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Jeffrey W. Jones <br />Attorney <br />D 612.359.7625 <br />jjones@fwhtlaw.com <br />City of Elk River, Minnesota <br />Elk River City Hall <br />13065 Orono Parkway <br />Elk River, MN 55330-5600 <br />Attn: City Administrator <br />333 South Seventh Street <br />E <br />FABYANSKE <br />Suite 2600 <br />° <br />WESTRA <br />Minneapolis, MN 55402 <br />HART & <br />7612.359.7600 <br />t <br />F612.359.7602 <br />THOMSON <br />March 17, 2016 <br />Re: Assignment and Assumption of Tax Abatement <br />Dear City Administrator: <br />I am an attorney representing Envision 3, LLC, and Sportech, Inc., with respect to a proposed <br />real estate sale/leaseback transaction for the Property described below. <br />To clarify, Envision 3, LLC ("Envision"), is the owner of Lots 1 and 2, Block 2, Natures Edge <br />Business Center Second Addition, in Elk River, Minnesota (the "Property"). As you know, <br />Envision is a party to a (i) Tax Abatement Agreement dated September 14, 2015 (the <br />"Abatement Agreement"), by and between Envision and the City of Elk River ("City"); (ii) <br />Mortgage, Security Agreement, Assignment of Leases and Rents, and Fixture Financing <br />Statement dated September 14, 2015 (the "Mortgage"), from the Envision, as mortgagor, in <br />favor of the City; and (iii) Promissory Note dated September 14, 2015 (the "Note") in favor of the <br />City. <br />Envision and Sportech built an assembly plant on the Property, which has been completed. <br />Envision is also under contract to sell the Property to Meritex Elk River, LLC (the "Landlord") <br />and upon the sale of the Property, Sportech, Inc., will be entering into a long-term Lease with <br />the Landlord. The Building will be Sportech's main assembly plant through at least the duration <br />of the Lease. Pursuant to the terms of the Lease, Sportech will be responsible for all <br />maintenance and repairs to the Building and will also be responsible for paying all property <br />taxes and insurance relating to the Property and Building. <br />The Mortgage contemplated this above described sale-leaseback transaction, and therefore <br />allowed the Mortgage to be released upon Sportech delivering a fully executed Lease to the <br />City. Unfortunately, the Abatement Agreement and the Note did not contain similar langague. <br />Therefore, Sportech, who is responsible for all obligations related to the Property under its <br />Lease, asks the City to (i) consent to the transfer of the Property and (ii) amend the agreements <br />so that Sportech will assume all obligations under the Abatement Agreement and Note upon the <br />transfer of the Property. This would make the agreements consistent with Sportech's <br />obligations under the Lease. <br />Very truly yours, <br />li4e . Jo -nes <br />JWJ/ <br />Enclosures <br />