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9.2.B. PRSR 12-14-2005Item # 9.2.6. ver MEMORANDUM TO: Parks and Recreation Commission FROM: Bill Maertz, Parks and Recreation Director DATE: December 14, 2005 SUBJECT: Tiller Property Purchase Agreement Staff has received a draft of the purchase agreement from Tiller Corporation for the purchase of the 78 acres adjacent to Woodland Trails. The agreement is currently being reviewed by the City Attorney's office. ATTACHED: Purchase Agreement PURCHASE AGREEMENT THIS AGREEMENT (Agreement), effective , 2005 ("Effective Date") is made by and between Tiller Corporation, a Minnesota corporation ("Seller" or "Tiller") and the City of Elk River, a Minnesota Municipal Corporation, ("Buyer" or "City"). RECITALS (Rl) Seller owns certain real property located in the City of Elk River, Sherburne County, Minnesota, consisting of approximately seventy-five (75) acres of land, legally described on Exhibit "A" attached hereto, herein "Property". (R2) Seller desires to sell and Buyer desires to purchase the Property upon the terms and conditions hereinafter set forth. AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS Unless the context otherwise specifies or requires, for the purposes of this Agreement the following terms shall have the meanings set forth in this Article: 1.1 Closing Date. The term "Closing Date" shall mean , 2005, or any other date approved in writing by Buyer and Seller for the closing with respect to the purchase and sale of the Property. 1.2 Title Commitment. The term "Title Commitment" shall mean a title commitment with respect to the Property to be issued by the Title Company. 1.3 Title Company. The term "Title Company" shall mean Old Republic National Title Insurance Company, 400 Second Avenue South, Minneapolis, Minnesota 55401. Page I Version Date: 12/8/05 5:\PARK & RECV2 14 OS Packet\Purchase Agreement v72072005.doc ARTICLE II PURCHASE PRICE/ADJUSTMENTS/ PAYMENT/EARNEST MONEY/ PROBATIONS/RESERVATION 2.1 Purchase Price. Buyer shall pay to Seller, as consideration for the conveyance of the Property, approximately one million seven hundred fifty-five thousand dollars and no/100 ($1,755,000) to be finally calculated at $22,500 per acre of Property as determined by the survey, the ("Purchase Price"), subject to adjustments, prorations and allocations, as hereinafter provided. 2.1.1 $1,390,000.00 of the purchase price shall be paid in cash at the time of closing. The earnest money to be paid by Buyer pursuant to the terms set forth in Section 2.3 shall be credited toward the payment of the purchase price at the time of closing. 2.1.2 The balance of the Purchase Price, approximately $365,000.00, shall be paid by Buyer in the form of park dedication credits ("Park Dedication Credits") given by City to and for the benefit of Tiller. The City shall hold the Park Dedication Credits on deposit for the benefit of Tiller. The dollar value of the Park Dedication Credits shall be adjusted annually, commencing on January 1, 2007, as follows: 2.1.2.1 The Park Dedication Credits balance shall be increased by an amount equal to the prime rate of interest as published annually by the Wall Street Journal's "Money Rate" section on January 1 of each yeaz commencing January 1 of 2007 for so long as the City continues to hold the Pazk Dedication Credits for the benefit of Tiller ("Adjusted Amount"). 2.1.2.2 City shall provide written notice to Tiller, certified by an authorized official of City, by January 30 of each year an accounting of the Park Dedication Credits and the Adjusted Amount on deposit. 2.1.2.3 In conjunction with the development of any property located in the Gravel Mining Overlay District in the City by Tiller, or Tiller's assignee, any dedication requirement lawfully imposed by City for open space for parks, playgrounds, trails, or public open space, whether arising out of City Ordinance No. 1008.18 or otherwise, shall be offset by the Pazk Dedication Credits and Adjusted Amount held on deposit by City for the benefit of Tiller to the extent said Park Dedication Credits together with the Adjusted Amount are needed and available to offset the dedication requirement. 2.1.2.4 The obligation of City to hold Park Dedication Credits as described herein on deposit for the benefit of Tiller shall survive the closing Pagc 2 Version Dale: 12/8/05 S:/PARK & REC9I214 OS PaokeAPurchase Agreement v12072005.doc of the transaction which is the subject of this Agreement, and shall be memorialized by a Park Dedication Credits Agreement to be executed by City and delivered to Tiller at closing as set forth in Section 8.2 of this Agreement. 2.2 Deed Restriction. Buyer agrees that the Property will be subject to the restriction contained in the Restriction Agreement attached hereto as Exhibit "C", which Deed Restrictions shall be recorded in the Office of the County Recorder on or about the Date of Closing. 2.3 Prorations and Allocations. Seller and Buyer shall make prorations and allocations of the following expenses, with respect to the Property: 2.3.1 Real Estate Taxes and Special Assessments. 2.3.1.1 Real Estate Taxes. General real estate taxes (i) payable in the years prior to the year of closing will be paid by Seller, (ii) payable in the year of closing shall be prorated by Seller and Buyer as of the Closing Date, based upon a calendar year; and (iii) payable in the year following the year of closing shall be paid by Buyer. 2.3.1.2 Special Assessments. Buyer shall pay or assume any special assessments levied or pending against the Subject Property as of the Effective Date, or that become levied or pending after the Effective Date of this Agreement, including, but not limited to, area wide transportation charges and area charges for sanitary sewer, storm sewer and trunk water charge, if any. 2.3.2 Title Insurance. Buyer shall pay the title insurance commitment fee and Buyer will pay all costs of the owner's Title Policy and all supplements and endorsements thereto. 2.3.3 Closing Fee. Buyer will pay any reasonable and customary closing fee or charge imposed by any closing agent designated by the Title Company. 2.3.4 Deed Tax. Buyer shall pay all state deed tax regarding the Warranty Deed to be delivered by Seller pursuant to this Agreement. 2.3.5 Recording Costs. Seller will pay the cost of recording any documents necessary to clear title and Buyer shall pay the cost of recording the Warranty Deed. 2.3.6 Attorneys' Fees. In any litigation, arbitration or similar proceeding to resolve a dispute between Seller and Buyer arising under or relating to this Agreement, the prevailing party shall be entitled to recover its reasonable costs, including reasonable attorney's fees, from the other party as Page 3 Vecsiov Dale: 72/8/05 S:\PARK & REC\12 14 OS Packet\Pumhase Agceemen[ v72072005.doc determined by the court, arbitrator or other decision maker. 2.3.7 Development Costs. Buyer, at its own cost and expense, shall be responsible for all required approvals of its project by all involved jurisdictions, permits, studies, engineering, analysis, construction, recording, and payment of all fees and permits. 2.3.8 Other Costs. All other costs shall be allocated in accordance with the customs prevailing in similar transactions in the Twin Cities area. 2.4 Earnest Money. Buyer shall, upon execution and delivery of this Agreement, deposit the sum of Ten Thousand Dollars ($10,000.00) as "Earnest Money" with the Title Company, to be held, retained or refunded as follows: 2.4.1 Deposit. The Earnest Money shall be deposited in an interest bearing account, in Buyer's name and for its account with the Title Company. 2.4.2 Default by Buver. In the event of a default by Buyer, the Earnest Money and all interest earned on the Earnest Money shall be retained by Seller free from all claims of Buyer. 2.4.3 Termination by Buver. If Buyer terminates this Agreement by reason of Seller's default or, if Buyer terminates this Agreement pursuant to Section 4.1, 4.3.1 or Article IX hereof, then, and only then, the Earnest Money shall be refunded to Buyer. 2.4.4 Other Cases. In all other cases, all of the Earnest Money and all interest thereon shall be retained by Seller. ARTICLE III ACCESS TO PROPERTY, INDEMNITY, REPORTS, SURVEY AND GRADING PLAN 3.1 Access to Property/Indemnity. Seller shall allow Buyer and Buyer's representatives access to the Property for the limited purpose of making such inspections, tests and verifications as they shall deem reasonably necessary; however, Buyer (i) shall pay all costs and expenses of such investigations, tests or verifications; (ii) shall indemnify and hold Seller and the Property harmless from all losses, liabilities, cost and expenses relating to the activities of Buyer and/or its representatives, which indemnity shall survive the Closing and/or the termination of this Agreement; and (iii) shall return the Property to the same condition as it was prior to said testing. Buyer shall provide Seller with a copy of all reports at no cost to Seller. 3.2 Survey. Buyer shall be responsible for obtaining a survey prepared by registered land surveyor complying with Minimum Standard Detail Requirements for Page 4 Version Dace: 12/8/05 S:~PARK & RI:CAI2 14 OS PackeHPurcA~ase Ayaeement v1207200S.doc ALTA/ACSM Land Title Surveys (Class A Urban)(1997) (the "Survey"). ARTICLE IV CONDITIONS PRECEDENT TO CLOSING/TERMINATION 4.1 Buyer's Conditions Precedent. The obligations of Buyer under this Agreement are subject to the following conditions precedent which, prior to the Closing Date, shall have either been waived in writing by Buyer or shall have been determined, in Buyer's sole discretion and at Buyer's sole expense, to have been satisfied: 4.1.1 The representations and warranties contained in this Agreement must be true now and on the Closing Date as if made on the Closing Date. 4.1.2 Title shall have been found acceptable, or been made acceptable, in accordance with the requirements and terms of this Agreement and the Title Company shall agree at the closing to issue the Owner's Policy contemplated in the Commitment as of the date of recording the warranty deed. 4.1.3 Seller shall perform all of the obligations required to be performed by Seller under this Agreement as and when required by this Agreement. 4.1.4 Buyer shall have determined on or before the Closing Date, that it, in its sole discretion, is satisfied with the results of and matters disclosed by soil tests, engineering inspections, hazardous waste and environmental reviews of the Property. All such tests, inspections and reviews are to be obtained at Buyer's expense. Buyer shall select each of the companies to conduct the above tests, inspections and reviews. If any such condition precedent has not been satisfied within the allowable times specified above, then this Agreement may be terminated, at Buyer's option, by written notice from Buyer to Seller. In the absence of a written notice from Buyer to Seller, the conditions precedent shall be deemed automatically waived by Buyer. Upon such termination, the earnest money shall be released to Buyer and upon such return, neither party will have any further rights or obligations regazding this Agreement or the Property and the parties agree to execute a Termination of Purchase Agreement. All of the conditions precedent set forth in this paragraph above are specifically stated and agreed to for the sole and exclusive benefit of the Buyer and the Buyer shall have the right to unilaterally waive any condition precedent by written notice to Seller. 4.2 Seller's Conditions Precedent The Obligations of Seller under this Agreement are subject to the following conditions precedent: 4.2.1 The Buyer shall have performed all of the obligations required to be performed by Buyer under this Agreement as and when required by this Page 5 Version Date: 1118/05 S:APARK & RECAI2 74 OS PacketAPurchese Agreement v120'12005.doc Agreement. 4.3 Termination. This Agreement shall continue in full force and effect unless terminated within the following times: 4.3.1 If all of the Conditions Precedent have not been timely satisfied then, this Agreement may be terminated, at the option of Buyer, by written notice from Buyer to Seller within ten (10) days prior to the date set out in Section 4.1 or prior if the failure of a Condition Precedent shall be known. 4.3.2 Unless terminated within the time and in the manner provided above, the Conditions Precedent shall be conclusively considered to be satisfied or waived and this Agreement shall continue in full force and effect. 4.4 Effects of Termination. Upon any such termination, except for disposition of the Earnest Money (which is treated in Section 2.3 hereof), neither party will have any further rights or obligations regarding this Agreement or the Property excepting only the indemnification obligations contained in Section 3.1 and Article XI hereof. 4.5 Waiver. All the Conditions Precedent to Closing set forth in this Agreement are specifically stated and agreed to be for the sole and exclusive benefit of the Buyer and/or Seller, as applicable, and the Buyer and/or Seller, as applicable, shall have the right to unilaterally waive any Condition Precedent by written notice to the other, as applicable, within the times provided above. ARTICLE V REPRESENTATIONS AND WARRANTIES, COVENANTS, AND INDEMNIFICATION The following representations and warranties are made by the Seller and Buyer. 5.1. Representations and Warranties by Seller. Seller represents and warrants to Buyer as of the Effective Date, the Closing Date and all dates in between, as follows: 5.1.1. Seller is a Minnesota Corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota. Seller has the full right and authority to enter into this Agreement and consummate the transactions contemplated herein, all of which have been duly authorized pursuant to all requisite action. The natural persons signing this Agreement on behalf of Seller are authorized to do so. 5.1.2. To the best of Seller's knowledge, there are no parties other than the City, it's Park Department and it authorized park users, in possession of any part of the Property, and there are no rights of possession which have been granted to any third party whatsoever except than to the City, its Park Page 6 Version Date: 12/8/05 S:\PARK & 12EC\12 74 OS Paoket\PUrchese Agreement v12072005.doc Department and it authorized pazk users. 5.1.3. To the best of Seller's knowledge, the Property is in compliance, in all material respects, with all applicable statutes, ordinances, codes, and all rules and regulations of all governmental and quasi-governmental authorities with jurisdiction over the Property. Seller has received no written notice of any violation of any of the foregoing. 5.1.4. To the best of Seller's knowledge the Property and its existing and all prior uses comply and have at all times complied with, and Seller is not in violation of, has not violated, in connection with its ownership, use, maintenance or operation of the Property and the conduct of the business related thereto, any applicable federal, state, county or local statutes, laws, regulations, rules, ordinances, codes, standazds, orders, licenses or permits of any governmental authorities relating to environmental matters (being hereinafter collectively referred to as the "Environmental Laws"), including by way of illustration and not by way of limitation, (A) the Clean Air Act, the federal Water Pollution Control Act of 1972, the Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Toxic Substances Control Act, the Minnesota Environmental Response and Liability Act (including any amendments or extensions thereof and any rules, regulations, standards or guidelines issued pursuant to any of said Environmental Laws), and (B) all other applicable environmental standazds or requirements. Without limiting the generality of the foregoing to the best of Seller's knowledge: (i) neither Seller, its agents, employees and independent contractors nor any tenant, has operated the Property for the purpose of disposing of petroleum products or any "hazardous material," as defined in said Environment Laws, other toxic dangerous or hazardous chemicals, materials, substances, pollutants and wastes, or any chemical, material or substance exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority (all the foregoing being hereinafter collectively referred to as "Hazardous Materials"); (ii) there are no existing or pending remedial actions or other work, repairs, construction or capital expenditures with respect to the Property in connection with the Environmental Laws, nor has Seller received any notice of any of the same; (iii) no Hazardous Materials have been or will be released into the environment, or have been or will be deposited, spilled, discharged, placed or disposed of at, on, or adjacent to the Property, nor has the Property been used at any time by any person as a landfill or a disposal site for Hazardous Materials or for garbage, waste or refuse of any kind; (iv) there are no electrical transformers or other equipment containing dielectric fluid containing polychlorinated biphenyls in excess of 50 parts per million located in, on or under the Property, nor is there any friable asbestos contained in, on or rage 7 Version Date: 12/8/05 S:\PARK & REC\12 14 OS Packet\PUrchase Agreement v12072005.doc under the Property; (v) there are no locations off the Property where Hazardous Materials generated by or on the Property have been treated, stored, deposited or disposed of; (vi) the sale of the Property by Seller to Buyer does not require notice to or the prior approval, consent or permission of any federal, state or local governmental agency, body, board or official; and (vii) no notices of any violation of any of the matters referred to in the foregoing subparagraphs relating to the Property or its use have been received by Seller and there are no writs, injunctions, decrees, orders or judgments outstanding, no lawsuits, claims, proceedings or investigations pending or threatened, relating to the ownership, use, maintenance or operation of the Property, nor is there any basis for any such lawsuit, claim, proceeding or investigation being instituted or filed. Buyer acknowledges that Seller or related entities, agents or designees and previous land owners may have been in the mining business and that the Property may have been used by Seller or related entities, agents or designees for mining activities. 5.1.5. To the best of Seller's knowledge, there are no others wells on the Property other than one (1) monitoring well. Buyer agrees to allow the Seller's continued use and access to said well at no cost to Seller. The Parties agree to execute a separate agreement to this effect concurrently with the execution of this Purchase Agreement. 5.1.6. There is no demand, proceeding, claim, suit, litigation, or other action pending or, to Seller's knowledge, threatened against Seller in connection with or related to the Property. 5.1.7. Seller is not a "foreign person" as that term is defined under Internal Revenue Code § 1445(F)(3) and the sale of the Property is not subject to any withholding requirements imposed by the Internal Revenue Code, including, without limitation, § 1445(F)(3) 5.1.8. No action in condemnation is now pending or, to Seller's knowledge, contemplated against the Property. 5.1.9. All labor and/or materials which have been furnished to the Property by or on behalf of Seller have been fully paid for or will be fully paid for prior to the Closing Date so that no lien for such labor or materials rendered can be asserted against the Property. 5.1.10. There is no "individual sewage treatment system" within the meaning of Minn. Stat. § 115.55 on or serving the Property. No sewage is generated at the Property. 5.1.11. Seller shall give Buyer prompt written notice of any matter coming to the attention of Seller which, to Seller's knowledge, would affect or change Page 8 Version Date: 12/8/OS S:\PARK & REC\12 14 OS Packet\Pnmhase Agreement v12072005.doc any of the foregoing representations and warranties. In the event any of the foregoing representations is not in any material respect true as of the Closing Date, Buyer may, without waiving any other right of remedy it may have, terminate this Agreement by notice to Seller. 5.1.12. As used in this Agreement, "to the best of Seller's knowledge," "to Seller's knowledge," and any other statements regarding the knowledge or awareness of Seller shall mean the actual knowledge of any current elected officer of the Seller, without investigation or inquiry. 5.1.13. The representations and warranties set forth in this paragraph shall be continuing and shall be true and correct on and as of the Closing Date with the same force and effect as if made at that time and said representations and warranties shall survive the Closing for a period of one (1) year. Any claim or cause of action by Buyer must be filed before the expiration of said one (1) year period or shall be barred. Seller agrees to indemnify and hold Buyer harmless from and against and to reimburse Buyer with respect to any and all claims, demands, causes of action, loss, damage, liabilities, and costs (including attorney's fees and court costs) asserted against or incurred by Buyer caused by the breach of any representation, warranty or covenant as set forth in this paragraph, except that any claim or cause of action must be filed within one (1) year after the Closing Date or shall be waived and barred. Seller's obligations and liabilities under this paragraph shall be limited to Buyer's actual, direct damages caused by Seller's breach, and in no event shall Seller be liable for lost profits or other consequential damages. 5.2. Representations and Warranties by Bu er. Buyer represents and warrants to Seller as of the Effective Date, the Closing Date and all dates in between, as follows: 5.2.1. Buyer is duly incorporated and qualified to transact business in the State of Minnesota; Buyer has the requisite corporate power and authority to enter into and perform this Agreement. 5.2.2. Buyer acknowledges that Buyer has had and/or will have the opportunity to inspect, inquire about, investigate and examine the Property and matters regarding the Property and that Buyer has or will obtain and/or perform, at Buyer's sole cost and expense, all such inspections, assessments, inquiries, investigations, examinations, studies, tests and reports that Buyer deems appropriate or otherwise desires (collectively referred to herein as "Due Diligence"). Seller and Buyer agree that Buyer will accept possession of the Property in it's AS-IS condition, WITH ALL FAULTS. Except for the warranties and representations explicitly set forth in this Agreement, such sale shall be without any other representation or warranty of any kind, express or implied, and Seller, for Seller, Seller's agents, attorneys, Pagc 9 Version Dere: 12/8/05 S:/PARK & RECA12 14 OS PackedPurchase Agreement v12072005doc representatives, heirs and assigns (hereinafter collectively referred to as "Seller and Seller's Agents") does hereby disclaim and renounce any other representation or warranty. Buyer specifically acknowledges that Buyer is not relying on any representations or warranties of any kind whatsoever, express or implied, from Seller or Seller's Agents as to any matter concerning the Property, except as explicitly set forth in this Agreement, and that Buyer, as to other matters, is relying entirely on Buyer's own Due Diligence, without any representations or warranties of any kind by Seller or Seller's Agents. ARTICLE VI TITLE EXAMINATION Examination of title to Property will be conducted as follows: 6.1 Title Commitment. Buyer shall obtain a commitment ("Title Commitment") from the Title Company for an ALTA Form of Owner's Policy of Title Insurance in the amount of the Purchase Price, wherein the Title Commitment will commit the Title Company to insure title to the Property at the Closing. 6.2 Title Examination. 6.2.1 Objections. Buyer shall have fifteen (15) days, after it has received (i) the Title Commitment and the survey, and (ii) all documents shown as exceptions therein, to make written objections to title of the Property ("Objections") and the failure by Buyer to make any such Objections within such time period will constitute a waiver of all Objections. 6.2.2 Cure of Objections/Non-Cure Notice. Seller will have one hundred twenty (120) days after receipt of any Objections to cure the Objections, during which period the Closing will be postponed as necessary; provided, however, that if Seller gives Buyer written notice (a "Non-Cure Notice") within said one hundred twenty (120) day period that Seller cannot or will not cure specified Objections, then this Agreement shall terminate, unless within ten (10) days after receiving the Non-Cure Notice Buyer gives Seller written notice that Buyer is waiving the Objections specified in the Non-Cure Notice, which items or matters subject to the Objection(s) shall then also become a Permitted Encumbrance(s). In any event, Seller shall cure any objection that can be cured solely by the payment of money. If the Purchase Agreement is terminated because the Seller cannot or will not cure specified Objections, then the Earnest Money shall be returned to the Buyer. Page 10 Version Dale: 12/8/05 5:\PARK & REC\12 14 OS Packet\Pwchase Agreement v12072005.doc ARTICLE VII SELLER'S CLOSING DOCUMENTS On the Closing Date, Seller shall deliver to Buyer the following (collectively, "Seller's Closing Documents"): 7.1 Deed. A Warranty Deed conveying the Property to Buyer, free and cleaz of all encumbrances, except the Permitted Encumbrances, in a form reasonably acceptable to the Buyer and the Title Company. 7.2 Well Disclosure. Seller will provide Buyer with a well disclosure statement as required by Minnesota State law or a statement that there is no well. 7.3 Title Documents. An Affidavit of Seller stating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Property; that Seller has not caused or allowed any work on the Property for which payment has not been made; and that there are no other unrecorded interests in the Property and such other Affidavits and documents as may be reasonably required by Title Company or Buyer in order to record Seller's Deed and issue the Title Policy required by this Agreement. ARTICLE VIII BUYER'S CLOSING DOCUMENTS On the Closing Date, Buyer will duly execute and/or deliver to Seller the following (collectively, "Buyer's Closing Documents"): 8.1 Purchase Price. The full Purchase Price (less Earnest Money and Park Dedication Credits), by wire transfer of U. S. funds, or by certified check (or other immediately available funds) to be payable to Seller or to Seller's account or as Seller may otherwise direct. 8.2 Pazk Dedication Agreement. The City shall execute and deliver the Park Dedication Agreement in the form and content of Exhibit "B" attached hereto and made a part hereof, securing the Buyer's remaining obligations under this Agreement. 8.3 Other Costs and Expenses. Payment for all other costs and expenses to be paid by Buyer pursuant to this Agreement. 8.4 Other Documents. Such other documents as the Title Company or Seller shall reasonably request to implement the within described transaction. Page ll Version Date: 12/8/05 S:\PARK & REC\I2 14 OS Packet\Purchase Agreement v12072005.doc ARTICLE IX CONDEMNATION If, prior to the Closing Date, eminent domain proceedings are commenced against all or any part of the Property, Seller shall immediately give notice to Buyer of such fact and at Buyer's option (to be exercised within thirty (30) days after receipt of Seller's notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement. If Buyer shall fail to give such notice of termination within such time, then there shall be no reduction in the Purchase Price and Seller shall assign to Buyer at the Closing Date all of Seller's right, title and interest in and to any award made or to be made in the condemnation proceedings in connection with the Property. ARTICLE X BROKER'S COMM_ Each party hereto warrants that it has not incurred any real estate brokerage fees, finder's fees, loan brokerage fees, or any other fees to any third party in connection with this purchase and sale. ARTICLE XI MUTUAL INDEMNIFICATION Seller and Buyer agree to indemnify each other against, and hold each other harmless from, all liabilities, claims, losses, damages, costs and expenses (including reasonable attorneys' fees in defending against claims) arising out of activities or agreements in regard to the Property whether before or after the Closing Date. Such right to indemnification will not arise to the extent that the claim for indemnification arises out of the act or neglect of the party seeking indemnification. This Article shall survive the Closing or the termination of this Agreement. ARTICLE XII ASSIGNMENT Neither party may assign, or sell for profit or otherwise, its rights under this Agreement with the prior written consent of the other party before or after the Closing Date. ARTICLE XIII NOTICES All notices, demands, consents, requests, or other communications provided for or permitted to be given pursuant to this Agreement shall be in writing and shall be sent to the address set forth below for the receiving party by any of the following means: (i) personal service; (ii) courier; or (iii) if being delivered or sent to an address that is within the same country from which the notice is being sent, by certified (or equivalent) or registered mail, postage prepaid, return receipt requested. Page 12 Version Date: 12/8/05 5:\PARK & REC\I2 14 OS Packet\ParoM1ase Ayreemeat v12072005.doc Buyer: The City of Elk River 13065 Orono Parkway Elk River, Minnesota With Copy To: Seller: Tiller Corporation 7200 Hemlock Lane N., Suite 200 P.O. Box 1480 Maple Grove, MN 55311-6480 Attn: Gary B. Sauer Tax ID# 41-1408578 With Copy To: Gries & Lenhardt, PLLP 12725 43rd Street NE St. Michael, MN 55376 Attn: John R. Gries If to Title Company: Old Republic National Title Company 400 Second Avenue South Minneapolis, MN 55401 Attn: Rick Zilka ARTICLE XIV MISCELLANEOUS 14.1 Force Majeure. Any prevention, delay, or stoppage because of strikes, lockouts, other labor disputes, material shortages, embargoes, civil unrest, governmental regulations, enemy or hostile governmental action, judicial order, public emergency, weather, fire, earthquake, other Acts of God, and other causes beyond the reasonable control of the party obligated to perform, will extend the period for performance of any act required by a party (except for payment obligations imposed pursuant to this Agreement), including the time required for satisfaction of any condition, for the period of the delay provided, however (i) the unavailability of financing shall not qualify for force majeure treatment and (ii) the affected party shall give reasonable written notice to the other of the occurrence causing such delay and shall include in such notice, if known, the date by which the delayed obligation will be performed. 14.2 Construction. This Agreement shall be governed by and construed under the laws of the State of Minnesota. All captions in this Agreement are for reference only. Page 13 Version Datc 12B/OS S:\PARK &RECU2 14 OS Packet\Pnmhase Agteemeat v12073005.doc 14.3 No Merger. The obligations, covenants, representations, and warranties, and the remedies for breach thereof, set forth in this Agreement shall survive the closing and shall not merge with transfer of title but shall remain in effect until fulfilled. 14.4 Confirmation of Termination. If this Agreement terminates, Buyer agrees to execute and deliver to Seller a quit claim deed for the Property and such execution and delivery shall be a condition precedent to the return of any Earnest Money, to the extent any Earnest Money is to be refunded to Buyer. 14.5 Location of Closing. The Closing shall take place at the office of the Title Company, or at such other place as may be agreed to by the parties. 14.6 Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. ARTICLE XV ENTIRE AGREEMENT; NO MODIFICATIONS This Agreement, together with the attached Addendum relating to the Title Company and the attached Exhibits "A", "B" and "C" constitutes the entire agreement of the Seller and Buyer with respect to the purchase and sale of the Property. This Agreement may not be modified or amended except in a writing signed by Seller and Buyer. ARTICLE XVI DEFAULT If either party defaults in the performance of any of the party's obligations under this Agreement and remains in default for ten (10) days after delivery of written notice of default, then the non-defaulting party may terminate this Agreement by written notice to the other party. [Signatures an following page) Page 14 Version Dale: 12/8/05 5:\PARK & RPC\I2 l4 OS Packet\PUrchase Agreement v12072005.doc IN WITNESS WHEREOF, the parties hereto have duly executed this Purchase Agreement the day and year first above written. BUYER CITY OF ELK RIVER a Minnesota Municipal Corporation SELLER TILLER CORPORATION a Minnesota Corporation By: gy. Its: Its: By: Its: Page I S Versivv Date: 12/8/05 5:\PARK & REC\12 14 OS Packet\Pvrchase Agreement v12072005.dvc EXHIBIT "A" Legal Description Page l6 Version Date: 12/S/OS S:V'AILK &RECV2 14 OS Packe[\Purohase Agreement v720]2005.doc EXHIBIT "B" Park Dedication Agreement Pnge I7 Version Dale: 12/8/05 5:\PARK & REC\72 14 OS Pmke[\PUrohase Agreemeul v12072005.doo Exhibit C Deed Restriction Page I R Version Date: 12B/OS 5:\PARK & IiEC\12 74 OS Packet\Purchase Agreement v12072005.doc