance with Section 6.2 hereof.
f) Upon request of a Holder, Landlord will enter
into an agreement with such Holder confirming the provisions
of this Section 6.4 for the benefit of such Holder and
acknowledging the Holder's Mortgage and the assignments
made therein.
6.5 Further Assurances. Landlord agrees to execute such amendments to
this Lease and further agreements as may reasonably be requested by any Holder,
provided such amendments and further agreements do not impose any material
obligations or liabilities upon Landlord, or affect the rights of Landlord hereunder in
any material respect.
6.6 Termination of Lease. No cancellation, surrender, abandonment,
acceptance of surrender or modification or amendment of this Lease shall be binding
upon any Holder or affect the lien of any Mortgage if done without the prior written
consent of said Holder (provided (x) that no consent shall be required to a surrender
on the Termination Date or earlier termination hereof, and (y) consents to any
modification or amendment to this Lease shall not be unreasonably withheld or
delayed by such Holder).
ARTICLE 7
ASSIGNMENT AND SUBLETTING
7.1 Assignments. Tenant and its successors and assigns shall not assign or
sublet all or substantially all of Tenant's interest in this Lease or the Development
without the prior written consent of Landlord, except as otherwise provided in (a) the
Development Agreement, (b) Article 6 hereof, or (c) Section 7.2 hereof.
7.2 Subleases.
(a) Tenant may enter into subleases of the housing in the Improvements as
provided in the Development Agreement without the need for Landlord
consent.
(b) Units in the Development may be subleased only for purposes of
residential housing and no unit may be subleased to a person under 62
years of age.
7.3 Other Agreements. Tenant may enter into the Financing Documents
and such other agreements affecting the Development Property as are contemplated
by the Development Agreement.
ARTICLE 8
END OF TERM
8.1 Surrender. Upon termination of this Lease or of Tenant's right of
possession of the Development Property, Tenant shall immediately quit and surrender
possession of the Development to Landlord in its then condition.
8.2 Vesting. Upon termination of this Lease, if Tenant does not exercise
Tenant's option to purchase under Section 2.5, all right, title and interest of Tenant in
the Development shall automatically vest in Landlord without the necessity of
confirmation by any other document. However, upon the request of Landlord, such
vesting shall be confirmed in separate recordable instruments in form and substance
acceptable to Landlord.
8.3 Tenant's Equipment. Any of Tenant's Equipment remaining in the
Development after termination of this Lease or of Tenant's right of possession of the
Development Property shall be deemed conclusively to have been abandoned by
Tenant and, after notice to Tenant and Tenant's failure to respond within twenty (20)
business days after service thereof, may be appropriated, sold, destroyed, or disposed
of by Landlord without further notice or obligation to compensate Tenant or account
therefor.
8.4 Acceptance. No modification, termination or surrender of this Lease or
surrender of the Development Property or any part thereof or any interest therein by
Tenant shall be valid or effective unless agreed to and accepted in writing by
Landlord and any Holders, and no act by any representative or agent of Landlord or
any Holder other than such written agreement and acceptance shall constitute
acceptance thereof.
8.5 Merger. There shall be no merger of the leasehold estate created by
this Lease with the fee estate in the Development Property by reason of the same party
owning or holding any interest in such leasehold estate and any interest in such fee
estate. No merger of the leasehold estate and fee estate shall occur unless and until all
parties (including any Holder) having any interest in the leasehold estate created by
this Lease and the fee estate in the Development Property shall join in and duly record
a written instrument effecting such merger.
ARTICLE 9
NOTICES AND ESTOPPELS
9.1 Notices. All notices and other communications from Landlord to
Tenant or from Tenant to Landlord under this Lease shall be in writing and shall be
deemed duly served if delivered personally to an officer of the party being served or if
mailed by registered or certified mail, postage prepaid, addressed
if to Landlord:
if to Tenant:
or such other address or addresses as Landlord or Tenant shall have designated in
writing to the other. Notices which are mailed shall be deemed to have been given on
the date received as evidenced by the customary registered or certified mail receipt.
9.2 Estoppels. Landlord or Tenant shall at any time and from time to time
upon not less than thirty (30) days prior notice from the other execute, acknowledge
and deliver a written statement certifying
(1) that this Lease is in full force and effect, subject only to such
modification (if any) as may be set out therein,
(2) the dates (if any) to which Rent is paid in advance,
(3) that there are not, to such party's knowledge, any uncured
defaults on the part of the other party, or specifying such defaults if any
are claimed, and
(4) such other matters as may be reasonably required by the
requesting party.
Any such statement may be relied upon by any prospective transferee or
encumbrancer of all or any portion of the Development or any interest therein or any
assignee of any such persons. If any party fails to timely deliver such statement, such
party shall be deemed to have acknowledged that this Lease is in full force and effect,
without modification except as may be represented by the other, and that there are no
uncured defaults in the other's performance.
ARTICLE 10
DEFAULT
10.1 Events of Default. Any one or more of the following events constitutes
an Event of Default:
(1) If Tenant shall have failed to pay when due Rent or any other
amount payable by Tenant pursuant to this Lease within five (5) days
following Tenant's receipt of written notice from Landlord stating that
such payment was not made; or
(2) If Tenant shall have failed to perform any of the other
covenants, terms, conditions or provisions of this Lease or any of its
obligations under the Development Agreement within thirty(30) days
after Tenant's receipt of written notice specifying such failure;
provided, however, with respect to those failures which cannot with due
diligence be cured within said 30-day period, Tenant shall not be
deemed to be in default hereunder if Tenant commences to cure such
default within such 30-day period and thereafter continues the curing of
such default with all due diligence;
10.2 Termination. If an uncured Event of Default exists under this Lease,
then Landlord may, subject to Section 10.5 hereof, exercise one or more of the
following remedies in addition to any other rights and remedies provided at law or in
equity:
(1) Landlord may terminate this Lease by written notice to Tenant
and may forthwith repossess the Development and recover as damages
the amounts provided in Section 10.3, or
(2) Landlord may terminate Tenant's right of possession and
repossess the Development without demand or notice of any kind and
without terminating this Lease, in which event Landlord may (but will
not be obligated to) relet all or any part of the Development or any part
thereof for the account of Tenant for such rent and upon such terms as
Landlord deems advisable and may make any changes, additions,
improvements, redecorations and repairs to the Development as
Landlord deems advisable without affecting Tenant's liability under
this Lease.
10.3 Payments. If pursuant to Section 10.2 this Lease is terminated or
Landlord terminates Tenant's right of possession and repossesses the Development,
Tenant shall pay to Landlord on demand the sum of:
(1) all unpaid Rent owing at the time of termination or repossession,
as the case may be,
(2) all expenses (together with interest thereon at a rate of twelve
percent(12%)per annum from the date paid by Landlord) incurred by
Landlord in terminating, repossessing and reletting including but not
limited to costs of changes, additions, improvements, redecorations and
repairs, brokerage and legal fees, and the collection of Rent, and
(3) any deficiency between the Rent, when due in accordance with
this Lease, for the remainder of the Term and the payments, if any,
received by Landlord from any reletting of the Development or portions
thereof
10.4 Injunctive Relief If an uncured Event of Default exists under this
Lease, Landlord shall have the right, in addition to any remedy available to Landlord
under Section 10.2, to institute from time to time an action or actions for injunctive
and/or other equitable relief
10.5 Forbearance. If there is a Mortgage on Tenant's interest in this Lease
or the Development Property, Landlord will not terminate this Lease or Tenant's right
of possession of the Development Property pursuant to Section 10.2, if Holder or any
purchaser or transferee of Tenant's interest in this Lease or the Development by
reason of foreclosure or other proceedings or by deed or assignment in lieu of such
proceedings (or an assignee of Holder or such purchaser or transferee) shall, within
forty-five (45) days after acquiring Tenant's interest in this Lease or the
Development, cure all defaults susceptible of being cured by such entity (or, if such
cure would reasonably require more than forty-five (45) days and thereafter promptly,
effectively and continuously proceed to cure such default). Nothing in this Section
shall affect Landlord's right to enforce any remedy under this Lease for an Event of
Default except, so long as Holder is in the process of curing such Event of Default or
foreclosing its Mortgage under this Section, the right to terminate this Lease or
Tenant's right of possession of the Development.
10.6 Costs. Tenant shall indemnify Landlord against all costs and charges
(including reasonable legal fees) lawfully and reasonably incurred in enforcing
payment of Rent, and in obtaining possession of the Development after an Event of
Default of Tenant or upon expiration or earlier termination of this Lease, or in
enforcing any covenant, proviso or agreement of Tenant contained in this Lease.
Landlord shall indemnify Tenant against all costs and charges (including legal fees)
lawfully and reasonably incurred in enforcing any covenant, proviso or agreement of
Landlord contained in this Lease.
10.7 Waiver of Default. No failure or delay by Landlord or Tenant to insist
on strict performance of any term of this Lease or to exercise any right, power, or
remedy upon a breach of this Lease shall constitute a waiver of such term or such
breach.
10.8 Tenant's Liability. Notwithstanding anything to the contrary provided
in this Lease, it is specifically understood and agreed, such agreement being a primary
consideration for the execution of this Lease by Tenant, that(i)there shall be
absolutely no personal liability on the part of Tenant, or its officers, directors,
members, employees and agents, to Landlord with respect to any of the terms,
covenants and conditions of this Lease, and(ii) Landlord shall look solely to
recovering possession of the Development Property in the event of any breach by
Tenant of any of the terms, covenants and conditions of this Lease to be performed by
Tenant.
ARTICLE 11
MISCELLANEOUS
11.1 Relationship. Nothing contained in this Lease shall create any
relationship between the parties hereto other than that of lessor and lessee. Landlord
and Tenant disclaim any intention to create a joint venture, partnership or agency
relationship.
11.2 Number and Gender. The words "Landlord" and "Tenant" as used
herein includes the plural as well as the singular. The use of specific gender includes
any other gender as applicable.
11.3 Captions. The captions in this Lease are for convenience only and shall
have no effect on the construction or interpretation of this Lease.
11.4 Time. Time is of the essence of this Lease and each of its provisions.
11.5 Construction. The provisions of this Lease shall be construed as a
whole according to their common meaning, and not strictly for or against Landlord or
Tenant.
11.6 Law. This Lease shall be governed by and construed under the laws of
Minnesota.
11.7 Binding. This Lease is binding upon and inures to the benefit of
Landlord and Tenant and their respective successors and assigns and shall not be for
the benefit of any third parties other than such successors and assigns.
11.8 Short Form. Landlord and Tenant agree upon request of the other to
execute a Short Form of this Lease suitable for recording.
11.9 Severability. If any term of this Lease or application of it to any person
or circumstance is invalid or unenforceable, the remainder of this Lease or the
application of it to other persons or circumstances shall not be affected, and each
provision of this Lease shall be valid and enforceable to the extent permitted by law.
11.10 Counterparts. This Lease may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the
same instrument.
11.11 Interest Rate. Any interest due from one party to another hereunder
shall be at the interest rate specified herein or the maximum rate permitted by
applicable law, if less.
IN WITNESS OF THIS LEASE, Landlord and Tenant have properly executed
it as of the date set out at its head.
LANDLORD ORONO HOUSING AND
REDEVELOPMENT AUTHORITY y:
Name: Its:
Executive Director
[SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)]
TENANT ORONO SENIOR HOUSING, LLC, a
Minnesota limited liability company By: Wedum Foundation, its Manager Member
By: Name: Its:
M1:746156.01
[SIGNATURE PAGE TO LEASE (DEVELOPMENT PROPERTY)]
EXHIBIT A
LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY
M1:746156.01
EXHIBIT B
PERMITTED ENCUMBRANCES
M1:746156.01
EXHIBIT C
FORM OF TIF NOTE
No. R- 1
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ORONO HOUSING AND
REDEVELOPMENT AUTHORITY
TAX INCREMENT REVENUE
NOTE OF 2001
[1] The Orono Housing and Redevelopment Authority(the "HRA"),
located in the City of Orono, Hennepin County, Minnesota, hereby acknowledges
itself to be indebted and, for value received, hereby promises to pay to Dunbar
Development Corporation, a Minnesota limited liability company, or its registered
assigns (the "Registered Owner"), but only in the manner, at the times, from the
sources of revenue, and to the extent hereinafter provided, the Principal Amount of
this Note (as defined in paragraph [2] hereof) and to pay interest on the unpaid
portions of the Principal Amount of this Note at the rate of interest of 7.00%per
annum. Interest shall accrue on the Principal Amount from , 2000, and shall
be computed on the basis of a 360-day year consisting of 12 30-day months. This
Note is the "TIF Note" described and defined in that certain Development Agreement,
dated as of June , 2001 (as the same may be amended from time to time, the
"Development Agreement"), among the HRA, the City of Orono, Minnesota, Dunbar
Development Corporation and Orono Senior Housing, LLC, a Minnesota limited
liability company, as the initial Developer under the Development Agreement. Each
capitalized term which is used but not otherwise defined in this Note shall have the
meaning given to that term in the Development Agreement.
[2] The Principal Amount of this Note shall be $900,000.
[3] Subject to the terms hereof, amounts due on this Note shall be payable
on each February 1 and August 1, commencing February 1, 2004, and continuing
through February 1, 2024 (the "Payment Dates"). All amounts of accrued interest on
this Note which are not paid in full on any Payment Date shall also accrue additional
interest from the date of such non-payment (the "Compound Interest") until paid at
the rate of interest of 7.00%per annum.
[4] On each Payment Date (or, if not a business day of the HRA, the first
business day thereafter)the HRA shall pay by check or draft mailed to the person that
was the Registered Owner of this Note at the close of the last business day of the
HRA preceding such Payment Date an amount equal to the lesser of(1) the Available
Tax Increments (which generally consist of 90% of the tax increments from the
HRA's Tax Increment Financing District No. 1-1)received by the HRA within the 6-
month period preceding said Payment Date and (2) the sum of(i)the Compound
Interest, (ii) the accrued and unpaid interest on the Principal Amount, and (iii) the
unpaid Principal Amount of this Note. All payments made by the HRA under this
Note shall be applied first to pay the Compound Interest, second to pay the accrued
and unpaid interest on the Principal Amount of this Note and third to pay the unpaid
Principal Amount hereof. The HRA shall not have the right on any Payment Date to
prepay the obligations on this Note (that is, to apply more revenue hereto than the
Available Tax Increments as of said Payment Date) without the prior written consent
of the Registered Owner and the Developer, which consent either may withhold in its
sole and absolute discretion. The HRA shall have the right without any consent to
prepay all unpaid Additional TIF Note Increments on any Additional Payment Date.
[5] This Note shall terminate and be of no further force and effect on any
date upon which the HRA shall have terminated the Development Agreement or on
the last Payment Date of the amounts due hereon, whichever occurs earliest.
[6] The HRA makes no representation or covenant, express or implied, that
the revenues described herein will be sufficient to pay, in whole or in part, the
amounts which are or may otherwise become due and payable hereunder. Any
amounts which have not become due and payable on this Note on or before the final
Payment Date shall no longer be a debt or obligation of the HRA whatsoever.
[7] The HRA's payment obligations hereunder shall be further conditioned
on the Developer's compliance with the terms and conditions of the Development
Agreement and on the fact that there shall not at the time have occurred and be
continuing an Event of Default under the Development Agreement, and, further, if
pursuant to the occurrence of an Event of Default under the Development Agreement
the HRA duly elects to terminate the Development Agreement pursuant to its terms,
the HRA shall have no further debt or obligation under this Note whatsoever;
provided that if, pursuant to an Event of Default, the HRA elects pursuant to Section
7.2 of the Development Agreement to withhold payment otherwise due hereon, said
suspended payment shall become payable hereon upon cure of the Event of Default.
Reference is hereby made to the provisions of the Development Agreement for a
fuller statement of the obligations of the Developer and of the rights of the HRA
thereunder, and said provisions are hereby incorporated by reference into this Note to
the same extent as though set out in full herein. The execution and delivery of this
Note by the HRA, and the acceptance thereof by the initial Registered Owner hereof,
shall conclusively establish this Note as the "TIF Note" (and shall conclusively
constitute discharge of the HRA's obligation to issue and deliver the same) under the
Development Agreement.
[8] This Note is not any obligation of any kind whatsoever of any public
body, except that this Note is a special and limited revenue obligation but not a
general or moral obligation of the HRA and is payable by the HRA only from the
sources and subject to the qualifications and limitations stated or referenced herein.
Neither the full faith and credit nor the taxing powers of the HRA are pledged to or
available for the payment of this Note, and no property or other asset of the HRA,
save and except the above referenced Available Tax Increments, is or shall constitute
a source of payment of the HRA's obligations hereunder.
[9] This Note is issued by the HRA in aid of financing a project pursuant to
and in full conformity with the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Sections 469.174 through 469.179, and including
•
specifically but without limitation Section 469.178, Subdivision 4, thereof.
[10] This Note may be assigned but upon such assignment the assignor shall
promptly notify the HRA thereof in writing, and the assignee shall surrender this Note
to the HRA either in exchange for a new fully registered note or for transfer of this
Note on the registration records for the Note maintained by the HRA. As a condition
to any such transfer, the transferee shall have delivered to the HRA an executed
Investor Letter in the form of Exhibit Ito the Development Agreement. Each such
assignee shall take this Note subject to the foregoing conditions and subject to all
provisions stated or referenced herein.
[11] IN WITNESS WHEREOF, the Orono Housing and Redevelopment
Authority has caused this Note to be executed by the manual signatures of its Chair
and Executive Director, has caused the official seal of the HRA to be omitted
herefrom, as permitted by law, and has caused this Note to be issued and dated as of
June , 2001.
Chair Executive Director
CERTIFICATION OF REGISTRATION
It is hereby certified that the foregoing Note was as of the latest date listed
below registered in the name of the last Registered Owner noted below, and that, at
the request of said Registered Owner of this Note, the undersigned has as of said
applicable date registered this Note as to principal and interest on the Note in the
name of such Registered Owner, as indicated in the registration blank below, on the
books kept by the undersigned for such purposes.
NAME OF REGISTERED DATE OF SIGNATURE OF
OWNER REGISTRATION HRA EXECUTIVE
DIRECTOR
Dunbar Development Corporation , 2001
M I:745421.01
EXHIBIT E
Form of Income Certification
Certification of Tenant Eligibility
UNIT NUMBER:
I/We, the undersigned, being first duly sworn, state that I/we have read and
answered fully and truthfully each of the following questions for all persons who are
to occupy the unit in the Orono Woods Apartments development for which
application is made, all of whom are listed below:
1. 2. 3. 4. 5.
Name of Members of the Household Relationship to Head of Household
Age Social Security Number Place
of Employment
Head - -
Spouse -
Income Computation
6. Anticipated Annual Income. The anticipated total annual income from all
sources of each person listed in item 1 above for the twelve month period beginning
on the date of this certificate, including income described in (a) below, but excluding
all income described in (b) below, is $
(a) The amount set forth above includes all of the following income (unless
such income is described in(b) below;
(i) all wages and salaries, overtime pay, commissions, fees, tips and
bonuses before payroll deductions;
(ii) net income from the operation of a business or profession or
from the rental of real or personal property (without deducting
expenditures for business expansion or amortization of capital
indebtedness or any allowance for depreciation of capital assets);
(iii) interest and dividends (including income from assets as set forth
in item 7(b) below);
(iv) the full amount of periodic payments received from social
security, annuities, insurance policies, retirement funds, pensions,
disability or death benefits and other similar types of periodic receipts;
(v) payments in lieu of earnings, such as unemployment and
disability compensation, workmen's compensation and severance pay;
(vi) the maximum amount of public assistance available to the above
persons;
(vii) periodic and determinable allowances, such as alimony and
child support payments and regular contributions and gifts received
from persons not residing in the dwelling;
(viii) all regular pay, special pay and allowances of a member of the
Armed Forces (whether or not living in the dwelling) who is the head
of the household or spouse; and
(ix) any earned income tax credit to the extent it exceeds income tax
liability.
(b) The following income is excluded from the amount set forth above:
(i) casual, sporadic or irregular gifts;
(ii) amounts that are specifically for or in reimbursement of medical
expenses;
(iii) lump sum additions to family assets, such as inheritances,
insurance payments (including payments under health and accident
insurance and workmen's compensation), capital gains and settlement
for personal or property losses;
(iv) amounts of educational scholarships paid directly to student or
educational institution, and amounts paid by the government to a
veteran for use in meeting the costs of tuition, fees, books and
equipment, but in either case only to the extent used for such purposes;
(v) hazardous duty pay to a member of the household in the armed
forces who is away from home and exposed to hostile fire;
(vi) relocation payments under Title H of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970;
(vii) income from employment of children (including foster children)
under the age of 18 years;
(viii) foster child care payments;
(ix) the value of coupon allotments under the Food Stamp Act of
1977;
(x) payments to volunteers under the Domestic Volunteer Service
Act of 1973;
(xi) payments received under the Alaska Native Claims Settlement
Act;
(xii) income derived from certain submarginal land of the United
States that is held in trust for certain Indian tribes;
(xiii) payments on allowances made under the Department of Health
and Human Services' Low-Income Home Energy Assistance Program;
(xiv) payments received from the Job Partnership Training Act;
(xv) income derived from the disposition of funds of the Grand River
Bank of Ottawa Indians; and
(xiv) the first $2,000 of per capita shares received from judgments
awarded by the Indian Claims Commission or the Court of Claims or
from funds held in trust for an Indian tribe by the Secretary of Interior.
7. Net Family Assets. If any of the persons described in item 1 above (or any
person whose income or contributions were included in item 6 above) has any
savings, stocks, bonds, equity in real property or other form of capital investment
(excluding interests in Indian trust lands), provide:
(a) the total value of all such assets owned by all such persons:
$ ;
(b) the amount of income expected to be derived from such assets in the
12-month period commencing on the date hereof:
$ ;
(c) the amount of such income included in item 6:
$ ;
8. Students
(a) Will all of the persons listed in item 1 above be or have they been full-
time students during five calendar months of this calendar year at an educational
institution (other than a correspondence school) with regular faculty and students?
Yes No
(b) (Complete only if the answer to item 8(a) is "Yes") Is any such person
(other than nonresident aliens) married and eligible to file a joint federal income tax
return?
e j
Yes No
The above information is full, true and complete to the best of my knowledge.
I have no objections to inquiries being made for the purpose of verifying the
statements made herein. The undersigned acknowledge that the lease executed by the
undersigned may be canceled upon notice as provided therein if the undersigned have
misrepresented any of the information set forth above.
Date:
Signature
FOR COMPLETION BY PROJECT OWNER OR MANAGER ONLY:
A. Calculation of eligible income:
(1) Enter amount entered for entire household in item 6 above:
(2) If the amount entered in item 7(a) above is greater than $5,000,
enter the greater of(i) the amount entered in 7(b) less the amount
entered in 7(c) or(ii) 10% of the amount entered in 7(a):
(3) TOTAL ELIGIBLE INCOME (Line A(I) plus line A(2):
B. The amount entered in A(3) (Total Eligible Income) is:
Less than $ , which is an amount
equal to 50% of median income for the Minneapolis-St.
Paul SMSA.
More than the above-mentioned amount.
C. Number of apartment unit assigned:
D. This apartment unit was was not last occupied for a
period of at least 31 consecutive days by a person or persons whose aggregate
anticipated annual income, as certified in the above manner, was less than or equal to
the amount at which a person would have qualified under B above.
E. Applicant:
Qualifies as a Lower-Income Tenant.
Does not qualify as a Lower Income Tenant,
Owner or Manager
MI 745419 01
f •
EXHIBIT F
INVESTOR LETTER
Orono Housing and
Redevelopment Authority
Orono, Minnesota
City of Orono, Minnesota
Orono, Minnesota
Re: Orono Housing and Redevelopment Authority Tax Increment
Revenue Note
Ladies and Gentlemen:
The undersigned representative of (the "Purchaser"),
being the purchaser of the Orono Housing and Redevelopment Authority Tax
Increment Revenue Note of 2001, dated as of June , 2001 (the "Note"), does
hereby certify, represent and warrant for the benefit of the addressees that:
(a) The Purchaser is either a bank, savings and loan association, registered
investment company, insurance company or other"Accredited Investor" as defined in
Rule 501(a) of Regulation D of the Securities Act of 1933, as amended. Purchaser(i)
is duly and validly organized under the laws of its jurisdiction of incorporation or
organization, (ii) is legally authorized to purchase the Note as lawful investment of
the Purchaser, (iii) has such knowledge and experience in business and financial
matters as to be capable of evaluating the merits and risks of an investment in the
Note on the basis of the information and review of documents described in section(d)
below and the investigation which the Purchaser has conducted and (iv) can bear the
economic risk of the purchase of the Note.
(b) The Purchaser has purchased the Note for its own account for
investment purposes only or has become the registered owner thereof for security
purposes and not for the account of any other person and not for distribution,
assignment or resale; provided, however, the Purchaser may dispose of the Note or
any portion thereof or interest therein in compliance with paragraph 10 of the Note
and provided further that a sale of shares in any investment company that purchases
the Note will not, in and of itself, constitute a distribution of the Note for the purposes
of this section(b).
(c) Neither the City of Orono, Minnesota(the "City"), the Orono Housing
and Redevelopment Authority (the "HRA") nor its counsel shall be deemed to have
made any representations with respect to the Note or the Development Agreement or
tax increment financing district referred to therein as of any date, except as expressly
provided in the Note or the Development Agreement.
(d) The Purchaser has obtained and has read and reviewed such documents,
C x
instruments and information related to the issuance of the Note as the Purchaser has
requested from the City and the HRA. The Purchaser has also reviewed such other
information as requested and has been provided an opportunity to ask questions of,
and has received answers from, representatives of the City and the HRA regarding the
terms and conditions of the Note. We understand that the Note is payable solely from
certain tax increment pledged to the payment thereof and understand that such tax
increment may not be sufficient to pay stated principal and interest on the Note and
that there may be other risks in such an investment which are not described therein.
(e) The undersigned is a duly appointed, qualified and acting officer or
representative of the Purchaser and authorized to make the certifications,
representations and warranties contained herein and the purchase of the Note
constitutes a lawful investment of the Purchaser.
(f) The Purchaser acknowledges that the City, the HRA, the members of
their respective governing bodies and their officers (each individually an"Issuer
Party" and collectively the "Issuer Parties") have not undertaken to furnish
information to the Purchaser or to ascertain the accuracy or completeness of any
information that may have been furnished to the Purchaser by or on behalf of the City,
the HRA or the prior holder of the Note relating to the tax increment pledged to
payment of the Note and that none of the Issuer Parties have made any representations
concerning the accuracy or completeness of any information supplied to the Purchaser
or relating to the security for the Note. The Purchaser hereby waives any
requirements of due diligence in investigation or inquiry on the part of any Issuer
Parties and all claims, actions, or causes of action which the Purchaser may have
directly or indirectly from or relating to any action which the Issuer Parties took or
could have taken, in connection with the issuance and sale of the Note to the
Purchaser.
IN WITNESS WHEREOF, I have hereunder set my hand the day of
Name:
Title:
MI:745420.01