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Vessel Systems Expansion DICW_Development AgreementMEMORANDUM May 23, 2003 TO:The Honorable Mayor and City Council Members FROM:Michael C. Van Milligen, City Manager SUBJECT:Approval of Development Agreement with Vessel Systems, Inc. for the Sale and Development of Property in the Dubuque Industrial Center West Economic DevelOpment Director Bill Baum recommends City Council approval of a Development Ag~"eement with Vessel Systems, Inc. for the sale and development of property in the DUbuque. Industrial. Center West.th The company plans to relocate its current manufacturing operations from East 7 Street, where they lease space from Morrison Brotherls. The key elements of the agreement include: 1) The purchase price for the 4.91 acres is $191,490 and represents a 50% discount on the land value. 2) The property will be conveyed by Special Warranty Deed that allows a reversion of the property to the City if the company does not perform in the construction of the Minimum Improvements (building and site construction) within a prescribed timeframe. Construction is anticipated to begin immediately after closing and be complete before the end of the year. 3) The comp any must construct a building of not less than 31,000 square feet costing not less th an $1 million. 4) The comp any must retain 24 existing jobs and create 25 new jobs within the first 36 months of operation. The 49 jobs must be retained for 2 additional years after the initial 36 n onths. The average hourly wage for new jobs will be $13.85/hour, with new Jobs r anging from $11.1 O/hour to $14.25/hour and several salaried positions in the $25-32,000/year range. The company also provides health and dental insurance benefits meeting State CEBA requirements. 5) An Economic Development Grant not to exceed $140,000 is also provided to the company. This is an up-front TIF grant to be repaid over a 10-year period by the new taxesI generated by the property. Vessel Systemsi in operation locally for 10 years, has outgrown its older, leased facility. A new facility, specifically designed for their large-scale production operation, will provide a more efficient layout and better utilization of space. Energy efficiencies and reduced production schedules will increase the company's bottom line. The company currently operates one shift but could accommodate a second shift in the new facility. Michael C. Van Milligen I concur with the recommendation and respectfully request Mayor and City Council approval. MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager William Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM May 22, 2003 TO:Michael Van Milligen, City Manager FROM:William Baum, Economic Development Director SUBJECT:Approval of Development Agreement with Vessel Systems, Inc. for the Sale and Development of Property in the Dubuque Industrial Center West INTRODUCTION This memorandum presents for City Council consideration a Resolution approving the Development Agreement for the disposition of Lots 7 and 8 Dubuque Industrial Center West 2na Addition by Special Warranty Deed to Vessel Systems, Inc. A public hearing on the disposition of this property has been set for June 2, 2003. BACKGROUND On May 19, 2003, the City Council was presented with the attached memorandum recommending that a public hearing be set for June 2nd on the proposed disposition of the above-described property to Vessel Systems, Inc. The Council received the memorandum and set the matter for hearing. DISCUSSION Attached to this memorandum is a resolution that approves a Development Agreement with Vessel Systems, Inc. and authorizes execution of the Agreement. The company plans to relocate their operation and create 25 new jobs in the City's west-side industrial park. The company is currently occupying leased space on East 7th Street. The Development Agreement establishes the terms of the sale of the Dubuque Industrial Center West property. The key elements of the agreement include the following: 1)The purchase price for the 4.91 acres is $191,490 and represents a 50% discount on the land value. 2)The property will be conveyed by Special Warranty Deed that allows a reversion of the property to the City if the company does not perform in the construction of the Minimum Improvements (building and site construction) within a prescribed timeframe. Construction is anticipated to begin immediately after closing and be complete before the end of the year. 3)The company must construct a building of not less than 31,000 square feet costing not less than $1 million. 4) The company must retain 24 existing jobs and create 25 new jobs within the first 36 months of operation. The 49 jobs must be retained for 2 additional years after the initial 36 months. The average hourly wage for new jobs will be $13.85/hour, with new jobs ranging from $11.10/hour to $14.25/hour and several salaried positions in the $25-32,000/year range. The company also provides health and dental insurance benefits meeting State CEBA requirements. 5)An Economic Development Grant not to exceed $140,000 is also provided to the company. This is an up-front TIF grant to be repaid over a 10-year period by the new taxes generated by the property. Additional terms and conditions of the disposition of the property are included within the attached Development Agreement. RECOMMENDATION I recommend that the City Council approve the Development Agreement with Vessel Systems, Inc. for the sale and development of property in the Dubuque Industrial Center West. This action supports the Council's objectives to assist a local business expand its operations and employment opportunities within the City. ACTION STEP The action step for the City Council is to adopt the attached Resolution. F:\USERS~Pmyhre\WPDOCS\LOANDOC\vessels\final.dispo,rnemo.r[f Prepared by: Pamela Myhre City Hall, 50 W. 13th Street Dubuque, IA 52001 RESOLUTION NO, 191-03 563-589-4213 RESOLUTION APPROVING A DEVELOPMENT AGREEMENT PROVIDING FOR THE SALE AND PRIVATE DEVELOPMENT OF LOTS 7 AND 8 DUBUQUE INDUSTRIAL CENTER WEST 2ND ADDITION IN THE CITY OF DUBUQUE, IOWA, TO VESSEL SYSTEMS, INC. Whereas, this Council, by Resolution No. 166 - 03 dated May 19, 2003, declared its intent to enter nto a Deve opment Agreement with Vessel Syst.ems, Inc. for the sale and development of Lots 7 and 8 of the Dubuque Industrial Center West 2"° Addition in the Cry of Dubuque, Iowa, as shown on the attached plat (the Property); and Whereas, pursuant to published notice, a public headng was held on the proposed dis. position on June 2, 2003, at 6:30 p.m. at the Carnegie-Stout Public Library Auditorium, 360 W. 11 "' Street, Dubuque, Iowa; and Whereas, it is the determination of this Council that approval of the DeveloPment Agreement for the sale to and development of the property by Vessel Systems, Inc. according to the terms and conditions set out in the attached Development Agreement is in the public interest of the citizens of the City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the attached Development Agreement by and between the City of Dubuque and Vessel Systems, Inc. and the sale of the Property to Vessel Systems, Inc. is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute the Development Agreement on behalf of the City and City Clerk is authorized and directed to attest to his signature. Section 3. That the Mayor and City Clerk are hereby authorized and directed to execute and deliver a Special Warranty Deed for the Property as provided in the Development Agreement. Section 4. That the City Manager is authorized to take such actions as are necessary to comply with the terms of the Development Agreement as herein approved. Passed, approved and adopted this 2nd day of June, 2003. Terrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk F:\USERS~Pmyhre\WPDOCS\LOANDOC\vessels\finaldispo.res.doc FINAL PLAT DUBUQUE INDUSTRIAL CENTER WEST 2ND ADDITION tN THE CITY OF DUBUQUE, IOWA TOTAL AREA SUR1/EYED: 57.181 ACRES SURVEYED FOR MEMORANDUM May 14, 2003 TO:The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Expansion of Vessel Systems, Inc. at the Dubuque Industrial Center West City staff has worked with the Greater Dubuque Development Corporation and Vessel Systems on an expansion at the west-side industrial park. The company plans to relocate its current manufacturing operations from East 7th Street, where they lease space from MorriSon Bros. They have committed to retaining their current 24 manufacturing jobs and will add 25 new jobs over the next three years. The company manufactures large steel pressurized tanks for various industries, including food processing and water treatment. The proposed Development Agreement provides for several incentives to encourage the relocation and expansion. An Acquisition Grant will reduce the asking price of the land from $78,000 per acre to $39,000 per acre. The company has also requested tax increment financing (TIF) to assist in their $1.5 million project. This would be in the form of an up-front TIF grant, estimated to be $140,000, based on the value of the improved property. AS the company pays its future tax obligation on the new improvements, the TIF bond is paid offover a 10-year period. Economic DevelOpment Director Bill Baum recommends that the City Council set a 'public hearing for June 2, 2003, on the disposition of Lots 7 and 8 in Dubuque Industrial Center West 2nd Addition to Vessel Systems Inc. for the purpose of constructing a 31,000 square foot manufacturing facility. 1 concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM/jh Attachmeni cc: Barry Lindahl, Corporation Counsel Cindy steinhauser, Assistant City Manager William Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM May 12, 2003 TO:Michael Van Milligen, City Manager FROM:William Baum, Economic Development Director SUBJECT:Expansion of Vessel Systems, Inc. at the Dubuque Industrial Center West INTRODUCTION This memoranddm presents for City Council consideration a Resolution initiating disposition of approximately 5 acres identified on the attached exhibit to Vessel Systems, Inc., who will be constructing a 31,000 square foot industrial facility in the Dubuque Industrial Center West. The attached Resolution sets a public hearing on the disposition of this property for June 2, 2003. BACKGROUND City staff has worked with the Greater Dubuque Development Corporation and Vessel Systems on an expansion at the west-side industrial park. The company plans to relocate its current manufacturing operations from East 7th Street where they lease space from Morrison Bros. They have committed to retaining their current 24 manufacturing jobs and will add 25 new jobs over the next 3 years. The company manufactures large steel pressurized tanks for various industries including food processing and water treatment. DISCUSSION Vessel Systems; in operation locally for 10 years, has outgrown its older, leased facility. A new facility, specifically designed for their large-scale production operation, will provide a more efficient layout and better utilization of space. Energy efficiencies and reduced production schedules will increase the company's bottom line. The company currently operates one shift but could accommodate a second shift in the new facility. The proposed Development Agreement provides for several incentives to encourage the relocation and expansion. An Acquisition Grant will reduce the asking price of the land from $78,000 per acre to $39,000 per acre. The company has also requested tax increment financing (-rlF) to assist in their $1.5 million project. This would be in the form of an up-front TIF grant, estimated to be $140,000 based on the value of the improved property. As the company pays its future tax obligation on the new improvements, the TIF bond is paidl off over a 10-year period. The attached Development Agreement establishes the terms of the sale of the property to Vessel Systems. The key elements of the agreement include the following: 1) The purchase price is $78,000 per acre for Lots 7 and 8, Dubuque Industrial Center West 2nd Addition. An Acquisition Grant to the developer reduces the cost to $39,000 per acre. 2) The property will be conveyed on or before July 15, 2003. 3)The company must construct a building of not less than 31,000 square feet costing not less than $1,000,000. 4)Vessel Systems Inc. must retain 24 existing jobs and create 25 new jobs within the first 36 months of operation. The 49 jobs must be retained for 2 additional years after the initial 36 months. The average hourly wage for new jobs will be $13.85/hour. 5)The company will receive an up-front TIF grant to be repaid over a 1 O-year period by the new tax increment generated by the property. 6) The City Will apply for a CEBA loan/forgivable loan on behalf of the company for $125,000. The City's match for the CEBA will be the Acquisition Grant and TIF grant proposed in the Development Agreement. Additional terms and conditions of the disposition of the property are included within the attached Development Agreement. RECOMMENDATION I recommend that the City Council set forpublic hearing the disposition of Lots 7 and 8 in the Dubuque Industrial Center West 2na Addition to Vessel Systems, Inc. for the purpose of constructing a 31,000 square foot manufacturing facility. This action supports the Council's objectives to assist a local business expand its operations and create new jobs. ACTION STEP The action step for the City Council is to adopt the attached Resolution. attachments F:\USERS~Pmyhre\wpDOcs\LOANDOC\vessels~dlspo.mem.doc RESOLUTION NO. RESOLUTION OF INTENT TO DISPOSE OF LOTS 7 AND 8 IN THE DUBUQUE INDUSTRIAL CENTER WEST 2ND ADDITION BY SALE TO VESSEL SYSTEMS, INC. WHEREAS, the City of Dubuque, Iowa (City) is the owner of Lots 7 and 8 in the Dubuque Industrial Center West 2nd Addition (the Property), as shown on the Exhibit attached hereto consisting of approximately 5 acres, more or less; and WHEREAS, City and Vessel Systems, Inc. have entered into a Development Agreement, subject to the approval of the City Council, a copy of which is on file at the Office of the City Clerk, City Hall, 50 W. 13th Street, Dubuque, Iowa pursuant to which City will sell the Property to Vessel Systems, Inc.; and WHEREAS, the City Council has tentatively determined that it would be in the best interests of the City to approve the Development Agreement, including conveyance of the Property to Vessel Systems, Inc. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1 ~ The City of Dubuque intends to dispose of its interest in the foregoing- described Propelrty to Vessel Systems, Inc: Section 2~ The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on City's intent to dispose of the foregoing-described Property, to be held ' on the 2nd day of June 2003 at 6:30 p.m. at the Carnegie-Stout Public Library Auditorium, 360 W. 11th Street, Dubuque, Iowa. Passed, approved and adopted this 19th day of May 2003. ATTEST: Jeanne F. Schneider City Clerk F:\USERS~Prnyhre\WPDOCS%OANDOC\vesseis~dispo.res.doc Terrance M. Duggan Mayor I�WA OFFICIAL NOTICE NOTICE is hereby giVen that the City ObUnbilof - Dubuque,lOwa, will con- duct a .06b.liahearing at a Meetingto ,cornenehce; at 6:30_120., On the 2nd day of June, 2003, in the Public Library Auditorium, 360 West llth. to: consider disposing of the • City'S, interest in tots 7:and 8 in Dubuque Induitrial Center West 2nd Addition to vessel Systems, (Copy •:' :„of supporting documents are on fife in the City. Clerk's Office and :may be viewed during working hours.) Written Comments re- garding disposal of Said' property may be submit- tedt to' the City, , Clerk's Offibe on or before time of 'public hearing. At said time and place of public hearing, ;all inter- ested citizen's and ,parties Will be given an opportu- nity ,to be heard for or , ; against disposing of said property. hearing Any r; ?Visual; or r impaired persons needing special assistance " or: perSons, with special ac- ceesibility:. :needs should contact the - City Clerk's; Office at (563) 5894120 or TDD ',(563) 69046676 • at: least Ma hours Prior:to:The • Published by order or the City Council given on the 19th day of May, 2002. ' /s/J9dtine F. Schneider, CMG, City Clerk it 5/23 STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Sherri A. Yutzy, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: May 23, 2003, and for which the charge is $12.05. Subscribed to before]. e, a Notary Public in and for Dubuque County, Iowa, ,20 o . this (23,42 _ day of Notary Public in and for Dubuque County, Iowa. K. WESTERMEYER r o- mission Number 154885 16 tly Comm. Exp. FEB. 1, 2005 DEVELOPMENT AGREEMENT AGREEMENT, made on or as of the "042 day of , 2003 ("Effective Date"), by and between the City of Dubuque, Iowa, a municipality ("City"), established pursuant to the Code of Iowa of the State of Iowa and acting under authorization of Chapter 403 of the Code of Iowa, as amended ("Urban Renewal Act"), Vessel Systems, Inc. an Iowa corporation with its principal place of business at Dubuque, Iowa ("Developer"). WITNESSETH: WHEREAS, in furtherance of the objectives of the Urban Renewal Act, City has undertaken an Urban Renewal project ("Project") to advance the community's ongoing economic development efforts; and WHEREAS, Project is located within the Dubuque Industrial Center Economic Development District ("Project Area"); and WHEREAS, as of the date of this Agreement there has been prepared and approved by City an Urban Renewal Plan for the Project Area consisting of the Urban Renewal Plan for the Dubuque Industrial Center Economic Development District, approved by City Council of City on May 2, 1988, and as subsequently amended through and including the date hereof, (as amended, attached hereto as Exhibit A)("Urban Renewal Plan"); and WHEREAS, a copy of the Urban Renewal Plan, as constituted on the date of this Agreement and in the form attached hereto, has been recorded among the land records in the office of the Recorder of Dubuque County, Iowa; and WHEREAS, Developer has determined that it requires new manufacturing space to maintain and expand its operations and employment in the Project Area; and WHEREAS, Developer has requested that City sell to Developer approximately five (5) acres, more or less, legally described as Lot 7 and 8 Dubuque Industrial Center West 2"d Addition identified on Exhibit B, attached, in the City of Dubuque, Dubuque County, Iowa, together with all easements, tenements, hereditaments, and appurtenances belonging thereto ("Property"), so that Developer may develop said Property, located in the Project Area, for the construction, use and occupancy of an industrial manufacturing building with appurtenant uses which the City has determined and represented to Developer is in accordance with the uses specified in the Urban Renewal Plan and in accordance with this Agreement; and WHEREAS, City believes that the development of Property pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of City and in accord with the public purposes and provisions of the applicable federal, state and local laws and the requirements under which the Project has been undertaken and is being assisted. 2 NOW THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: SECTION 1. CONVEYANCE OF PROPERTY TO DEVELOPER 1.1 Purchase Price. The purchase price for Property ("Purchase Price") shall be the sum of Seventy -Eight Thousand Dollars ($78,000.00) per acre, which shall be due and payable by Developer in immediately available funds in favor of City, on or before July 15, 2003, or on such other date as the parties may mutually agree ("Closing Date"). 1.2 Title to Be Delivered. City agrees to convey good and marketable fee simple title in Property to Developer subject only to easements, restrictions, conditions and covenants of record as of the date hereof to the extent not objected to by Developer as set forth in this Agreement, and to the conditions subsequent set forth in Section 5.3, below: (1) City, at its sole cost and expense, shall deliver to Developer an abstract of title to Property continued through the date of this Agreement reflecting merchantable title in City in conformity with this Agreement, applicable State law. The abstract shall be delivered together with full copies of any and all encumbrances and matters of record applicable to the Property, and such abstract shall become the property of Developer when Purchase Price is paid in full in the manner as aforesaid. (2) Developer shall have until time of Closing to render objections to title, including any easements or other encumbrances not satisfactory to Developer, in writing to City. Developer agrees, however, to review the Abstract promptly following Developer's receipt of Developer's land survey and the Abstract and to promptly provide City with any objections to title identified therein. Nothing herein shall be deemed to limit Developer's rights to raise new title objections with respect to matters revealed in any subsequent title examinations and surveys and which were not identified in the Abstract provided by the City. City shall promptly exercise its best efforts to have such title objections removed or satisfied and shall advise Developer of intended action within ten (10) days of such action. If City shall fail to have such objections removed as of Closing, or any extension thereof consented to by Developer, Developer may, at its sole discretion, either (a) terminate this Agreement without any liability on its part, and any sums previously paid to City by Developer (or paid into escrow for City's benefit) shall be returned to Developer with interest, or (b) take title subject to such objections. City agrees to use its best reasonable efforts to promptly satisfy any such objections. 1.3 Rights of Inspection. Testing and Review. Developer, its counsel, accountants, agents and other representatives, shall have full and continuing access to Property and all parts thereof, upon reasonable notice to City. Developer and its agent and representatives shall also have the right to enter upon Property at any time after the execution and delivery hereof for any purpose whatsoever, including inspecting, surveying, engineering, test boring, performance of environmental tests, provided that Developer shall hold City harmless and fully indemnify City against any damage, claim, liability or cause of action arising from or caused by the actions of Developer, its agents, or representatives upon 3 Property (except for any damage, claim, liability or cause of action arising from conditions existing prior to any such entry upon the Property), and shall have the further right to make such inquiries of governmental agencies and utility companies, etc. and to make such feasibility studies and analyses as it considers appropriate. 1.4 Representations of City. In order to induce Developer to enter into this Agreement and purchase Property, City hereby represents and warrants to Developer that to the best of City's knowledge: (1) No action in condemnation, eminent domain or public taking proceedings are now pending or contemplated against Property. (2) No ordinance or hearing is now or before any local governmental body which either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against Property. (3) City has good and marketable fee simple title interest to Property. (4) There are no notices, orders, suits, judgments or other proceedings relating to fire, building, zoning, air pollution, health violations or other matters that have not been corrected. City has notified Developer in writing of any past notices, orders, suits, judgments or other proceedings relating to fire, building, zoning, air pollution or health violations as they relate to Property of which it has actual notice. (5) Property will as of the date of closing be free and clear of all liens, security interests, and encumbrances. (6) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement, and that it has full power and authority to execute, deliver and perform its obligations under this Agreement. The City's attorney shall issue a legal opinion to Developer at time of closing confirming the representation contained herein, in form and substance reasonably satisfactory to Developer. (7) All utilities necessary for the development and use of the Property as an industrial manufacturing facility adjoin the Property, and Developer shall have the right to tie into said utilities (8) The Property is free and clear of any occupants, and no party has a lease to or other occupancy or contract right in the Property that shall in anyway be binding upon the Property or Developer. (9) City shall exercise its best efforts to cooperate with Developer in the development process. (10) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. „ 4 (11) With respect to the period during which City has owned or occupied the Property, and to City's knowledge after reasonable investigation with respect to the time before City owned or occupied the Property, no person or entity has caused or permitted materials to be stored, deposited, treated, recycled, or disposed of on, under or at the Property, which materials, if known to be present, would require cleanup, removal or some other remedial action under environmental laws. 1.5 Conditions to Closing. The closing of the transaction contemplated by this Agreement and all the obligations of Developer under this Agreement are subject to fulfillment, on or before the Closing Date, of the following conditions: (1) The representations and warranties made by City in Section 1.4 shall be correct as of the Closing Date with the same force and effect as if such representations were made at such time. At the closing, City shall deliver a certificate to that effect. (2) Title to Property shall be in the condition warranted in Section 1.4. (3) Developer, in its sole and absolute discretion, having completed and approved of any inspections done by Developer hereunder. (4) Developer having obtained any and all necessary governmental approvals, including without limitations approval of zoning, subdivision or platting which might be necessary or desirable in connection with the sale and transfer and development of Property. Any conditions imposed as a part of the zoning, platting or subdivision must be satisfactory to Developer, in its sole opinion. City shall cooperate with Developer in attempting to obtain any such approvals and shall execute any documents necessary for this purpose, provided that City shall bear no expense in connection therewith. In connection therewith, the City agrees (a) to review all of Developer's plans and specifications for the project and to either reject or approve the same in a prompt and timely fashion; (b) to issue a written notification to Developer, following City's approval of same, indicating that the City has approved such plans and specifications, and that the same are in compliance with the Urban Renewal Plan, this Agreement and any other applicable City or affiliated agency requirements, with the understanding that Developer and its lenders shall have the right to rely upon the same in proceeding with the project; (c) to identify in writing within ten (10) working days of submission of said plans and specifications, any and all permits, approvals and consents that are legally required for the acquisition of the Property by Developer, and the construction, use and occupancy of the project with the intent and understanding that Developer and its lenders and attorneys will rely upon same in establishing their agreement and time frames for construction, use and occupancy, lending on the project and issuing legal opinions in connection therewith; and (d) to cooperate fully with Developer to streamline and facilitate the obtaining of such permits, approvals and consents. (5) City having completed all required notice to or prior approval, consent or permission of any federal, state or municipal or local governmental agency, body, 5 board or official to the sale of Property; and consummation of the closing by the City shall be deemed a representation and warranty that it has obtained the same. (6) Developer and City shall be in material compliance with all the terms and provisions of this Agreement. (7) Developer shall have furnished City with evidence, in a form satisfactory to City (such as a letter of commitment from a bank or other lending institution), that Developer has firm financial commitments in an amount sufficient, together with equity commitments, to complete Minimum Improvements (as defined herein) in conformance with Construction Plans (as defined herein), or City shall have received such other evidence of such party's financial ability as in the reasonable judgment of 'City is required. (8) Receipt of an opinion of counsel to Developer in the form attached hereto as Exhibit C. ' (9) Developer shall have the right to terminate this Agreement at anytime prior to the consummation of the closing on the Closing Date if Developer determines in their sole discretion that conditions necessary for the successful completion of the project contemplated herein (the "Project" or "project") have not been satisfied to the full satisfaction of such party in such party's sole and unfettered discretion. Upon the giving of notice of termination by such terminating party to the other parties to this Agreement, this Agreement shall be deemed null and void. 1.6 Closing. The closing of the purchase and sale shall take place on Closing Date. Exclusive possession of Property shall be delivered on the Closing Date, in its current condition and in compliance with this Agreement, including City's representations and warranties regarding the same. Consummation of the Closing shall be deemed an agreement of the parties to this Agreement that the conditions of closing shall have been satisfied or waived. 1.7 Citv's Obligations at Closing. At or prior to Closing Date, City shall: (1) Deliver to Developer City's duly recordable Special Warranty Deed to Property (in the form attached hereto as Exhibit D ("Deed") conveying to Developer marketable fee simple title to Property and all rights appurtenant thereto, subject only to easements, restrictions, conditions and covenants of record as of the date hereof and not objected to by Developer as set forth in this Agreement, and to the conditions subsequent set forth in Section 5.3, below. (2) Deliver to Developer the Abstract of Title to Property. (3) Deliver to Developer such other documents as may be required by this Agreement, all in a form satisfactory to Developer. 1.8 Delivery of Purchase Price: Obligations At Closing. At closing, and subject to the terms, conditions, and provisions hereof and the performance by City of its obligations as set forth herein, Developer shall pay the Purchase Price to City pursuant to Section 1.1 6 hereof, but subject to Developer receiving a partially offsetting credit pursuant to Section 3.1 below. 1.9 Closing Costs. The following costs and expenses shall be paid in connection with the closing: (1) City shall pay: (a) The transfer fee imposed on the conveyance. (b) A pro -rata portion of all taxes as provided in Section 1.10. (c) All special assessments whether levied, pending or assessed. (d) City's attorney's fees. (e) City's broker and/or real estate commissions and fees, if any. (f) The cost of recording the satisfaction of any existing mortgage and any other document necessary to make title marketable. (2) Developer shall pay the following costs in connection with the closing: (a) The documentary fee necessary to record the Deed. (b) Developer's attorney's fees. (c) Developer's broker and/or real estate commissions and fees, if any. (d) A pro -rata portion of all taxes as provided in Section 1.10. 1.10 Real Estate Taxes. City shall pay all real estate taxes for all fiscal years which end prior to Closing Date. Real estate taxes for the fiscal year in which Closing Date occurs shall be prorated between City and Developer to Closing Date on the basis of a 365 -day calendar year. Developer shall pay or cause to be paid all real estate taxes due in subsequent fiscal years. Any proration of real estate taxes on Property shall be based upon such taxes for the year currently payable. SECTION 2. DEVELOPMENT ACTIVITIES 2.1 Required Minimum Improvements. City acknowledges that Developer is building an industrial manufacturing facility on the Property. Specifically, Developer is charged with constructing the structure of the building and certain internal systems thereto, and with finishing the building including, without limitation, all interior improvements ("Minimum Improvements"); all as more particularly depicted and described on the plans and specifications to be delivered to and approved by the City as contemplated in this Agreement. Developer hereby agrees to construct on the Property an industrial manufacturing facility of not less than thirty-one thousand (31,000) square feet of floor 7 space along with necessary sitework as contemplated in this Agreement at a cost of not less than $1,000,000. 2.2 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of Property and the construction of Minimum Improvements thereon ("Construction Plans") shall be in conformity with Urban Renewal Plan, this Agreement, and all applicable State and local laws and regulations, including but not limited to the Amended and Restated Declaration of Covenants, Conditions, Restrictions, Reservations, Easements, Liens and Charges, recorded as Instrument No. 7990-02, records of Dubuque County, Iowa. Developer shall submit to City, for approval by City, plans, drawings, specifications, and related documents with respect to the improvements to be constructed by Developer on the Property. All work with respect to the Minimum Improvements shalrbe in substantial conformity with the Construction Plans approved by City. 2.3 Timing of Improvements. Developer hereby agrees that construction of Minimum Improvements on Property shall be commenced within three (3) months after Closing Date, and shall be substantially completed by March 1, 2004. The time frames for the performance of these obligations shall be suspended due to unavoidable delays meaning delays, outside the control of the party claiming its occurrence in good faith, which are the direct result of strikes, other labor troubles, unusual shortages of materials or labor, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion directly results in delays, or acts of any federal, state or local government which directly result in extraordinary delays. The time for performance of such obligations shall be extended only for the period of such delay. 2.4 Certificate of Completion. Promptly following the request of Developer upon completion of Minimum Improvements, City shall furnish Developer with an appropriate instrument so certifying. Such certification ("Certificate of Completion") shall be in recordable form and shall be a conclusive determination of the satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of Developer to construct Minimum Improvements. The Certificate of Completion shall waive all rights of revestment of title in City as provided in Section 5.3, and the Certificate of Completion shall so state. 2.5 Developer's Lender's Cure Rights. The parties agree that if Developer shall fail to complete the Minimum Improvements as required by this Agreement such that revestment of title may occur (or such that the City would have the option of exercising its revestment rights), then Developer's Lender shall have the right, but not the obligation, to complete such Minimum Improvements. SECTION 3. CITY PARTICIPATION 3.1 Acquisition Grant to Developer. For and in consideration of Developer's obligations hereunder to construct Minimum Improvements, City agrees to make an Acquisition Grant to Developer on the Closing Date, or such other date as the parties shall mutually agree upon in writing, in the amount of One Hundred Ninety One Thousand Four Hundred Ninety 8 Dollars ($191,490). The parties agree that the Acquisition Grant shall be payable in the ( form of a credit favoring Developer at time of Closing with the effect of directly offsetting a portion of the purchase price obligation of Developer. 3.2 Economic Development Grant to Developer. For and in consideration of Developer's obligations to undertake the employment commitments as provided herein, City agrees (subject to the conditions set forth in this Section) to make an Economic Development Grant to Developer on the Closing Date, or such other date as the parties shall,mutually agree upon in writing. The Economic Development Grant shall be in the total amount not to exceed One Hundred Forty Thousand Dollars ($140,000.00) and shall be payable solely and only from the proceeds of the sale of urban renewal tax increment revenue bonds or notes by City as described in Section 3.3 hereof, and not from any other source. 3.3 Issuance of Notes. The Developer acknowledges and agrees that City intends to finance all of its costs associated with Project (including the funding of the Economic Development Grant to Developer) through the issuance of urban renewal tax increment revenue bonds or notes to be issued by City under the provisions of Section 403.9 of the Iowa Code, the Urban Renewal Act and this Section (such obligation being referred to herein as Notes). Developer further acknowledges and agrees that it shall identify for City a purchaser for the Notes. Developer further acknowledges and agrees that the Notes shall be sold on such terms and conditions, bear such interest rates, mature at such times and in such amounts as City, reasonably, shall determine to be acceptable to it and shall be payable from and secured solely and only by a pledge of the tax increment revenues collected by City in respect of the Property and the Minimum Improvements located thereon for a period not to exceed ten (10) years or as City shall otherwise determine. City shall have no obligation to fund any of its obligations hereunder from any source other than the proceeds of the Notes. City's obligation to issue the Notes and undertake its obligations hereunder shall be subject in all respects oto unavoidable delays, the provisions of this Section, and to the satisfaction of all conditions required (in the judgment of bond counsel for City) by Chapter 403 of the Code of Iowa, as amended, with respect to the issuance of the Notes. 3.4 Limitations on Financial Undertakings of City. Notwithstanding any other provisions of this Agreement, City shall have no obligation to Developer under this Agreement to issue the Notes or to fund the Economic Development Grant to Developer if any of the following conditions exist: (1) City is unable to complete the sale of the Notes on such terms and conditions as it shall deem reasonably acceptable to it in accordance with the requirements of Section 3.3 above; or (2) City is entitled (or, with the passage of time or giving of notice, or both, would be entitled) under Section 5 of this Agreement to exercise any remedies set forth therein as a result of any Event of Default; or (3) There has been, or there occurs, a material change in the financing commitments secured by Developer for construction and operation of Minimum Improvements during the term hereof, which change(s) make it substantially 9 more likely, in the reasonable judgment of City, that Developer will be unable to fulfill its covenants and obligations under this Agreement. 3.5 Use of Tax Increments. Developer recognizes that City intends to utilize the tax increment revenues collected in respect of Minimum Improvements to pay debt service including without limitations the principal and accrued interest on the Notes. After the payment of required debt service, City shall be free to use all tax increment revenues collected in respect of Minimum Improvements or other properties within Project Area for any purpose for which the tax increment revenues may lawfully be used pursuant to the provisions of the Urban Renewal Act, and City shall have no obligation to Developer with respect to use thereof. SECTION 4. COVENANTS OF DEVELOPER 4.1 Job Creation. Developer shall maintain its existing twenty-four (24) employees in Dubuque, Iowa, and shall create or cause to be created not less than twenty-five (25) new full time equivalent (2080 hours per year) jobs by within three (3) years from the date of this Agreement, and shall maintain those jobs for two (2) years thereafter. It is agreed by the parties that Developer has a base employment in Dubuque, Iowa, of twenty-four (24) existing full time equivalent jobs as of May 19, 2003, and that new job creation will be calculated by subtracting this amount from Developer's actual total employment in Dubuque, Iowa as of the dates established in Section 4.2. In the event that any certificate provided to City under Section 4.2 hereof discloses that Developer has not created at least twenty-five (25) FTE employees as provided hereinabove, Developer shall pay to City, promptly upon written demand therefor, an amount equal to $3,908.00 per job not created. 4.2 Certification. To assist City in monitoring the performance of Developer hereunder, three (3) years from the date of this Agreement, and again two (2) years thereafter, a duly authorized officer of Developer shall certify to City (a) the number of full time equivalent jobs employed at Property, and (b) to the effect that such officer has re-examined the terms and provisions of this Agreement and that at the date of such certificate, and during the preceding twelve (12) months, Developer is not or was not in default in the fulfillment of any of the terms and conditions of this Agreement and that no Event of Default (or event which, with the lapse of time or the giving of notice, or both, would become an Event of Default) is occurring or has occurred as of the date of such certificate or during such period, or if the signer is aware of any such default, event or Event of Default, said officer shall disclose in such statement the nature thereof, its period of existence and what action, if any, has been taken or is proposed to be taken with respect thereto. Such certificate shall be provided not later than July 1, 2006, and on July 1, 2008. 4.3 Books and Records. Developer shall keep at all times proper books of record and account in which full, true and correct entries will be made of all dealings and transactions of or in relation to the business and affairs of Developer in accordance with generally 10 accepted accounting principles -consistently applied throughout the period involved, and Developer shall provide reasonable protection against loss or damage to such books of record and account. 4.4 Execution of Assessment Agreement. Developer shall agree to, and with City shall execute, as soon as the plans and specifications for Minimum Improvements are prepared but no later than Closing Date, an Assessment Agreement substantially in the form attached hereto as Exhibit E (Assessment Agreement) pursuant to the provisions of Section 403.6(19) of the Code of Iowa specifying the Assessor's Minimum Actual Value for Property end Minimum Improvements for calculation of real property taxes. Specifically, Developer shall agree to a minimum actual value for Property and Minimum Improvements that will result in a minimum actual value as of January 1, 2004 of not less than One Million Dollars ($1,000,000.00) (such minimum actual value at the time applicable is herein referred to as the Assessor's Minimum Actual Value). Nothing in the Assessment Agreement shall limit the discretion of the Assessor to assign an actual value to Property in excess of such Assessor's Minimum Actual Value nor prohibit Developer from seeking through the exercise of legal or administrative remedies a reduction in such actual value for property tax purposes; provided, however, that Developer shall not seek a reduction of such actual value below Assessor's Minimum Actual Value in any year so long as Assessment Agreement shall remain in effect. Assessment Agreement shall remain in effect until July 1, 2016 (the Termination Date). Assessment Agreement shall be certified by the Assessor for City as provided in Iowa Code Section 403.6(19) and shall be filed for record in the office of the County Recorder of Dubuque County, and such filing shall constitute notice to any subsequent encumbrancer or purchaser of Property (or part thereof), whether voluntary or involuntary, and such Assessment Agreement shall be binding and enforceable in its entirety against any such subsequent purchaser or encumbrancer. 4.5 Real Property Taxes. From and after the Closing Date, Developer shall pay or cause to be paid, when due, all real property taxes and assessments payable with respect to all and any parts of the Property until Developer's obligations have been assumed by any other person pursuant to the provisions of this Agreement. 4.6 Insurance Reauirements. (1) Developer will provide and maintain or cause to be maintained at all times during the process of constructing Minimum Improvements (and, from time to time at the request of City, furnish City with proof of insurance in the form of a certificate of insurance for each insurance policy): 11 (a) All risk builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100%) of the replacement value when construction is completed; (b) Commercial general liability insurance covering the Property and operations (including operations of subcontractors), completed operations and contractual liability insurance with limits of liability of not less than $2,000,000 for each occurrence and in the aggregate (an umbrella or excess liability policy may be used), bodily injury and property damage; and (c) Statutory worker's compensation insurance coverage and employer's liability insurance in the amount of $1,000,000. (2) Upon completion of construction of Minimum Improvements and prior to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the request of City shall furnish proof of insurance in the form of a certificate of insurance) insurance as follows: (a) All risk property insurance against loss and/or damage to Minimum Improvements under an insurance policy written in an amount not less than the full insurable replacement value of Minimum Improvements. The term "replacement value" shall mean the actual replacement cost of Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time to time at the request of City, but not more frequently than once every three years. (b) Commercial general liability insurance, in the minimum amount for each occurrence and in aggregate of $2,000,000.00, bodily injury and property damage. (3) All insurance required by this Section shall be taken out and maintained in responsible insurance companies selected by Developer that are authorized under the laws of the State to assume the risks covered thereby. Developer will deposit annually with City certificates of insurance or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Section, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to Developer and City at least thirty (30) days before the cancellation or modification becomes effective. Developer shall furnish City evidence satisfactory to City that the policy, has been renewed or replaced by another policy conforming to the provisions of this Section, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, Developer may maintain a single policy, or blanket or umbrella policies, or a combination 12 thereof, which provide the total coverage required herein, in which event Developer shall deposit with City a certificate or certificates of the respective insurers as to the amount of coverage in force upon Minimum Improvements, provided, however, that the specific limit shall not be impaired. (4) Developer agrees to notify City immediately in the case of damage exceeding $500,000.00 in amount to, or destruction of, Minimum Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance ("Net Proceeds"), shall be paid directly to Developer as its interests may appear. If the damage oto the Minimum Improvements is sufficiently extensive to cause the lease for the Property to be terminated, Developer, at its option, may: (a) Forthwith repair, reconstruct and restore Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Developer will apply the Net Proceeds of any insurance relating to such damage received by Developer to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property (as its interests may appear). Developer shall complete the repair, reconstruction and restoration of Minimum Improvements whether or not the Net Proceeds of insurance received by Developer for such Purposes are sufficient; or (b) Elect not to repair, reconstruct and restore Minimum Improvements. In this event, Developer shall repay to City the unamortized portion of the Acquisition Grant made by City to Developer pursuant to the provisions of section 3.1, above. The "unamortized portion" of the Acquisition Grant shall be calculated by dividing the total amount of the acquisition grant by one hundred twenty (120) months, and then multiplying the resulting figure by the number of months between the date that the damage occurred to the Property and the 10th anniversary of the Effective Date. 4.7 Preservation of Property. During the term of this Agreement, Developer shall maintain, preserve and keep, or cause others to maintain, preserve and keep, Minimum Improvements in good repair and working order, ordinary wear and tear accepted, and from time to time shall make all necessary repairs, replacements, renewals and additions. Nothing in this Agreement, however, shall be deemed to alter any agreements between Developer or any other party including, without limitation, any agreements between the parties regarding the care and maintenance of the Property. 13 4.8 Non -Discrimination. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, age or disability. 4.9 Conflict of Interest. Developer agrees that no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in a decision-making process or gain insider information with regard to the project, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of this project at any time during or after such person's tenure. In connection with this obligation, Developer shall have the right to rely upon the representations of any party with whom it does business and shall not be obligated to perform any further examination into such party's background. 4.10 Non-transferabilitv. Until such time as Minimum Improvements are complete (as certified by City under Section 2.4), this Agreement may not be assigned by Developer nor may Property be transferred by Developer to another party without the prior written consent of City, which shall not be unreasonably withheld. Thereafter, Developer shall have the right to assign this Agreement and upon assumption of the Agreement by the assignee, Developer shall no longer be responsible for its obligations under this Agreement. 4.11 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to Property or any part thereof that they, and their respective successors and assigns, shall: (1) Devote Property to, and only to and in accordance with, the uses specified in the Urban Renewal Plan (and the City represents and agrees that use of the Property as an industrial manufacturing center is in full compliance with the Urban Renewal Plan) (however, Developer shall not have any liability to the City to the extent that a successor in interest shall breach this covenant and the City shall seek enforcement of this covenant directly against the party in breach of same); and (2) Not discriminate upon the basis of race, religion, color, sex, national origin, age or disability in the sale, lease, rental, use or occupancy of Property or any improvements erected or to be erected thereon, or any part thereof (however, Developer shall not have any liability to the City to the extent that a successor in interest shall breach this covenant and the City shall seek enforcement of this covenant directly against the party in breach of same). 14 4.12 Release and Indemnification Covenants. (1) Developer releases City and the governing body members, officers, agents, servants and employees thereof (hereinafter, for purposes of this Section 4.12, the "Indemnified Parties") from, covenants and agrees that the Indemnified Parties shall not be liable for, and agrees to indemnify, defend 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 Minimum Improvements. (2) Except for any gross negligence, willful misrepresentation or any willful or wanton misconduct or any unlawful act of the Indemnified Parties, Developer agrees to protect and defend the Indemnified Parties, now or forever, and further agrees to hold the Indemnified Parties harmless, from any claim, demand, suit, action or other proceedings whatsoever by any person or entity whatsoever arising or purportedly arising from (1) any violation of any agreement or condition of this Agreement (except with respect to any suit, action, demand or other proceeding brought by Developer against City based on an alleged breach of any representation, warranty or covenant of City under this Agreement and/or to enforce its rights under this Agreement) or (2) the acquisition, construction, installation, ownership; and operation of Minimum Improvements or (3) the condition of Property and any hazardous substance or environmental contamination located in or on Property, occurring after Developer takes possession of Property. (3) The Indemnified Parties shall not be liable to Developer for any damage or injury to the persons or property of Developer or its officers, agents, servants or employees or any other person who may be on, in or about Minimum Improvements due to any act of negligence of any person, other than any act of negligence on the part of any such Indemnified Party or its officers, agents, servants or employees. (4) AH covenants, stipulations, promises, agreements and obligations of City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of City, and not of any governing body member, officer, agent, servant or employee of City in the individual capacity thereof. (5) The provisions of this Section 4.12 shall survive the termination of this Agreement. 4.13 Compliance with Laws. Developer will comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations the failure to comply with which or the sanctions and penalties resulting therefrom, would not have a material adverse effect on the business, property, operations, financial or otherwise, of Developer. 15 SECTION 5. EVENTS OF DEFAULT AND REMEDIES 5.1 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: (1) Failure by Developer to pay or cause to be paid, before delinquency, all real property taxes assessed with respect to Minimum Improvements and Property. (2) Failure by Developer to cause the construction of Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement. (3) Transfer of any interest by Developer of Minimum Improvements in violation of the provisions of this Agreement prior to the issuance of the final Certificate of Completion. (4) Failure by Developer or City to substantially observe or perform any other material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. 5.2. Remedies on Default by Developer. Whenever any Event of Default referred to in Section 5.1 of this Agreement occurs and is continuing, City, as specified below, may take any one or more of the following actions after the giving of written notice by City to Developer (and the holder of any mortgage encumbering any interest in the Property of which City has been notified of in writing) of the Event of Default, but only if the Event of Default has not been cured within sixty (60) days following such notice, or if the Event of Default cannot be cured within sixty (60) days and Developer does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter: (1) City may suspend its performance under this Agreement until it receives assurances from the defaulting party deemed adequate by City, that the defaulting party will cure its default and continue its performance under this Agreement; (2) Until the Closing, City may cancel and rescind this Agreement; (3) City shall be entitled to recover from the defaulting party the sum of all amounts expended by City in connection with the funding of the Acquisition Grant to Developer, and City may take any action, including any legal action it deems necessary, to recover such amounts from the defaulting party; (4) City may withhold the Certificate of Completion; or 16 (5) The non -defaulting parties may take any 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 under this Agreement. 5.3 Revesting Title in the Citv Upon Happening of Event Subsequent to Conveyance to Developer. In the event that subsequent to conveyance of Property to Developer by City and prior to receipt by Developer of the Certificate of Completion, but subject to the terms of the mortgage granted by Developer to secure a loan obtained by Developer from a commercial lender or other financial institution to fund the acquisition of Property or construction of Minimum Improvements, ("First Mortgage") an Event of Default under Section 5.1 of this Agreement occurs and is not cured within the times specified in Section 5.2, then City shall have the right to re-enter and take possession of Property and any portion of Minimum Improvements thereon and to terminate (and revest in City pursuant to the provisions of this Section 5.3 subject only to any superior rights in any holder of the First Mortgage) the estate conveyed by the City to Developer, it being the intent of this provision, together with other provisions of this Agreement, that the conveyance of Property to Developer shall be made upon the condition that (and the Deed shall contain a condition subsequent to the effect that), in the event of default under Section 5.1 on the part of Developer and failure on the part of Developer to cure such default within the period and in the manner stated herein, City may declare a termination in favor of City of the title and of all Developer's rights and interests in and to Property conveyed to Developer, and that such title and all rights and interests of Developer, and any assigns or successors in interests of Developer, and any assigns or successors in interest to and in Property, shall revert to City (subject to the provisions of Section 5.3 of this Agreement), but only if the events stated in Section 5.1 of this Agreement have not been cured within the time period provided above, or, if the events cannot be cured within such time periods, Developer does not provide assurance to City, reasonably satisfactory to City, that the events will be cured as soon as reasonably possible. Notwithstanding the foregoing, however, City agrees to execute a Subordination Agreement in favor of Developer's first mortgage lender, in a form reasonably acceptable to City and to Developer's first mortgage lender. 5.4. Resale of Reacquired Property: Disposition of Proceeds. Upon the revesting in City of title to Property as provided in Section 5.3 of this Agreement, City shall, pursuant to its responsibility under law, use its best efforts, subject to any rights or interests in such property or resale granted to any holder of a First Mortgage, to resell Property or part thereof as soon and in such manner as City shall find feasible and consistent with the objectives of such law and of the Urban Renewal Plan to a qualified and responsible party or parties (as determined by City in its sole discretion) who will assume the obligation of making or completing Minimum Improvements or such other improvements in their stead as shall be satisfactory to City and in accordance with the uses specified for such Property or part thereof in the Urban Renewal Plan. Subject to any rights or interests in such 17 property or proceeds granted to any holder of a First Mortgage upon such resale of Property the proceeds thereof shall be applied: (1) First, to pay and discharge the First Mortgage; (2) Second, to pay the principal and interest on mortgage(s) created on Property, or any portion thereof, or any improvements thereon, previously acquiesced in by City pursuant to this Agreement. If more than, one mortgage on the Property, or any portion thereof, or any improvements thereon, has been previously acquiesced in by City pursuant to this Agreement and insufficient proceeds of the resale exist to pay the principal of, and interest on, each such mortgage in full, then such proceeds of the resale as are available shall be used to pay the principal of and interest on each such mortgage in their order of priority, or by mutual agreement of all contending parties including Developer, or by operation of law; (3) Third, to reimburse City for all allocable costs and expenses incurred by City, including but not limited to salaries of personnel, in connection with the recapture, management and resale of property or part thereof (but less any income derived by City from the property or part thereof in connection with such management); any payments made or necessary to be made to discharge any encumbrances or liens (except for mortgage(s) previously acquiesced in by the City) existing on Property or part thereof at the time of revesting of title thereto in City or to discharge or prevent from attaching or bring made any subsequent encumbrances or liens due to obligations, default or acts of Developer, its successors or transferees (except with respect to such mortgage(s)), any expenditures made or obligations incurred with respect to the making or completion of Minimum Improvements or any part thereof on Property or part thereof, and any amounts otherwise owing to City (including water and sewer charges) by Developer and its successors or transferees; and (4) Fourth, to reimburse Developer up to the amount equal to (1) the sum of the Purchase Price paid to City for Property and the cash actually invested by such party in making any of the Minimum Improvements on Property, less (2) any gains or income withdrawn or made by such party from this Agreement or Property. 5.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 18 5.6. No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any 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. 5.7. Agreement to Pay Attorneys' Fees and Expenses. If any action at law or in equity, including an action for declaratory relief or arbitration, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and costs of litigation from the other party. Such fees and costs of litigation may be set by the court in the trial of such action or by the arbitrator, as the case may be, or may be enforced in a separate action brought for that purpose. Such fees and costs of litigation shall be in addition to any other relief which may be awarded. 5.8 Remedies on Default by City. If City defaults in the performance of this Agreement, Developer may take any action, including legal, equitable or administrative action which may appear necessary or desirable to collect any payments due under this Agreement, to recover expenses of Developer, or to enforce performance and observance of any obligation, agreement, or covenant of City under this Agreement. Developer may suspend their performance under this Agreement until they receive assurances from City, deemed adequate by Developer, that City will cure its default and continue its performance under this Agreement. SECTION 6. GENERAL TERMS AND PROVISIONS 6.1 Notices and Demands. Whenever this Agreement requires or permits any notice or written request by one party to another, it shall be deemed to have been properly given if and when delivered in person or three (3) business days after having been deposited in any U.S. Postal Service and sent by registered or certified mail, postage , prepaid, addressed as follows: (1) If to Developer: Vessel Systems, Inc. Dubuque, IA 52001 Phone: Fax: (2) If to City: City Manager 50 W. 13th Street Dubuque, IA 52001 Phone: (563) 589-4110 Fax: (563) 589-4149 19 Or at such other address with respect to either party as that party may, from time to time designate in writing and forward to the other as provided in this Section. 6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their respective successors and assigns. 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on July 1, 2016 (the "Termination Date"). 6.4. Execution Bv, Facsimile. The parties agree that this Agreement may be transmitted between them by facsimile machine. The parties intend that the faxed signatures constitute original signatures and that a faxed Agreement containing the signatures (original or faxed) of all the parties is binding on the parties. IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City Clerk and Developer has caused this Agreement to be duly executeon or as of the first above written. CITY OF DUBUQUE, IOWA By: Ter nce M. Duggan, May anne F. Schneider, City Clerk F:\USERS\Pmyh re\WPDOCS\LOAN DOCivessels\DevAg reed oc VESSEL SYSTEMS, INC.