2013/05/29 Council Agenda Packet

MAY 10,2013 DRAFT 4 matters specifically provided in the attached Exhibit D) on or before the date of transfer of the Properties to Polygon. 7. Transfer Fee. In part consideration for the City's agreement hereunder and as reimbursement to the City for the City's administrative and other costs in considering and processing this Assignment Agreement, Polygon shall pay three hundred fifty thousand dollars ($350,000) (the "Transfer Fee") to the City at the closing of the transfer of the Properties to Polygon. 8. Cost Covenant. The OM Entities represent, warrant and covenant that the total consideration paid by Polygon for the Properties and for all rights associated with the Properties is less than or equal to the total costs incurred by the OM Entities and Principal Life Insurance Company in the acquisition,development, and improvement of the Properties (such covenant by the OM Entities,the"Cost Covenant"). No later than twenty(20) days prior to the closing of the transfer of the Properties to Polygon, the OM Entities shall deliver to the City a written certification in a form reasonably acceptable to the City from the independent, certified public accountant typically retained by the OM Entities for their accounting matters certifying that the Cost Covenant is true, with such certification including a summary of data backing up the certification (such written certification acceptable to the City, the "Acceptable Written Certification"). The City may engage an independent third-party accountant at the City's sole expense,to verify such information and the OM Entities will provide such accountant full access to the data necessary to verify the written certification, subject to the condition that such third- party accountant beforehand executes a commercially reasonable non-disclosure agreement with the OM Entities. The OM Entities acknowledge and agree that, if documents available to the City regarding the transfer of the Properties to Polygon make it appear that the Cost Covenant is not true (such as, for example, a situation where the 2013 real estate excise tax affidavits for the transfer of the Properties by the OM Entities to Polygon indicate higher selling prices than the selling prices in the 2008 real estate excise tax affidavits for the transfer of the Properties by the City to the OM Entities)or if the City's third-party accountant determines that the Cost Covenant does not appear to be true, then along with the written certification, OM must provide the City additional detailed data, reasonably acceptable to the City, sufficient to place in context the available information and demonstrate that the Cost Covenant remains true. If OM does not demonstrate that the Cost Covenant is true to the reasonable satisfaction of the City and its third- party accountant, if one is retained, then the City's consent to the assignment and assumption under this Assignment Agreement, and the assignment, assumption and releases under this Assignment Agreement shall not be effective. 9. Effective Date. This Assignment Agreement and the City's consent to assignment are effective on the date of the latest to occur of the following events(the"Effective Date"): A. closing of the transfer of the Properties to Polygon; B. delivery to the City of the Seventh Amendment fully executed by Polygon; C. recording of the termination of the Subordination Agreement in • accordance with Section 5 above; -6- 21