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516094v1 JAE LN140-116
<br />LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA
<br />
<br />RESOLUTION NO.18-01
<br />
<br />RESOLUTION APPROVING COLLATERAL ASSIGNMENT AND SUBORDINATION OF
<br />DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE.
<br />
<br /> WHEREAS, the City of Lino Lakes, Minnesota (the “City”) and the Lino Lakes Economic
<br />Development Authority (the “Authority”) have established, and the Authority administers, Development
<br />District No. 1 (the “Development District”) located within the City and have caused to be created a
<br />Development Plan therefor, pursuant to Minnesota Statutes, Sections 469.090 through 469.1082, as
<br />amended; and
<br />
<br /> WHEREAS, within the Development District the City and the Authority have created Tax
<br />Increment Financing (Economic Development) District No. 1-12 (the “TIF District”), pursuant to Minnesota
<br />Statutes, Sections 469.174 through 469.1794, as amended; and
<br />
<br /> WHEREAS, the Authority, United Properties Development LLC, a Minnesota limited liability
<br />company (the “Developer”), and Distribution Alternatives, Inc., a Minnesota corporation (the “Tenant”),
<br />have entered into a Contract for Private Development, dated July 25, 2016 (the “Contract”), pursuant to
<br />which the Developer agreed to develop an approximately 400,000 square foot warehouse and distribution
<br />facility with related office space and other improvements to be constructed on property located within the
<br />TIF District for use by the Tenant in its distribution business (the “Minimum Improvements”), and in turn
<br />the Authority agreed to reimburse the Developer for certain public improvements and site preparation costs;
<br />and
<br />
<br /> WHEREAS, the Authority issued to the Developer its Tax Increment Revenue Note, Series 2017
<br />(the “TIF Note”), in the original aggregate principal amount of $1,200,000, to reimburse the Assignor for
<br />the public improvements and site preparation costs as provided in the Contract; and
<br />
<br /> WHEREAS, the Developer conveyed the Minimum Improvements and the property on which the
<br />Minimum Improvements are located to AX Lino Lakes L.P., a Delaware limited partnership (the “Owner”),
<br />and also assigned its interest, rights, and obligations under the Contract and the TIF Note to the Owner; and
<br />
<br /> WHEREAS, Bank of America, N.A., a national banking association (the “Lender”), has agreed to
<br />provide a loan to the Owner in the maximum principal amount of $16,110,000 (the Lender Loan”) to
<br />finance a portion of the costs of the Minimum Improvements; and
<br />
<br /> WHEREAS, as a condition to providing the Lender Loan to the Owner, the Lender requires that
<br />the Owner assign all of its rights under the Contract and the TIF Note to the Lender, that the Authority
<br />agree to the collateral assignment of the Owner’s rights under the Contract and the TIF Note, and that the
<br />Authority agree to subordinate its rights under the Contract to the rights of the Lender under the loan
<br />documents to be executed in connection with the Lender Loan (collectively, the “Lender Loan
<br />Documents”); and
<br />
<br /> WHEREAS, there has been presented to the Board of Commissioners of the Authority a form of
<br />Collateral Assignment of and Subordination of Development Agreement and Tax Increment Revenue
<br />Note (the “Collateral Assignment”), proposed to be entered into between the Owner, the Lender, and the
<br />Authority, which sets forth the terms of the collateral assignment of the Owner’s rights under the
<br />Contract and the TIF Note, the Authority’s approval of such assignment, and the Authority’s
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