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5. EDSR 02-11-2013 Elk REQUEST FOR ACTION River To ITEM NUMBER Economic Development Authority 5. AGENDA SECTION MEETING DATE PREPARED BY February 11, 2013 Deborah Huebner, COD Senior Administrative Assistant ITEM DESCRIPTION REVIEWED By Call Public Hearing for Disposition of EDA Property Suzanne Fischer, Community Operations and - Oudot A,Northstar Business Park Development Director REVIEWED BY Cal Portner, City Administrator ACTION REQUESTED Call Public Hearing for Disposition of EDA Property- Outlot A,Northstar Business Park BACKGROUND/DISCUSSION At the January 14, 2013 EDA meeting, the EDA called a Public Hearing to be held by the EDA on February 11, 2013 for Disposition of Outlot A, Northstar Business Park. Due to a misunderstanding, the Notice of Public Hearing was not sent to the Star News for publication. The EDA is asked to call a public hearing for March 11, 2013 to allow time for advertising of the public hearing in order to meet State Statue requirements. ATTACHMENTS • Memo dated January 14, 2013 titled Call Public Hearing for Disposition of EDA Property- Out lot A in Northstar Business Park • Revised Purchase Agreement with Provo Enterprises,LLC [eIEHEI 1 ( NATURE * REQUEST FOR ACTION River To ITEM NUMBER Economic Development Authority 7. AGENDA SECTION MEETING DATE PREPARED BY January 14,2012 Annie Deckert,Director of Economic Development ITEM DESCRIPTION REVIEWED By Call Public Hearing for Disposition of Suzanne Fischer,Community Operations and EDA Property-Outlot A,Northstar Business Park Development Director REVIEWED BY Cal Portner,City Administrator ACTION REQUESTED Call Public Hearing for Disposition of EDA Property-Outlot A,Northstar Business Park. BACKGROUND/DISCUSSION On November 13,the EDA directed staff to advertise the sale of the lot through a public bidding process,following a request from Bryan Provo,owner and General Manager of Alliance Machine and Provo Enterprises,LLC, to purchase Outlot A in Northstar Business Park. A notice was published for two weeks in The Elk River Star News and a bid opening was held on January 9, 2013. A total of one bid was received: • Provo Enterprises,LLC $41,300 Staff recommends the EDA call a public hearing for Monday,February 11,2013,at 5:30 p.m. regarding the sale of the 43.75-acres of EDA-owned property in the Northstar Business Park to Provo Enterprises in the amount of$41,300. Staff will work with the city attorney to draft a purchase agreement for the sale of the parcel. The property is proposed to be sold in the amount of$41,300,which exceeds the appraised value of the property(appraisal completed on 12-7-12). Additionally,Provo Enterprises,LLC,will pay$1,750 to cover the cost of the property appraisal and all legal fees associated with the sale. Per state statute, appraisals are confidential until a purchase agreement is entered into. The purchase agreement includes the statutory requirements for the sale of EDA property. Minnesota Statues require the EDA to provide notice and hold a public hearing prior to the sale of the property. As indicated prior,the property cannot be platted and shall remain as is. FINANCIAL IMPACT Costs involved with this request will be paid by Provo Enterprises,LLC,with the exception of staff time. II E 1 E I NAME ATTACHMENTS • Memo dated 11-13-12 titled Consider Disposition of EDA Property- Outlot A in Northstar Business Park • Public Hearing Notice published December 22 and 29,2013 C •f REQUEST FOR ACTION 'ver To ITEM NUMBER Eonomic Development Authority 5. AGENDA SECTION MEETING DATE PREPARED BY November 13, 2012 Annie Deckert,Director of Economic Development ITEM DESCRIPTION REVIEWED By Consider Disposition of EDA Property- Outlot A in Northstar Cal Portner,City Administrator Business Park REVIEWED BY ACTION REQUESTED Consider Disposition of EDA Property-Outlot A of Northstar Business Park BACKGROUND/DISCUSSION On October 24,2012, staff received a request from Bryan Provo, owner and General Manager of Alliance Machine and Provo Enterprises,to purchase Outlot A in Northstar Business Park. Mr. Provo has made an offer to purchase Outlot A in Northstar Business Park for$56,900 and has indicated he would like to utilize the property for bow hunting. The 43.75 acre parcel lies adjacent to Northstar Business Park and is currently undevelopable. Representatives of the engineering,planning and environmental divisions indicated they have no issues with the EDA selling the property,they shared however that the property cannot be platted and must remain as is. The police department indicated that bow hunting would be permitted on this parcel; however the property owner would need to apply for the applicable license on an annual basis. A representative from the ERPD will be present at the EDA meeting to answer questions regarding the process. According to the Sherburne County Assessor,the property is assessed at$56,900 and would generate approximately$937 a year in taxes,calculated at a seasonal recreational use. Additionally,the assessor indicated that any time a tax exempt parcel sells,the county completes a new appraisal,and therefore the value could change. The parcel was appraised in 2010 and is scheduled to be reappraised in 2016. Staff is seeking direction on how to proceed with this request. Per state statute,the EDA has three options: • The EDA may elect to work with Mr.Provo,to sell the lot at a negotiated price • The EDA may choose to advertise the sale of the lot through a public bidding process • The EDA may elect to not sell the lot If the EDA chooses to sell the property,staff recommends getting a formal independent appraisal to properly value the parcel. The county assessor's applied value is for tax equalization purposes and is a ill ( ' ii NAME one-time snapshot of the parcel's value,in this case reflecting 2010. For transparency purposes,it is recommended to ensure the best value for taxpayers. If the EDA chooses to work with Mr.Provo,to sell the lot at a negotiated price, staff will begin working with the city attorney to draft a purchase agreement and call a public hearing for December 10,2012,to consider public comments regarding the disposition of EDA property. If the EDA chooses to move forward with the sale of the lot through a public bidding process,staff will advertise for bids,and the highest bidder may be granted the option to purchase the property upon staff recommendation. The city attorney indicated that total legal fees for the process (purchase agreement, drafting of covenants,etc.) to be approximately$3,000-$5,000,excluding the cost of the appraisal or staff time). Staff anticipates the EDA to call a public hearing at the December 10,2012,meeting, to be held at the January 7,2013,meeting. Additionally,state statute requires the Planning Commission and City Council to pass a resolution binding the sale of the lot is consistent with the Comprehensive Plan. If the EDA chooses to not sell the property,there is no action required. FINANCIAL IMPACT Costs involved with this request will vary depending on the course of action taken. ATTACHMENTS • Request dated 10-24-12 from Provo Enterprises • Site location map Action Motion by Second by Vote Follow Up 2,4OLTLot Bryim Provo 17520 Tyler Street Elk Rrver,.MN 55330 October 22,2012 Annie Decked Director of Economic Development City of Elk River 13065 Orono Parkway Elk River, MN 55330 Greetings Annie, We have recently become interested on the property to the west of Alliance Machine Inc in Elk River,MN It is my understanding that the property is owned by the Elk River Economic Development Authority. The property parcel id is 75-737001(}and is 43.75 acres With the.raearch I have done,the land is not buildable and maybe of no benefit other than we would like to use it for bow hunting.The Tax assessment is valued at $56,900.00 on the Beacon Website. On behalf of Alliance Rhine and Provo Enterprises,we would like to make an offer of$56,900.00 to purchase this proms:We look forward to your response. . . Best Regard, ger Bryan Provo GM Provo Enterprises Sherburne County, MN till,beacoriT' . . Date Created-.114201. . .. .. . .; . . , ... , , .,... _ , Okiadio, .,-• -.of--i--)---;:— -..: 1A.,--.-.,-.......A.A) 0 Nide . . .' :..- • ,, Sr":4.1 .,"*..) i . -i '. • .-. 7--- i , -,/ . sr- . , , . ---44--;%.- -, , ..,-,.. .--r' 1 - ' -, .... , . , — „, .,,,,, - :". . , . ' . . .._,........ .. • 1, , .. 14 N ' Parcel ID 75-757-0010 Alterrrats ID his Owetor Ark:Muss Na Sec/Tiorp/Rsog 2-32-26 Class 776-MtracMosi-All Other Propitiator Address Acreage 43.75 Dlitrict ELK FtIVE.R CITY Brief Tax Description n/a (Note:Not to be used on legal documents) i-ast Data Upload. 1116/2012 7-,22-.41 AM D l e s a i m e r E v e r y aitsagst*As IN***muds to avian ON Ivo vidomplion caniskoki an Sys sob Mt 6 viii al Ow Ira et pirnersion.tag/burl.COM* coil ay 414440414440444‘4.44•es4044,move,ar aereastions at say Irove tintseiout magic Arbilionsfly,ehertaras CovINY&Mims sivY lel al*eat(fer Thy,ak.g.....tyg..., 010100111rIcorted area*a iwArstey so a met of wogs,agoilkes or viiievomeles and is not ovvsoonsible for Wows cormislalsrposiollek Dols it ""0 wwww",","COVPOrelai up6ssed poiokally.for ihe mood essarit iniorwoMen arOad*a appropiale cow*depoimerd. Sciirvicier UMVWSChnilidaret3iPAMM Sherburne County, MN Obeaconni Date Created:11/6/2012 Summary Parcel ID 75-757-0010 Parcel n/a Parcel Type RE Property Address Plat 757-NORTHSTAR BUSINESS PARK Sec-Twp-Rng Sec.2 132N R26W Legal Description OUTLOT A (Note:Legal descriptions here are for tax purposes only.Do not use them for recording purposes.) Last Recording A 646416 Date:03/29/2007 Class 77644unidpal-AN Other Occupancy NON-HOMESTEAD Deeded Acres 43.75 Tax District ELK RIVER CITY School District 728-ELK RNER Owner /21 This Owner information is password protected. Click here for information on obtaining a user account Residential fa This Residential information is password protected. $ aick here for information on obtaining a user account. Other Buildings 12 This Other Buildings information Is password protected. Click here for information on obtaining a user account. Valuation .!. 1"2012 Assessment 2011 Assessment M 2009 Assessment Estimated Land Value $56,900 $56,900 $56,900 $1,000 Building Value 111111111.1111111 otal Estimated Value $56,900 $56,900 $56,900 $1 t Tax ' • 2012 Payab 2011 sable Value $56,900 $56,900 $1,000 $1,000 Net Tax $0.00 $0.00 $0.00 $0.00 tz„.—, Assessments 60.001- $0.00 $0.00 $0.00 Prindple Balance of Spec.Assessments otal Payable $0.00 $0.00 -•Mg 1.00 Penalty Due $00 $0.00 $0.00 $0.00 Cost Due&Fees $0.11 $0.00 $0.00 $0.11 Interest Due $0.00 $0.00 $0., ia I at*Unpaid $000 $0.00 $0.00 $0.00 Penalty/Interest amounts are vat I only for a lolled line Pay Taxes Online Click here for General Information&Pavmert Ootions •' Deckert,Annie roft Pat Dwyer<pdwyerathebankofelkriver.com> lent: . Thursday, November 08, 2012 11:19 AM To: 'BryanOalliancemachine.com' Cc 'Dan Tveite'; Deckert,Annie Subject: Tuesdays meeting Hi Bryan, I'm going to be at my place on the North Shore next week and won't be able to attend Tuesday night's EDA meeting. The item about the sale of the outlot concerns me. I am in favor of selling the outlot as it adds no real value to the remaining EDA property in the business park. With that said, we need to advertise the sale and seek the highest possible bid. Not doing that would open the EDA and the city up to a serious conflict of interest charge of selling property to an EDA member without competitive bidding. We just can't take the chance of hurting the EDA's reputation and good standing in the community by doing that. I hope you are the successful bidder,but the bidding process needs to be followed. PHD Patrick I DWYER siu.• Lent'111KAittant ktakik The Bank. OF ELit RIVE 530 Main Street I Elk River, Minnesota 55330 iffice: 763-241-8528 I Fax: 763-441-0847 P ICer thebankofelkriver.aom The information in this email Is confidential and may be legally privileged. It is intended solely for the recipient(s)addressed. Access to this email by anyone other that the recipient is unauthorized. If you are not the intended recipient,any disclosure,reproduction,distribution,or any action taken or omitted to be taken in reliance on It is prohibited and may be unlawful. • 1 CITY OF ELK RIVER NOTICE FOR SEALED BIDS PROPERTY AVAILABLE FOR SALE NORTHSTAR BUSINESS PARK,OUTLOT A,ELK RIVER,MN 55330 Notice is hereby given that sealed bids will be received,publicly opened,and read aloud by representatives of the Economic Development Authority(EDA)for the City of Elk River(City),Sherburne County,MN,at the Elk River City Hall at 13065 Orono Parkway,in said City at 1:30 p.m.on January 9,2013,for the sale of: Outlot A,Northstar Business Park,Elk River,MN 55330 At their November 13,2012,meeting,the City of Elk River Economic Development Authority elected to go out for bid for the sale of Outlot A,Northstar Business Park, Elk River, MN 55330. This property is unbuildable. A site location map of the property can be obtained online at www.elkrivermn.gov or picked up at City Hall at 13065 Orono Parkway, Elk River, Minnesota or sent via regular mail by calling the EDA Executive Director,Annie Decked at(763)635-1042. A public hearing for the sale of this property is anticipated to be held at 5:30 p.m.on January 14,2013,at Elk River City Hall at 13065 Orono Parkway, Elk River MN, 53300 at the regularly scheduled EDA meeting. Bids must be on the basis of cash payment, and no bid will be considered unless sealed and accompanied by a certified check,payable to the EDA for$5,000 as a guarantee that the bidder will,within 30 days after notification of award of the contract,enter into a non-contingent agreement with the EDA for acquisition of the property in the amount of the bid. This deposit will be applied to the purchase price at the time of closing,but will be forfeited if the bidder fails to enter into an agreement to acquire the property or fails to close on acquisition of the property as provided in the agreement. The EDA reserves the right to reject any and all bids,to waive any informalities therein,and to adjourn the contract award meeting to a later date for the purpose of further consideration of the bids and taking action thereon. No bid may be withdrawn after opening of the bids. 2 PURCHASE AGREEMENT RELATING TO A LOT IN NORTHSTAR BUSINESS PARK, SHERBURNE COUNTY,MINNESOTA 1. Parties. The parties to this Purchase Agreement are: a. The Economic Development Authority of the City of Elk River, a body corporate and politic organized pursuant to Minnesota Statutes, Section 469.090 to 469.1082, 13065 Orono Parkway, Elk River,MN 55330-5600,Attention: Executive Director, (the "Seller"); and b. Attention: ' (the "Buyer"). This Agreement sometimes refers to Seller and Buyer individually as a"Party" and collectively as the "Parties". 2. Property. The real property that is the subject of this Agreement is located in the City of Elk River, Sherburne County,Minnesota and is the property depicted as Lot_,Block _,on the Preliminary Plat of NORTHSTAR BUSINESS PARK, Sherburne County,Minnesota (the "Property"). The property is vacant land. The Plat of NORTHSTAR BUSINESS PARK is not recorded. As set forth in Section 18(d),Buyer's obligations under this Agreement are contingent upon Seller's recording of the Plat of NORTHSTAR BUSINESS PARK on or before the Date of Closing, as defined in Section 11. The term "Property", as used in this Agreement includes all hereditaments and appurtenances to the Property. The Parties do not contemplate the conveyance of any personal property pursuant to this Agreement. 3. Purchase and Sale. Subject to Section 4, Seller agrees to sell the Property to Buyer pursuant to the terms of this Agreement,and Buyer agrees to purchase the Property from Seller pursuant to the terms of this Agreement. 4. Public Hearing. Before Seller may convey the Property to Buyer, Seller's Board must hold a hearing on the proposed sale and must determine that the sale is in the best interest of the City of Elk River and its people and furthers Seller's general plan of economic development. Within a reasonable period after Buyer submission of a signed copy of this Purchase Agreement to Seller, Seller will publish the required notice of and hold the hearing required by Minnesota Statute Section 469.105, Subd. 2. If,at the hearing, Seller's Board does not adopt a resolution approving a sale pursuant to the terms of this Agreement,Buyer may terminate this Agreement pursuant to Section 18(f),or Seller may terminate this,Agreement pursuant to Section 19(a). If Seller's Board adopts a resolution approving a sale pursuant to the terms of this Agreement and a taxpayer appeals Seller's decision in accordance to Minnesota Statute Section 469.105, Subd. 3, Seller must give Buyer written notice of the appeal,and Buyer 1778984v6 _ may terminate this Agreement pursuant to Section 18(f)or Seller may terminate this Agreement pursuant to Section 19(b). If neither Buyer nor Seller terminates this Agreement pursuant to Section 18(f)or Section 19(b),within five(5)business days of Seller's delivery of written notice of an appeal to Buyer, all time periods provided for in this Agreement will be tolled pending the outcome of such appeal. If neither Buyer nor Seller terminates this Agreement pursuant to Section 18(f)or Section 19(b)and a District Court finds in favor of the party taking the appeal, this Agreement automatically terminates and Seller must return the Earnest Money to Buyer. 5. Purchase Price. The purchase price for the Property is Dollars($ ) (the "Purchase Price"). [The purchase price will be determined by multiplying the gross square footage of the Property, less the square footage of any portion of the Property subject to the existing,recorded easement in favor of Northern Natural Gas Company,by$2.00.1 6. Earnest Money. Seller's execution of this Agreement acknowledges Buyer's deposit of earnest money in the amount of$15,000.00 (the "Earnest Money"). Buyer must deposit the Earnest Money with Seller. Seller may commingle the Earnest Money with other funds of Seller. Seller has no obligation to invest the Earnest Money,and if Seller elects to invest the Earnest Money,any interest which the Earnest Money earns is the property of Seller. Earnest Money in the possession of Seller remains the property of Buyer until paid to Seller pursuant to Section 8 below or until Buyer defaults in the performance of Buyer's obligations under this Agreement and Seller terminates this Agreement pursuant to the provisions of Section 22(a) in which case Seller may retain the Earnest Money. If Seller defaults in the performance of Seller's obligations under this Agreement,Buyer may terminate this Agreement pursuant to the provisions of Section 22(b), and the Seller must return Earnest Money to Buyer. Seller must also return the Earnest Money to Buyer if Buyer terminates this Agreement pursuant to Section 13, Section 18 or Section 20 or if Seller terminates this Agreement pursuant to Section 19. Upon Seller's full performance of Seller's obligations under this Agreement,the Earnest Money must be delivered to Seller and applied towards payment of the Purchase Price pursuant to the provisions of Section 8(a)below. 7. Plans and Specifications. Within 14 days of the date of this Agreement, Buyer must deliver plans and specifications for the improvements Buyer intends to construct on the Property("the Plans and Specifications")to Seller for review as required by Minnesota Statutes, Section 469.105, Subd. 7. The Plans and Specifications must include(a)a site plan showing all proposed buildings and above ground improvements; (b)floor plans;and(c)exterior elevations (all sides). The Plans and Specifications must be as detailed as the plans and specifications that City of Elk River requires in connection with the issuance of a building permit. The Plans and Specifications must provide for the construction of the improvements described therein in a manner that conforms to all applicable federal, state and local laws, statute,ordinances and regulations. Seller must notify Buyer,within ten(10)business days of Buyer's submission of complete Plans and Specifications to Seller,that Seller either approves or rejects the Plans and Specifications. If Seller does not notify Buyer within the ten(10)business day period that it has approved or rejected the Plans and Specifications, Seller is deemed to have approved the Plans and Specifications. Seller must include in any written notice rejecting the Plans and Specifications, in whole or in part, specifics as to Seller's basis for rejecting the Plans and Specifications. If Seller notifies Buyer that Seller is rejecting the Plans and Specifications,in 1778984v6 2 whole or in part, Buyer must submit new or revised Plans and Specifications to the Seller within twenty(20)days after Buyer receives written notification from Seller of Seller's rejection of the Plans and Specifications. Within five (5)business days after Buyer's submission of new or revised Plans and Specifications to Seller, Seller must notify Buyer that Seller either approves or rejects the new or revised Plans and Specifications. If Seller does not notify Buyer within the five(5)business day period that is has approved or rejected the new or revised Construction Plans, Seller is deemed to have approved them. Seller's approval Plans and Specifications pursuant to this Section 7 constitutes approval for purposes of this Agreement only. Seller's review and approval or disapproval of Plans and Specifications pursuant to this Agreement is not intended to and does not satisfy any requirements of the City of Elk River's ordinances and is not intended as a substitute for any plan review provided for therein. The provisions of this Section 7 relating to submissions, approval,rejection and resubmission of Plans and Specifications continue to apply until Seller has approved the Plans and Specifications. If Seller has not approved Plans and Specifications on or before the Date of Closing, either Buyer or Seller may terminate this agreement pursuant to Section 18 or Section 19 respectively. 8. Payment Terms. Upon Seller's full performance of Seller's obligations under this Agreement,Buyer must: a. Authorize Seller to retain the Earnest Money; and b. Tender the balance of the Purchase Price to Seller in wire transferred funds. 9. Conveyance Terms. Upon Buyer's full performance of Buyer's obligations under this Agreement, Seller must execute and deliver to Buyer a Warranty Deed conveying fee title to the Property to Buyer subject only to: a. Building,zoning and subdivision statutes,laws, ordinances and regulations; b. Reservations of minerals or of mineral rights in favor of the State of Minnesota, if any; c. The lien of real estate taxes and special assessments not yet due and payable; and d. Covenants, conditions,restrictions, easements,encumbrances or other defects in title which are disclosed by the Evidence of Title, as defined in Section 12,and which are not the subject of an Objection,as defined in Section 13,or which are the subject of an Objection that Buyer has waived pursuant to the provisions of Section 13(b). e. As required by Minnesota Statutes, Section 469.105,the following covenants in favor of Seller: (i) Within one year of the Date of Closing,as defined in Section 11, Buyer must complete the construction of the improvements described in the Plans 1ns984v6 3 and Specifications Seller approves pursuant to Section 7,as evidenced by the City of Elk River's issuance of a Certificate of Occupancy, and devote the property to useas a ; and (ii) Buyer must not transfer title to the Property within one year of the Date of Closing without the consent of Seller which consent Seller will not unreasonable withhold or delay. f. A right of re-entry for breach of either of the covenants described at 9(e)(i) or 9(e)(ii). If Buyer violates either of the covenants set forth at 9(e)(i)or 9(e)(ii), Seller may commence an action in Sherburne County District Court seeking a judicial decree from the District Court that the Warranty Deed is canceled,that title to the Property reverts to Seller and that the Purchase Price is forfeited to the Seller, all as set forth in Minnesota Statute Section 469.105, Subd. 6. The forgoing is Seller's sole and exclusive remedy in the event of a breach of the covenants described in Section 9(e)(i)or 9(e)(ii). Seller hereby agrees that if Buyer grants a third party a mortgage which constitutes a first lien on the Property and uses the proceeds of the loan the mortgage securers to finance the construction of the improvements described in the Plans and Specifications Seller approves pursuant to Section 7, a transfer of title from Buyer to the mortgagee pursuant to a foreclosure of the mortgage shall be deemed to have the consent of Seller for purposes of Minnesota Statute Section 469.105, Subd. 5 and covenant described in Subsection e(ii)above. (hereinafter, collectively,the "Permitted Encumbrances"). 10. Possession. Upon Buyer's full performance of Buyer's obligations under this Agreement, Seller must deliver possession of the Property to Buyer. 11. Closing. The Parties must meet at the offices of Seller at 13065 Orono Parkway, Elk River,Minnesota at 9:30 a.m., on , 2005, or at such other place or other date as the Parties may establish by written agreement or pursuant to the provisions of Sections 11 below(the "Date of Closing"),at which time: a. Seller must: (i) execute and deliver to Buyer the deed described in Section 9 above. Seller will include on the deed the statement "The Seller certifies that the Seller does not know of any wells on the described real property." (ii) execute and deliver to Buyer and Buyer's title insurer,if any, an appropriate Minnesota Uniform Conveyancing Form Affidavit(Form 117-M) evidencing the absence of bankruptcies,judgments,tax liens involving parties with the same or similar names as the Seller and evidencing the absence of mechanic's lien rights affecting the Property,unrecorded interests affecting the Property,persons in possession of the Property and known encroachments or boundary line questions affecting the Property; 1778984v6 4 (iii) execute and deliver to Buyer a non-foreign affidavit in recordable form containing such information as is required under IRC Section 1445(b)(2) and any regulations relating thereto; (iv) provide Buyer or Title, as defined in Section 10 with the information necessary to complete a Minnesota Certificate of Real Estate Value; and (v) pay or provide evidence of payment of the following: the cost of providing the Evidence of Title as defined in Section 12;the State Deed Tax due upon the execution of the deed described in Section 9;real estate taxes and, if applicable, levied or pending special assessments pursuant to the provisions of Section 14; and one-half of Title's fee to conduct and insure the closing of this transaction. b. Buyer must: (i) Tender the Purchase Price to Seller pursuant to the provisions of Section 6 above; and (ii) Pay or provide evidence of payment of the following: the premium for Buyer's owner's policy of title insurance,if any;the changes for any endorsements to Buyer's title insurance policy that Buyer elects to purchase;the recording fee due upon the recording the deed from Seller to Buyer; all costs associated with Buyer's financing, if any, including mortgagee's title insurance policy costs and premiums, if any, and one-half of Title's fee to conduct and insure the closing of this transaction. 12. Evidence of Title. Within ( )days of the date of this Agreement, Seller must, at Seller's sole cost and expense, deliver to Buyer a commitment from ("Title")to issue an ALTA Form 1992 Owner's Policy of Title Insurance, in the amount of the Purchase Price,identifying Buyer as the proposed insured(the "Title Commitment"). After receiving the Title Commitment, Seller will promptly forward the Title Commitment to and instruct to prepare ALTA/ACSM survey(the "Survey")of the Property certified to Seller,Buyer,and Title. Buyer may instruct to also certify the survey to Buyer's lender. Seller will pay the cost of the base ALTA/ACSM survey. If Buyer requests that additional items be included in the survey including,but not limited to, "Table A" items,Buyer must pay any additional fees or cost associated with the additional survey work. The Title Commitment and Survey are referred to,collectively, in this Agreement as the "Evidence of Title." 13. Examination of Title. Within ten(10)business days of Buyer's receipt of the last item of the Evidence of Title or within ten(10)days of Buyer's discovery of a defect in the marketability of Seller's title to the Property which defect was not reasonably ascertainable from the Evidence of Title,Buyer may give Seller written notice of alleged defect(s)in the marketability of Seller's actual or record title to the Property and request that Seller make Seller's title marketable(an"Objection"). The Permitted Encumbrances described in Sections 7(a)and 1778984v6 5 7(b)may not serve as a basis for an Objection. Any defect in the marketability of Seller's title to the Property which Buyer does not object to, in writing,within the time period set forth above, is a Permitted Encumbrances. Within five(5)business days of Seller's receipt of Buyer's Objection(s), Seller must notify Buyer, in writing, if Seller will attempt to make Seller's title to the Property marketable. If Seller notifies Buyer that Seller will attempt to make Seller's title to the Property marketable, Seller must use commercially reasonable efforts to do so within one hundred twenty(120)days from Seller's receipt of Buyer's Objection, and, if necessary,the Date of Closing must be rescheduled accordingly. If Seller makes Seller's title marketable within the one hundred and twenty(120)day period, Seller must notify Buyer, in writing,and the Parties must close pursuant to the terms of the Agreement. The new"Date of Closing" must be the date fifteen(15)days from the date Seller notifies Buyer that Seller's title is marketable. If Seller notifies Buyer that Seller does not intend to make Seller's title marketable or if Seller notifies Buyer that Seller intends to make Seller's title marketable but,notwithstanding Seller's use of commercially reasonable efforts, Seller is unable to make Seller's title marketable within one hundred twenty(120) days from Seller's receipt of Buyer's Objection, Buyer may either: a. terminate this Agreement pursuant to the procedures set forth in Section 23 below; or b. notify Seller that Buyer waives Buyer's Objection. If Buyer waives Buyer's Objection,the matter giving rise to such Objection will be deemed a Permitted Encumbrance and the Parties must fully perform their obligations under this Agreement. The Parties must establish a new Date of Closing by mutual agreement,but if the Parties cannot establish a new Date of Closing by mutual agreement,the Date of Closing will be the date fifteen(15)days from the effective date of Buyer's notice to Seller that Buyer waives Buyer's Objection. If Buyer does not notify Seller of Buyer's election to terminate this Agreement pursuant to subsection(a)above or waive Buyer's Objection pursuant to subsection(b)above within fifteen (15)days of Buyer's receipt of notice from Seller that Seller does not intend to make Seller's title to the Property marketable or the expiration of the one hundred twenty(120)day period provided for above, as the case may be,this Agreement automatically terminates; Buyer must deliver an executed and recordable quit claim deed to the Property to Seller to evidence the termination of this Agreement; and Seller must return the Earnest Money to Buyer. 14. Real Estate Taxes and Special Assessments. The Parties must pay the real estate taxes(which term, as used in this Agreement,must include service charges assessed against real property on an annual basis pursuant to Minnesota Statutes 429.101)and special assessments as follows: a. On or before the Date of Closing, Seller must pay the real estate taxes, special assessments and any penalties and interest thereon that are due and payable with respect to the Property,on or before the Date of Closing; b. On or before the Date of Closing, Seller must pay or provide for the payment of all special assessments levied or pending against the Property as of the Date 1778984v6 6 of Closing, including special assessments certified for payment with the current year's real estate taxes; and c. Buyer and Seller must pro rate the real estate taxes, if any,which are payable in the year of closing on a per-diem basis using a calendar year,to the Date of Closing. If the Date of Closing occurs in the year in which Seller records the plat of NORTHSTAR BUSINESS PARK, Seller will have already paid any real estate taxes due and payable in that year in connection with the recording of the plat of NORTHSTAR BUSINESS PARK. For purposes of the pro-ration described in this Section 14(c),the real estate taxes due and payable with respect to the property in the year in which Seller records the plat of NORTHSTAR BUSINESS PARK, will be calculated by multiplying the amount of the real estate taxes due and payable in that year for all of the property subject to the plat of NORTHSTAR BUSINESS PARK by a fraction the numerator of which is the square footage of the Property and a denominator of which is the square footage of all lots in NORTHSTAR BUSINESS PARK. If the Date of Closing occurs in a year following the year in which the plat of NORTHSTAR BUSINESS PARK is recorded,the current year real estate tax information will be used, if available, and if current year real estate tax information is not available using the amount of the real estate taxes due and payable in the year immediately preceding the year of closing. Any such pro-ration is fmal and no subsequent adjustments,refunds or additional payments must be made. 15. Seller's Representations. Seller makes the following representations to Buyer: a. Seller represents that,to the best of Seller's actual knowledge,there is no action, litigation,governmental investigation, condemnation or administrative proceeding of any kind pending against Seller with respect to the Property or otherwise involving any portion of Property,and no third party has threatened Seller with commencement of any such action,litigation, investigation,condemnation or administrative proceeding. b. Seller represents that,to the best of Seller's actual knowledge,there are no wells located on the Property. c. Seller represents that,to the best of Seller's actual knowledge,there are no underground or above ground storage tanks of any size or type located on the Property. d. Seller represents that,to the best of Seller's actual knowledge,there are no Hazardous Substances located on the Property;the Property is not subject to any liens or claims by government or regulatory agencies or third parties arising from the release or threatened release of Hazardous Substances in,on or about Property; and Property has not been used in connection with the generation,disposal, storage,treatment or transportation of Hazardous Substances. For purposes of this Agreement,the term "Hazardous Substance" includes but is not limited to substances defined as "hazardous substances," "toxic substances" or"hazardous wastes" in the Comprehensive Environmental Response Compensation Liability Act of 1980,as amended,42 U.S.C. §9601,et seq.,and substances defined as"hazardous wastes," "hazardous substances," "pollutants,or contaminants"as defined in the Minnesota Environmental Response and 1778984v6 7 Liability Act,Minnesota Statutes,§115B.02. The term"hazardous substance" must also include asbestos,polychlorinated biphenyls,petroleum, including crude oil or any fraction thereof,petroleum products,heating oil,natural gas,natural gas liquids, liquified natural gas, or synthetic gas useable for fuel (or mixtures of natural gas and synthetic gas). If,at any time prior to the Date of Closing, Seller acquires actual knowledge of events, circumstances or facts which render the representations set forth in this Section 15 inaccurate in any respect, Seller must immediately notify Buyer, in writing. Buyer's acceptance of the deed described in Section 9 from Seller and payment of the Purchase Price to Seller with knowledge that one or more of the matters set forth above are not as represented constitutes Buyer's waiver or release of any claims due to such misrepresentation. 16. Buyer's Representations. Buyer hereby represents to Seller as follows: a. The individuals executing this Agreement on behalf of Buyer represent and warrant that they have the authority to execute this Agreement on behalf of Buyer and to bind Buyer. Buyer represents that Buyer has the full and complete authority to enter into this Agreement and to purchase the Property. b. Buyer represents that Buyer has engaged ("Buyer's Agent")to act as Buyer's real estate agent in connection with this transaction. Buyer represents that Buyer has not engaged anyone else to act as Buyer's agent in this transaction. 17. Buyer's Inspection and "AS IS" Sale. At all times prior to the Date of Closing, Buyer and its agents have the right,upon reasonable notice to Seller,to go upon the Property to inspect the Property and to determine the condition of the Property including, specifically,the presence or absence of Hazardous Substances, in, on, or about the Property. Buyer agrees to indemnify and defend Seller from and to hold Seller harmless against any and all claims,causes of action or expenses, including attorneys fees,relating to or arising from Buyer's or Buyer's agents or contractors presence on the Property prior to the Date of Closing. Buyer agrees to repair any damage to the Property caused by such inspections and to return the Property to substantially the same condition as existed prior to Buyer's inspection. BUYER ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN RELIANCE ON THE REPRESENTATIONS OF SELLER SET FORTH IN SECTION 15; ON BUYER'S INSPECTION OF THE PROPERTY PURSUANT TO THIS SECTION 17; AND ON BUYER'S JUDGMENT REGARDING THE SUFFICIENCY OF SUCH INSPECTIONS. BUYER IS NOT RELYING ON ANY WRITTEN OR ORAL REPRESENTATIONS,WARRANTIES OR STATEMENTS THAT SELLER OR SELLER'S AGENTS HAVE MADE EXCEPT FOR THE REPRESENTATIONS SET FORTH IN SECTION 15 OF THIS AGREEMENT. SUBJECT TO BUYER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO SECTION 18,BUYER IS PURCHASING THE PROPERTY IN "AS IS" CONDITION RELYING ONLY ON THE REPRESENTATIONS SET FORTH IN SECTION 15. 1778984v6 8 18. Buyer's Contingencies. Buyer's obligations under this Agreement are contingent on: a. Buyer's determination,based on the inspections described in Section 17 above and any other relevant information,that the condition of the Property is acceptable to Buyer; b. Buyer's acquisition of a commitment for financing,acceptable to Buyer in Buyer's sole and absolute discretion, sufficient to permit Buyer to close on the acquisition of the Property; c. Buyer's determination,that Buyer will be able to obtain all zoning or rezoning approvals, variances, conditional use permits,operating permits or other federal, state or local approvals or permits(collectively, "Permits")necessary for Buyer's intended use of the property as a d. Seller's recording of the plat of NORTHSTAR BUSINESS PARK on or before the Date of Closing; e. The City of Elk River and Sherburne County having adopted appropriate tax abatement financing resolutions approving the tax abatement financing and City of Elk River and Buyer having executed a mutually acceptable form of tax abatement financing agreement; f. Seller having satisfied the notice and hearing requirements set forth in Minnesota Statute Section 469.105, Subd. 2; having made findings and a decision that the sale is advisable and having entered its findings on its records as required by Minnesota Statute Section 469.105, Subd. 3 and either(i)no taxpayer having filed an appeal within the twenty(20)day time period described in Minnesota Statute Section 469.105, Subd. 3; or(ii)the time periods during which a taxpayer may appeal the District Court's decision having expired,on or before the Date of Closing; and g. The City of Elk River having let contracts for the construction of street, sanitary sewer, storm sewer and water main improvements which,when completed,will be sufficient to support Buyer's intended use of the Property as a Buyer must use commercially reasonable efforts to satisfy the contingencies described in Sections 18(a), 18(b)and 18(c)on or before the date sixty(60)days after the Effective Date,as defined in Section 29. If Buyer does not satisfy one or more of the contingencies described in Sections 18(a), 18(b)or 18(c)on or before the date sixty(60)days after the Effective Date,or if one or more of the contingencies described in Sections 18(d), 18(e), 18(f)or 18(g),are not satisfied on or before the Date of Closing, Buyer may terminate this Agreement pursuant to the procedures set forth in Section 23. If Buyer does not notify Seller,in accordance with the requirements of Section 23,on or before the date sixty(60)days after the Effective Date that Buyer is exercising one or more of the contingencies described in Sections 18(a), 18(b)or 18(c), or if Buyer does not notify Seller,in accordance with the requirements in Section 23,on or before the Date of Closing that Buyer is exercising one or more of the contingencies described in Sections 18(d), 18(e), 18(f)or 18(g). Buyer's right to exercise the contingencies described in this 1778984v6 9 Section 18 terminates, and the Parties must proceed pursuant to the other provisions of this Agreement. 19. Seller's Contingencies. Seller's obligations under this Agreement are contingent on: a. Seller's Board(i) determining that the sale contemplated by this Agreement is in the best interest of the City of Elk River and its people and furthers Seller's general plan of economic development; and(ii) adopting a resolution approving a sale pursuant to the terms of this Agreement at a hearing called and held in accordance with the requirements of Minnesota Statutes Section 469.105, Subd. 2; b. No taxpayer filing an appeal within the twenty(20)day time period described in Minnesota Statutes 469.105, Subd. 3; c. Buyer having submitted and Seller having approved Plans and Specifications pursuant to Section 7 on or before the Date of Closing. If one or more of the contingencies described in this Section 19 are not satisfied, Seller may terminate this Agreement pursuant to Section 23. 20. Condemnation. If a public or private entity with the power of eminent domain commences condemnation proceedings against all of any part of the Property, Seller must immediately notify Buyer, and Buyer may, at Buyer's sole option,terminate this Agreement pursuant to Section 23 below. Buyer has twenty(20)days from Buyer's receipt of Seller's notice to Buyer to exercise Buyer's termination right. If Buyer does not terminate this Agreement within said twenty(20)day period,the Parties must fully perform their obligations under this Agreement,with no reduction in the Purchase Price,and Seller must assign to Buyer,on the Date of Closing, all of Seller's right,title and interest in any award made or to be made in the condemnation proceedings. Seller must not designate counsel, appear or otherwise act with respect to any such condemnation proceedings without Buyer's prior written consent unless Buyer fails to respond within seven(7)days to a request for such written consent. 21. Assignment. Buyer may not assign Buyer's rights or obligations under this Agreement to a third party without the written consent of Seller. Seller may grant or withhold Seller's consent to an assignment in Seller's sole and absolute discretion. 22. Default. If either Party defaults in the performance of any of the Party's obligations under this Agreement,the non-defaulting Party may, after written notice to the defaulting Party, suspend performance of its obligations under this Agreement,and the rights of the non-defaulting Party are as follows: a. Buyer's Default. If Buyer defaults in the performance of any of Buyer's obligations under this Agreement, Seller has the right to terminate this Agreement pursuant to Minnesota Statutes, Section 559.21 and retain the Earnest Money. If one or more of the representations set forth in Section 16 are inaccurate,when made or if Buyer defaults in the performance of one or more of Buyer's obligations under Section 17, Seller may commence an action for damages against Buyer in Sherburne County District 1778984v6 10 Court,and if Seller prevails in such an action, Seller is entitled to recover from Buyer Seller's reasonable attorneys fees and costs. The remedies set forth in this Section 22(a) are Seller's sole and exclusive remedies in the event of Buyer's default. b. Seller's Default. If Seller defaults in the performance of any of Seller's obligations under this Agreement, Buyer may: (i) terminate this Agreement pursuant to Section 23 below, in which case Seller must return the Earnest Money to Buyer; (ii) initiate a civil action to compel Seller's specific performance of Seller's obligations under this Agreement provided that Buyer commences such action within six(6)months of the date of Seller's default. If Buyer prevails in any such action for specific performance,Buyer may also recover Buyer's reasonable attorneys fees and costs; or (iii) If any one or more of the representations set forth in Section 15 are inaccurate,when made, Buyer may commence an action for damages against Seller in Sherburne County District Court, and if Buyer prevails in such action, Buyer may also recover from Seller Buyer's reasonable attorneys fees and costs. The remedies set forth in this Section 22(b)are Buyer's sole and exclusive remedies in the event of Seller's default. 23. Termination of this Agreement. Sections 13, 18, 20 and 22(b)of this Agreement allow Buyer to terminate this Agreement under certain conditions. Section 19 allows Seller to terminate this Agreement under certain conditions. The following procedures govern the exercise of those termination rights: a. The party that desires to terminate this Agreement(the "Terminating Party")must notify the other party(the "Non-Terminating Party"), in writing,of the Terminating Party's intent to terminate this Agreement. b. The Terminating Party's notice must recite the Section of this Agreement that authorizes the Terminating Party's termination of this Agreement and must describe the facts and circumstances which the Terminating Party asserts justify termination under the referenced Section. c. The Terminating Party's notice of termination is effective as of the date the Terminating Party deposits the notice of termination with the United States Postal Service,with all necessary postage paid,for delivery to the Non-Terminating Party via certified mail,return receipt requested,at the address set forth in Section 1. If the Terminating Party delivers a notice of termination in a different manner than described in the preceding sentence,the notice of termination is effective as of the date the Non- Terminating Party actually receives the notice of termination. The Terminating Party must also mail a copy of the notice of termination to the Parties respective attorneys as provided for in Section 26 below. 1778984v6 11 d. If the Non-Terminating Party disputes the Terminating Party's right to terminate this Agreement,the Non-Terminating Party must so notify the Terminating Party, in writing,within five(5)business days of the Non-Terminating Party's receipt of the Terminating Party's notice of termination. e. If the Non-Terminating Party does not dispute the Terminating Party's right to terminate the Agreement, Buyer must execute and delivery to Seller a recordable quit claim deed or other recordable instrument evidencing the termination of Buyer's rights in the Property, and upon the receipt of such a quit claim deed or other instrument, Seller must return the Earnest Money to Buyer. f. If the Parties dispute the validity of an attempted termination of this Agreement, either Party may initiate a civil action in a court of competent jurisdiction to determine the status of this Agreement, and the Party that prevails in any such action is entitled to recover its reasonable attorneys'fees and costs in the action from the non- prevailing Party. 24. Time. Time is of the essence for all provisions of this Agreement. 25. Survival of Terms. The Parties'obligations under this Agreement survive Seller's delivery of a deed to Buyer and the closing of this transaction. 26. Notices. All notices provided for in this Agreement must be in writing. The notice must be effective as of the date two days after the Party sending such notice deposits the notice with the United States Postal Service with all necessary postage paid, for delivery to the other Party via certified mail, return receipt requested, at the address set forth in Section 1 above. If Party delivers a notice provided for in this Agreement in a different manner than described in the preceding sentence,notice must be effective as of the date the other party actually receives the notice. The Party sending the notice must also mail a copy of the notice to the Parties' respective attorneys via first class United States mail at the addresses set forth below: Attorney for Buyer: Attorney for Seller: Briggs and Morgan,P.A. 332 Minnesota Street, Suite W2200 Saint Paul,MN 55101 Attn: Mr. Thomas L. Bray 27. Full Agreement. The Parties acknowledge that this Agreement represents the full and complete agreement of the Parties relating to the purchase and sale of the Property and all matters related to the purchase and sale of the Property. This Agreement supersedes and replaces any prior agreements,either oral or written,and any amendments or modifications to this Agreement must be in writing and executed by both Parties to be effective. 1778954v 12 28. Governing Law. This Agreement has been made under the laws of the State of Minnesota and such laws must control its interpretation 29. Effective Date. This Agreement is effective as of the day of , 2005 (the "Effective Date");provided,however, if Seller and Buyer each execute this Agreement without having completed the blanks in this Section 29, the Effective Date is the later of the dates inserted on the signature pages of this Agreement. 1778984v6 13 Dated: SELLER: THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a body corporate and politic, organized under Minnesota Statutes, Chapter 469 By Its President By Its Vice President By Its Executive Director 1778984v6 14 Dated: BUYER: By Its By Its 1778984v6 15 4, I7LLyeJam" PURCHASE AGREEMENT / RELATING TO A LOT IN NORTHSTAR BUSINESS PARK, SHERBURNE COUNTY,MINNESOTA 1. Parties. The parties to this Purchase Agreement are: a. The Economic Development Authority of the City of Elk River, a body corporate and politic organized pursuant to Minnesota Statutes, Section 469.090 to 469.1082, 13065 Orono Parkway,Elk River,MN 55330-5600,Attention: Executive Director, (the"Seller"); and b. Provo Enterprises LLC 17520 Tyler Street Elk River,MN 55330, Attention: Bryan Provo, General Manager(the"Buyer"). This Agreement sometimes refers to Seller and Buyer individually as a"Party"and collectively as the"Parties". 2. Property. The real property that is the subject of this Agreement is located in the City of Elk River, Sherburne County,Minnesota and is the property legally described as Outlot A,NORTHSTAR BUSINESS PARK, Sherburne County, Minnesota(the"Property"). The property is vacant land. The term"Property",as used in this Agreement includes all hereditaments and appurtenances to the Property. No personal property will be conveyed pursuant to this Agreement. 3. Purchase and Sale. Subject to the contingencies set forth herein, Seller agrees to sell the Property to Buyer pursuant to the terms of this Agreement,and Buyer agrees to purchase the Property from Seller pursuant to the terms of this Agreement. 4. Public Hearing. Before Seller may convey the Property to Buyer, Seller's Board must hold a hearing on the proposed sale and must determine that the sale is in the best interest of the City of Elk River and its people and furthers Seller's general plan of economic development. Within a reasonable period after Buyer submits a signed copy of this Purchase Agreement to Seller, Seller will publish the required notice of and hold the hearing required by Minnesota Statute Section 469.105, Subd.2. If,at the hearing, Seller's Board does not adopt a resolution approving a sale pursuant to the terms of this Agreement, Buyer may terminate this Agreement pursuant to Section 18(b),or Seller may terminate this Agreement pursuant to Section 19(a). If Seller's Board adopts a resolution approving a sale pursuant to the terms of this Agreement and a taxpayer appeals Seller's decision in accordance to Minnesota Statute Section 469.105, Subd. 3, Seller must give Buyer written notice of the appeal, and Buyer may terminate this Agreement pursuant to Section 18(b)or Seller may terminate this Agreement pursuant to Section 19(b). If neither Buyer nor Seller terminates this Agreement pursuant to Section 18(b)or Section 19(b),within five(5)business days of Seller's delivery of written notice of an appeal to Buyer,all time periods provided for in this Agreement will be tolled pending the outcome of such appeal. If neither Buyer nor Seller terminates this Agreement pursuant to Section 18(b)or Section 19(b)and a District Court finds in favor of the party taking the appeal,this Agreement automatically terminates and Seller must return the Earnest Money to Buyer. 5. Purchase Price. The purchase price for the Property is Forty-One Thousand Three Hundred and 00/100 Dollars($41,300)(the"Purchase Price"). Buyer will also pay for: (a)the cost of the appraisal,$1,750; (b)any legal or other fees associated with the sale of the property;and(c)any other costs and expenses allocated to Buyer herein below. 6. Earnest Money. Seller's execution of this Agreement acknowledges Buyer's deposit of earnest money in the amount of$5,000.00(the"Earnest Money"). Buyer must deposit the Earnest Money with Seller. Seller may commingle the Earnest Money with other funds of Seller. Seller has no obligation to invest the Earnest Money. Earnest Money in the possession of Seller remains the property of Buyer until paid to Seller pursuant to Section 8 below or until Buyer defaults in the performance of Buyer's obligations under this Agreement and Seller terminates this Agreement pursuant to the provisions of Section 22 in which case Seller may retain the Earnest Money. If Seller defaults in the performance of Seller's obligations under this Agreement,Buyer may terminate this Agreement pursuant to the provisions of Section 22,and the Seller must return Earnest Money to Buyer. Seller must also return the Earnest Money to Buyer if Buyer terminates this Agreement pursuant to Section 13, Section 18 or Section 20 or if Seller terminates this Agreement pursuant to Section 19. Upon Seller's full performance of Seller's obligations under this Agreement,the Earnest Money must be delivered to Seller and applied towards payment of the Purchase Price pursuant to the provisions of Section 8(a)below. 7. Plans and Specifications. Intentionally left blank. 8. Payment Terms. Upon Seller's full performance of Seller's obligations under this Agreement, Buyer must: a. Authorize Seller to retain the Earnest Money; and b. Tender the balance of the Purchase Price to Seller in wire transferred funds. 9. Conveyance Terms. Upon Buyer's full performance of Buyer's obligations under this Agreement, Seller must execute and deliver to Buyer a Warranty Deed conveying fee title to the Property to Buyer subject only to: a. Building,zoning and subdivision statutes, laws,ordinances and regulations; b. Reservations of minerals or of mineral rights in favor of the State of Minnesota,if any; c. The lien of real estate taxes and special assessments not yet due and payable; and 2 d. Covenants,conditions,restrictions,easements,encumbrances or other defects in title which are disclosed by the Evidence of Title,as defined in Section 12,and which are not the subject of an Objection,as defined in Section 13,or which are the subject of an Objection that Buyer has waived pursuant to the provisions of Section 13(b). (hereinafter,collectively,the"Permitted Encumbrances"). 10. Possession. Upon Buyer's full performance of Buyer's obligations under this Agreement,Seller must deliver possession of the Property to Buyer. 11. Closing. The Parties must meet at the offices of Seller at 13065 Orono Parkway, Elk River,Minnesota at 9:30 a.m.,on March 12,2013,or at such other place or other date as the Parties may establish by written agreement(the"Date of Closing"),at which time: a. Seller must: (i) execute and deliver to Buyer the deed described in Section 9 above. Seller will include on the deed the statement"The Seller certifies that the Seller does not know of any wells on the described real property." (ii) execute and deliver to Buyer and Buyer's title insurer, if any,an Affidavit by Seller indicating that on the date of Closing there are no outstanding, unsatisfied judgments,tax liens,or bankruptcies against or involving the Property; that there has been no skill, labor,or material furnished to the Property for which payment has not been made or for which mechanics' liens could be filed;and there are no other unrecorded interests in the Property,together with whatever standard owner's affidavit as may be reasonably required by the Buyer's title insurer; (iii) execute and deliver to Buyer a non-foreign affidavit in recordable form containing such information as required under IRC Section 1445(b)(2)and any regulations relating there to; (iv) provide Buyer or Title,as defined in Section 10 with the information necessary to complete a Minnesota Certificate of Real Estate Value; and (v) pay or provide evidence of payment of the following: the cost of providing the Evidence of Title as defined in Section 12;the State Deed Tax due upon the execution of the deed described in Section 9;real estate taxes and, if applicable, levied or pending special assessments pursuant to the provisions of Section 14;and one-half of Title's fee to conduct and insure the closing of this transaction. b. Buyer must: (i) Tender the Purchase Price to Seller pursuant to the provisions of Section 6 above;and 3 (ii) Pay or provide evidence of payment of the following: the premium for Buyer's owner's policy of title insurance, if any;the changes for any endorsements to Buyer's title insurance policy that Buyer elects to purchase;the recording fee due upon the recording the deed from Seller to Buyer;all costs associated with Buyer's financing,if any, including mortgagee's title insurance policy costs and premiums, if any,and one-half of Title's fee to conduct and insure the closing of this transaction. 12. Evidence of Title. Within ten(10)business days of the Effective Date,Seller must,at Seller's sole cost and expense,deliver to Buyer a commitment from Sherburne County Abstract and Title("Title")to issue an ALTA Form 2006 Owner's Policy of Title Insurance,in the amount of the Purchase Price, identifying Buyer as the proposed insured(the"Title Commitment")as well as any so called"Schedule B-II documents". 13. Examination of Title. Within five(5)business days of Buyer's receipt of the Title Commitment,Buyer may give Seller written notice of alleged defect(s) in the marketability of title to the Property and request that Seller make Seller's title marketable(an"Objection"). Any defect in the marketability of Seller's title to the Property which Buyer does not object to, in writing,within the time period set forth above,is a Permitted Encumbrance. Seller will cure any mortgages,judgments, liens or incurred or created by Seller at or before the Date of Closing. Seller may,but will have no obligation to,cure any other Objection. If any other Objections remain uncured on the Contingency Date(as defined in Section 18),then Buyer may: a. terminate this Agreement pursuant to the procedures set forth in Section 23 below;or b. notify Seller that Buyer waives Buyer's Objection. If Buyer waives Buyer's Objection,the matter giving rise to such Objection will be deemed a Permitted Encumbrance and the Parties must fully perform their obligations under this Agreement. If Buyer does not timely notify Seller of Buyer's election to terminate this Agreement pursuant to subsection(a)above,then Buyer will be deemed to have waived all Objections(that Seller is not required to cure)and closing will occur as scheduled. 14. Real Estate Taxes and Special Assessments. The Parties must pay the real estate taxes(which term,as used in this Agreement,must include service charges assessed against real property on an annual basis pursuant to Minnesota Statutes 429.101)and special assessments as follows: a. On or before the Date of Closing,Seller must pay the real estate taxes, installments of special assessments and any penalties and interest thereon that are due and payable with respect to the Property,on or before the Date of Closing; b. On or before the Date of Closing,Seller must pay or provide for the payment of all installments of special assessments levied or pending against the Property as of the Date of Closing, including installments of special assessments certified for payment with the current year's real estate taxes;and 4 c. Buyer will be responsible for all amounts of real estate taxes and special assessments which are due and payable from and after the Date of Closing. 15. Seller's Representations. Seller makes the following representations to Buyer: a. Seller represents that,to the best of Seller's actual knowledge,there is no action,litigation,governmental investigation,condemnation or administrative proceeding of any kind pending against Seller with respect to the Property or otherwise involving any portion of Property,and no third party has threatened Seller with commencement of any such action,litigation,investigation,condemnation or administrative proceeding. b. Seller represents that,to the best of Seller's actual knowledge,there are no wells located on the Property. c. Seller represents that,to the best of Seller's actual knowledge,there are no underground or above ground storage tanks of any size or type located on the Property. d. Seller represents that,to the best of Seller's actual knowledge,there are no Hazardous Substances located on the Property;the Property is not subject to any liens or claims by government or regulatory agencies or third parties arising from the release or threatened release of Hazardous Substances in,on or about Property; and Property has not been used in connection with the generation,disposal,storage,treatment or transportation of Hazardous Substances. For purposes of this Agreement,the term "Hazardous Substance"includes but is not limited to substances defined as"hazardous substances,""toxic substances"or"hazardous wastes"in the Comprehensive Environmental Response Compensation Liability Act of 1980,as amended,42 U.S.C. §9601,et seq.,and substances defined as"hazardous wastes,""hazardous substances," "pollutants,or contaminants"as defined in the Minnesota Environmental Response and Liability Act,Minnesota Statutes, §115B.02. The term"hazardous substance"must also include asbestos,polychlorinated biphenyls,petroleum, including crude oil or any fraction thereof,petroleum products, heating oil,natural gas,natural gas liquids, liquefied natural gas,or synthetic gas useable for fuel(or mixtures of natural gas and synthetic gas). If,at any time prior to the Date of Closing,Seller acquires actual knowledge of events, circumstances or facts which render the representations set forth in this Section 15 inaccurate in any respect, Seller must immediately notify Buyer, in writing. Buyer's acceptance of the deed described in Section 9 from Seller and payment of the Purchase Price to Seller with knowledge that one or more of the matters set forth above are not as represented constitutes Buyer's waiver or release of any claims due to such misrepresentation. 16. Buyer's Representations. Buyer hereby represents to Seller as follows: a. The individuals executing this Agreement on behalf of Buyer represent and warrant that they have the authority to execute this Agreement on behalf of Buyer and to bind Buyer. Buyer represents that Buyer has the full and complete authority to enter into this Agreement and to purchase the Property. 5 b. Buyer represents that Buyer has not engaged anyone else to act as Buyer's agent in this transaction. 17. Buyer's Inspection and"AS IS" Sale. At all times prior to the Date of Closing, Buyer and its agents have the right,upon reasonable notice to Seller,to go upon the Property to inspect the Property and to determine the condition of the Property including,specifically,the presence or absence of Hazardous Substances, in,on,or about the Property. Buyer agrees to indemnify and defend Seller from and to hold Seller harmless against any and all claims,causes of action or expenses,including attorneys' fees,relating to or arising from Buyer's or Buyer's agents or contractors presence on the Property prior to the Date of Closing. Buyer agrees to repair any damage to the Property caused by such inspections and to return the Property to substantially the same condition as existed prior to Buyer's inspection. BUYER ACKNOWLEDGES THAT BUYER IS PURCHASING THE PROPERTY IN RELIANCE ON THE REPRESENTATIONS OF SELLER SET FORTH IN SECTION 15; ON BUYER'S INSPECTION OF THE PROPERTY PURSUANT TO THIS SECTION 17; AND ON BUYER'S JUDGMENT REGARDING THE SUFFICIENCY OF SUCH INSPECTIONS. BUYER IS NOT RELYING ON ANY WRITTEN OR ORAL REPRESENTATIONS,WARRANTIES OR STATEMENTS THAT SELLER OR SELLER'S AGENTS HAVE MADE EXCEPT FOR THE REPRESENTATIONS SET FORTH IN SECTION 15 OF THIS AGREEMENT. SUBJECT TO BUYER'S RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO SECTION 18,BUYER IS PURCHASING THE PROPERTY IN"AS IS"CONDITION RELYING ONLY ON THE REPRESENTATIONS SET FORTH IN SECTION 15. 18. Buyer's Contingencies. Buyer's obligations under this Agreement are contingent on: a. Buyer's determination,based on the inspections described in Section 17 above and any other relevant information,that the condition of the Property is acceptable to Buyer;and b. Seller having satisfied the notice and hearing requirements set forth in Minnesota Statute Section 469.105, Subd. 2;having made findings and a decision that the sale is advisable and having entered its findings on its records as required by Minnesota Statute Section 469.105, Subd. 3 and either(i)no taxpayer having filed an appeal within the twenty(20)day time period described in Minnesota Statute Section 469.105,Subd. 3; or(ii)the time periods during which a taxpayer may appeal the District Court's decision having expired,on or before the Date of Closing. Buyer must use commercially reasonable efforts to satisfy the contingency described in Section 18(a)on or before 12:00 noon on March 11th,2013,the date of Seller's Board's regularly scheduled meeting(the"Contingency Date"). If Buyer does not notify Seller,in accordance with the requirements of Section 23,on or before the date of the Public Hearing that Buyer is exercising the contingency described in Section 18(a), Buyer's right to exercise the contingency described in this Section 18(a)terminates,and the Parties must proceed pursuant to the other provisions of this Agreement. 6 19. Seller's Contingencies. Seller's obligations under this Agreement are contingent on: a. Seller's Board(i)determining that the sale contemplated by this Agreement is in the best interest of the City of Elk River and its people and furthers Seller's general plan of economic development;and(ii)adopting a resolution approving a sale pursuant to the terms of this Agreement at a hearing called and held in accordance with the requirements of Minnesota Statutes Section 469.105, Subd. 2;and b. No taxpayer filing an appeal within the twenty(20)day time period described in Minnesota Statutes 469.105, Subd. 3. If one or more of the contingencies described in this Section 19 are not satisfied, Seller may terminate this Agreement pursuant to Section 23. 20. Condemnation. If a public or private entity with the power of eminent domain commences condemnation proceedings against all of any part of the Property,this Agreement shall terminate. 21. Assignment. Buyer may not assign Buyer's rights or obligations under this Agreement to a third party without the written consent of Seller. Seller may grant or withhold Seller's consent to an assignment in Seller's sole and absolute discretion. 22. Default. If either Party defaults in the performance of any of the Party's obligations under this Agreement,the non-defaulting Party may,after written notice to the defaulting Party,suspend performance of its obligations under this Agreement,and the rights of the non-defaulting Party are as follows: a. Buyer's Default. If Buyer defaults in the performance of any of Buyer's obligations under this Agreement, Seller has the right to terminate this Agreement pursuant to Minnesota Statutes, Section 559.21 and retain the Earnest Money. If one or more of the representations set forth in Section 16 are inaccurate,when made or if Buyer defaults in the performance of one or more of Buyer's obligations under Section 17, Seller may commence an action for damages against Buyer in Sherburne County District Court,and if Seller prevails in such an action, Seller is entitled to recover from Buyer Seller's reasonable attorney's fees and costs. The remedies set forth in this Section 22(a) are Seller's sole and exclusive remedies in the event of Buyer's default. b. Seller's Default. If Seller defaults in the performance of any of Seller's obligations under this Agreement, Buyer's sole remedy is to terminate this Agreement pursuant to Section 23 below,in which case Seller must return the Earnest Money to Buyer. 23. Termination of this Agreement. Sections 13, 18, 20 and 22(b)of this Agreement allow Buyer to terminate this Agreement under certain conditions. Section 19 allows Seller to terminate this Agreement under certain conditions. The following procedures govern the exercise of those termination rights: a. The party that desires to terminate this Agreement(the"Terminating Party")must notify the other party(the"Non-Terminating Party"), in writing,of the Terminating Party's intent to terminate this Agreement. b. The Terminating Party's notice must recite the Section of this Agreement that authorizes the Terminating Party's termination of this Agreement and must describe the facts and circumstances which the Terminating Party asserts justify termination under the referenced Section. c. The Terminating Party's notice of termination is effective as of the date the Terminating Party deposits the notice of termination with the United States Postal Service,with all necessary postage paid,for delivery to the Non-Terminating Party via certified mail,return receipt requested,at the address set forth in Section 1. If the Terminating Party delivers a notice of termination in a different manner than described in the preceding sentence,the notice of termination is effective as of the date the Non- Terminating Party actually receives the notice of termination. The Terminating Party must also mail a copy of the notice of termination to the Parties respective attorneys as provided for in Section 26 below. d. If the Non-Terminating Party disputes the Terminating Party's right to terminate this Agreement,the Non-Terminating Party must so notify the Terminating Party, in writing,within five(5)business days of the Non-Terminating Party's receipt of the Terminating Party's notice of termination. e. If the Non-Terminating Party does not dispute the Terminating Party's right to terminate the Agreement,Buyer must execute and deliver to Seller a recordable quit claim deed or other recordable instrument evidencing the termination of Buyer's rights in the Property,and upon the receipt of such a quit claim deed or other instrument, Seller must return the Earnest Money to Buyer. f. If the Parties dispute the validity of an attempted termination of this Agreement, either Party may initiate a civil action in a court of competent jurisdiction to determine the status of this Agreement,and the Party that prevails in any such action is entitled to recover its reasonable attorneys' fees and costs in the action from the non- prevailing Party. 24. Time. Time is of the essence for all provisions of this Agreement. 25. Survival of Terms. The Parties'obligations under this Agreement survive Seller's delivery of a deed to Buyer and the closing of this transaction. 26. Notices. All notices provided for in this Agreement must be in writing. The notice must be effective as of the date two days after the Party sending such notice deposits the notice with the United States Postal Service with all necessary postage paid, for delivery to the other Party via certified mail,return receipt requested,at the address set forth in Section 1 above. If Party delivers a notice provided for in this Agreement in a different manner than described in the preceding sentence,notice must be effective as of the date the other party actually receives 8 the notice. The Party sending the notice must also mail a copy of the notice to the Parties' respective attorneys via first class United States mail at the addresses set forth below: Attorney for Buyer: N/A Attorney for Seller: Peter Beck Law Office 800 Nicollet Mall, Suite 2600 Minneapolis,MN 55402 Attn: Mr. Peter Beck 27. Full Agreement. The Parties acknowledge that this Agreement represents the full and complete agreement of the Parties relating to the purchase and sale of the Property and all matters related to the purchase and sale of the Property. This Agreement supersedes and replaces any prior agreements,either oral or written,and any amendments or modifications to this Agreement must be in writing and executed by both Parties to be effective. 28. Governing Law. This Agreement has been made under the laws of the State of Minnesota and such laws must control its interpretation 29. Effective Date. This Agreement is effective as of the day of January, 2013 (the"Effective Date");provided,however,if Seller and Buyer each execute this Agreement without having completed the blanks in this Section 29,the Effective Date is the later of the dates inserted on the signature pages of this Agreement. 9 Dated: SELLER: THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, a body corporate and politic, organized under Minnesota Statutes, Chapter 469 By Its President By Its Vice President By Its Executive Director 10 Dated: (Z—`� ( BUYER: By / � 11' Its <<L„"" Ll•- r By Its GP:3324546 v4 1 I