HomeMy WebLinkAbout4.F.3. Approval of Contract for Private Development (including a Business Subsidy Agreement) with Datacard Corporation - Res. No. 7376 Consent Business 4. F. 3.
SHAKOPEE
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Samantha DiMaggio, Economic Development Coordinator
DATE: 11/06/2013
SUBJECT: Approval of Contract for Private Development(including a Business Subsidy
Agreement)with Datacard Corporation- Res.No. 7376 (D)
Action Sought
The City Council is asked to adopt Resolution No. 7376, a Resolution approving the Contract for
Private Development between Scott County, Datacard Corporation and the City of Shakopee.
Background
On July 29, 2013, the City Council and the Scott County Board of Commissioners held a joint
public hearing to consider granting a Property Tax Abatement for Datacard Corporation. After
the public hearing, the City Council authorized Resolution No. 7333, A Resolution Granting
Property Tax Abatement for Datacard Corporation.
Since the July 29, 2013 meeting, City and County staff have been negotiating with Datacard
Corporation regarding the final Development Agreement, a copy of which is attached.
The City Council is asked to approve the Contract for Private Development with Datacard
Corporation. The attached Contract contains the action authorized by the City following the July
29th Public Hearing, which provides for a cumulative City Tax Abatement of
$334,869, commencing in 2014 and continuing through 2024. The maximum annual abatement
shall not exceed $36,195.
The contract also specifies that 680 employees will be relocated from their existing facility in
Minnetonka within two years. Datacard must also create 100 additional jobs during that time,
which will pay at least $14.50 per hour. Finally, within five years, Datacard must create 120 new
positions in the City of Shakopee, which will pay an average hourly wage of$14.50.
Recommendation
Staff recommends that the Council approve the attached Development Agreement.
Budget Impact
There is no direct budget impact as a result of the proposed action.
Relationship to Vision
This supports Goal D, "Maintain, improve and create strong partnerships with other public and
private sector entities".
Requested Action
Council should, by motion, Resolution No. 7376, A Resolution approving Contract for Private
Development with Scott County and Datacard Corporation for certain property in the City of
Shakopee.
Attachments: Datacard Contract for Private Dev.
Datacard Resolution
EXECUTION COPY
CONTRACT
FOR
PRIVATE DEVELOPMENT
between
CITY OF SHAKOPEE,MINNESOTA,
SCOTT COUNTY,MINNESOTA,
and
DATACARD CORPORATION
Dated: November 6,2013
This document was drafted by:
KENNEDY&GRAVEN, Chartered(JAE)
470 U.S.Bank Plaza
200 South Sixth Street
Minneapolis,Minnesota 55402
Telephone: 337-9300
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TABLE OF CONTENTS
Page
PREAMBLE ................................................................................................................................................ 1
ARTICLE I
Definitions
Section1.1. Definitions..........................................................................................................................2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the City................................................................................................5
Section 2.2. Representations by the County...........................................................................................5
Section 2.3. Representations and Warranties by the Developer.............................................................5
ARTICLE III
Property Tax Abatement
Section 3.1. Status of Development Property.........................................................................................7
Section 3.2. Environmental Conditions..................................................................................................7
Section 3.3. Minimum Improvements....................................................................................................7
Section 3.4. City Property Tax Abatement.............................................................................................7
Section 3.5. County Property Tax Abatement........................................................................................8
Section 3.6. Payment of Administrative Costs.......................................................................................8
Section3.7. Records...............................................................................................................................9
Section 3.8. Business Subsidy Agreement..............................................................................................9
Section 3.9. Restrictions on Use........................................................................................................... 11
Section 3.10. Job and Wage Maintenance.............................................................................................. 11
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements......................................................................................... 12
Section 4.2. Construction Plans............................................................................................................ 12
Section 4.3. Commencement and Completion of Construction............................................................ 13
Section 4.4. Certificate of Completion................................................................................................. 13
ARTICLE V
Insurance and Condemnation
Section5.1. Insurance........................................................................................................................... 14
Section5.2. Subordination.................................................................................................................... 15
ARTICLE VI
Taxes
Section 6.1. Right to Collect Delinquent Taxes.................................................................................... 16
Section 6.2. Reduction of Taxes........................................................................................................... 16
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ARTICLE VII
Financing
Section7.1. Financing.......................................................................................................................... 17
Section 7.2. Modification; Subordination............................................................................................. 17
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development.................................................................................... 18
Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of
Agreement......................................................................................................................... 18
Section 8.3. Release and Indemnification Covenants...........................................................................19
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined................................................................................................20
Section9.2. Remedies on Default.........................................................................................................20
Section9.3. No Remedy Exclusive ......................................................................................................21
Section 9.4. No Additional Waiver Implied by One Waiver ...............................................................21
Section9.5. Attorney Fees....................................................................................................................21
Section 9.6. Default by City or County.................................................................................................21
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests;Representatives Not Individually Liable.........................................22
Section 10.2. Equal Employment Opportunity.......................................................................................22
Section 10.3. Provisions Not Merged With Deed...................................................................................22
Section 10.4. Titles of Articles and Sections..........................................................................................22
Section 10.5. Notices and Demands.......................................................................................................22
Section10.6. Counterparts......................................................................................................................22
Section10.7. Recording..........................................................................................................................22
SIGNATURES ..........................................................................................................................................S-1
SCHEDULE A Development Property....................................................................................................A-1
SCHEDULE B Certificate of Completion...............................................................................................B-1
SCHEDULE C Form of Subordination Agreement.................................................................................C-1
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CONTRACT FOR PRIVATE DEVELOPMENT
THIS CONTRACT FOR PRIVATE DEVELOPMENT (the "Agreement") is made as of
November 6, 2013, by and between the CITY OF SHAKOPEE, MINNESOTA, a Minnesota municipal
corporation (the "City"), SCOTT COUNTY, MINNESOTA, a political subdivision of the State of
Minnesota (the "County"), and DATACARD CORPORATION, a Delaware corporation, or any of its
affiliates(the"Developer").
RECITALS
WHEREAS, pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815 (the "Act'),
the City and the County are authorized to abate property taxes in order to increase or preserve tax base
and provide employment opportunities; and
WHEREAS, pursuant to Minnesota Statutes, Sections 116J.993 to 1161995, as amended (the
"Business Subsidy Act'), the City and the County are authorized to grant business subsidies to facilitate
development in the City,the County,and the State of Minnesota(the"State");and
WHEREAS,the Developer has proposed to acquire,renovate,equip,and construct an expansion to
an approximately 370,000 square foot building currently consisting of manufacturing space for use as its
corporate headquarters(the"Minimum Improvements"), on real property located in the City and described
in Exhibit A(the"Development Property");and
WHEREAS,pursuant to the Act,the City Council of the City and the Board of Commissioners of
the County have each approved resolutions authorizing abatements of a portion of real property taxes on
the Development Property; and
WHEREAS, in order to reimburse the Developer for certain costs related to the construction of the
Minimum Improvements, the Developer has requested the following assistance: (i) tax abatement from the
City for up to eleven years in the maximum amount of $334,869 pursuant to the Act with an annual
maximum amount not to exceed$36,195; and(ii)tax abatement from the County for up to eleven years in the
maximum amount of$324,324 pursuant to the Act,with an annual maximum not to exceed$35,055.
WHEREAS,the County and the City have determined that the financial assistance provided to the
Developer as contemplated herein and the fulfillment generally of this Agreement are in the vital and best
interests of the City and the County and the health, safety, morals, and welfare of their residents, and in
accord with the public purposes and provisions of the applicable State and local laws and requirements
under which this Agreement has been undertaken; and
NOW, THEREFORE,in consideration of the mutual obligations contained in this Agreement,the
parties agree as follows:
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the
context:
"Abatement Capacity" means the maximum amount of property taxes that may be abated in any
year by a political subdivision under Section 469.1813, subdivision 8 of the Act, as amended. As of the
date of this Agreement, the Abatement Capacity for the City is the greater of 10%of the net tax capacity
of the City for the taxes payable year to which the abatement applies or $200,000. As of the date of this
Agreement, the Abatement Capacity for the County is the greater of 10% of the net tax capacity of the
County for the taxes payable year to which the abatement applies or$200,000.
"Act"means Minnesota Statutes, Sections 469.1812 through 469.1815, as amended.
"Agreement"means this Contract for Private Development, as the same may be from time to time
modified,amended,or supplemented.
"Available Abatement" means the sum of the City Available Abatement and County Available
Abatement.
"Business Day"means any day except a Saturday, Sunday, legal holiday, a day on which the City
or County is closed for business, or a day on which banking institutions in the City are authorized by law
or executive order to close.
"Business Subsidy Act"means Minnesota Statutes,Sections 116J.993 to I I6J.995,as amended.
"Certificate of Completion"means the certification provided to the Developer, or the purchaser of
any part,parcel or unit of the Development Property,pursuant to Section 4.4 of this Agreement.
"City"means the City of Shakopee,Minnesota.
"City Abatement" means one hundred percent (100%) of the real property taxes (i) generated in
any tax-payable year by extending the City's total tax rate for that year against the tax capacity increase
resulting from the Minimum Improvements constructed on the Property,excluding the tax capacity of the
land, and the existing building(in the amount of$7,300,000, as established in tax payable year 2013) and
excluding the portion of the tax capacity attributable to the areawide tax under Minnesota Statues,
Chapter 473F, all as of January 2 in the prior year, and(ii)remitted to the City by the County.
"City Abatement Resolution" means Resolution No. 7333, approved by the City Council of the
City on July 29,2013,regarding abatement of property taxes on the Development Property.
"City Available Abatement" means, on each Payment Date, the City Abatement generated in the
preceding six (6) months with respect to the Development Property and remitted to the City by the
County, or such lesser amount as shall cause (i) the cumulative principal amount of the City Abatement
paid to the Developer during the term of this Agreement to be no more than $334,869; and (ii)the
cumulative principal amount of the City Available Abatement and the County Available Abatement paid
to the Developer during the term of this Agreement to be no more than$659,193.
427747v9 JAE SH155-317 2
"Compliance Date" means, for purposes of the job and wage creation goals set forth in Section
3.8 hereof, the date which is two years after the date of issuance of the Certificate of Completion of the
Minimum Improvements.
"Construction Plans" means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property, including the
Minimum Improvements and the related site improvements, which (a) shall be as detailed as the plans,
specifications, drawings and related documents which are submitted to the appropriate building officials
of the City, and (b) shall include at least the following: (1) site plan; (2) foundation plan; (3) basement
plans;(4)floor plan for each floor; (5)cross sections of each(length and width); (6) elevations(all sides);
(7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the City may
reasonably request to allow it to ascertain the nature and quality of the proposed construction work.
"County"means Scott County,Minnesota.
"County Abatement" means one hundred percent(100%) of the real property taxes (i) generated
in any tax-payable year by extending the City's total tax rate for that year against the tax capacity increase
resulting from the Minimum Improvements constructed on the Property, excluding the tax capacity of the
land and the existing building (in the amount of$7,300,000, as established in tax payable year 2013) and
excluding the portion of the tax capacity attributable to the areawide tax under Minnesota Statues,
Chapter 473F, all as of January 2 in the prior year, and(ii)paid to the City by the County.
"County Abatement Resolution" means Resolution No. 2013-139, adopted by the Board of
Commissioners of the County on July 29, 2013, regarding abatement of property taxes on the
Development Property.
"County Available Abatement" means, on each Payment Date, the County Abatement generated
in the preceding six (6) months with respect to the Development Property and transferred to the City by
the County, or such lesser amount as shall cause (i) the cumulative principal amount of the County
Abatement paid to the Developer during the term of this Agreement to be no more than $324,324 with an
annual payment of no more than $35,055; and (ii) the cumulative principal amount of the City Available
Abatement and the County Available Abatement paid to the Developer during the term of this Agreement
to be no more than$659,193.
"Developer" means DataCard Corporation, a Delaware corporation, or its permitted successors
and assigns.
"Development Property"means the real property described in Schedule A of this Agreement.
"Event of Default"means an action by the Developer listed in Article IX of this Agreement.
"Holder"means the owner of a Mortgage.
"Minimum Improvements"means the renovation, equipping, and expansion of an existing 370,000
square foot building presently consisting of manufacturing space for use as the Developer's corporate
headquarters on the Development Property.
"Mortgage" means any mortgage made by the Developer which is secured, in whole or in part,
with the Development Property and which is a permitted encumbrance pursuant to the provisions of
Article VIII of this Agreement.
427747v9 JAE SH155-317 3
"Payment Date"means each February 1 and August 1, commencing August 1,2014;provided that if
any such Payment Date is not a Business Day,the Payment Date shall be the next succeeding Business Day.
"Project"means the Development Property as improved with the Minimum Improvements.
"State"means the State of Minnesota.
"Tax Abatements"means collectively the City Abatement and the County Abatement.
"Tax Official" means any County assessor, County auditor, County or State board of
equalization,the commissioner of revenue of the State, or any State or federal district court, the tax court
of the State, or the State Supreme Court.
"Transfer"has the meaning set forth in Section 8.2(a)hereof.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be
excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by
third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any
federal, state or local governmental unit (other than the City in exercising their rights under this
Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the
Developer's obtaining of permits or governmental approvals necessary to enable construction of the
Minimum Improvements by the dates such construction is required under Section 4.3 of this Agreement,
so long as the Construction Plans have been approved in accordance with Section 4.2 hereof.
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427747v9 JAE SH155-317 4
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the City. The City makes the following representations and
warranties as the basis for its covenants herein:
(a) The City is a statutory city duly organized and existing under the laws of the State.
Under the provisions of the Act, the City has the power to enter into this Agreement and carry out its
obligations hereunder.
(b) The City proposes to grant abatement of taxes on the Development Property and the
Minimum Improvements thereon, to assist in financing the Minimum Improvements, which will increase
the tax base and create significant employment opportunities within the City.
Section 2.2. Representations by the County. The County makes the following representations
and warranties as the basis for its covenants herein:
(a) The County is a political subdivision of the State, duly organized and existing under the
laws of the State. Under the provisions of the Act,the County has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The County proposes to grant abatement of taxes on the Development Property and the
Minimum Improvements thereon, for the purposes of increasing the tax base, and creating employment
opportunities, and encouraging economic development within the County.
Section 2.3. Representations and Warranties by the Developer. The Developer makes the
following representations and warranties as the basis for its covenants herein:
(a) The Developer is a corporation, duly organized and in good standing under the laws of
the State of Delaware, is not in violation of any provisions of its operating agreement or its bylaws, is
duly authorized to transact business within the State,has power to enter into this Agreement and has duly
authorized the execution,delivery and performance of this Agreement by proper action of its officers.
(b) The Developer will construct the Minimum Improvements and cause the Minimum
Improvements to be operated and maintained in accordance with the terms of this Agreement and all
local, state and federal laws and regulations (including, but not limited to, environmental, zoning,
building code and public health laws and regulations).
(c) The Developer has received no notice or communication from any local, State or federal
official that the activities of the Developer with respect to the Minimum Improvements may be or will be
in violation of any environmental law or regulation(other than those notices or communications of which
the City is aware). The Developer is aware of no facts the existence of which would cause it to be in
violation of or give any person a valid claim under any local, state or federal environmental law,
regulation or review procedure with respect to the Minimum Improvements.
(d) The Developer will construct the Minimum Improvements in accordance with all local,
State or federal energy-conservation laws or regulations.
I
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(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 applicable local, State and federal
laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully
constructed.
(f) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement is prevented,limited by or conflicts with or results in a breach of,the terms,conditions or
provisions of any corporate restriction or any evidence of indebtedness, agreement or instrument of
whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default
under any of the foregoing, which default or breach might prevent the Developer from performing its
obligations under this Agreement.
(g) The Developer shall promptly advise the City and the County in writing of all litigation
or claims affecting any part of the Minimum Improvements and all written complaints and charges made
by any governmental authority materially affecting the Minimum Improvements or materially affecting
the Developer or its business which may delay or require changes in construction of the Minimum
Improvements through the date of the Certificate of Completion.
(h) The Developer is not in default under any business subsidy agreement pursuant to
Section 116J.994 of the Business Subsidy Act.
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427747v9 JAE SH155-317 6
ARTICLE III
Property Tax Abatement
Section 3.1. Status of Development Property. As of the date of this Agreement,the Developer has
acquired the Development Property. The City and the County shall have no obligation to acquire the
Development Property or any portion thereof.
Section 3.2. Environmental Conditions.
(a) The Developer acknowledges that the City and County make no representations or
warranties as to the condition of the soils on the Development Property or the fitness of the Development
Property for construction of the Minimum Improvements or any other purpose for which the Developer may
make use of such property, and that the assistance provided to the Developer under this Agreement neither
implies any responsibility by the City or County for any contamination of the Development Property nor
imposes any obligation on such parties to participate in any cleanup of the Development Property.
(b) Without limiting its obligations under Section 8.3 of this Agreement,the Developer further
agrees that it will indemnify, defend, and hold harmless the City and the County and their governing body
members, officers, and employees, from any claims or actions arising out of the presence, if any, of
hazardous wastes or pollutants existing on or in the Development Property,unless and to the extent that such
hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnitees. Nothing
in this section will be construed to limit or affect any limitations on liability of the City or County under State
or federal law,including without limitation Minnesota Statutes,Sections 466.04 and 604.02.
Section 3.3. Minimum Improvements. The Developer hereby covenants to construct the
Minimum Improvements on the Development Property pursuant to the terms and conditions of this
Agreement. The Minimum Improvements consist of the renovation, equipping, and expansion of an
existing 370,000 square foot building presently consisting manufacturing space for use as the Developer's
corporate headquarters on the Development Property.
Section 3.4. Ci1y Property Tax Abatement.
(a) Generally. In order to make the Project economically feasible, the City will grant the
City Abatement to the Developer commencing 2014 and continuing through 2024. In no event shall the
City Abatement exceed $36,195 in any year or a cumulative total of$334,869 over the term of the City
Abatement. In no event shall the City Abatement and the County Abatement provided to Developer from
2014 through 2024 exceed$659,193. The City Abatement will reimburse the Developer for a portion of
the costs of completing the Project. Subject to the City Abatement Capacity, the City shall pay the
Developer the City Available Abatement each February 1 and August 1 (each a "Payment Date"),
commencing August 1,2014,and terminating on February 1,2025.
(b) Limitations. The pledge of City Available Abatement is subject to all the terms and
conditions of the City Abatement Resolution. The City Available Abatement is payable solely from and
to the extent of the City Abatement, and nothing herein shall be construed to obligate the City to make
payments from any other funds. The City makes no warranties or representations as to the amount of the
City Available Abatement. Any estimates of City Available Abatement amounts prepared by the City's
financial consultants are for the benefit of the City only, and the Developer is not entitled to rely on such
estimates.
427747v9 JAE SH155-317 7
The Developer further acknowledges that the total property tax abatements payable by the City in
any year may not exceed the City Abatement Capacity all pursuant to Section 469.1813,subdivision 8 of the
Act. The City does not warrant or represent that the City Abatement in the amounts pledged under this
Agreement will be within the City's Abatement Capacity. The City represents that it has previously granted
three other abatements under the Act that are ongoing as of the date of this agreement and which shall be paid
prior to the City Abatement hereunder. The City agrees that if the City grants any additional abatements
under the Act during the term of this Agreement,the City's Abatement Capacity will be allocated first to the
abatements granted prior to the date of this Agreement, next and to the City Abatement pledged pursuant to
this Agreement,and then to any additional abatements.
Section 3.5. County Property Tax Abatement.
(a) Generally. In order to make the Project economically feasible,the County will grant the
County Abatement to the Developer commencing 2014 and continuing through 2024. In no event shall the
County Abatement exceed$35,055 in any year or a cumulative total of$324,324 over the term of the County
Abatement. Further, in no event shall the cumulative City Abatement and County Abatement paid to the
Developer during the term of this Agreement exceed an amount of$659,193. The County Abatement will
reimburse the Developer for a portion of the costs of the Project. Subject to the County Abatement
Capacity, the County shall pay the City the County Available Abatement on or before the business day
prior to each Payment Date, commencing the business day prior to August 1, 2014, and continuing
through the business day prior to February 1, 2025. The transfer by the County of the County Available
Abatement to the City will be accompanied by electronic communication to the City's Finance Director
providing the amount of the County Available Abatement transferred. The City shall disburse the County
Available Abatement received pursuant to this Section to the Developer on each Payment Date.
(b) Limitations. The pledge of County Available Abatement is subject to all the terms and
conditions of the County Abatement Resolution. The County Available Abatement is payable solely from
and to the extent of the County Abatement, and nothing herein shall be construed to obligate the County
to make payments from any other funds. The County makes no warranties or representations as to the
amount of the County Available Abatement. Any estimates of County Available Abatement amounts
prepared by the County's financial consultants are for the benefit of the County only, and the Developer is
not entitled to rely on such estimates.
The Developer further acknowledges that the total property tax abatements payable by the County in
any year may not exceed the County Abatement Capacity,all pursuant to Section 469.1813,subdivision 8 of
the Act. The County does not warrant or represent that the County Abatement in the amounts pledged under
this Agreement will be within the County's Abatement Capacity. The County represents that it has
previously granted four other abatements under the Act that are ongoing as of the date of this agreement and
which shall be paid prior to the City Abatement hereunder. The County agrees that if the County grants any
additional abatements under the Act during the term of this Agreement, the County's Abatement Capacity
will be allocated first to the abatements granted prior to the date of this Agreement, next to the County
Abatement pledged pursuant to this Agreement and then to any additional abatements.
Section 3.6. Payment of Administrative Costs. The Developer will pay to the City all
out-of-pocket costs incurred by the City and the County (including without limitation attorney and fiscal
consultant fees) in the negotiation and preparation of this Agreement and other documents and
agreements in connection with the development contemplated hereunder (collectively, the
"Administrative Costs"). Administrative Costs shall be evidenced by invoices, statements or other
reasonable written evidence of the costs incurred by the City or the County. The Developer shall pay
Administrative Costs from time to time within 30 days after receipt of written notice thereof from the
427747v9 JAE SH155-317 8
City. The City shall transfer to the County any portion of Administrative Costs attributable to the County
promptly upon receipt of payment from the Developer.
Section 3.7. Records. The City and the County and their respective representatives shall have the
right at all reasonable times after reasonable notice to inspect, examine and copy all books and records of
Developer relating to the Project. The Developer shall also use its best efforts to cause the contractor or
contractors, all subcontractors and their agents and lenders to make their books and records relating to the
Project available to City and County,upon reasonable notice,for inspection, examination and audit.
Section 3.8. Business Subsidy Agreement. The provisions of this Section constitute the
"business subsidy agreement" in connection with the business subsidy provided by the City and the
County for the purposes of the Business Subsidy Act.
(a) General Terms. The parties agree and represent to each other as follows:
(1) The business subsidy provided to the Developer under this Agreement consists of
(i)the City Abatement; and (ii) the County Abatement. All such payments and grants represent
forgivable loans that are repayable by the Developer in accordance with this Section.
(2) The public purposes of the subsidies are to provide employment opportunities,
increase the tax base of the City and the County and encourage economic development within the
City and the County.
(3) The goals for the subsidies are to secure development of the Minimum
Improvements, to maintain the Minimum Improvements as a corporate headquarters for at least
five years as described in clause(6) below,and to create the jobs (100 new jobs) and wage levels
in accordance with Section 3.8(b)hereof.
(4) If the goals described in clause (3) are not met, the Developer must make the
payments to the City described in Section 3.8(c).
(5) The subsidies are needed to induce the Developer to locate its operations in the
City, thus enhancing job and tax base growth for the City, the County, and the State as a whole.
Absent the subsidy provided in this Agreement,the expansion would likely occur in another city.
(6) The Developer must continue operation of the Minimum Improvements as a
corporate headquarters for at least five years after the date of issuance of the Certificate of
Completion.
7) In addition to the subsidies described in this Section 3.8(a), the Developer has
also received financial assistance from the following other "grantors" as defined in the Business
Subsidy Act, in connection with the Development Property or the Minimum Improvements:
Minnesota Investment Fund Forgivable Loan: $ 500,000.
(b) Job and Wage Goals. It is expected that 680 jobs will be relocated to Shakopee. In
addition, within two years after the date of issuance of the Certificate of Completion of the Minimum
Improvements (the "Compliance Date"), the Developer shall cause to be created at least 100 new full-
time equivalent jobs on the Development Property and shall cause the wages for all employees on the
Development Property to be no less than $14.50 per hour, exclusive of benefits. Notwithstanding
anything to the contrary herein, if the wage and job goals described in this paragraph are met by the
Compliance Date, those goals are deemed satisfied despite the Developer's continuing obligations under
427747v9 JAE SH155-317 9
Sections 3.8(a)(6) and 3.8(d). The City and the County may, after public hearings held by the respective
governing body and approval by both bodies, extend the Compliance Date by up to one year, provided
that nothing in this section will be construed to limit the City's or County's legislative discretion
regarding this matter.
(c) Remedies. If the Developer fails to meet the goals described in Section 3.8(a)(3), this
Agreement will be deemed terminated, and the Developer shall repay to the City upon written demand
from the City a"pro rata share"of the City Abatement and the County Abatement, if any, as well as a pro
rata share of the amounts disbursed to Developer with respect to the City Development Assistance. The
term"pro rata share"means percentages calculated as follows:
(i) if the failure relates to the number of jobs,the jobs required less the jobs created,
divided by the jobs required;
(ii) if the failure relates to wages,the number of jobs required less the number of jobs
that meet the required wages,divided by the number of jobs required;
(iii) if the failure relates to maintenance of the corporate headquarters in accordance
with Section 3.8(a)(6), 60 less the number of months of operation as a corporate headquarters
(where any month in which the facility is in operation for at least 15 days constitutes a month of
operation), commencing on the date of the certificate of completion and ending with the date the
facility ceases operation as determined by the City, divided by 60; and
(iv) if more than one of clauses (i) through (iii) apply, the sum of the applicable
percentages,not to exceed 100%.
Notwithstanding the foregoing, instead of terminating the payment of the City Abatement, the
County Abatement, and the City Development Assistance,upon the Developer's failure to meet the goals
described in Section 3.8(a)(3), the City and the County may independently determine to continue their
respective payments under this Agreement but reduce the amount of such assistance using the pro rata
reduction formula set forth above.
Any amounts received under this Section by the City and related to payments of the City
Abatement and the County Abatement shall be distributed between the City and the County based on the
pro rata amount of Tax Abatements that have been paid by each entity to the Developer. Promptly upon
receipt of any repayment by the Developer, the City will remit to the County a pro rata amount
attributable to the Tax Abatements paid by the County. Nothing in this Section shall be construed to limit
the City's or County's remedies under Article IX hereof. In addition to the remedy described in this
Section and any other remedy available to the City or County for failure to meet the goals stated in
Section 3.8(a)(3),the Developer agrees and understands that it may not a receive a business subsidy from
the City, the County, or any other grantor (as defined in the Business Subsidy Act) for a period of five
years from the date of the failure or until the Developer satisfies its repayment obligation under this
Section,whichever occurs first.
(d) Reports. The Developer must submit to the City, with a copy to the County, a written
report regarding business subsidy goals and results by no later than March 1 of each year, commencing
March 1, 2014, and continuing until the later of(i)the date the goals stated in Section 3.8(a)(3) are met;
(ii) 30 days after expiration of the five-year period described in Section 3.8(a)(6); or (iii) if the goals are
not met, the date the subsidy is repaid in accordance with Section 3.8(c). The report must comply with
Section 1161994, subdivision 7 of the Business Subsidy Act. The City will provide information to the
Developer regarding the required forms. If the Developer fails to timely file any report required under
427747v9 JAE SH 155-317 10
this Section,the City will mail the Developer a warning within one week after the required filing date. If,
after 14 days of the postmarked date of the warning,the Developer fails to provide a report,the Developer
must pay to the City a penalty of$100 for each subsequent day until the report is filed. The maximum
aggregate penalty payable under this Section is $1,000. The City will file, on behalf of the City and the
County,any reports required to be filed with the State under the Business Subsidy Act.
Section 3.9. Restrictions on Use. The Developer agrees that it shall operate the Minimum
Improvements thereon as a corporate headquarters for the term of this Agreement; provided that after
expiration of the five-year period described in Section 3.8(a)(6), the repayment remedy described in
Section 3.8(d) will not be imposed on Developer for default under this Section However, if the
Developer fails to operate the Minimum Improvements as a corporate headquarters for the term of this
Agreement, the City or the County may decrease or discontinue the future payment of City Abatement or
County Abatement,as applicable.
Section 3.10. Job and Wage Maintenance. Pursuant to Section 3.8(b),the Developer has agreed
to relocate 680 jobs to the City and create 100 new full-time equivalent jobs in the City. The Developer
further covenants that, within five years after the date the Developer occupies the Minimum
Improvements, the Developer shall cause at least one hundred (120) of the jobs created pursuant to the
terms of this Agreement, exclusive of benefits,to have an average base wage of at least$14.50 or more,
exclusive of benefits. After the expiration of the reporting requirement set forth in Section 3.8(d) under
the Business Subsidy Agreement, the Developer must continue to submit to the City, with a copy to the
County,a report from the Developer's payroll application that shows the total number of employees,their
base wage levels, along with benefits allocations, in order to determine whether the job and wage
requirements required under this Agreement continue to be met.In addition,the Developer must report to
the City, with a copy to the County, which lists each new job, by class or category, subject to this
Agreement, along with the base pay or annual salary, exclusive of benefits. The reports must be filed no
later than February 1 of each year during the term of this Agreement. If the Developer fails to meet and
sustain the job and wage requirements set forth in this Section 3.10 during the term of this Agreement,the
County and the City may each independently determine whether to continue their respective payments
under this Agreement, continue their respective payments but reduce the amount of County or City
Abatement, terminate the payment of County or City Abatement or pursue the remedies set forth in
Section 9.2 hereof.
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427747v9 JAE SH155-317 11
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements. The Developer agrees that it will construct the
Minimum Improvements on the Development Property in accordance with the approved Construction
Plans and at all times during the term of this Agreement will operate, maintain, preserve and keep the
Minimum Improvements with the appurtenances and every part and parcel thereof, in good repair and
condition. The City and the County shall have no obligation to operate or maintain the Minimum
Improvements.
Section 4.2. Construction Plans.
(a) Before commencement of construction of the Minimum Improvements, the Developer
shall submit to the City the Construction Plans. The Construction Plans shall provide for the construction
of the Minimum Improvements and shall be in conformity with this Agreement, and all applicable State
and local laws and regulations. The City will approve the Construction Plans in writing if. (i) the
Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans
conform to all applicable federal, State and local laws, ordinances, rules and regulations; (iii) the
Construction Plans are adequate to provide for construction of the Minimum Improvements; (iv) the
Construction Plans do not provide for expenditures in excess of the funds available to the Developer from
all sources for construction of the Minimum Improvements;and(v)no Event of Default has occurred.
Approval may be based upon a review by the City's Building Official of the Construction Plans.
No approval by the City shall relieve the Developer of the obligation to comply with the terms of this
Agreement, applicable federal, State and local laws, ordinances,rules and regulations, or to construct the
Minimum Improvements in accordance therewith. No approval by the City shall constitute a waiver of an
Event of Default. If approval of the Construction Plans is requested by the Developer in writing at the
time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the
City,in whole or in part within 20 days after the date of their receipt by the City. Such rejections shall set
forth in detail the reasons therefore,and shall be made within 20 days after the date of their receipt by the
City. If the City rejects any Construction Plans in whole or in part, the Developer shall submit new or
corrected Construction Plans within 20 days after its receipt of written notification to the Developer of the
rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected
Construction Plans shall continue to apply until the Construction Plans have been approved by the City.
The City's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive
determination that the Construction Plans (and the Minimum Improvements constructed in accordance
with said plans)comply to the City's satisfaction with the provisions of this Agreement relating thereto.
(b) If the Developer desires to make any material change in the Construction Plans after their
approval by the City,the Developer shall submit the proposed change to the City for its approval. For the
purposes of this Section, the term "material"means any change that increases or decreases the total cost
of the Minimum Improvements by $500,000 or more. If the Construction Plans, as modified by the
proposed change, conform to the requirements of this Section 4.2 with respect to such previously
approved Construction Plans, the City shall approve the proposed change and notify the Developer in
writing of its approval within 20 days after the date of their receipt by the City. Such change in the
Construction Plans shall, in any event, be deemed approved by the City unless rejected, in whole or in
part, by written notice by the City to the Developer, setting forth in detail the reasons therefor. Such
rejection shall be made within 20 days after receipt of the notice of such change. The City's approval of
any such change in the Construction Plans will not be unreasonably withheld.
427747v9 JAE SH155-317 12
(c) The approval of Construction Plans by the City under this Section 4.2 is for the purposes
of this Agreement only. The Developer must also obtain any approvals necessitated by the City's
planning and zoning requirements. The County has no responsibility with respect to approving
Construction Plans or any other requirements of this Section.
Section 4.3. Commencement and Completion of Construction. The Developer shall commence
construction of the Minimum Improvements on or prior to June 30, 2014. Subject to Unavoidable
Delays, the Developer shall complete the construction of the Minimum Improvements by December 31,
2014. All work with respect to the Minimum Improvements to be constructed or provided by the
Developer on the Development Property shall be in conformity with the Construction Plans as submitted
by the Developer and approved by the City.
The Developer agrees for itself, its successors and assigns, and every successor in interest to the
Development Property, or any part thereof, that the Developer, and such successors and assigns, shall
promptly begin and diligently cause the completion of the development of the Development Property
through the construction of the Minimum Improvements thereon, and that such construction shall in any
event be commenced and completed within the period specified in this Section 4.3. After the date of this
Agreement and until construction of the Minimum Improvements has been completed, the Developer
shall make reports, in such detail and at such times as may reasonably be requested by the City, as to the
actual progress of the Developer with respect to such construction.
Section 4.4. Certificate of Completion.
(a) Promptly after completion of the Minimum Improvements in accordance with those
provisions of the Agreement relating solely to the obligations of the Developer to construct the Minimum
Improvements (including the dates for beginning and completion thereof), the City will furnish the
Developer with a Certificate of Completion shown as Schedule B and shall forward a copy of such
Certificate of Completion to the County. Such certification and such determination shall not constitute
evidence of compliance with or satisfaction of any obligation of the Developer to any Holder of a
Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements,
or any part thereof.
(b) If the City shall refuse or fail to provide any certification in accordance with the
provisions of this Section 4.4 of this Agreement, the City shall, within thirty (30) days after written
request by the Developer,provide the Developer with a written statement,indicating in adequate detail in
what respects the Developer has failed to complete the Minimum Improvements in accordance with the
provisions of the Agreement,or is otherwise in default,and what measures or acts it will be necessary,in
the reasonable opinion of the City, for the Developer to take or perform in order to obtain such
certification.
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427747v9 JAE SH155-317 13
ARTICLE V
Insurance and Condemnation
Section 5.1. Insurance.
(a) The Developer will provide and maintain at all times during the process of constructing
the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time
during that period, at the request of the City, on behalf of the City and the County, furnish the City with
proof of payment of premiums on policies covering the following:
(i) Builder's risk insurance, written on the so-called `Builder's Risk -- Completed
Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the
Minimum Improvements at the date of completion, and with coverage available in nonreporting
form on the so-called "all risk" form of policy. The interest of the City and the County shall be
protected in accordance with a clause in form and content satisfactory to the City and the County.
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability insurance)
together with an Owner's Protective Liability Policy with limits against bodily injury and
property damage of not less than $2,000,000 for each occurrence (to accomplish the above-
required limits, an umbrella excess liability policy may be used). The required comprehensive
general liability insurance coverage may be satisfied by primary and/or umbrella or excess
coverage. The City and the County shall be listed as additional insureds on the policy.
(iii) Workers' compensation insurance, with statutory coverage, provided that the
Developer may be self-insured with respect to all or any part of its liability for workers'
compensation.
(b) Upon completion of construction of the Minimum Improvements and during the term of
this Agreement,the Developer shall maintain, or cause to be maintained, at its cost and expense, and from
time to time at the request of the City or the County shall furnish proof of the payment of premiums on,
insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar businesses.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), against liability for injuries to persons and/or
property, in the minimum amount for each occurrence and for each year of $2,000,000 and
$5,000,000 in the aggregate, and shall be endorsed to show the City and the County as additional
insureds. The required comprehensive general liability insurance coverage may be satisfied by
primary and/or umbrella or excess coverage.
(iii) Such other insurance, including workers' compensation insurance respecting all
employees of the Developer, in such amount as is customarily carried by like organizations
engaged in like activities of comparable size and liability exposure; provided that the Developer
may be self-insured with respect to all or any part of its liability for workers' compensation.
427747v9 JAE SH155-317 14
(c) All insurance required in Article V of this Agreement shall be taken out and maintained
in responsible insurance companies selected by the Developer which are authorized under the laws of the
State to assume the risks covered thereby. Upon request, the Developer will deposit or cause to be
deposited annually with the City policies evidencing all such insurance, or a certificate or certificates or
binders of the respective insurers stating that such insurance is in force and effect. In lieu of separate
policies, the Developer may maintain or cause to be maintained a single policy, blanket or umbrella
policies, or a combination thereof, having the coverage required herein, in which event the Developer
shall deposit with the City a certificate or certificates of the respective insurers as to the amount of
coverage in force upon the Minimum Improvements.
(d) The Developer will notify the City and County promptly in the case of damage exceeding
$1,000,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting
from fire or other casualty. In such event the Developer will promptly repair, reconstruct and restore the
Minimum Improvements to substantially the same or an improved condition or value as it existed prior to
the event causing such damage, or with modifications to the Minimum Improvements that are approved
by the City and County in writing, and, to the extent necessary to accomplish such repair,reconstruction
and restoration, the Developer will apply the net proceeds of any insurance relating to such damage
received by the Developer to the payment or reimbursement of the costs thereof. A request to the City
and County to approve modifications to the Minimum Improvements prior to repair, reconstruction or
restoration of the Minimum Improvements shall not be unreasonably withheld. Any failure to request
such certificate if not received by the Developer shall not constitute a waiver of the Developer's
responsibilities under this Article V.
The Developer shall complete the repair, reconstruction and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Developer for such purposes
are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs,
construction and restoration shall be the property of the Developer.
A failure to promptly repair, reconstruct and restore the Minimum Improvements as required by
this Section 5.1(d) will be considered an Event of Default under this Agreement and the City and/or
County may suspend payments of Abatement or other financial assistance described herein or exercise
any other remedies provided in Section 9.2 hereof.
(e) All of the insurance provisions set forth in this Article V shall terminate upon the
termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary herein, the rights of the
City and County with respect to the receipt and application of any insurance proceeds shall, in all
respects,be subordinate and subject to the rights of any Holder under a Mortgage securing construction or
permanent financing for the Minimum Improvements.
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427747v9 JAE SH155-317 15
ARTICLE VI
Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Developer acknowledges that the City and
County are providing substantial aid and assistance in furtherance of the Project pursuant to this
Agreement. The Developer understands that the City Abatement and County Abatement pledged
pursuant to this Agreement are derived from real estate taxes on the Development Property, which taxes
must be promptly and timely paid. To that end,the Developer agrees for itself,its successors and assigns,
that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes
assessed against the Development Property and the Minimum Improvements. The Developer
acknowledges that this obligation creates a contractual right on behalf of the City or the County to sue the
Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or interest
thereon and to pay over the same as a tax payment to the County auditor. In any such suit,the City and
the County shall also be entitled to recover their costs,expenses and reasonable attorney fees.
Section 6.2. Reduction of Taxes. Prior to the termination of this Agreement,the Developer will
not (a) cause a reduction in the real property taxes paid in respect of the Development Property through
willful destruction of the Minimum Improvements or any part thereof; (b)fail to reconstruct the
Minimum Improvements if damaged or destroyed, as required under Section 5.1(d)hereof, or(c)convey
or transfer or allow conveyance or transfer of its leasehold interests in the Development Property to any
entity that is exempt from payment of real property taxes under State law.
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427747v9 JAE SH155-317 16
ARTICLE VII
Financine
Section 7.1. Financinc. The Developer warrants and represents to the City and County that it has or
will have available funds sufficient to construct the Minimum Improvements in accordance with the
Construction Plans.
Section 7.2. Modification, Subordination. If the Developer requires mortgage financing for the
development of the Minimum Improvements,the City and County agree to subordinate their rights under this
Agreement to the Holder of any Mortgage securing construction or permanent financing and the City and
County agree to consent to such subordination, in accordance with the terms of a subordination agreement
substantially in the form attached as Schedule C, or such other form as the City and the County approve.
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427747v9 JAE SH155-317 17
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Developer's purchase of the Development
Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of
development of the Development Property and not for speculation in land holding.
Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of
Agreement. Prior to the issuance of a Certificate of Completion for the Minimum Improvements:
(a) Except only by way of security for, and only for, the purpose of obtaining financing
necessary to enable the Developer or any successor in interest to the Development Property, or any part
thereof, to perform its obligations with respect to making the Minimum Improvements under this
Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created
and will not make or create or suffer to be made or created any total or partial sale, assignment,
conveyance,or lease,or any trust or power,or transfer in any other mode or form of or with respect to the
Agreement or its leasehold interests in the Development Property or any part thereof or any interest
therein,or any contract or agreement to do any of the same,to any person or entity whether or not related
in any way to the Developer (collectively, a "Transfer"), without the prior written approval of the City
and the County unless the Developer remains liable and bound by this Agreement in which event the
City's and County's approval are not required. Any such Transfer shall be subject to the provisions of
this Agreement. Notwithstanding anything to the contrary in this Section, the Developer may assign its
rights under this Agreement or the Notes to the Holder of a Mortgage,provided the Mortgage is approved
by the City and the County.
(b) In the event the Developer, upon Transfer of the Development Property or any portion
thereof, seeks to be released from its obligations under this Agreement as to the portions of the
Development Property that is transferred or assigned,the City and the County shall be entitled to require,
except as otherwise provided in the Agreement,as conditions to any such release that:
(i) Any proposed transferee shall have the qualifications and financial responsibility,
in the reasonable judgment of the City and the County, necessary and adequate to fulfill the
obligations undertaken in this Agreement by the Developer as to the portion of the Development
Property to be transferred.
(ii) Any proposed transferee,by instrument in writing satisfactory to the City and the
County and in form recordable in the public land records of the County, shall, for itself and its
successors and assigns, and expressly for the benefit of the City and the County, have expressly
assumed all of the obligations of the Developer under this Agreement as to the portion of the
Development Property to be transferred and agreed to be subject to all the conditions and
restrictions to which the Developer is subject as to such portion; provided,however,that the fact
that any transferee of,or any other successor in interest whatsoever to,the Development Property,
or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed,
and shall not(unless and only to the extent otherwise specifically provided in this Agreement or
agreed to in writing by the City and the County)deprive the City and the County of any rights or
remedies or controls with respect to the Development Property or any part thereof or the
construction of the Minimum Improvements; it being the intent of the parties as expressed in this
Agreement that (to the fullest extent permitted at law and in equity and excepting only in the
manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or
427747v9 JAE SH155-317 18
change with respect to, ownership in the Development Property or any part thereof, or any
interest therein, however consummated or occurring, and whether voluntary or involuntary, shall
operate,legally or practically,to deprive or limit the City and the County of or with respect to any
rights or remedies on controls provided in or resulting from this Agreement with respect to the
Minimum Improvements that the City and the County would have had, had there been no such
transfer or change. In the absence of specific written agreement by the City and County to the
contrary, no such transfer or approval by the City and County shall be deemed to relieve the
Developer, or any other party bound in any way by this Agreement or otherwise with respect to
the construction of the Minimum Improvements, from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the
transfer of any interest in this Agreement or the Development Property governed by this
Article VIII, shall be in a form reasonably satisfactory to the City and the County.
In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation
under this Agreement, as to the portion of the Development Property that is transferred, assigned or
otherwise conveyed. The restrictions under this Section terminate upon issuance of the Certificate of
Completion.
Section 8.3. Release and Indemnification Covenants.
(a) The City and County and the governing body members, officers, agents, servants and
employees thereof(the "Indemnified Parties") shall not be liable for and the Developer shall indemnify
and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Development Property or the
Minimum Improvements.
(b) Except for any willful misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of
their obligations under this Agreement, the Developer agrees to protect and defend the Indemnified
Parties,now and forever, and further agrees to hold the aforesaid harmless from any claim, demand,suit,
action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising
from this Agreement, or the transactions contemplated hereby or the acquisition, construction,
installation, ownership, maintenance and operation of the Development Property or the Minimum
Improvements.
(c) Except for any willful misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties,the Indemnified Parties shall not be liable for any damage or injury
to the persons or property of the Developer or its officers, agents, servants or employees or any other
person who may be about the Development Property or Minimum Improvements.
(d) All covenants, stipulations,promises, agreements and obligations of the City and County
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations
of such entities and not of any governing body member, officer, agent, servant or employee of such
entities in the individual capacity thereof.
427747v9 JAE SH155-317 19
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this
Agreement and the term"Event of Default" shall mean,whenever it is used in this Agreement, any one or
more of the following events:
(a) failure by the Developer to observe or perform any covenant, condition, obligation or
agreement on its part to be observed or performed hereunder;
(b) commencement by the Holder of any Mortgage on the Development Property or any
improvements thereon, or any portion thereof, of foreclosure proceedings as a result of default under the
applicable Mortgage documents; or
(c) if the Developer shall:
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United States
Bankruptcy Act or under any similar federal or State law; or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due; or
(iv) be adjudicated a bankrupt or insolvent.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of
this Agreement occurs, the City or County may each exercise any of the following rights under this
Section 9.2 after providing thirty days' written notice to the Developer of the Event of Default,but only if
the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature
incurable within thirty days, the Developer does not, within such thirty-day period, provide assurances
reasonably satisfactory to the party providing notice of default that the Event of Default will be cured and
will be cured as soon as reasonably possible:
(a) Suspend its performance under the Agreement until it receives reasonably satisfactory
assurances that the Developer will cure its default and continue its performance under the Agreement.
(b) Cancel and rescind or terminate its obligations under the Agreement, provided that:
(i) if the City terminates its obligations under the Agreement, it shall have no obligation
to make payments of City Abatement;
(ii) if the County terminates its obligations under the Agreement, it shall have no further
obligations to make payments of County Abatement to the City hereunder, and the City shall have
no obligation to make payments of County Abatement to the Developer;
(iv) if the City and County both terminate their obligations hereunder, respectively, this
Agreement shall be deemed terminated and the City shall have no further obligations thereunder.
Except as otherwise provided in Section 3.8(c),the City may not terminate its obligations to make
427747v9 JAE SH155-317 20
payments under this Agreement unless the City and County have both terminated their
obligations hereunder.
(c) Take whatever action, including legal, equitable or administrative action, which may
appear necessary or desirable to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant of the Developer under this
Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party 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 for the City or the County 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 IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the other party,
such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any
other concurrent,previous or subsequent breach hereunder.
Section 9.5. Attorney Fees. Whenever any Event of Default occurs and if the City or Developer
shall employ attorneys or incur other expenses for the collection of payments due or to become due or for
the enforcement of performance or observance of any obligation or agreement on the part of the
Developer or the City under this Agreement, the non-prevailing party or parties in any such action agrees
that it shall, within 10 days of written demand by the prevailing party or parties, pay to the prevailing
party or parties the reasonable fees of such attorneys and such other reasonable expenses so incurred. If
the County shall employ attorneys or incur other expenses for the collection of payments due or to
become due or for the enforcement of performance or observance of any obligation or agreement on the
part of the Developer or the City under this Agreement, it shall pay its own attorney fees and expenses,
regardless of what party is the prevailing party and shall not pay the attorneys' fees or expenses of any
other party to this Agreement.
Section 9.6. Default by City or County. Notwithstanding anything to the contrary herein, in the
event the City or County fails to perform any covenant, condition, obligation or agreement on its part,and
such failure has not been cured within 30 days after receipt of written notice to the party from the
Developer, or if such failure is by its nature incurable within 30 days, the party does not, within such
30-day limit, provide assurances reasonably satisfactory to the Developer that the failure will be cured as
soon as reasonably possible,then the Developer may exercise such remedies as may be available at law or
in equity with respect to the defaulting party. The terms of Sections 9.3, 9.4, and 9.5 shall apply in favor
the Developer as well as the City and County.
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427747v9 JAE SH155-317 21
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Representatives Not Individually Liable. The City and
County and the Developer,to the best of their respective knowledge,represent and agree that no member,
official, or employee of the City or the County shall have any personal interest, direct or indirect, in the
Agreement, nor shall any such member, official, or employee participate in any decision relating to the
Agreement which affects his personal interests or the interests of any corporation, partnership, or
association in which he is, directly or indirectly,interested. No member,official,or employee of the City
or County shall be personally liable to the Developer, or any successor in interest, in the event of any
default or breach by the City or County or for any amount which may become due to the Developer or
successor or on any obligations under the terms of the Agreement.
Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and
assigns, agrees that during the term of this Agreement it will comply with all applicable federal, state and
local equal employment and non-discrimination laws and regulations.
Section 10.3. Provisions Not Merged With Deed. None of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Development
Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this
Agreement.
Section 10.4. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section 10.5. Notices and Demands. Except as otherwise expressly provided in this Agreement,
a notice, demand, or other communication under the Agreement by either party to the other shall be
sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return
receipt requested,or delivered personally; and
(a) in the case of the Developer, is addressed to or delivered personally to the Developer at
DataCard Group, 1187 Park Place, Shakopee,Minnesota 55379;Attention: Legal Department;and
(b) in the case of the City, is addressed to or delivered personally to City Hall, 129 Holmes
Street South, Shakopee,Minnesota 55379;Attention: City Administrator; and
(c) in the case of the County, is addressed to or delivered personally to the County at the
Scott County Government Center, 200 Fourth Avenue West, Shakopee, Minnesota 55379; Attention:
County Auditor.
or at such other address with respect to either such party as that party may, from time to time, designate in
writing and forward to the other as provided in this Section.
Section 10.6. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall constitute one and the same instrument.
Section 10.7. Recording. The City may record this Agreement and any amendments thereto with
the Scott County Recorder. The Developer shall pay all costs for recording.
427747v9 JAE SH155-317 22
IN WITNESS WHEREOF,the City,County,and Developer have caused this Contract for Private
Development to be duly executed by their duly authorized representatives as of the date first above
written.
CITY OF SHAKOPEE,MINNESOTA
By:
Its: Mayor
By:
Its: City Administrator
STATE OF MINNESOTA )
SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of November, 2013, by
Brad Tabke,the Mayor of the City of Shakopee,Minnesota,on behalf of the City.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of November, 2013, by
Mark McNeill,the City Administrator of the City of Shakopee,Minnesota,on behalf of the City.
Notary Public
427747v9 JAE SH155-317 S-1
Execution page of the County to the Contract for Private Development, dated as of the date and year first
written above.
SCOTT COUNTY,MINNESOTA
By:
Its: Board Chair
By:
Its: County Administrator
Approved as to form:
By:
County Attorney
STATE OF MINNESOTA )
SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 2013, by
Tom Wolf,the Board Chair of the Board of Commissioners of Scott County, Minnesota, on behalf of the
County.
Notary Public
STATE OF MINNESOTA )
SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 2013, by
Gary Shelton,the County Administrator of Scott County,Minnesota,on behalf of the County.
Notary Public
427747v9 JAE SH155-317 S-2
Execution h Developer f a e
p g o the eve oper to the Contract for Private Development, dated as of the date and year
first written above.
DATACARD CORPORATION
By:
Its:
STATE OF )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2013,
by , the of DataCard Corporation,
a Delaware Corporation,on behalf of the Developer.
Notary Public
427747v9 JAE SH155-317 S-3
SCHEDULE A
DEVELOPMENT PROPERTY
Part of Lot 1, Block 2, Valley Park I Ph Addition, lying South of a line commencing at the
Northeast corner of said Lot 1 Block 2, thence proceeding South along the East line 447 feet to
the point of beginning of the land to be described,thence West for 797.52 feet to the West line of
said Lot 1,Block 2 and there terminating.
The West 22 feet of the South 743.31 feet of Lot 1,Block 1, Valley Park 9`"Addition.
427747v9 JAE SH155-317 A_1
SCHEDULE B
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that DataCard Corporation, a Delaware corporation (the
"Developer"), has fully complied with its obligations under Articles III and IV of that document titled
"Contract for Private Development," dated November 6, 2013, between the City of Shakopee, Minnesota
(the "City"), Scott County, Minnesota(the "County"), and the Developer, with respect to construction of
the Minimum Improvements in accordance with the Construction Plans, and that the Developer is
released and forever discharged from its obligations to construct the Minimum Improvements set forth in
Articles III and IV of the Contract for Private Development.
Dated: ,20_.
CITY OF SHAKOPEE,MINNESOTA
By:
Its:
[A copy of this Certificate shall be provided to the County.]
427747v9 JAE SH155-317 B_1
SCHEDULE C
FORM OF SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this day of
20_, between (the "Lender"), whose address is at
, the CITY OF SHAKOPEE, MINNESOTA, a public body corporate and
politic (the "City"), and SCOTT COUNTY, MINNESOTA, a public body corporate and politic (the
"County").
RECITALS
A. DataCard Corporation, a Delaware corporation(the "Developer"), is the owner of certain
real property situated in Scott County, Minnesota and legally described in Exhibit A attached hereto and
incorporated herein(the"Property").
B. Lender has made a mortgage loan to Developer in the original principal amount of
$ (the"Loan"). The Loan is the evidenced and secured by the following documents:
[insert loan documents]
The [loan documents], and all other documents and instruments evidencing, securing and
executed in connection with the Loan,are hereinafter collectively referred to as the "Loan Documents."
C. The City and the County are the owners and holders of certain rights under a certain
recorded Contract for Private Development (the "Contract") by and between the City, the County, and the
Developer,dated ,2013.
NOW, THEREFORE,in consideration of the foregoing and as an inducement to Lender to make the
Loan, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,the parties hereto represent,warrant and agree as follows:
1. Consent. The City and County acknowledge that the Lender is making the Loan to the
Developer and consent to the same. The City and County also consent to and approve the assignment of the
Contract to the Lender as collateral for the Loan; provided, however, that this consent shall not deprive the
City or County of or otherwise limit any of the City's or County's rights or remedies under the Contract and
shall not relieve the Developer of any of its obligations under the Contract; provided further, however, the
limitations to the City's and County's consent contained in this Paragraph 1 are subject to the provisions of
Paragraph 2 below.
2. Subordination. The City and County hereby agree that the rights of the City and County
with respect to the Development Property under the Contract are and shall remain subordinate and subject to
liens, rights and security interests created by the Loan Documents and to any and all amendments,
modifications,extensions,replacements or renewals of the Loan Documents;provided,however,that nothing
herein shall be construed as subordinating the requirements contained in Section 3.8 of the Contract.
3. Notice to City and County. Lender agrees to notify City and County of the occurrence of
any Event of Default given to Developer under the Loan Documents.
427747v9 JAE SH 155-317 C-1
4. No Assumption. The City and County acknowledge that the Lender is not a party to the
Contract and by executing this Agreement does not become a party to the Contract,and specifically does not
assume and shall not be bound by any obligations of the Developer to the City and County under the
Contract, and that the Lender shall incur no obligations whatsoever to the City and County except as
expressly provided herein.
5. Notice from City. So long as the Contract remains in effect, the City agrees to give to the
Lender copies of notices of any Event of Default given to Developer under the Contract.
6. Governing Law. This Agreement is made in and shall be construed in accordance with the
laws of the State of Minnesota.
7. Successors. This Agreement and each and every covenant, agreement and other provision
hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns, including any person who acquires title to the Development Property through the Lender of a
foreclosure of the Mortgage.
8. Severability. The unenforceability or invalidity of any provision hereof shall not render any
other provision or provisions herein contained unenforceable or invalid.
9. Notice. Any notices and other communications permitted or required by the provisions of
this Agreement shall be in writing and shall be deemed to have been properly given or served by depositing
the same with the United States Postal Service, or any official successor thereto, designated as registered or
certified mail,return receipt requested,bearing adequate postage, or delivery by reputable private carrier and
addresses as set forth above.
10. Transfer of Title to Lender. The City and County agree that in the event the Lender, a
transferee of Lender,or a purchaser at foreclosure sale,acquires title to the Development Property pursuant to
a foreclosure, or a deed in lieu thereof,the Lender,transferee, or purchaser shall not be bound by the terms
and conditions of the Contract except as expressly herein provided.
11. Estoppel. The City and County hereby represent and warrant to Lender, for the purpose of
inducing Lender to make advances to Developer under the Loan Documents that:
(a) No default or event of default by Developer exists under the terms of the Contract on the
date hereof;
(b) The Contract has not been amended or modified in any respect, nor has any material
provision thereof been waived by any of the City, the County, or the Developer, and the
Contract is in full force and effect;
(c) Such other reasonable certifications as the Lender may request.
13. Amendments. The City and County hereby represent and warrant to Lender that City and
County will not agree to any amendment or modification to the Contract that materially affects the collection
of City Available Abatement, and County Available Abatement(as those terms are defined in the Contract)
in any way affects the Development Property without the Lender's written consent.
(The remainder of this page is intentionally left blank.)
427747v9 JAE SH155-317 C_2
IN WITNESS WHEREOF,this Subordination Agreement has been executed and delivered as of the
day and year first written above.
CITY OF SHAKOPEE,MINNESOTA
By:
Its: Mayor
By:
Its: City Administrator
STATE OF MINNESOTA )
SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 20_, by
the Mayor of the City of Shakopee,Minnesota,on behalf of the City.
Notary Public
STATE OF MINNESOTA )
) SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 20_, by
the City Administrator of the City of Shakopee,Minnesota, on behalf of the City.
Notary Public
427747v9 JAE SH155-317 C_3
SCOTT COUNTY,MINNESOTA
By:
Its: Board Chair
By:
Its: County Administrator
Approved as to form:
By:
County Attorney
STATE OF MINNESOTA )
SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 20_, by
, the Board Chair of the Board of Commissioners of Scott County, Minnesota, on behalf of
the County.
Notary Public
STATE OF MINNESOTA )
SS.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 20_, by
the County Administrator of Scott County,Minnesota,on behalf of the County.
Notary Public
427747v9 JAE SH155-317 C_4
[LENDER]
By:
Its:
STATE OF MINNESOTA )
SS.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 20_, by
the ,on behalf of the [Lender].
Notary Public
427747v9 JAE SH155-317 C_5
CITY OF SHAKOPEE,MINNESOTA
RESOLUTION NO.7376
RESOLUTION APPROVING CONTRACT FOR PRIVATE
DEVELOPMENT WITH SCOTT COUNTY AND DATACARD CORPORATION
FOR CERTAIN PROPERTY IN THE CITY OF SHAKOPEE
BE IT RESOLVED by the City Council (the "City Council") of the City of Shakopee, Minnesota
(the"City")as follows:
Section 1. Recitals.
1.01. DataCard Corporation, a Delaware corporation(the"Developer")seeks to acquire,renovate,
equip, and construct an expansion to an approximately 370,000 square foot building currently consisting of
manufacturing space for use as its corporate headquarters (the "Minimum Improvements") on real property
located in the City and legally described as set forth in Exhibit A attached hereto(the"Property").
1.02. To help pay for the costs of the Minimum Improvements, the Developer has requested
financial assistance from the City in the form of a property tax abatement (the "Abatement") pursuant to
Minnesota Statutes, Sections 469.1812 to 469.1815 (the "Abatement Act"). On July 29, 2013, the City
Council adopted a resolution agreeing to provide the Developer with the Abatement for a maximum term of
eleven years and in a maximum amount of$334,869,with an annual maximum amount of$36,195.
1.03. On July 29, 2013, the Board of Commissioners of Scott County, Minnesota(the "County")
agreed to abate a portion of the County's taxes for the benefit of the Developer for a maximum term of eleven
years and a maximum amount of$324,324,with an annual maximum amount of$35,055.
1.04. A form of Contract for Private Development between the City, the County, and the
Developer(the"Contract for Private Development")has been presented to the City Council,which sets forth
the terms of the Abatements provided by the City and the County.
1.05. The Contract for Private Development incorporates a business subsidy agreement within the
meaning of Minnesota Statutes, Sections 116J.993 to 116J.995 (the`Business Subsidy Act"), setting certain
goals in connection with the subsidy represented by the Abatement. The Contract for Private Development is
incorporated herein by reference.
1.06. On July 29, 2013, the Council conducted a duly noticed public hearing regarding the
Abatement and the Business Subsidy described in this resolution, and regarding the business subsidy
agreement incorporated in the Contract for Private Development, all in accordance with the Abatement Act
and the Business Subsidy Act,at which the views of all interested persons were heard.
Section 2. Findings.
2.01. The recitals set forth above are incorporated into this resolution.
2.02. The Contract for Private Development is hereby in all respects authorized, approved, and
confirmed and the Mayor and City Administrator are hereby authorized and directed to execute and deliver
the Contract for Private Development for and on behalf of the City in substantially the form now on file with
427888v2 JAE SH155-317
the City but with such modifications as shall be deemed necessary, desirable or appropriate,their execution
thereof to constitute such conclusive evidence of their approval of any and all modifications therein.
Section 3. Implementation. The Mayor and the City Administrator are authorized and directed to
execute and deliver any additional agreements, certificates or other documents that the City determines are
necessary to implement this resolution.
Section 4. Effective Date. This resolution is effective upon the date of its adoption.
2013. Approved by the City Council of the City of Shakopee, Minnesota this 6th day of November,
ATTEST: Mayor
Finance Director/City Clerk
427888v2 JAE SH155-317 2
EXHIBIT A
DEVELOPMENT PROPERTY
Part of Lot 1, Block 2, Valley Park 11`1i Addition, lying South of a line commencing at the Northeast
corner of said Lot 1 Block 2, thence proceeding South along the East line 447 feet to the point of
beginning of the land to be described,thence West for 797.52 feet to the West line of said Lot 1, Block 2
and there terminating.
The West 22 feet of the South 743.31 feet of Lot 1,Block 1, Valley Park 9"'Addition.
427888v2 JAE SH155-317 A-1