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(b) There is no litigation pending, or to the best of its knowledge threatened, against the Developer affecting its ability to develop and operate t11e Development or to carry out the terms of this Agreement. A~T~CI.,E 1~~ '~' ESE T)1®1~ Section 2.01. Exempt Status. The Developer shall have the right, at ally t1111e, following or during the construction of portions of the Development, to apply for exemption for some or all of the Development from real property taxation in accordance with applicable Minnesota law, and the City agrees to acquiesce in such application, providing the Developer is not then in default hereunder. A~T~CLE ~I~ PA~'MEl~'T F®~ CI'I'I' SER~CES Section 3.01. City Services. The City hereby agrees to provide the Developer with all of the services that it provides to property owners and the public in general within the City limits, including without limitation police protection and fire protection services (referred to generally as "Municipal Services"). Section 3.02. Payment for Municipal Services. In each calendar year in which no property taxes are payable with respect to any portion of the Development because of a granted exemption, the Developer shall make a payment in lieu of taxes to the City equal to the amount the City and Independent School District 622 would have received if that portion of the Development inclusive of real estate and improvements thereto (the "Exempt Property") were not exempt from property taxation and the market value of the Exempt Property was determined in accordance with the provisions hereof. The Development and the City stipulate and agree that such amount is fair compensation for the Municipal Services. Section 3.03. Computation of Pa ly neut. The City Administrator/Clerk/Treasurer shall compute the amount of the required payment annually and advise the Developer of the amount due in such year and of the ma1111er in which such amount was computed as early as practicable. The computation shall be completed by the City for the current year by March 15 and calculated in accordance section 3.04 and invoiced no later than March 31. The payment shall be made in two equal illsta11111e11ts due o11 May 15 and October 15 of each year, or on such other dates as are established fi-oln time to time by law for the payment of ad valorem property taxes in Mirulesota. In the event payment is not made when due, the Developer shall also pay penalties and interest computed as provided in Minnesota Statutes, as amended from time to time, for delinquent property tax payments. The aggregate annual payment shall be the product of the market value of the Exempt Property as of January 2 of the year next preceding the year for which the payment amount is being computed and determined in accordance with the following Sections 3.04 through 3.07, the local tax rate for the City and Independent School District 622 determined in