Agenda - Economic Development Authority - 08/12/2021

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payments shall be applied first to accrued interest and then to reduce the principal of the TIF Note. (5) The TIF Note shall be a special and limited obligation of the City and not a general obligation of the City, and only Tax Increments shall be used to pay the principal and interest on the TIF Note. If, on any TIF Note Payment Date, the Tax Increments for the payment of the accrued and unpaid interest on the TIF Note are insufficient for such purposes, the difference shall be carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a future TIF Note Payment Date there are Tax Increments in excess of the amounts needed to pay the accrued interest then due on the TIF Note. (6) The City's obligation to make payments on the TIF Note on any Note Payment Date or any date thereafter shall be conditioned upon the requirements that: (A) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement beyond any applicable notice and/or cure period and (B) this Agreement shall not have been rescinded pursuant to Section 4.2. (7) The TIF Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit B. In the event of any conflict between the terms of the TIF Note and the terms of this Section 3.2, the terms of the TIF Note shall govern. The issuance of the TIF Note pursuant and subject to the terms of this Agreement, and the taking by the City of such additional actions as bond counsel for the TIF Note may require in connection therewith, are hereby authorized and approved by the City. Section 3.4. Business Subsidies Act. (1) In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 to 116J.995 (the "Business Subsidies Act"), the Developer acknowledges and agrees that the amount of the "Business Subsidy" granted to the Developer under this Agreement is $1,172,000 which is the TIF Amount for the cost of the acquisition of the Development Property and that the Business Subsidy is needed because the Project is not sufficiently feasible for the Developer and the Owner to undertake without the Business Subsidy. The Tax Increment District is an economic development district and the public purpose of the Business Subsidy is to encourage the construction of manufacturing, warehousing, storage and distribution facilities in the City. The Developer and the Owner agree that they will cause the tenants of the Project to meet the following goals (the "Goals") in connection with the development of the Development Property. The tenants shall create at least one hundred (100) full time jobs in the City at an average hourly wage totaling of at least $17.50 per hour, excluding benefits, within two years from the "Benefit Date", which is the earlier of the date the Developer completes the construction of the Project or the tenants occupy the Project. (2) If no Goals are met, the Developer agrees to repay all of the Business Subsidy that has been paid to the Developer to the City, plus interest ("Interest") set at the implicit price deflator defined in Minnesota Statutes, Section 275.70, Subdivision 2, accruing from and after the Benefit Date, compounded semiannually. If the Goals are met in part, the Developer will repay a portion of the Business Subsidy (plus Interest) that has been paid to the Developer determined by multiplying the Business Subsidy by a fraction, the numerator of which 7 13580713v2