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HomeMy WebLinkAbout12-12-2016 EDA PacketLINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MEETING Monday, December 12, 2016 Immediately Following Regular City Council Meeting. City Council Chambers 1. Call to Order and Roll Call 2. Consideration of Minutes of July 25, 2016 3. Action Items A) Consider Resolution No. 16-06, Approving Collateral Assignment and Subordination of Development Agreement and TIF Note, United Properties – TIF District 1-12, Michael Grochala 4. Adjourn EDA MINUTES July 25, 2016 DRAFT 1 DATE : July 25, 2016 TIME STARTED : 8:32 p.m. TIME ENDED : 8:50 p.m. MEMBERS PRESENT : EDA Members Kusterman, Reinert, Rafferty, Maher, Manthey MEMBERS ABSENT : None OTHERS PRESENT: : Community Development Director Michael Grochala; City Clerk Julie Bartell The meeting was called to order at 8:32 p.m. by EDA President Kusterman. CONSIDERATION OF THE MINUTES OF APRIL 11, 2016 Economic Development Authority (EDA) Member Rafferty moved to approve the June 13, 2016 minutes as presented. EDA Member Maher seconded the motion. Motion carried on a voice vote. RESOLUTION NO. 16-04, APPROVING MODIFIED DEVELOPMENT DISTRICT PLAN AND APPROVING TAX INCREMENT FINANCING PLAN Community Development Director Grochala reviewed the written staff report and requested actions. President Kusterman indicated that the council already had a full report and robust discussion on this subject as part of the regular council meeting. EDA Member Maher moved to approve Resolution No. 16-04 as presented. Council Rafferty seconded the motion. Motion carried on a voice vote. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION NO. 16-05, APPROVING CONTRACT FOR PRIVATE DEVELOPMENT AND AWARDING SALE OF TAX INCREMENT REVENUE NOTE Michael Grochala, Community Development Director, reviewed the written staff report. He noted that this will be a public hearing. Julie Eddington, Kennedy & Graven, counsel to the EDA, explained what is included in the proposed development contract, including the term required for construction. With respect to the tenant, the contract requires that there be an executed lease including a job requirement. Because of the statutory requirement related to a Green Acres property, the tenant will additionally be required to meet certain wage stages. The developer agrees to pay for everything related to the construction and in exchange the EDA promises a pay-as-you -go note and that will be attached to a tax increment note. The job and wage requirements will be monitored. The developer is still in the process of purchasing the property although they are in the final stages. If the developer does run into purchase issues, they can terminate the contract. The action approves the contract and provides authorization to issue the note. EDA MINUTES July 25, 2016 DRAFT 2 President Kusterman opened the public hearing. There being no one present wishing to speak, the public hearing was closed. EDA Member Manthey moved to approve Resolution No. 16-05 as presented. EDA Member Maher seconded the motion. Motion carried on a voice vote. ADJOURNMENT There being no further business for consideration, the meeting was adjourned at 8:50 p.m. LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: December 12, 2016 TOPIC: Consider Resolution No. 16-06, Approving Collateral Assignment and Subordination of Development Agreement and TIF Note, United Properties – TIF District 1-12 VOTE REQUIRED: 3/5 BACKGROUND The Economic Development Authority (EDA) approved the Contract for Private Development with United Properties and Distribution Alternatives in July of 2016. The action also included authorization for the issuance of a Tax Increment Revenue Note. Construction of the 402,000 square foot facility and associated public improvements has commenced in accordance with the agreement. United Properties Development LLC (the “Developer”) is in the process of has requested that the EDA execute a Collateral Assignment and Subordination of Development Agreement and Tax Increment Note. Pursuant to Section 7.3 of the Contract for Private Development, dated July 25, 2016, between the EDA, the Developer, and Distribution Alternatives, Inc., the EDA agreed to subordinate its rights under the Contract for Private Development as long as the subordination was subject to reasonable terms and conditions. The Collateral Assignment does the following:  Assigns the TIF Note to the UMB Bank N.A. (the lender for the construction of the building)  Requires EDA to give notice to bank of any default  Allows the Bank to step into the shoes of the Developer to cure a default  Allows the Bank to assume the role of Developer in the case of a default  If the Bank forecloses, the Contract for Private Development is terminated Julie Eddington, EDA development counsel, has reviewed the agreement and, subject to her comments, has found the agreement satisfactory for approval. RECOMMENDATION Staff is recommending approval of Resolution No. 16-06. ATTACHMENTS 1. Resolution No. 16-06 2. Assignment and Subordination Agreement 491614v1 JAE LN140-116 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, MINNESOTA RESOLUTION NO. 16-06 RESOLUTION APPROVING COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE. WHEREAS, the City of Lino Lakes, Minnesota (the “City”) and the Lino Lakes Economic Development Authority (the “Authority”) have established, and the Authority administers, Development District No. 1 (the “Development District”) located within the City and have caused to be created a Development Plan therefor, pursuant to Minnesota Statutes, Sections 469.090 through 469.1082, as amended; and WHEREAS, within the Development District the City and the Authority have created Tax Increment Financing (Economic Development) District No. 1-12 (the “TIF District”), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended; and WHEREAS, the Authority, United Properties Development LLC, a Minnesota limited liability company (the “Developer”), and Distribution Alternatives, Inc., a Minnesota corporation (the “Tenant”), have entered into a Contract for Private Development, dated July 25, 2016 (the “Contract”), pursuant to which the Developer agreed to develop an approximately 400,000 square foot warehouse and distribution facility with related office space and other improvements to be constructed on property located within the TIF District for use by the Tenant in its distribution business (the “Minimum Improvements”), and in turn the Authority agreed to reimburse the Developer for certain public improvements and site preparation costs through the issuance of a Tax Increment Revenue Note, Series 2016 (the “TIF Note”); and WHEREAS, UMB Bank N.A., a national banking association (the “Bank”), has agreed to provide the Developer with a loan (the “Project Loan”) to finance the construction of the Minimum Improvements; and WHEREAS, prior to providing the Project Loan, the Bank requires that the Authority agree to subordinate its interest and rights under the Contract to the Bank and that the Developer agree to assign its interest in the TIF Note to the Bank; and WHEREAS, Section 7.3 of the Contract authorizes the Authority to subordinate its interest and rights under the Contract to the Bank so long as the Authority and the Bank mutually agree to the conditions of subordination in writing; and WHEREAS, there has been presented before the Board of Commissioners of the Authority a Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note (the “Subordination and Assignment”), proposed to be executed by the Developer, the Bank, and the Authority, which provides for the subordination of the Authority’s interest and rights under the Contract and the assignment of the Developer’s interest in the TIF Note to the Bank; and NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Lino Lakes Economic Development Authority that: 1. The proposed Subordination and Assignment is hereby approved in all respects and satisfies the conditions set forth in Section 7.3 of the Contract . 491614v1 JAE LN140-116 2 2. The President and the Executive Director are hereby authorized to execute and deliver the Subordination and Assignment in substantially the form on file with the Authority, with such additions, deletions, and other changes as are approved by the President and the Executive Director. The President and the Executive Director are further directed to take all steps and do all things necessary to effectuate the provisions of the Subordination and Assignment. Adopted by the Board of Commissioners of the Lino Lakes Economic Development Authority this 12th day of December, 2016. The motion for the adoption of the foregoing resolution was introduced by Board Member _______________and was duly seconded by Board Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: William Kusterman, President ATTEST: Jeff Karlson, Executive Director CORE/0808310.0004/125458168.8 PREPARED BY AND WHEN RECORDED RETURN TO: Stinson Leonard Street LLP 150 South Fifth Street, Suite 2300 Minneapolis, MN 55402 Attention: Lara S. Page (Space above reserved for recorder’s use.) COLLATERALASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE This COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE (this “Assignment”) is made and entered into as of December __, 2016, by and among UNITED PROPERTIES DEVELOPMENT LLC, a Minnesota limited liability company (“Developer”), UMB BANK N.A., a national banking association (“Bank”), and the LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic duly organized and existing under the laws of the State of Minnesota (“Authority”). Capitalized terms used herein without specific definition shall have the meanings given to them in the Development Agreement (as hereinafter defined). A. Developer is developing a warehouse facility located in Lino Lakes, Minnesota (the “Project”), on the real property described on Exhibit A attached hereto (the “Property”). B. Pursuant to that certain Project Addendum dated as of even date herewith, by and among Developer, United Properties Investments LLC, a Minnesota limited liability company (“Borrower”) and Bank (as amended, restated or otherwise modified from time to time, the “Project Addendum”) and the Loan Agreement referred to therein, Bank has agreed to make a loan to Borrower in the maximum principal amount of [Twenty Million and No/100 Dollars ($20,000,000.00)] (the “Project Loan”) in order to finance the construction of the Project. C. The Project Loan will be secured by, among other things, a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing, made by Developer in favor of Bank and encumbering the Property (as amended, restated or otherwise modified from time to time, the “Mortgage”). CORE/0808310.0004/125458168.8 2 D. To assist Developer in financing the Project, Developer, Distribution Alternatives, Inc. and Authority have entered into a Contract for Private Development dated as of July 25, 2016 (the “Development Agreement”). Pursuant to the Development Agreement, Authority has agreed to issue to Borrower its Tax Increment Revenue Note, Series 2016, in the maximum principal amount of $1,200,000.00 (the “TIF Note”) upon satisfaction of certain conditions set forth in the Development Agreement. E. Pursuant to the Project Addendum and the Loan Agreement, and as a condition to making the Project Loan, Bank has required that Developer and the Authority execute and deliver this Assignment to Bank. NOW, THEREFORE, in consideration of the foregoing and in order to induce Bank to make the Project Loan, Developer and the Authority agree as follows: 1. Assignment. Developer hereby transfers and assigns to Bank and grants to Bank a security interest in all of its right, title and interest in, to and under the Development Agreement, the TIF Note, the tax increments payable thereunder, any and all other payments made or to be made thereunder and all proceeds thereof. This Assignment is made to induce Bank to enter into the Project Addendum and make the Project Loan and for the purpose of securing the performance and observance by Developer and Borrower of all of the terms and conditions of the Project Addendum, the Loan Agreement and the Note (as defined in the Project Addendum), and all other obligations of Developer and Borrower to Bank in connection with the Project. This Assignment shall constitute a perfected, absolute and present assignment, provided that Bank shall not have any right under this Assignment to enforce the provisions of the Development Agreement or exercise any other remedies under this Assignment unless and until Bank delivers an Assumption Notice pursuant to Section 8 of this Assignment. 2. Endorsement and Delivery of TIF Note. Upon issuance of the TIF Note, Developer shall endorse the TIF Note to Bank. Developer authorizes and directs Authority to deliver the TIF Note, registered in Bank's name, directly to Bank at the address set forth in Section 15 hereof. Upon receipt, Bank shall attach to the TIF Note an endorsement from Developer in favor of Bank in the form of Exhibit B attached hereto, which Developer shall execute contemporaneously with this Assignment. Bank shall then hold the TIF Note subject to the terms of this Assignment. 3. Representations and Warranties of Developer. Developer represents and warrants to Bank and agrees as follows: (a) Developer will not, without the prior written consent of Bank, modify, amend, supplement, terminate, surrender or change in any manner whatsoever the Development Agreement or the TIF Note and will not release or discharge the obligations of any party thereto or modify or extend the time of performance thereunder or the scope of the work thereunder. (b) The Development Agreement and the TIF Note are or will be, as applicable, free and clear of all liens, security interests, assignments and encumbrances other than the assignment and security interest created by this Assignment. CORE/0808310.0004/125458168.8 3 (c) Developer has the full right, power and authority to assign the Development Agreement and, upon its issuance, the TIF Note, free and clear of any and all liens, security interests and assignments. (d) Developer will keep the Development Agreement and the TIF Note free from any lien, encumbrance, assignment or security interest whatsoever, other than this Assignment and security interest. (e) Developer will from time to time and at the request of Bank execute such documents and pay the cost of filing and recording the same and do such other acts and things as Bank may request to establish and maintain a perfected security interest in the Development Agreement and the TIF Note which is valid and superior to all liens, claims or security interests whatsoever. (f) There have been no defaults on the part of Developer under the Development Agreement, and, to Developer’s knowledge, neither the Authority nor Tenant is in default under the Development Agreement. 4. Covenants of Developer. Developer covenants and agrees that: (a) It shall perform each and every one of its duties and obligations under the Development Agreement and observe and comply with each and every term, covenant, condition, agreement, requirement, restriction and provision of the Development Agreement. (b) It shall give prompt notice to Bank of any claim of or notice of default under the Development Agreement known or given to it together with a copy of any such notice or claim if in writing. (c) At the sole cost and expense of Developer, Developer will enforce the full and complete performance of each and every duty and obligation to be performed by Authority and/or Tenant under the Development Agreement and the TIF Note. (d) It will appear in and defend any action arising out of or in any manner connected with the Development Agreement and the duties and obligations of Developer, Tenant or the Authority thereunder. 5. Authority’s Representations, Warranties and Covenants. Authority represents and warrants to and covenants with Bank as follows: (a) The execution, delivery and performance of this Assignment have been duly authorized by all necessary action. (b) Until all amounts advanced and to be advanced under the Loan Documents have been repaid, no amendment to the Development Agreement shall be binding on Bank unless Bank consents to the amendment in writing. CORE/0808310.0004/125458168.8 4 (c) The Development Agreement is in full force and effect and has not been amended, and neither the Authority nor, to the Authority’s knowledge, none of Developer or Tenant, is in default under the Development Agreement. (d) If a default shall occur under the Development Agreement, the Authority shall provide Bank with written notice of such default contemporaneously with any notice given to Developer or Tenant. Prior to exercising its rights under the Development Agreement in connection with any default (including but not limited to Section 9.2 set forth therein), the Authority shall provide Bank with the same opportunity to cure such default as is given to Developer or Tenant under the Development Agreement, and the Authority shall accept such cure as if tendered directly by Developer or Tenant ; provided, however, that (i) Bank shall have not less than thirty (30) days to cure a monetary default and not less than sixty (60) days to cure a nonmonetary default , (ii) Bank will not be required to cure any default which is personal to Developer or Tenant and is not susceptible of being cured by Bank, and (iii) if Bank's ability to cure requires it to obtain possession of the Property, then it shall have such time to cure as is reasonably necessary to gain possession through foreclosure, deed in lieu of foreclosure or other methods. For the avoidance of doubt, the Authority shall not take any action to terminate the Development Agreement or the TIF Note due to any default by Developer or Tenant as long as Bank is exercising its cure rights as provided in this Section with reasonable diligence. 6. Bank’s Rights to Act on Behalf of Developer. Developer hereby authorizes Bank during an Event of Default to act on its behalf either in the name of Developer or Bank in connection with the exercise of any of the rights of Developer under the Development Agreement. Developer hereby irrevocably constitutes and appoints Bank as its attorney-in-fact to demand, receive and enforce Developer’s rights with respect to the Development Agreement and the TIF Note. Developer agrees to reimburse Bank on demand for any expenses incurred by Bank, or its agents or attorneys, pursuant to the aforesaid authorization. Developer hereby irrevocably instructs, directs, authorizes and empowers all parties to the Development Agreement to recognize the claims of Bank, or its successors or assigns hereunder, and to act upon any instructions or directions of Bank without investigating the reason for any action taken by Bank. 7. Consent to Loan Documents. Authority consents to the execution and recording of the Mortgage and to the assignment of the Development Agreement and the TIF Note by Developer to Bank under the terms of this Assignment. 8. Bank’s Option to Assume Development Agreement. Upon the occurrence and continuance of an Event of Default, Bank may, at its option, notify Authority and Developer in writing that it has elected to assume the obligations of Developer under the Development Agreement (such notice is hereinafter referred to as the “Assumption Notice”). Following receipt of the Assumption Notice, Authority shall treat Bank as if it were the Developer under the Development Agreement, and shall continue to perform its obligations under the Development Agreement for the benefit of Bank, as long as Bank continues to perform the obligations of Developer under the Development Agreement. Bank shall not have any obligation with respect to the Development Agreement unless and until delivery of an Assumption Notice by Bank to Authority. CORE/0808310.0004/125458168.8 5 9. Subordination of Development Agreement. Regardless of the priority of any rights or interests otherwise available or belonging to Authority and notwithstanding anything to the contrary set forth in the Development Agreement, each and every right and interest of Authority in and to the Property of any kind whatsoever, including without limitation any rights or interests acquired in the Property pursuant to the Development Agreement, are hereby subjected and subordinated and shall remain in all respects and for all purposes, subject, subordinate and junior to the provisions of the Mortgage and other Loan Documents (as defined in the Project Addendum) and to the rights of Bank thereunder and the liens created thereby. The subordination effected hereby shall extend to any and all advances heretofore or hereafter made pursuant to the terms of the Loan Documents and to any amendment, modification, extension, replacement or renewal of any of the Loan Documents, including any amendment which increases the principal amount secured by the Mortgage. If (a) Bank does not elect to give Authority the Assumption Notice, and (b) Bank forecloses the Mortgage or Developer delivers to Bank a deed in lieu of foreclosure, then upon the completion of such foreclosure and the expiration of the applicable redemption period, or upon recording of a deed in lieu of foreclosure, all right, title and interest of Authority in or to the Property, whether pursuant to the Development Agreement or otherwise, shall terminate automatically and shall be null and void without the need for the execution or recording of any other documents. If Bank has provided Authority with the Assumption Notice, then the rights of Authority under the Development Agreement shall survive foreclosure of the Mortgage or acceptance of a deed in lieu of foreclosure. Except as specifically agreed to herein, nothing in this Assignment, including a foreclosure by Bank or acceptance of a deed in lieu of foreclosure, shall extinguish the Development Agreement as an agreement between Authority and Developer or limit the rights and remedies of Authority as against Developer. 10. Event of Default. As used herein, the term “Event of Default” shall mean the occurrence of any Event of Default under the Development Agreement, the TIF Note, the Loan Agreement or any other Loan Documents, or any related documents. 11. Remedies. Upon the occurrence of an Event of Default, Bank may without demand or performance or other demand, advertisement, or notice of any kind, except such notice as may be required under the Uniform Commercial Code, and all of which are, to the extent permitted by law, hereby expressly waived, collect the amounts payable to Developer pursuant to the Development Agreement or the TIF Note and shall hold such amounts free and clear of the interest of Developer therein and shall be entitled to own, hold, dispose of and otherwise deal with the amounts payable pursuant to the Development Agreement and the TIF Note in its own right and name as its own property, or in the name of Developer or otherwise, exercise any right of Developer to demand, collect, receive and receipt for, compromise, compound, settle and prosecute and discontinue any suits or proceedings in respect of any or all of the amounts payable pursuant to the Development Agreement or the TIF Note; take any action that Bank may deem necessary or desirable in order to collect the amounts payable pursuant to the Development Agreement and the TIF Note, including, without limitation, the power to perform or direct the performance by any other party to any contracts which are a part of the Development Agreement; exercise any of the remedies available to a secured party under the Uniform Commercial Code and/or to proceed to protect and enforce this Assignment by suits or proceedings or otherwise; and to enforce any other legal or equitable remedy available to Bank. The foregoing remedies are cumulative of and in addition to and are not restrictive of or in lieu of, the rights or remedies CORE/0808310.0004/125458168.8 6 provided for or allowed in the Mortgage, the Loan Documents or any other instrument given for the security of the Project Loan, or as provided for or allowed by law or in equity. 12. Indemnity. Unless and until Bank delivers an Assumption Notice, Bank shall have no obligation to perform or satisfy any duty or obligation of Developer under the Development Agreement. Developer shall and does hereby indemnify, defend and hold Bank harmless from and against and in respect of any and all actions, causes of action, suits, claims, demands, judgments, proceedings and investigations (or any appeal thereof or relative thereto or other review thereof) of any kind or nature whatsoever, arising out of, by reason of, as a result of or in connection with the Development Agreement or the TIF Note, and any and all liabilities, damages, losses, costs, expenses (including fees of counsel and expenses and disbursements of counsel), amounts of judgment, assessments, fines or penalties, and amounts paid in compromise or settlement, suffered, incurred or sustained by Bank as a result of, or reason of or in connection with any of the matters above. 13. Uniform Commercial Code. To the extent that this Assignment may be governed by the provisions of the Uniform Commercial Code now or hereafter in effect, this Assignment shall be deemed to be a security agreement within the meaning of the Uniform Commercial Code, shall be governed by the provisions thereof and shall constitute a grant to Bank of a security interest in the Development Agreement, the TIF Note (upon its issuance) and the proceeds thereof. 14. Choice of Law. Notwithstanding the place of execution of this instrument, the parties to this Assignment have contracted for Minnesota law to govern this Assignment and it is agreed that this Assignment is made pursuant to, and shall be construed and governed by, the laws of the State of Minnesota without regard to the principles of conflicts of law. 15. Notices. Any notices and other communications permitted or required by the provisions of this Assignment (except for telephonic notices expressly permitted) 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 Certified Mail, Return Receipt Requested, bearing adequate postage, or deposited with a reputable private courier or overnight delivery service, and addressed to the address set forth herein. Each such notice shall be effective upon being deposited as aforesaid. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice sent. To Bank: UMB Bank N.A. 1000 Grand Blvd. Kansas City, Missouri 64106 Attention: Randy Timbers Telephone No.: 816-860-7256 CORE/0808310.0004/125458168.8 7 With a copy to: Stinson Leonard Street LLP 1201 Walnut Street, Suite 2900 Kansas City, Missouri 64106 Attn: Donald J. Kirkpatrick Telephone No.: 816-691-2409 To Developer: United Properties Development LLC 3600 American Blvd. West, Suite 750 Minneapolis, Minnesota 55431 Attention: Richard E. Student Telephone No.: 952-893-7598 With a copy to: Dorsey & Whitney 50 South 6th Street, Suite 1500 Minneapolis, Minnesota 55402-1498 Attention: David Meyer Telephone No.: 612.492-6585 If to Authority: Lino Lakes Economic Development Authority City Hall 600 Town Center Parkway Lino Lakes, Minnesota 55014 Attention: Executive Director Telephone No.: ____________ With a copy to: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South 6th Street Minneapolis, Minnesota 55402 Attention:________________ Telephone No.:____________ By giving to the other party hereto at least 10 days’ notice thereof, either party hereto shall have the right from time to time to change its address and shall have the right to specify as its address any other address within the United States of America. 16. Successors and Assigns; Recording. This Assignment shall bind Developer and Authority and their respective successors and assigns, and shall inure to the benefit of Bank and its successors and assigns. At the option of Bank, this Assignment may be recorded in the land records of Anoka County, Minnesota. [The remainder of this page has been left blank intentionally.] S-1 COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE Signature Page IN WITNESS WHEREOF, Developer has executed this Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note as of the date and year first written above. DEVELOPER: UNITED PROPERTIES DEVELOPMENT LLC a Minnesota limited liability company By: ______________________________ Name: Title: STATE OF MINNESOTA ) ) ss COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of ____________, 2016, by __________, the _____________ of United Properties Development LLC, a Minnesota limited liability company, on behalf of said limited liability company. Notary Public S-2 COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE Signature Page IN WITNESS WHEREOF, Bank has executed this Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note as of the date and year first written above. BANK: UMB BANK N.A., a national banking association By:___________________________________ Name: Randy Timbers Title: Vice President STATE OF _____________ ) ) ss. COUNTY OF ____________ ) The foregoing instrument was acknowledged before me this _____ day of _______________, 2016, by Randy Timbers, the Vice President of UMB Bank N.A., a national banking association, on behalf of such national banking association. ___________________________________ (Notarial Seal) Notary Public S-3 COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE Signature Page IN WITNESS WHEREOF, Authority has executed this Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note as of the date and year first written above. AUTHORITY: LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY By Name: Title: STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this ____ day of ________________, 2016, by ____________________________, the _______________________ of the Lino Lakes Economic Development Authority, a body corporate and politic duly organized and existing under the laws of the State of Minnesota. ___________________________________ Notary Public S-4 ACKNOWLEDGEMENT AND CONSENT TO COLLATERAL ASSIGNMENT AND SUBORDINATION OF DEVELOPMENT AGREEMENT AND TAX INCREMENT REVENUE NOTE The undersigned hereby acknowledges and consents to the foregoing Collateral Assignment and Subordination of Development Agreement and Tax Increment Revenue Note and the terms set forth therein, effective as of the date and year first written above. TENANT: DISTRIBUTION ALTERNATIVES, INC,., a Minnesota corporation Name:________________ Title:__________________ STATE OF MINNESOTA ) ) ss. COUNTY OF _______________ ) The foregoing instrument was acknowledged before me this ____ day of ____________, 2016, by __________, the _____________ of Distribution Alternatives, Inc., a Minnesota corporation, on behalf of said corporation. Notary Public CORE/0808310.0004/125458168.8 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY CORE/0808310.0004/125458168.8 EXHIBIT B Form of Endorsement of TIF Note ALLONGE TO: TAX INCREMENT REVENUE NOTE, SERIES 2016, IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,200,000.00, ISSUED TO UNITED PROPERTIES DEVELOPMENT LLC PURSUANT TO THAT CERTAIN CONTRACT FOR PRIVATE DEVELOPMENT DATED AS OF JULY 25, 2016, BY AND AMONG THE LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY, DISTRIBUTION ALTERNATIVES, INC. AND THE UNDERSIGNED. UNITED PROPERTIES DEVELOPMENT LLC a Minnesota limited liability company By: ______________________________ Name: Title: Dated: December ___, 2016.