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HomeMy WebLinkAbout5 Bees, LLC - Dev Agmnt and Lease Termination with 3 Little Lambs - 7.13.20(RECORDED) IIIIIIIIIII IIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIII III• Doc ID: 010006770025 Type: GEN Recorded: 11/20/2020 at 03:23:30 PM Fee Amt: $127.00 Page 1 of 25 Black Hawk County Iowa SANDIE L. SMITH RECORDER File2021-00011025 wa}eYllo Prep red by Christopher S.Wendland, P.O. Box 596,Waterloo, IA 50704 Phone(319)234-5701 DEVELOPMENT AGREEMENT (Phased Development) This Development Agreement (the "Agreement") is entered into as of -: kA1A\ t 3 , 2020 by and between 5 Bees, LLC (the "Company") and the City of Waterloo, Iowa (the "City"). RECITALS A. In furtherance of the objectives of Chapter 403 of the Code of Iowa, 2015, as amended (the "Urban Renewal Act"), City is engaged in carrying out urban renewal project activities in an area known as the Rath Urban Renewal and Redevelopment Plan Area ("Urban Renewal Area"). B. Company is willing and able to finance and construct buildings and related improvements on property located in the Urban Renewal Area. C. City considers economic development within the City a benefit to the community and is willing for the overall good and welfare of the community to provide financial incentives so as to encourage that goal. City believes that the development of the Property (defined below) is in the vital and best interests of the City and in accordance with the public purposes and provisions of the applicable State and local laws and requirements under which the project has been undertaken and is being assisted. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Sale of Property. Within 30 days from the date of this Agreement, City shall convey to Company, for the sum of$1.00, the real property described on Exhibit "A" attached hereto (the "Property"). Conveyance shall be by special warranty deed, free and clear of all encumbrances arising by or through City except: (a) easements, conditions and restrictions of record; (b) current and future real estate real property taxes and assessments subject to the agreements made herein; (c) general utility and (ii) 5 right-of-way easements serving the Property; and (d) restrictions imposed by the City zoning ordinances, or other applicable law. 2. Phased Development. The parties contemplate that Company will develop the Property and other nearby properties in phases, each of which is generally described as follows, although more detailed plans for each phase will be developed at one or more future dates: A. Phase 1. Demolition of existing structure on the Property and construction of a new commercial building of no less than 3,000 square feet. B. Phase 2. Interior and exterior improvements to an existing building on property at 1813 Black Hawk Street, Waterloo. C. Phase 3. Demolition of existing structure at 175 W. 16th Street, Waterloo (the "Phase 3 Lot") and construction of a new commercial building of no less than 3,000 square feet. D. Phase 4. Construction of a commercial building of no less than 6,500 square feet on parcel no. 8913-25-453-005 at the corner of Black Hawk Street and W. 18th Street (the "Phase 4 Lot"). Properties corresponding to Phases 2-3 are referred to as "Developer Properties," and the Property, Developer Properties and Phase 4 Lot are referred to as "Project Properties." For each phase, City may require that Company submit specific building designs and site plans for City review and approval. Improvements to the Project Properties completed within the schedule established by Section 5 below will be eligible for the benefits provided for in this Agreement, and any Phase of the Improvements not completed within the prescribed period will not be eligible for said benefits. 3. Improvements by Company. Company shall construct on the Project Properties the improvements described in Section 2 above, and related landscaping, paving, signage and parking improvements (collectively, the "Improvements"). Company agrees that the Improvements shall be constructed in accordance with the terms of this Agreement, the Urban Renewal Plan, and all applicable City, state, and federal building codes and shall comply with all applicable City ordinances and other applicable law. Company will use its best efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Improvements may be lawfully constructed. The Project Properties, the Improvements, and all site preparation and development- related work to make the Project Properties usable for Company's purposes as contemplated by this Agreement are collectively referred to as the "Project". 4. Timeliness of Construction; Possibility of Reverter. The parties agree that Company's commitment to undertake the Project and to construct the Improvements in a timely manner constitutes a material inducement for the City to 2 extend the development incentives provided for in this Agreement, including but not limited to its commitment to convey the Property and the Phase 4 Lot to Company, and that without said commitment City would not have done so. A. Deadlines to commence and complete. Subject to Unavoidable Delays (defined below), Company must obtain all permits to demolish the existing structure on the Property and to construct the Phase 1 Improvements so that construction on Phase 1 Improvements begins by April 1, 2021 (the "Phase 1 Start Date") and is completed no later than April 30, 2022 (the "Phase 1 Completion Deadline"). Phase 2 Improvements must be substantially completed by December 31, 2023, and Phase 3 Improvements must be substantially completed by December 31, 2024. Company must begin construction of Phase 4 Improvements within 12 months after City conveys the Phase 4 Lot to Company (the "Phase 4 Start Date) and must substantially complete such Improvements by December 31, 2026 or within 24 months after City conveys title to the Phase 4 Lot to Company, whichever is later (the "Phase 4 Completion Deadline"). For any phase, substantial completion of construction shall be evidenced by issuance of an occupancy permit. B. Events triggering reverter of title. (i) Subject to Unavoidable Delays as set forth below, if Company has not, in good faith, begun the construction of Phase 1 Improvements and Phase 4 Improvements by the corresponding Phase Start Date, then City may terminate this Agreement as to such phase area and title to such phase area shall revert to the City, except as may be provided in this Agreement; provided, however, that if construction has not begun by the applicable Phase Start Date but the development of the Project as to such phase is still imminent, the City Council may, but shall not be required to, consent to an extension of time for the construction of the phase Improvements, and if an extension is granted but construction of the phase Improvements has not begun within such extended period, then City may terminate this Agreement as to such phase area(s) and title to the applicable phase area(s) shall revert to the City after the end of said extended period. In the event of any termination, City shall have no further obligations under this Agreement with respect to any affected phase area. (ii) If Company determines at any time that the Project, in whole or in part, is not economically feasible, then after giving thirty (30) days' advance written notice to City, Company may convey the applicable undeveloped phase area(s) to City by special warranty deed, free and clear of any lien, claim, or encumbrance arising by or through Company, and thereupon neither party shall have any further obligation under this Agreement with respect to any such phase area conveyed, except as expressly provided. In connection with any conveyance to City, Company shall pay in full, so as to discharge or satisfy, all liens, claims, charges, and encumbrances on or against any Project Property deeded to City. 3 (iii) If development has commenced within the required period or any extended period and is stopped and/or delayed as a result of an act of God, war, civil disturbance, court order, labor dispute, fire, or other cause beyond the reasonable control of Company, the requirement that construction of any phase or of the entire Project shall be tolled for a period of time equal to the period of such stoppage or delay, and thereafter if construction is not completed within the allowed period of extension then title to the phase area(s) shall revert to City. 5. Reverter of Title; Indemnity. In the event of any reverter of title, Company agrees that it shall, at its own expense, promptly execute all documents, including but not limited to a special warranty deed, or take such other actions as the City may reasonably request to effectuate said reverter and to deliver to City title to the reverted Project Property that is free and clear of any lien, claim, or encumbrance arising by or through Company. Company shall pay in full, so as to discharge or satisfy, all liens, claims, charges, and encumbrances on or against such property. Appointment of Attorney in Fact: If Company fails to deliver such documents, including but not limited to a special warranty deed, to City within thirty (30) days after written demand by City, then City shall be authorized to execute, on Company's behalf and as its attorney-in-fact, the special warranty deed required by this Section, and for such limited purpose Company does hereby constitute and appoint City as its attorney- in-fact. Company further agrees that it shall indemnify City and hold it harmless with respect to any demand, claim, cause of action, damage, cost, expense, liability or injury made, suffered, or incurred as a result of or in connection with the Project, or Company's failure to carry on or complete same, or any lien, claim, charge, or encumbrance on or against the reverted Project Property of any type or nature whatsoever that attaches to such property by virtue of Company's ownership of same. If City files suit to enforce the terms of this Agreement and prevails in such suit, then Company shall be liable for all legal expenses, including but not limited to reasonable attorneys' fees. Company's duties of indemnity pursuant to this Section shall survive the expiration, termination or cancellation of this Agreement for any reason. 6. Water and Sewer. Company will be responsible for extending water, sewer, telephone, telecommunications, electric, gas and other utility services to any location on the Project Property that Company desires and for payment of any associated connection fees. 7. Additional City Assistance. The incentives described in the following subsections of this Section 7 are in addition to the other Project incentives extended by City to Company hereunder. A. Development Grant; Contingent Repayment; Security. City will provide payments of up to $120,000.00 (the "Grant") to assist Company with acquisition of Developer Properties and Company's demolition activities thereon. The schedule of payment shall be as follows: 4 1) $70,000.00 within thirty (30) days after the date of this Agreement; 2) $25,000.00 within thirty (30) days after Company provides to City proof of closing on Company's purchase of the Phase 3 Lot. 3) $25,000.00 within thirty (30) days after Company provides to City proof of completed demolition of existing structures on the Property and the Phase 3 Lot. If Company fails to complete the Project as required by Sections 2 and 3, then the Grant will be repayable to City at the rate of$30,000.00 for each Project phase that is not completed. Any amount repayable shall accrue interest at the rate of six percent (6%) per annum from and after the date of disbursement from City and continuing until repaid in full. As security for repayment of the Grant, Company shall either (a) provide a mortgage to City against the Project Properties, which City agrees to subordinate to any mortgage for acquisition or construction financing, or (b) obtain and keep in force one or more performance bonds in the amount of not less than $150,000.00 for each Project phase and one or more payment bonds that guarantee the timely payment of all materials, services and labor. If Company elects to maintain performance and payment bonds, then certificates or copies of said bonds shall be delivered to City, and until Project completion Company will not do or omit the doing of any act which would vitiate any bond. Upon completion of a Project phase, City shall release any mortgage against property corresponding to such phase, and Company may terminate any performance bond or payment bond corresponding to such phase. B. Phase 4 Lot. Within sixty (60) days after the date of this Agreement, City will terminate the existing lease for the Phase 4 Lot between City and 3 Little Lambs, LLC and shall enter into a new lease for the Phase 4 Lot with Company, substantially in the form attached hereto as Exhibit "B". Within thirty (30) days after the lapse, release or discharge of any and all tax liens, judgment liens or other liens affecting the Phase 4 Lot (anticipated to occur no later than May 2024), City shall convey the Phase 4 Lot to Company on the same terms as the conveyance described in Section 1 of this Agreement. C. Partial Tax Exemption. Because the Property is located in a designated Consolidated Urban Revitalization Area (CURA), the Property is eligible for tax exemption consistent with and to the extent provided for in Iowa law, provided that Company meets all requirements to qualify for such exemption. D. Vacated Alley. City agrees to take all steps necessary to vacate the alley behind the Property and to convey same to Company by quit claim deed concurrently with conveyance of the Property. 8. Minimum Assessment Agreement. Company acknowledges and agrees that it will pay when due all taxes and assessments, general or special, and all s other charges whatsoever levied upon or assessed or placed against the Property. Company further agrees that prior to the date set forth in Section 2 of the Minimum Assessment Agreement (the "MAA") attached hereto as Exhibit "C" it will not seek or cause a reduction in the taxable valuation for the Property as improved pursuant to this Agreement, which shall be fixed for assessment purposes, below the amount of $150,000.00 (the "Phase 1 Minimum Actual Value"), through: (i) willful destruction of the Property, Improvements, or any part of either; (ii) a request to the assessor of Black Hawk County; or (iii) any proceedings, whether administrative, legal, or equitable, with any administrative body or court within the City, Black Hawk County, the State of Iowa, or the federal government. Company agrees to execute and deliver the MAA concurrently with execution and delivery of this Agreement. In connection with Phase 2 Improvements, Phase 3 Improvements, and Phase 4 Improvements, the parties will execute and record for each such phase a separate MAA to establish the Minimum Actual Value ("MAV") for such phase. The parties anticipate that the MAV for Phase 2 will be $100,000.00, the MAV for Phase 3 will be $150,000.00, and the MAV for Phase 4 will be $400,000.00. The total MAV will be not less than $800,000.00 for all combined phases of Improvements. 9. No Encumbrances; Limited Exception. Until completion of the Improvements, Company agrees that it shall not create, incur, or suffer to exist any lien, encumbrance, mortgage, security interest, or charge on the Project Properties, other than such mortgage or mortgages as may be reasonably necessary to finance Company's completion of the Improvements and of which Company notifies City in advance of Company's execution of any such mortgage. Company may not mortgage the Project Properties or any part thereof for any purpose except in connection with financing of the Improvements. 10. No Assignment or Conveyance. Company agrees that it will not sell, convey, assign or otherwise transfer, in whole or in part, its interest in any Project Property prior to completion of the applicable Project phase to any other person or entity without the prior written consent of City. Reasonable grounds for the City to withhold its consent shall include but are not limited to the inability of the proposed transferee to demonstrate to the City's satisfaction that it has the financial ability to observe all of the terms to be performed by Company under this Agreement. 11. Additional Covenants of Company. In addition to the other promises, covenants and agreements of Company as provided elsewhere in this Agreement, Company agrees as follows: A. Company agrees during construction of the Improvements and thereafter until the MAA termination date to maintain, as applicable, builder's risk, property damage, and liability insurance coverages with respect to the 6 Improvements in such amounts as are customarily carried by like organizations engaged in activities of comparable size and liability exposure, and shall provide evidence of such coverages to the City upon request. B. Until substantial completion of the Improvements, Company shall make such reports to City, in such detail and at such times as may be reasonably requested by City, as to the actual progress of Company with respect to construction of the Improvements. C. Each Project Property will have a taxable value as set forth in the corresponding MAA, and Company agrees that the minimum actual value of such property and completed Improvements thereon as stated in the MAA will be a reasonable estimate of the actual value of the such property and related Improvements for ad valorem property tax purposes. Company agrees that it will spend enough in construction of the Improvements that, when combined with the value of the Project Property and related site improvements, will equal or exceed the assessor's minimum actual value for such Project Property and Improvements as set forth in the MAA. D. Until termination of an MAA, Company will maintain, preserve and keep the Project Properties, including but not limited to the related Improvements, in good repair and working order, ordinary wear and tear excepted, and from time to time will make all necessary repairs, replacements, renewals and additions. E. Company shall pay, or cause to be paid, when due, all real property taxes and assessments payable with respect to any and all parts of the Project Properties owned by it. Company agrees that (1) it will not seek administrative review or judicial review of the applicability or constitutionality of any Iowa tax statute or regulation relating to the taxation of real property that is determined by any tax official to be applicable to the Project Properties or to Company, or raise the inapplicability or constitutionality of any such tax statute or regulation as a defense in any proceedings of any type or nature, including but not limited to delinquent tax proceedings, and (2) it will not seek any tax deferral, credit or abatement, either presently or prospectively authorized under Iowa Code Chapter 403 or 404, or any other state law, of the taxation of real property included within the Project Properties. 12. Obligations Contingent. Each and every obligation of City under this Agreement is expressly made subject to and contingent upon City's completion of all procedures, hearings and approvals deemed necessary by City or its legal counsel for amendment of the urban renewal plan applicable to the Project Properties and/or project area, all of which must be completed within 120 days from the date this Agreement is approved by the City council. If such completion does not occur, then this Agreement shall be deemed canceled and shall be null and void. 13. Representations and Warranties of City. City hereby represents and warrants as follows: A. City is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Each person who executes and delivers this Agreement and all documents to be delivered hereunder is and shall be authorized to do so on behalf of City. 14. Representations and Warranties of Company. Company hereby represents and warrants as follows: A. It is duly organized, validly existing, and in good standing under the laws of the state of its organization and is duly qualified and in good standing under the laws of the State of Iowa. B. It has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as presently proposed to be conducted, and to enter into and perform its obligations under this Agreement. C. This Agreement has been duly and validly authorized, executed and delivered by Company and, assuming due authorization, execution and delivery by the other parties hereto, is in full force and effect and is a valid and legally binding instrument of Company that is enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. D. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the articles of organization or operating agreement of Company or of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which Company is now a party or by which it or its property is bound, nor do they constitute a default under any of the foregoing. E. There are no actions, suits or proceedings pending or threatened against or affecting Company in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business (present or prospective), financial position, or results of operations of Company or which in any manner raises any questions affecting the validity of the Agreement or Company's ability to perform its obligations under this Agreement. 15. Materiality of Company's Promises, Covenants, Representations, and Warranties. Each and every promise, covenant, representation, and warranty set forth in this Agreement on the part of Company to be performed is a material term of this Agreement, and each and every such promise, covenant, representation, and 8 warranty constitutes a material inducement for City to enter this Agreement. Company acknowledges that without such promises, covenants, representations, and warranties, City would not have entered this Agreement. Upon breach of any promise or covenant, or in the event of the incorrectness or falsity of any representation or warranty, City may, at its sole option and in addition to any other right or remedy available to it, terminate this Agreement and declare it null and void. 16. Indemnification and Releases. A. Company hereby releases City, its elected officials, officers, employees, and agents (collectively, 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 the Project Properties or resulting from any defect in the Improvements. The indemnified parties shall not be liable for any damage or injury to the persons or property of Company or its directors, officers, employees, contractors or agents, or any other person who may be about the Project Properties or the Improvements, due to any act of negligence or willful misconduct of any person, other than any act of negligence or willful misconduct on the part of any such indemnified party or its officers, employees or agents. B. Except for any willful misrepresentation, any willful misconduct, or any unlawful act of the indemnified parties, Company 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 or any type or nature whatsoever by any person or entity whatsoever that arises or purportedly arises from (1) any violation of any term or condition of this Agreement (except with respect to any suit, action, demand or other proceeding brought by Company against the City to enforce its rights under this Agreement), or (2) the acquisition and condition of the Property or the Phase 4 Lot and the construction, installation, ownership, and operation of the Improvements, or (3) any hazardous substance or environmental contamination located in or on the Property or Phase 4 Lot, but only to the extent such liability has not been previously transferred to and accepted by the City in writing. C. The provisions of this Section shall survive the expiration or termination of this Agreement. 17. Default. The following shall be "Events of Default" under this Agreement, and the term "Event of Default" shall mean any one or more of the following events that continues beyond any applicable cure periods: A. Failure by Company to cause the construction of the Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement; 9 B. Transfer by Company of any interest (either directly or indirectly) in the Improvements, the Property, the Phase 4 Lot, or this Agreement, without the prior written consent of City; C. Failure by Company to pay, before delinquency, all ad valorem property taxes levied on or against any of the Project Properties; D. Failure by any party hereto to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement or an MAA; E. Company (1) files any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the federal bankruptcy law or any similar state law; (2) makes an assignment for the benefit of its creditors; (3) admits in writing its inability to pay its debts generally as they become due; (4) is adjudicated a bankrupt or insolvent; or if a petition or answer proposing the adjudication of Company as a bankrupt or its reorganization under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of Company, or part thereof, shall be appointed in any proceedings brought against Company and shall not be discharged within ninety (90) days after such appointment, or if Company shall consent to or acquiesce in such appointment; or (5) defaults under any mortgage applicable to any of Project Properties. F. Any representation or warranty made by Company in this Agreement, or made by Company in any written statement or certificate furnished by Company pursuant to this Agreement, shall prove to have been incorrect, incomplete or misleading in any material respect on or as of the date of the issuance or making thereof. 18. Remedies. A. Default by Company. Whenever any Event of Default in respect of Company occurs and is continuing, the City may terminate this Agreement. Before exercising such remedy, City shall give 30 days' written notice to Company of the Event of Default, provided that by the conclusion of such period the Event of Default shall not have been cured, or the Event of Default cannot reasonably be cured within 30 days and Company shall not have provided assurances reasonably satisfactory to the City that the Event of Default will be cured as soon as reasonably possible. Upon termination, City may exercise any and all remedies available at law, equity, contract or otherwise for recovery of any sums paid by City to Company before the date of termination or to recover ownership of the Property and/or Phase 4 Lot as set forth in this Agreement. B. Default by City. Whenever any Event of Default in respect of Company occurs and is continuing, Company may take such action against City 10 to require it to specifically perform its obligations hereunder. Before exercising such remedy, Company shall give 30 days' written notice to City of the Event of Default, provided that by the conclusion of such period the Event of Default shall not have been cured, or if the Event of Default cannot reasonably be cured within 30 days and City shall not have provided assurances reasonably satisfactory to the Company that the Event of Default will be cured as soon as reasonably possible. C. Remedies under this Agreement shall be cumulative and in addition to any other right or remedy given under this Agreement or existing at law or in equity or by statute. Waiver as to any particular default, or delay or omission in exercising any right or power accruing upon any default, shall not be construed as a waiver of any other or any subsequent default and shall not impair any such right or power. 19. Performance by City. Company acknowledges and agrees that all of the obligations of City under this Agreement shall be subject to, and performed by City in accordance with, all applicable statutory, common law or constitutional provisions and procedures consistent with City's lawful authority. All covenants, stipulations, promises, agreements and obligations of City contained in this Agreement shall be deemed to be the covenants, stipulations, promises, agreements and obligations of City and not of any governing body member, officer, employee or agent of City in the individual capacity of such person. 20. No Third-Party Beneficiaries. No rights or privileges of any party hereto shall inure to the benefit of any contractor, subcontractor, material supplier, or any other person or entity, and no such contractor, subcontractor, material supplier, or other person or entity shall be deemed to be a third-party beneficiary of any of the provisions of this Agreement. 21. Notices. Any notice under this Agreement shall be in writing and shall be delivered in person, by overnight air courier service, by United States registered or certified mail, postage prepaid, or by facsimile (with an additional copy delivered by one of the foregoing means), and addressed: (a) if to City, at 715 Mulberry Street, Waterloo, Iowa 50703, facsimile number 319-291-4571, Attention: Mayor, with copies to the City Attorney and the Community Planning and Development Director. (b) if to Company, at P.O. Box 655, Waterloo, IA 50704, Attention: Jonathan Brundrett. Delivery of notice shall be deemed to occur (i) on the date of delivery when delivered in person, (ii) one (1) business day following deposit for overnight delivery to an overnight air courier service which guarantees next day delivery, (iii) three (3) business days following the date of deposit if mailed by United States registered or certified mail, postage prepaid, or (iv) when transmitted by facsimile so long as the sender obtains written electronic confirmation from the sending facsimile machine that such 11 transmission was successful. A party may change the address for giving notice by any method set forth in this Section. 22. No Joint Venture. Nothing in this Agreement shall, or shall be deemed or construed to, create or constitute any joint venture, partnership, agency, employment, or any other relationship between the City and Company nor to create any liability for one party with respect to the liabilities or obligations of the other party or any other person. 23. Amendment, Modification, and Waiver. No amendment, modification, or waiver of any condition, provision, or term of this Agreement shall be valid or of any effect unless made in writing, signed by the party or parties to be bound or by the duly authorized representative of same, and specifying with particularity the extent and nature of the amendment, modification, or waiver. Any waiver by any party of any default by another party shall not affect or impair any rights arising from any subsequent default. 24. Severability; Reformation. Each provision, section, sentence, clause, phrase, and word of this Agreement is intended to be severable. If any portion of this Agreement shall be deemed invalid or unenforceable, whether in whole or in part, the offending provision or part thereof shall be deemed severed from this Agreement and the remaining provisions of this Agreement shall not be affected thereby and shall continue in full force and effect. If, for any reason, a court finds that any portion of this Agreement is invalid or unenforceable as written, but that by limiting such provision or portion thereof it would become valid and enforceable, then such provision or portion thereof shall be deemed to be written, and shall be construed and enforced, as so limited. 25. Captions. All captions, headings, or titles in the paragraphs or sections of this Agreement are inserted only as a matter of convenience and/or reference, and they shall in no way be construed as limiting, extending, or describing either the scope or intent of this Agreement or of any provisions hereof. 26. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 27. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 28. Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior or contemporaneous negotiations, discussions, understandings, or agreements, whether oral or written, with respect to the subject matter hereof. 29. Time of Essence. Time is of the essence of this Agreement. 12 thereof shall be deemed to be written, and shall be construed and enforced, as so limited. 25. Captions. All captions, headings, or titles in the paragraphs or sections of this Agreement are inserted only as a matter of convenience and/or reference, and they shall in no way be construed as limiting, extending, or describing either the scope or intent of this Agreement or of any provisions hereof. 26. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 27. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 28. Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior or contemporaneous negotiations, discussions, understandings, or agreements, whether oral or written, with respect to the subject matter hereof. 29. Time of Essence. Time is of the essence of this Agreement. IN WITNESS WHEREOF, the parties have executed this Development Agreement by their duly authorized representatives as of the date first set forth above. CITY OF WATERLOO, IOWA 5 BEES, LLC By: O x-QN(st:( • — Quentin M. Hart, Mayor than Brundrett, V and Spe ial Projects Director Attest: Kg" elchl City Clerk PERSONAL GUARANTY. The undersigned, being either an officer, shareholder, manager, or member of Company, hereby agree for themselves and their heirs, personal representatives, and assigns, to unconditionally guarantee to City, its successors and assigns, the full and prompt performance by Company, its successors and assigns, of all 13 promises and covenants on the part of Company to be performed pursuant to the foregoing Agreement, including but not limited to the duties of indemnity set forth therein. Liability of guarantors hereunder is joint and several. William Brundrett than Brundrett 14 EXHIBIT "B" BUSINESS PROPERTY LEASE This Business Property Lease (the "Lease") is made and entered into as of ji.11.1 I j , 2020, by and between the City of Waterloo, Iowa, an Iowa municipal corporation ("Landlord"), whose address for the purpose of this Lease is 715 Mulberry Street, Waterloo, Iowa, 50703, and 5 Bees, LLC ("Tenant"), whose address for the purposes of this Lease is P.O. Box 655,Waterloo, Iowa, 50704. 1. PREMISES AND TERM. The Landlord, in consideration of the rents herein reserved and of the agreements and conditions herein contained, on the part of the Tenant to be kept and performed, leases unto the Tenant and Tenant hereby rents and leases from Landlord, according to the terms and provisions herein, the following described real estate, situated in Black Hawk County, Iowa, to wit: Tax parcel no. 8913-25-453-005, in Waterloo, Iowa, at the northwesterly corner of Black Hawk Street and W. 18th Street, as legally described on Exhibit"A", with the improvements thereon and all rights, easements, and appurtenances thereto belonging, for a term commencing upon the date hereof and continuing until and including December 31, 2024, upon the condition that the Tenant pays rent therefor, and otherwise performs as provided in this Lease. 2. RENTAL. Tenant agrees to pay to Landlord as rental for said term, as follows: $ 1.00 , in advance, due upon signing of this Lease. 3. POSSESSION. Tenant shall be entitled to possession on the first day of the term of this Lease and shall yield possession to the Landlord at the time and date of the close of this Lease term, except as herein otherwise expressly provided. 4. USE OF PREMISES. Tenant covenants and agrees during the term of this Lease to use and to occupy the leased premises only for lawful purposes in its current condition. 5. QUIET ENJOYMENT. Landlord covenants that its estate in said premises is fee simple and that the Tenant on paying the rent herein reserved and performing all the agreements by the Tenant to be performed as provided in this Lease, shall and may peaceably have, hold and enjoy the demised premises for the term of this Lease free from molestation, eviction or disturbance by the Landlord or any other persons or legal entity whatsoever, except as otherwise provided herein. 6. CARE AND MAINTENANCE OF PREMISES. Tenant takes said premises in their present condition. Landlord shall have no duty whatsoever to care for or maintain the premises or any part thereof. Tenant will make no unlawful use of said premises and agrees to comply with all valid regulations of the Board of Health, municipal ordinances, the laws of the State of Iowa and the federal government, but this provision shall not be construed as creating any duty by Tenant to members of the general public. Tenant will not allow trash of any kind to accumulate on said premises, and it will remove same from the premises at its own expense. Tenant shall, after taking possession of said premises and until the termination of this Lease and the actual removal from the premises, at its own expense, care for and maintain the premises in a reasonably safe and serviceable condition consistent with its own needs and pursuant to applicable law, ordinance or regulation. Tenant shall make no structural improvements without the Landlord's prior written approval of the plans and specifications therefor. Tenant shall be responsible for all necessary upkeep of lawns and grounds to keep the premises well- maintained. Tenant shall be responsible to clear ice and snow from all sidewalks on or abutting the premises. 7. FACILITY SERVICES. Tenant, during the term of this Lease, shall pay before delinquency all charges for use of telephone, water, sewer, gas, electricity, power, garbage or trash disposal, and all other utilities or services of whatever kind and nature which may be used in or upon the leased premises. 15 8. END OF TERM. This Lease shall terminate upon expiration of the original term in accordance with Section 1. Tenant agrees that upon the termination of this Lease it will surrender, yield up and deliver the leased premises as required by Sections 3 and 4. Tenant shall not continue to occupy the premises beyond the Lease term without the express prior written consent of Landlord. 9. ASSIGNMENT AND SUBLETTING. Tenant may assign this Lease or sublet the premises or any part thereof without the prior written consent of Landlord, but in any such instance shall provide written notice of such assignment or sublease to Landlord. 10. PROPERTY TAXES. The Property is currently tax exempt. Tenant shall be responsible to pay before delinquency any general property taxes that may be assessed against the Property during the Term hereof. 11. INSURANCE. (a) Tenant agrees that it will at its own expense procure and maintain commercial general liability insurance in the amount of not less than $1,000,000 per occurrence and $1,000,000 annual aggregate. Such insurance shall cover liability arising from premises operations, independent contractors, personal injury, products, and completed operations and liability assumed under an insured contract, including but not limited to the activities of Tenant, its employees and agents. Certificates or copies of said policies, naming the Landlord as an additional insured, and providing for thirty (30) days' advance notice to the Landlord before cancellation, shall be delivered to the Landlord within no later than the date that Tenant begins to occupy the leased premises. A renewal certificate shall be provided to Landlord prior to expiration of any policy. (b) Tenant will not do or omit the doing of any act which would vitiate any insurance, or increase the insurance rates in force upon the real estate improvements on the premises or upon any personal property of the Tenant upon which the Landlord by law or by the terms of this Lease, has or shall have a lien. (c) Tenant further agrees to comply with recommendations of Iowa Insurance Services Office, or its successor office, and to be liable for and to promptly pay, as if current rental, any increase in insurance rates on said premises and on the building of which said premises are a part, due to increased risks or hazards resulting from Tenant's use of the premises otherwise than as herein contemplated and agreed. 12. INDEMNITY. Except as to any negligence of the Landlord or its agents in the performance of any obligation of Landlord under this Lease, and to the extent not covered by insurance maintained by Landlord or Tenant, Tenant will protect, indemnify, and save harmless the Landlord, its officers, officials, employees, and agents, from and against any and all claims, demands, causes of action, loss, costs, expenses, damages and liabilities of any type or nature (including but not limited to attorneys' fees and expenses) (each of the foregoing is a "Claim") occasioned by, or arising out of, any accident or other occurrence causing or inflicting injury and/or damage to any person or property, happening or done, in, upon, or about the leased premises, or due directly or indirectly to the tenancy, use, or occupancy thereof, or any part thereof by the Tenant or any person claiming through or under the Tenant. The foregoing indemnity shall include, but is not limited to, Claims of Tenant or any third party for loss, damage or destruction of any personal property or fixtures left on the premises after termination of the tenancy. The provisions of this paragraph shall survive the expiration, abandonment, or termination of this Lease. 13. FIRE AND CASUALTY. In the event of a destruction or damage of the leased premises so that Tenant is not able to conduct its business on the premises, and which damages cannot be repaired within sixty (60) days, this Lease may be terminated at the option of either the Landlord or Tenant. Such termination in such event shall be effected by written notice of one party to the other, within twenty (20) days after such destruction. Tenant shall surrender possession within ten (10) days after such notice issues and, each party shall be released from all future obligations hereunder, Tenant paying rental pro rata only to the date of such destruction. 14. CONDEMNATION. N/A. 15. TERMINATION OF LEASE AND DEFAULTS OF TENANT. (a) TERMINATION UPON EXPIRATION OR UPON NOTICE OF DEFAULTS. This Lease shall terminate upon expiration of the demised term. Upon default by Tenant in accordance with the terms and provisions of this Lease, or upon Tenant's abandonment of the premises by failure to engage in business activities on the premises for more than fourteen (14) consecutive 16 business days, this Lease may at the option of the Landlord be canceled and forfeited, provided, however, before any such cancellation and forfeiture Landlord shall give Tenant a written notice specifying the default, or defaults, and stating that this Lease will be canceled and forfeited ten (10) days after the giving of such notice, unless such default, or defaults, are remedied within such grace period. As an additional optional procedure or as an alternative to the foregoing (and neither being exclusive of the other), Landlord may proceed as provided in paragraph 22 below. (b) Waiver as to any default shall not constitute a waiver of any other or subsequent default. 16. RIGHT OF EITHER PARTY TO MAKE GOOD ANY DEFAULT OF THE OTHER. N/A. 17. SIGNS. Tenant shall have the right and privilege of attaching, affixing, painting, or exhibiting signs on the leased premises, provided only that any and all signs shall comply with the ordinances of the municipality in which the property is located and with the laws of the State of Iowa. 18. MECHANIC'S LIENS. Neither the Tenant nor anyone claiming by, through, or under the Tenant, shall have the right to file or place any mechanic's lien or other lien of any kind or character whatsoever upon said premises or upon any building or improvement thereon, or upon the leasehold interest of the Tenant therein, and notice is hereby given that no contractor, subcontractor, or anyone else who may furnish any material, service, or labor for any building, improvements, alteration, repairs, salvaging or any part thereof, shall at any time be or become entitled to any lien thereon, and for the further security of the Landlord, the Tenant covenants and agrees to give actual notice thereof in advance to any and all contractors and subcontractors who may furnish or agree to furnish any such material, service, or labor. 19. LANDLORD'S LIEN AND SECURITY INTEREST. Landlord shall have, in addition to the lien given by law, a security interest as provided by the Uniform Commercial Code as codified in the State of Iowa upon all personal property, and all substitutions, replacements, accessories, and accessions thereto and thereof, kept and used on the leased premises by Tenant. Landlord may proceed at law or in equity with any remedy provided by law or by this Lease for the recovery of rent or for termination of this Lease because of Tenant's default in its performance. 20. SUBSTITUTION OF EQUIPMENT, MERCHANDISE. ETC. Tenant shall have the right, from time to time during the term of this Lease, to sell or otherwise dispose of any personal property of the Tenant situated on the leased premises, when in the judgment of the Tenant it shall have become obsolete, outworn, or unnecessary in connection with the operation of Tenant's business on the leased premises. 21. OTHER PROVISIONS. (a) The parties acknowledge that the leased premises are subject to several federal tax liens and/or judgment liens arising from a prior owner, which by the passage of time will lapse in 2024. If before the date of lapse any lien holder takes action to enforce its lien, Landlord agrees to work diligently to seek a release or discharge of such lien. After lapse, release or discharge of all liens, Landlord shall convey the leased premises to Tenant pursuant to the terms of a development agreement between the parties. 22. RIGHTS CUMULATIVE. The various rights, powers, options, elections, and remedies of either party as provided in this Lease shall be construed as cumulative and no one of them as exclusive of the others or exclusive of any rights, remedies, or priorities allowed either party by law, and shall in no way affect or impair the right of either party to pursue any other equitable or legal remedy to which either party may be entitled as long as any default remains in any way unremedied, unsatisfied, or undischarged. 23. NOTICES AND DEMANDS. Notices as provided for in this Lease shall be given to the respective parties hereto at the respective addresses designated on page one of this Lease unless either party notifies the other, in writing, of a different address. Without prejudice to any other method of notifying a party in writing or making a demand or other communication, such message shall be considered given under the terms of this Lease when sent, addressed as above designated, postage prepaid, by registered or certified mail, return receipt requested, by the United States mail and so deposited in a United States mail box. 17 24. BINDING EFFECT. Each and every covenant and agreement herein contained shall extend to and be binding upon the respective heirs, personal representatives, successors, and assigns of the parties hereto; except that if any part of this Lease is held in joint tenancy, the successor in interest shall be the surviving joint tenant. 25. CHANGES TO BE IN WRITING. None of the covenants, provisions, terms, or conditions of this Lease to be kept or performed by Landlord or Tenant shall be in any manner modified, waived, or abandoned, except by a written instrument duly signed by the parties and delivered to the Landlord and Tenant. This Lease contains the entire agreement of the parties and supersedes any and all discussions, negotiations, understandings, or agreements pertaining to the subject matter hereof. 26. CONSTRUCTION. Words and phrases herein, including acknowledgment hereof, shall be construed as in the singular or plural number, and as masculine, feminine, or neuter, according to the context. IN WITNESS WHEREOF, the parties hereto have duly executed this Business Property Lease as of the date first written above. LANDLORD TENANT City of Waterloo, Iowa 5 Bees, LLC By: aj..QA1Z-1174 By. Quentin Hart, Mayor n than Brundrett, VP an Sp cial Pr cts Director Attest:Yidey Felc City Clerk 18 EXHIBIT"1" Legal Description of Leased Premises HAYES ADDITION PARCEL I OF SE 1/4 SEC 25 T 89 R 13 LYING IN BLK 15 AND FORMALLY A PART OF PARCEL F AS SHOWN IN DOC 2007-014335 DESC AS COM AT SELY COR BLK 15 HAYES ADD TH N 49 DEG 01 MIN 25 SEC W 5 FT ALONG SLY LINE BLK 15 TO PT OF BEG TH N 24 DEG 27 MIN 43 SEC E 426.10 FT TO PT ON SWLY LINE OF PARCEL DEED B 545 P 381 PT BEING 75 FT NWLY OF ELY TERMINUS OF THAT LINE TH N 40 DEG 14 MIN 30 SEC W 154.78 FT ALONG PARCEL DESC CLD B 545 P 381 TH S 40 DEG 50 MIN 06 SEC W 259.58 FT ALONG A LINE PAR WITH AND 140 FT DISTANT TO ELY LINE BLK 16 HAYES ADD TO SLY LINE BLK 15 TH S 49 DEG 01 MIN 25 SEC E 222.28 FT ALONG SAID SLY LINE BLK 15 TO PT OF BEG EXC NWLY 45.94 FT IN EVEN WIDTH AS MEASURED ALONG NLY ROW LINE BLACK HAWK ST. 19 EXHIBIT "C" MINIMUM ASSESSMENT AGREEMENT This Minimum Assessment Agreement (the "Agreement") is entered into as of_ k- y ►3 zeZp , by and among the CITY OF WATERLOO, IOWA ("City"), 5 BEES, LLC ("Company"), and the COUNTY ASSESSOR of the City of Waterloo, Iowa ("Assessor"). WITNESSETH: WHEREAS, on or before the date hereof the City and Company have entered into a development agreement (the "Development Agreement") regarding certain real property, described in Exhibit "A" thereto, located in the City; and WHEREAS, it is contemplated that pursuant to the Development Agreement, the Company will undertake, or cause to be undertaken, the development of an area ("Project") within the Rath Urban Renewal and Redevelopment Plan area of the City; and WHEREAS, pursuant to Iowa Code §403.6, as amended, the City and the Company desire to establish a minimum actual value for the land and the building(s) pursuant to this Agreement and applicable only to the Project, which shall be effective upon substantial completion of the Project and from then until this Agreement is terminated pursuant to the terms herein and which is intended to reflect the minimum actual value of the land and buildings as to the Project only; and WHEREAS, the City and the Assessor have reviewed the preliminary plans and specifications for the improvements (the "Improvements") which the parties contemplate will be erected as a part of the Project. NOW, THEREFORE, the parties hereto, in consideration of the promises, covenants, and agreements made by each other, do hereby agree as follows: 1. Upon substantial completion of construction of the Improvements, the minimum actual value which shall be fixed for assessment purposes for the land and Improvements to be constructed thereon as a part of the Project shall not be less than $150,000.00 (the "Minimum Actual Value") until termination of this Agreement. The parties agree that construction of the Improvements will be substantially completed on or before December 31,20.40 . If it is not, then the parties agree to execute an amendment to this Agreement that will extend the dates specified in Section 2 below. 2. The Minimum Actual Value herein established shall be of no further force and effect, and this Minimum Assessment Agreement shall terminate, on December 31, -b 32_ . Nothing herein shall be deemed to waive the Company's rights under Iowa Code 20 § 403.6, as amended, to contest that portion of any actual value assignment made by the Assessor in excess of the Minimum Actual Value established herein. In no event, however, shall the Company seek or cause the reduction of the actual value assigned below the Minimum Actual Value established herein during the term of this Agreement. Nothing herein shall limit the discretion of the Assessor to assign at any time an actual value to the land and Improvements in excess of the Minimum Actual Value. 3. Company agrees that it will not seek administrative review or judicial review of the applicability or constitutionality of any Iowa tax statute or regulation relating to the taxation of real property included within the Property that is determined by any tax official to be applicable to the Property or to Company, or raise the inapplicability or constitutionality of any such tax statute or regulation as a defense in any proceedings. 4. This Agreement shall be promptly recorded by the City with the Recorder of Black Hawk County, Iowa. The City shall pay all costs of recording. 5. Neither the preambles nor provisions of this Agreement are intended to, or shall be construed as, modifying the terms of the Development Agreement. 6. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties, including but not limited to future owners of the Project property. CITY OF WATERLOO, IOWA 5 BEES, LLC By: B .111111/1/ 1/ Quentin M. Hart, Mayor • athan Brundrett, VP Stecial Projects Director Attest: Kelley Fe hle, City Clerk STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) On this I 1 day of , 2020, before me, a Notary Public in and for the State of Iowa, personally a3peared Quentin M. Hart and Kelley Felchle, to me personally known, who being duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Waterloo, Iowa, a municipal corporation, created and 21 existing under the laws of the State of Iowa, and that the seal affixed to the foregoing instrument is the seal of said municipal corporation, and that said instrument was signed and sealed on behalf of said municipal corporation by authority and resolution of its City Council, and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said municipal corporation by it and by them voluntarily executed. • "'"`• NANCY HIGBY • COMMISSION NO.788229 NotaryPublic • " MY COMMISSION EXPIRES •av 'Z—?— STATE OF IOWA ) ) ss. BLACK HAWK COUNTY ) it/Ay before me on /t/A y 7 , 2020 by Jonathan Brundrett as Vice President and Special Projects Director of 5 Bees, LLC. wAL. TIM ANDERA T COMMISSION NO.772518 * * MY COMMISSION EXPIRES ,gyp APRIL 11,2021 Notary Public 22 CERTIFICATION OF ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed for the development, and being of the opinion that the minimum market value contained in the foregoing Minimum Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the property subject to the development, upon completion of improvements to be made on it and in accordance with the Minimum Assessment Agreement, certifies that the actual value assigned to such land, building and equipment upon completion of the development shall not be less than One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate, until termination of this Minimum Assessment Agreement pursuant to the terms hereof. essor for Black Hawk County, Iowa — 3 ' - 2P Date STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) 44 Subscribed and sworn to before me orr� 2o7P7?fiic ' , by T.J. Koenigsfeld, Assessor for Black Hawk County, Vowa. gAAld TIM ANDERA COMMISSION N0.772518pIRES `\ * + MY COA RIL 112021 pwl, Notary Public 23 TERMINATION OF BUSINESS PROPERTY LEASE WHEREAS,the City of Waterloo,Iowa("City")and 3 Little Lambs,LLC("Company")are parties to a certain Business Property Lease(the"Agreement")concerning real property in Black Hawk County,Iowa,described as parcel no. 8913-25-453-005,and the parties desire to terminate the Lease. NOW,THEREFORE,the parties herby terminate the Lease as of the date hereof and state that the Lease shall have no further force or effect. Dated J `v1 t3 ,2020 CITY OF WATERLOO,IOWA 3 LITTLE LAMBS,LLC By: D-%-4.0.415L-14—Ude— Quentin Hart,Mayor athan Brundrett M naging Member Attest:Veli / Kelley Fel.iti e, City Clerk