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7.0. EDSR 08-08-2005 ITEM # 7. City of Elk -�-� River MEMORANDUM TO: Economic Development Authority FROM: Heidi Steinmetz, Assistant Director of Economic Development DATE: August 8, 2005 SUBJECT: Public Hearings: Consider Disposition of EDA Property to Provo Enterprises, LLC, O'Brien Holdings, LLC, and Medical Extrusion Technologies, Inc. Attachments • Disposition of Property Public Hearing Notices,Elk River Star News,July 27, 2005 411 • Purchase Agreements for Provo Enterprises,LLC, O'Brien Holdings,LLC, and Medical Extrusion Technologies, Inc. • Resolutions Authorizing Execution of Purchase Agreements Background On July 11, 2005, the EDA called a public hearing for August 8,2005 regarding the sale of three lots of EDA property located in Northstar Business Park for industrial development purposes. The attached public hearing notices appeared in the Elk River Star News on July 27, 2005. Below is a summary of the proposed sale: Gross Purchase Price (Buyer) Company Acres for Improved Land Project Provo Enterprises,LLC 2.84 $207,956 Build 18,000 SF,retain 30 (Affiance Machine, Inc.) jobs, create 9 new jobs O'Brien Holdings,LLC 3.7 $276,940 Build 32,000 SF,retain 31 (Crystal Distribution, Inc.) jobs, create 15 new jobs Medical Extrusion Technologies, Inc. 2.64 $229,996 Build 20,000 SF, create 23 new jobs Provo Enterprises,LLC will lease the property to Affiance Machine, Inc. O'Brien Holdings,LLC will lease the property to Crystal Distribution, Inc.,and a similar arrangement will be made with Medical Extrusion Technologies, Inc. • Consider Disposition of EDA Property to Provo Enterprises,LLC,O'Brien Holdings,LLC,and Medical Extrusion Technologies,Inc. August 8,2005 EDA Meeting Page 2 of 2 • Issue Attached for your review are the purchase agreements for the three lots. Along with staff, the attorneys of Briggs &Morgan drafted and negotiated each agreement. Action Requested Staff recommends that the EDA consider approving the attached Resolutions authorizing execution of purchase agreements between the EDA and Provo Enterprises,LLC, O'Brien Holdings,LLC, and Medical Extrusion Technologies, Inc. • I coo 1J2 11 Sectivu ovv.,ko as u 1 uau signeu LL ',';a. 1V1uuiesota 111n1Lea naon- S ENTERED this certificate under oath. ity company (the "Developer') [NNE S O TA Dated: June 28,2005 under Minnesota Statutes,Section ON 582.032, Signed: Rodney Schumm 469.105. AMONG Owner The property is being sold pur- THAT THE (Jy20-27) suant to a Purchase Agreement PREMISES between the Developer and the H A CERTIFICATE OF ASSUMED Authority. A copy of the Purchase E G OF NAME—STATE OF Agreement will be on file and Disii S, ARE NIINNESOTA available for public inspection USED IN Pursuant to Chapter 333, at the office of the Executive ZODUCTION, Minnesota Statutes; the under-" Director of the -Authority, City -- JED." signed, who is or will be conduct- Hall, 13065 Orono Parkway, Elk 5. ing or transacting a commercial River, Minnesota: ge Electronic business in the state of Minnesota All persons may appear at the Systems, Inc. under an assumed name, hereby > public hearing and present their of Mortgagee certifies: views orally or in writing on the 'DEN P.L.L.P. 1. The assumed name under proposed subsidy and the sale of en which the business is or will be the property. gee/ conducted is: Dan's Cleaning. Dated:July 11,2005 e 2. The street address of the prin- BY ORDER OF THE BOARD #120 cipal place of business is or will be: OF COMMISSIONERS 16 9810 261st Avenue, Zimmerman, (Jy27) MN 555398. 3. List the name and complete CITY OF ELK RIVER street address of all persons con- COUNTY OF SHERBTRNE; UNICATION ducting business under the above STATE OF MINNESOTA LECTOR. Assumed Name, including any cor- NOTICE OF 1-31)(10cb) porations that may be conducting PUBLIC HEARING this business. Jennifer L. Wudtke, REGARDING THE RTGAGE 9810 261st Avenue, Zimmerman, DISPOSITION OF PROPERTY E SALE MN 555398; Daniel A. Wudtke, NOTICE IS HEREBY GIVEN EBY GIVEN 9810 261st Avenue, Zimmerman, that the Board of Commissioners occurred in MN 555398. of the Economic Development he following 4. I certify that I am authorized Authority of the City of Elk River, to sign this certificate and I fur- Minnesota (the "Authority"), will kGGctober ther certify that I understand that hold a public hearing on August by signing this certificate, I am 8, 2005, beginning at approxi- ?RINCIPAL subject to the penalties of perjury mately 5:30 p.m., Central Time, 1ORTGAGE: as set forth in Minnesota Statutes at City Hall, on the proposed sale section;609.48 as if I had signed of certain real fro s- . . he Timothy L. this certificate under oath. Authority to 4' ovo Enterprises L. Dated: 6/21/05 LLC, a Minnesota limited habil- Mortgage Signed:Jennifer L.Wudtke ity company (the "Developer") ion Systems, .. Owner under Minnesota Statutes,Section (Jy20-27) 469.105. , LACE OF The property is being sold pur- ded: October NOTICE AND ORDER FOR suant to a Purchase Agreement me County HEARING ON PETITION FOR between the Developer and the 1o.: 567206 DESCENT OF PROPERTY Authority. A copy of the Purchase PTION OF STATE OF MINNESOTA Agreement will beton file and _ ilock 3, Lake 'COUNTY OF SHERBURN'E r°"°' available' for public`-inspec n n,.Sherburne DISTRICT COURT at the office of the Executi e TENTH JUDICIAL DISTRICT Director of the Authority, City WHICH Probate Division Hall, 13065 Orono Parkway, Elk LOCATED: Court File No. P9-05-1528 River, Minnesota. Estate of: Donald.F.Johnson, All persons may appear at the D CLAIMED Decedent. public hearing and present their F DATE OF A Petition for Determination;of ,views orally or in writing on the ) Descent has been filed with this proposed subsidy and the sale of isure require- Court. The Petition represents the property. mplied with; that the Decedent died more than , Dated:July 11,2005 oceeding has three years ago, leaving property BY ORDER OF THE BOARD orrwise in Minnesota and.. requests the OF COMMISSIONERS cuiWy said probate of Decedent's last will, if (Jy27). thereof; any, and the descent of such prop- power of sale erty be determined and assigned ROGERS Lortgage, the by this Court to the persons enti- BID REQUEST )erty will be tled to the property. The City of Rogers, MN will f said county Any objections to the Petition receive sealed bids until 11:00 must be filed with the Court prior a.m. on August 24, 2005 for the OF RALE. to or at tha hParina If nrnnar and fnllnwina anarifiad 'lira trurlr and ;.coni • Wednesday,July 27, 2005/Star News /19B • r an assumed name, hereby Hall, 13065`Orono Parkway, Elk les: River,Minnesota; rhe assumed name under All persons may appear at the i the business is or.will be public hearing and present their icted is: Hot Rods Metal views orally or in writing on the cation and Body Shop. proposed subsidy and the sale of rhe street address of the the property. ipal place of business is or Dated:July 11,2005 3e: 26069 2nd Street West, BY ORDER OF THE BOARD ierman,MN 55398. OF COMMISSIONERS ,ist the name and complete (Jy27) t address, of all persons con= ng business under the above CITY OF ELK RIVER ned Name, including any cor- COUNTY OF SHERBURNE ions that may be conducting STATE OF MINNESOTA business. Rodney Schumm, NOTICE OF 283-1/2 Ave., Zimmerman, PUBLIC HEARING 5398. REGARDING THE his certificate is an amend- DISPOSITION OF PROPERTY of Certificate of Assumed NOTICE IS HEREBY GIVEN number 1202596-2 origi- that the Board of Commissioners filed on 1/27/05 under the of the .Economic Development H ods Auto Body and Authority of the City of Elk River, F ation. Minnesota (the "Authority"), will ce that I am authorized hold a public hearing on August n this certificate and I fur- 8, 2005, beginning at approxi- ertify that I understand that mately 5:30 p.m., Central Time, ;ning this certificate, 'I am at City Hall, on the proposed sale t to the penalties of perjury of certain real •ro,,pgrty b the forth in Minnesota Statutes Authority to the ®': r • • . • • • n 609.48 as if I had signed LLC, ,a Minnesota limited liabil- artificate under oath. ity company (the "Developer") 43:June 28,2005 under Minnesota Statutes,Section Signed: Rodney Schumm 469.105. Owner The property is being sold pur- (Jy20-27) suant to a Purchase Agreement between the Developer and the TIFICATE OF ASSUMED Authority. A copy of the Purchase NAME—STATE OF Agreement will be 'on file and MINNESOTA available for public inspection uant to Chapter 333, at the office , of the Executive sota Statutes; the under- Director of the `Authority, City 1, who is or will be conduct- Hall, 13065 Orono Parkway, Elk • transacting a commercial River,Minnesota:' ass in the state of Minnesota All persons may appear at the an assumed name, hereby • public hearing and present their °s: views orally or in writing on the he assumed name under proposed subsidy and the sale of the business is or will be the property. ted is: Dan's Cleaning. Dated:July 11,2005 e s t address of the prin- BY ORDER OF THE BOARD 'la usiness is or will be: OF COMMISSIONERS 261s Avenue, Zimmerman, (Jy27) ;5398. st the name and complete CITY OF ELK RIVER address of all persons con- COUNTY OF SHERBURNE, g business under the above STATE OF MINNESOTA ed Name, including any cor- NOTICE OF ins that may be conducting PUBLIC HEARING or otherwise to recover the debt BY THE MORTGAGOR, THE MAGNUSSEN, LTD ificati, MORTGAGOR'S PERSONAL First Financial Center REPRESENTATIVES OR 812 Main Street, Suite 102 #1 Cause of suicide ASSIGNS, MAY BE REDUCED Elk River, MN 55330 CER' TO FIVE WEEKS IF A Attorney License No: 120893 UNTREATED DEPRESSIoN JUDICIAL ORDER IS ENTERED Telephone: 763/441-7040 UNDER MINNESOTA FAX: 763/441-0901 Purs http://www.save.org STATUTES, SECTION 582.032, (Jy27-Ag3) Minn( DETERMINING, AMONG signet • OTHER THINGS, THAT THE CITY OF ELK RIVER ing of Depression is a MORTGAGED PREMISES COUNTY OF SHERBURNE ' businE t ARE IMPROVED WITH A - STATE OF MINNESOTA under RESIDENTIAL DWELLING OF NOTICE OF certifi SeriVSf4ireafLESS THAN FIVE UNITS ARE PUBLIC HEARING 1. T 0 NOT PROPERTY USED IN REGARDING THE which AGRICULTURAL PRODUCTION O DISPOSITION O F I PROPERTY condu, AND ARE ABANDONED. NOTICE IS HEREBY GIVEN 2. TY: fo anyone fliafDated:July 27,2005 that the Boardof Commissioners cipal r Mortgage Electronic of the Economic Development 460 LI Registration Systems, Inc. Authority of the City of Elk River, Big 1...4 �as a brain. Mortgagee Minnesota (the "Authority"), 3. Li Wilford & Geske hold a public hearingon Aust 8, street Attorneys for Mortgagee 2005, beginning at approximately ductin Depression is a suppres- Lawrence A.Wilford 5:30 p.m., Central Time, in the Assurc sion of brain activity that can James A. Geske City Hall, on the proposed sale porati 7650 Currell Boulevard, Suite 300 of certain real Drom rty by the ing th strike anyone. It can make Woodbury, Minnesota 55125 Authority to (Iedical Extrusio) 331 P life unbearable, but it is also (651)209-3300 Technologies, a California cor- 55309 File ID: 09436 poration (the "Developer"), or a 4. I < readily, medically treatable, (Jy27-Ag3-10-17-24-31)(3cb) related entity to the Developer, to sig and that's something you under Minnesota Statutes,Section ther should keep in' mind. AMENDMENT TO 469.105. - by sig CERTIFICATE OF ASSUMED The property is being sold pur- subjec NAME—STATE OF suant to a Purchase Agreement as set r Message from SAVE MINNESOTA between the Developer and the sectioi (Suicide Awareness/ Pursuant to Chapter 333, Authority. A copy of the Purchase this cE • Minnesota Statutes; the under- Agreement will be on file and Date Voices of Eduction) signed, who is.or will be conduct- available for public inspection ing or transacting a commercial at the office of the Executive business in the state of Minnesota Director of the Authority, City Hall, 13065 Orono Parkway, Elk River, Minnesota. • All persons may appear at the public hearing and present their "` wa.–,r`urG1u.7 will uc uuiluutbeu lb. 11u1+ nuns ivieual views orally or in writing on the sold by the Sheriff of said county Fabrication and Body Shop. proposed subsidy and the sale of as follows: 2. The street address of the the property. DATE AND TIME OF SALE: principal place of business is or Dated:July 11,2005 September 15,2005 at 10:00 AM will be: 26069 2nd Street West, BY ORDER OF THE BOARD PLACE OF SALE:Sheriff's Office, Zimmerman,MN 55398. OF COMMISSIONERS Sherburne County Courthouse, 3. List. the name and complete (Jy27) Elk River, MN street address, of all persons Ion- to pay the debt then secured by ducting business under the above CITY OF ELK RIVER said Mortgage, and taxes, if any, Assumed Name, including any cor- COUNTY OF SHERBURNE on said premises, and the costs porations that may be conducting STATE OF MINNESOTA and disbursements, including this business. Rodney Schumm, NOTICE OF attorneys'fees allowed by law sub- 14649 283-1(2 Ave., Zimmerman, PUBLIC HEARING ject to redemption within six (6) MN 55398. REGARDING THE months from the date of said sale 4. This certificate is an amend- DISPOSITION OF PROPERTY by the mortgagor(s),their personal ment of Certificate of Assumed NOTICE IS HEREBY GIVEN representatives or assigns. Name number 1202596-2 origi- that the Board of Commissioners. MORTGAGOR(S) RELEASED nally filed on 1/27/05 under the of the Economic Development ilF OMFINANCIAL OBLIGATION name Hot Rods Auto Body and Authority of the City of Elk River, ORTGAGE: None Metal Fabrication. Minnesota (the "Authority"), will E TIME ALLOWED BY 5. I certify that I am authorized hold a public hearing on August LAW FOR REDEMPTION to sign this certificate and I fur- 8, 2005, beginning at approxi- BY THE MORTGAGOR, .THE ther certify that I understand that mately 5:30 p.m., Central Time, MORTGAGOR'S PERSONAL by signing this certificate, I am at City Hall, on the proposed sale REPRESENTATIVES OR subject to the penalties of perjury of certain real property by the ASSIGNS, MAY BE REDUCED as set forth in Minnesota Statutes Authority to the O'Brien Holdings, TO FIVE . WEEKS IF A section 609.48 as if I had signed LLC, a Minnesota limited habil- TT TTtr,T A T 11 TT T.T. T'. v...Tr..T.r.�.-. .. . ..-- _ • 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. CFrovo Enterprises, LLC,' ttention: Bryan Provo, 10650 County Road 81, Suite 1, Osseo, MN 55369 (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 S 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(f) or Seller may terminate this Agreement 1787559v3 • 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 Two Hundred Seven Thousand Nine Hundred Fifty Six and 00/100 Dollars ($207,956.00) (the "Purchase Price"). 6. Earnest Money. Seller's execution of this Agreement acknowledges Buyer's deposit of earnest money in the amount of$10,000.00 (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 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 1787559v3 2 • 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 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 • use as a manufacturing facility; and 1787559v3 3 IP (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; (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) 111/ and any regulations relating thereto; 1787559v3 4 • (iv) provide Buyer or Title, as defined in Section 12 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; the fee or commission Buyer owes to Buyer's Agent, as defined in Section 16(b), up to but not in excess of 4% of the Purchase Price; and one-half of Title's fee to conduct and insure the closing of this transaction. b. Buyer must: (1) 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; any fee or commission Buyer owes to Buyer's • Agent in excess of 4% of the Purchase Price; and one-half of Title's fee to conduct and insure the closing of this transaction. 12. Evidence of Title. Within fourteen(14) days of the date of this Agreement, Seller must, at Seller's sole cost and expense, deliver to Buyer a commitment from Sherburne County Abstract &Title, as agent for Old Republic National Title Insurance Company("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 7(b)may not serve as a basis for an Objection. Any defect in the marketability of Seller's title to 1787559v3 5 • 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 1111 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 • of Closing, including special assessments certified for payment with the current year's real estate taxes; and 1787559v3 6 • 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 final 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 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 1787559v3 7 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 C. B. Richard Ellis ("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. 18. Buyer's Contingencies. Buyer's obligations under this Agreement are contingent on: • 1787559v3 8 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 manufacturing facility; 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 manufacturing facility; and h. Buyer having submitted and Seller having approved Plans and Specifications pursuant to Section 7 on or before the date of Closing. 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), 18(g) or 18(h), 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 1787559v3 9 • before the Date of Closing that Buyer is exercising one or more of the contingencies described in Sections 18(d), 18(e), 18(f), 18(g) or 18(h). Buyer's right to exercise the contingencies described in this 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 1787559v3 10 • 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 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 1787559v3 11 S 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 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: Joseph A. Wentzell, Esq. Wentzell Law Offices, PLLC 2855 Anthony Lane S., Suite 200 St. Anthony,MN 55418 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 1787559v3 12 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 , 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. S • 1787559v3 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 S • 1787559v3 14 Dated: BUYER: PROVO ENTERPRISES, LLC By Its By Its • 1787559v3 15 0 EXHIBIT A PRELIMINARY PLAT a© -------ilh - --�----_� _ s 1r 1 _ i J' -( / tt /!ts" ? „�' //././t ,111 > _:< .—_ I /�z -off , ../..,-,..„.„.--, / LI_ i r r o �-_ //f s em' 7 :11— lil lr'— I-/�/ '� "---,,e,—,- 7 `-- / 0 i " 1 ,- • \ 1 ' i , t / ' C I 1 / A / 1 i6 !e<1 1 q ;N ki // I: '/ II `'Y�• 1I a ' j Il� — — — 1 Y ' 1 • 11 1 I !�I �. " i ol ■YY ..II i ,151 i L:'E 1 i5 w I I jai '11 P1 g N5 ' 6 iaq II ! i i w^'` .81 i • EXHIBIT B GRADING PLAN .' _ fix /V° � . �77 �e . .•', ..../Nr,2 I '4':,-, ,,<„,:%.....::,... ,:. ....... .,„ <‘, ..,, ,r.r.10,,. „, ,,,,:1, . .. .:,.;,,1!„, 1!, . .,1)4....::::.. .....:.:::,:.., ..:: , , , :" ,., .\ :4,,,,,„,,t,, ,i,,,i11 .,. _.11 ;•..: .__,,,,,,:.... .. ...:,:.:.: .„.::i, „/ „.‘ ...,..,..../ ..„1,,,,,141111 : ,_ : ....... .;.....,_..,_........:....r.... .,. ........,....... ), ;....2 „›, ,,„ ,... .,___, ‘ ,, ,:, ,,,v,),I,J);. .. ... .: 7., , „...z.. .... ....,1:........,:. ....:, „/ .. , ,---1-7-Ni l''N'k''.2 4111,__ '- //J y .:::::•---- --,•.7,--::::. -- ,.� // .lam✓_/l• • 4,. ,..:•.,.::( 1,, .,;-- j . ,., 4 / , , ..: . : '''1 .-iP 04/11/ / 7,7rg".47N C rik /if / LII MIIIIIIIIMMIN,� fes. -es. I t'.I. , T (® • thi k 6 If rIkar60457 eV MILK C »'nti"a W",:,".� ,.,�, 4� 'i�r,� fn�O u9�694A63mN18UgQ69��G1WC3 _ vM ,:M,PIMP� 'rz • •"'•"' g n[mrz a wwou aZ &h! € PR�pMOG'IG1Rfl7®RADOGS MUM A r.I aaNx u.Axon�sox n-sons awn PM ...s 411 PURCHASE AGREEMENT RELATING TO A LOT IN NORTHSTAR BUSINESS PARK, SHERBURNE COUNTY,MINNESOTA 1. Parties. The parties to this Purchase Agreement ("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. 'Brien Holdings, LL-C-,.Minnesota limited liability company,Attention: Pat O'Brien, 9560 85th Avenue North, Maple Grove, MN 55369 (the "Buyer"), or its assigns. This Agreement sometimes refers to Seller and Buyer individually as a "Party" and collectively as the "Parties". References to a "Section" in this Agreement is a reference to one of the numbered Sections in this Agreement. • 2. Property. The real property(the "Property")that is the subject of this Agreement is located in the City of Elk River, Sherburne County, Minnesota, is depicted as Lot 2, Block 1, NORTHSTAR BUSINESS PARK on the Preliminary Plat of NORTHSTAR BUSINESS PARK, Sherburne County, Minnesota, attached to and incorporated into this Agreement as Exhibit "A", together with all hereditaments and appurtenances to and benefiting 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 recording the Plat of NORTHSTAR BUSINESS PARK on or before the Date of Closing, as defined in Section 11. 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 of Commissioners ("Board") must hold a public 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. No later than August 8, 2005, 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 1787610v6 4110 Buyer written notice of the appeal, and Buyer 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 seven(7) business days after the effective date of Seller's notice of an appeal to Buyer, as determined pursuant to Section 26, 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) in connection with such appeal and a District Court finds in favor of the party taking the appeal, this Agreement automatically terminates and Seller must immediately return the Earnest Money to Buyer. 5. Purchase Price. The purchase price for the Property is Two Hundred Seventy- six Thousand Nine Hundred Forty Dollars ($276,940.00) (the "Purchase Price"). The Parties acknowledge that the Purchase Price for the Property has been determined by multiplying the gross square footage of the Property(161,172 square feet), less the square footage of any portion of the Property subject to the existing,recorded easement in favor of Northern Natural Gas Company(22,702 square feet),by$2.00 per square foot. 6. Earnest Money. Seller's execution of this Agreement acknowledges Buyer's deposit of earnest money with Seller in the amount of$15,000.00 (the "Earnest Money"). 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 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 Seller must return the 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 and Buyer's full performance of their respective obligations under this Agreement, the Earnest Money must be applied towards payment of the Purchase Price pursuant to the provisions of Section 8(a)below. 7. Plans. On or before August 3, 2005, Buyer must deliver plans for the improvements Buyer intends to construct on the Property(the "Plans") to Seller for review as required by Minnesota Statutes Section 469.105, Subd. 7. The Plans 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 must provide for the construction of the improvements described therein in a manner that conforms to all applicable federal, state and local laws, statutes, ordinances and regulations. Seller must notify Buyer, within ten(10)business days of Buyer's submission of complete Plans to Seller, that Seller either approves or rejects the Plans. If Seller does not notify Buyer within the ten(10)business day period that it has approved or rejected the Plans, Seller is deemed to have approved the Plans. Seller must include in any written notice rejecting the Plans, in whole or in part, specifics as to Seller's basis for rejecting the Plans. If Seller notifies Buyer that Seller is rejecting the Plans, in whole or in part, Buyer imust submit new or revised Plans to the Seller within twenty(20) days after Buyer receives written notification from Seller of Seller's rejection of the Plans. Within five (5)business days 1787610v6 2 IP after Buyer's submission of new or revised Plans to Seller, Seller must notify Buyer that Seller either approves or rejects the new or revised Plans. If Seller does not notify Buyer within the five (5)business day period that it has approved or rejected the new or revised Plans, Seller is deemed to have approved the new or revised Plans. Seller's approval of Buyer's Plans pursuant to this Section 7 constitutes approval for purposes of this Agreement only. Seller's review and approval or disapproval of Plans 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; provided that, Seller agrees not to require any changes to the Plans that violate the City of Elk River's ordinances or other requirements of the City of Elk River for the issuance of a building permit for the improvements described in the Plans. The provisions of this Section 7 relating to submissions, approval, rejection and resubmission of Plans continue to apply until Seller has approved the Plans;provided that, if Seller has not approved the Plans on or before September 30, 2005, 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, and Buyer's satisfaction or waiver of all of Buyer's contingencies 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 on the Date of Closing. 9. Conveyance Terms. Upon Buyer's full performance of Buyer's obligations under this Agreement and Seller's satisfaction or waiver of all of Seller's contingencies under this Agreement, Seller must execute and deliver to Buyer, on the Date of Closing, 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 not otherwise payable by Seller under this Agreement; 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: 1787610v6 3 (i) Within one year from the Date of Closing, as defined in Section 11, Buyer must devote the Property to use as a manufacturing facility or begin work on the improvements to the Property to devote the Property to that use; 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 unreasonably withhold or delay; and f. A right of re-entry for breach of either of the covenants described at Subsections 9(e)(i) or 9(e)(ii) above. If Buyer violates either of the covenants set forth at Subsections 9(e)(i) or 9(e)(ii) above, Seller may, after thirty(30) days advance written notice to Buyer and failure by Buyer to cure such violation, 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 foregoing is Seller's sole and exclusive remedy in the event of a breach of the covenants described in Subsections 9(e)(i) or 9(e)(ii) above. 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 secures to finance the construction of the improvements described in the Plans Seller approves pursuant to Section 7, a transfer of title from Buyer to the mortgagee pursuant to a foreclosure of the mortgage is deemed to have the consent of Seller for purposes of Minnesota Statute 111 Section 469.105, Subd. 5 and the covenant described in Subsection 9(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. Subject to the last paragraph of this Section 11, the Parties must meet at the offices of Seller at 13065 Orono Parkway, Elk River, Minnesota at 9:30 a.m., on September 30, 2005 (the"Date of Closing"), or at such other place or other date as the Parties may establish by written agreement or pursuant to the provisions of Section 13 below, 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 Blank Form Affidavit (Form 117- M) evidencing, among other matters, 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; 1787610v6 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 the Title Company, as defined in Section 12,with the information necessary to complete a Minnesota Certificate of Real Estate Value; and (v) if not earlier provided to Buyer, provide Buyer with an executed Survey, as defined in Section 12; and (vi) 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, deferred or pending special assessments pursuant to the provisions of Section 14; the fee or commission Buyer owes to Buyer's Agent, as defined in Section 16(b), up to,but not in excess of, four percent of the Purchase Price; and one-half of the Title Company's fee to conduct and insure the closing of this transaction. b. Buyer must: (i) Authorize Seller to retain the Earnest Money and tender the balance of the Purchase Price to Seller pursuant to the provisions of Section 8(b) 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 charges for any endorsements to Buyer's title insurance policy that Buyer elects to purchase; the recording fee due upon the recording of 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; any fee or commission Buyer owes to Buyer's Agent in excess of four percent of the Purchase Price; and one-half of the Title Company's fee to conduct and insure the closing of this transaction. Notwithstanding anything contained in this Agreement to the contrary, including but not limited to the terms of Section 13, if (i) the actual Date of Closing has not occurred by September 30, 2005, and/or(ii) as of September 30, 2005, the City of Elk River has not completed its grading of the Property pursuant to the Preliminary Grading Plan for Northstar Business Park prepared by BDM Consulting Engineers, PLC, and dated July 19, 2005 (a copy of which is attached hereto as Exhibit B) so that on September 30, 2005, Buyer, its agents and contractors, will not have access to the Property to begin construction of the improvements according to the approved Plans, Buyer, in its sole discretion, may elect to extend the Date of Closing under this Agreement to August 31, 2006, or such earlier date as elected by Buyer, upon ten (10) days written notice by Buyer to the Seller, but in no event shall closing occur prior to the City of Elk River's 411 completion of the grading as described in Section 19(d) of this Agreement. 1787610v6 5 • 12. Evidence of Title. Within fourteen(14) days after the Effective Date, Seller must, at Seller's sole cost and expense, deliver to Buyer a title insurance commitment from Sherburne County Abstract&Title, as agent for Old Republic National Title Insurance Company (the "Title Company") 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 BDM Consulting Engineers, PLC and instruct BDM Consulting Engineers, PLC to prepare an ALTA/ACSM survey(the "Survey") of the Property certified to Seller, Buyer, and the Title Company. Buyer may instruct BDM Consulting Engineers, PLC to also certify the survey to Buyer's lender. Seller will pay the cost of the base ALTA/ACSM survey. The base cost will include the determination of the gross square footage of the Property and the square footage of the portion of the Property subject to the existing, recorded easement in favor of Northern Natural Gas Company. 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 costs associated with the additional survey work. Buyer understands that BDM Consulting Engineers, PLC will not be able to sign the Survey until the Plat of NORTHSTAR BUSINESS PARK is recorded, and Buyer agrees to use the unsigned Survey for purposes of Buyer's examination of title to the Property pursuant to Section 13, subject to Seller's obligation to provide a signed copy of the Survey to Buyer on the earlier of(a) three (3) days after the date of recording of the Plat of NORTHSTAR BUSINESS PARK, or(b)the Date of Closing. The Title Commitment and the Survey are referred to, collectively, in this Agreement as the "Evidence of Title." • 13. Examination of Title. Within the later of seven (7)business days after Buyer's receipt of the last item of the Evidence of Title or within ten(10) days after Buyer's actual 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 title to the Property and request that Seller make Seller's title marketable (an "Objection"). The Permitted Encumbrances described in Sections 9(a), 9(b), 9(c), 9(e) and 9(f)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(s) set forth above, is deemed to be a Permitted Encumbrance. Within five (5) business days after 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 thirty(30) days from the date of Seller's receipt of Buyer's Objection(s), and, if necessary, the Date of Closing must be rescheduled accordingly. If Seller makes Seller's title marketable within the thirty(30) day period, Seller must notify Buyer, in writing, and the Parties must close pursuant to the terms of the Agreement provided Buyer's other contingencies have been satisfied or waived. The new "Date of Closing" must be no later than five (5) days after 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 • thirty(30) days from the date of Seller's receipt of Buyer's Objection(s), Buyer may either: 1787610v6 6 • a. terminate this Agreement pursuant to the procedures set forth in Section 23 below; or b. notify Seller that Buyer waives Buyer's Objection(s). If Buyer waives Buyer's Objection(s), the matter giving rise to such Objection(s)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 five(5) days from the date of Buyer's notice to Seller that Buyer waives Buyer's Objection(s). If Buyer does not notify Seller of Buyer's election to terminate this Agreement pursuant to subsection(a) above or waive Buyer's Objection(s)pursuant to subsection (b) above within five (5)business days after the date 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 thirty(30) 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 Section 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, deferred or pending against the Property as of the Date of Closing, including special assessments certified for payment with the current year's real estate taxes. For purposes of this Section 14(b), Seller and Buyer agree that any special assessments the City of Elk River levies to finance the construction of improvements described in the feasibility study for Northstar Business Park, Elk River, Minnesota(Project No. 819610J) as approved by the Elk River City Council on June 6, 2005 are deemed to be "pending against the Property as of the Date of Closing" for purposes of this Section 14(b), and Seller is obligated to pay or provide for the payment of all such special assessments; and c. Buyer and Seller must pro-rate the real estate taxes, if any, which are due and payable with respect to the Property 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 calendar 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 1787610v6 7 • 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 the denominator of which is the square footage of the platted 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, the amount of the real estate taxes due and payable in the year immediately preceding the year of closing will be used. Any such pro-ration will be final and no subsequent adjustments,refunds or additional payments will 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 the 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 and there are no individual sewage treatment systems on or serving 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 nor were there any underground storage tanks located on the Property which were subsequently removed. d. Seller represents that, to the best of Seller's actual knowledge, there are no Hazardous Substances located in, on or about the Property; the Property is not subject to any liens or claims by governmental or regulatory agencies or third parties arising from the release or threatened release of Hazardous Substances in, on or about Property; and the 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 Substances" includes,but is not limited to, substances defined as "hazardous substances," "toxic substances" or"hazardous wastes" in the Comprehensive Environmental Response, Compensation and 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 Substances" also includes 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 1787610v6 8 • 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 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 C. B. Richard Ellis, Inc. ("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 and contractors have the right, upon reasonable verbal or written 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 reasonable attorneys 110 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,BUYER'S INSPECTION OF THE PROPERTY PURSUANT TO THIS SECTION 17 AND 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. 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, in Buyer's sole and absolute discretion; • 1787610v6 9 • 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 manufacturing facility; d. Seller's recording of the plat of NORTHSTAR BUSINESS PARK on or before the Date of Closing,with no changes to the Property or the other portions of NORTHSTAR BUSINESS PARK as shown on Exhibit A attached hereto; e. The City of Elk River and Sherburne County having adopted appropriate tax rebate or tax abatement financing resolutions approving the tax rebate or tax abatement financing and the City of Elk River and Buyer having executed a mutually acceptable form of tax rebate or tax abatement financing agreement; f. Seller having satisfied the notice and hearing requirements set forth in Minnesota Statute Section 469.105, Subd. 2; having adopted a resolution approving a sale pursuant to the terms of this Agreement; 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/or 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; g. The City of Elk River having let contracts for construction of streets, the 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 manufacturing facility and which contracts (except for the contract relating to the construction of streets) provide that all of such improvements will be completed no later than December 31, 2005; h. Seller having approved the Plans pursuant to Section 7 on or before the Date of Closing; i. The City of Elk River having issued a building permit for the construction of Buyer's improvements on the Property;provided,however, Buyer may not exercise this contingency if Buyer does not submit to the City of Elk River on or before September 16, 2005, all initial information and materials the City of Elk River requests and requires for the issuance of a building permit prior to such date. Such submission deadline shall not apply to the City of Elk River's subsequent requests for supplemental information after such date; j. The City of Elk River having completed its grading of the Property pursuant to the Preliminary Grading Plan for Northstar Business Park prepared by BDM Consulting Engineers,PLC, and dated July 19, 2005 (a copy of which is attached as 1787610v6 10 • Exhibit B) on or before the Date of Closing so that as of the Date of Closing Buyer, its agents and contractors,will have access to the Property to begin construction of the improvements according to the approved Plans; k. Buyer and the fee owner of Lot 1, Block 1,NORTHSTAR BUSINESS PARK, and Buyer and the fee owner of Lot 3,Block 1,NORTHSTAR BUSINESS PARK, each having entered into a mutually agreeable easement and maintenance agreement for joint access on the north boundary line of the Property and the south boundary line of the Property, respectively. The proposed location of such easement areas are depicted on Exhibit C to this Agreement. Buyer and Seller, as applicable, agree to use commercially reasonable efforts and to act in good faith with such fee owners with respect to the negotiation and execution of the foregoing easement agreements. Buyer must use commercially reasonable efforts to satisfy the contingencies described in Sections 18(a), 18(b) and 18(c) on or before September 26,2005. If Buyer does not satisfy one or more of the contingencies described in Sections 18(a), 18(b) or 18(c) on or before September 26, 2005, or if one or more of the contingencies described in Sections 18(d), 18(e), 18(f), 18(g), 18(h), 18(i), 18(j) or 18(k) are not satisfied on or before September 30, 2005, 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 September 26, 2005, 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 September 30, 2005, that Buyer is exercising one or more of the contingencies described in Sections 18(d), 18(e), 18(f), 18(g), 18(h), 18 (i), 18(j) or 18(k), Buyer's right to exercise the contingencies described in this Section 18 terminate, 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 Section 469.105, Subd. 3; c. Buyer having submitted and Seller having approved Plans pursuant to Section 7; and d. The City of Elk River having completed its grading of the Property pursuant to the Preliminary Grading Plan for Northstar Business Park prepared by BDM Consulting Engineers, PLC, dated July 19, 2005 (a copy of which is attached as Exhibit • B), on or before the Date of Closing. 1787610v6 11 • If one or more of the contingencies described in Section 19(a), 19(b) and 19(c) are not satisfied by the earlier of the applicable date or the Date of Closing, Seller may terminate this Agreement pursuant to the procedures set forth in Section 23. 20. Condemnation. If a public or private entity with the power of eminent domain commences condemnation proceedings against all or 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 the effective date of Seller's notice to Buyer, as determined pursuant to Section 26,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 in or otherwise act with respect to any such condemnation proceedings without Buyer's prior written consent unless Buyer fails to respond within seven(7)business 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. Notwithstanding anything contained herein to the contrary, Buyer may assign its rights and obligations under this Agreement, without Seller's written consent, to a separate legal entity to be formed by one or • more of Buyer's members; provided that, as of the time of the assignment and as of the Date of Closing such member(s) of Buyer hold a majority of the economic rights in such entity and hold sufficient governance rights to control the operations of the entity. 22. Default. If either Party defaults in the performance of such 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 in Sherburne County District Court against Buyer to recover the damages Seller suffers or incurs as a result of the misrepresentations under Section 16 and/or the default under Section 17, 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: • 1787610v6 12 (i) terminate this Agreement pursuant to Section 23 below, in which case Seller must return the Earnest Money to Buyer; or (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; and (iii) if any one or more of the Seller's representations set forth in Section 15 are inaccurate when made, Buyer may commence an action in Sherburne County District Court against Seller to recover the damages Buyer suffers or incurs as a result of the misrepresentations under Section 15, 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. 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. 1787610v6 13 • e. If the Non-Terminating Party does not dispute the Terminating Party's right to terminate this Agreement within such five (5)business day period, 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 either of the Parties disputes 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 the deed to Buyer and the closing of this transaction. 26. Notices. All notices provided for in this Agreement must be in writing unless verbal notice is expressly authorized in this Agreement. Written notice will be effective as of the date 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 a Party delivers a notice provided for in this Agreement in a different manner than described in the preceding sentence,notice will be • effective as of the date the other Party actually receives the notice. The Party sending the written 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: Henson&Efron, P.A. 220 South Sixth Street, Suite 1800 Minneapolis, MN 55402 Attn: Mr. Alan C. Eidsness 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. This Agreement may be executed in one or more counterparts, each of which shall constitute an original and when taken together constitute one and the same agreement. The Parties may initially sign and deliver facsimile signature pages to this Agreement provided original signature pages are subsequently delivered to each of the Parties. 1787610v6 14 28. Governing Law. This Agreement has been made under the laws of the State of Minnesota and such laws will control its interpretation 29. Effective Date. This Agreement is effective as of the day of August, 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. • • 1787610v6 15 • Dated: August , 2005 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 • Dated: August , 2005 BUYER: O'BRIEN HOLDINGS, LLC, a Minnesota limited liability company By Its • 1787610v6 16 • EXHIBIT A PRELIMINARY PLAT �a qP Ii, i f -\ � / 1 ,' ! 4<" q ',1/ f- . i 1� l 1 4:1 1 , 11 it f '.0 � 1 �/ ;7, i /v / 54\ d 1 /'' j Rp Y //i Y1-7..,,..-- ..1 tl5 Y / Yt , .� 17- ' / .. .t % 1 8 1- - ) 1- I Cl u y / . .. a. , III 0 . , , .... .... 1 , k iei. y ti Ai \ ``� p // 6s / ale IP/Fi 1 / 4]).1(,/. 6I , ell 1 rI A 4 a� /.." as r� /i f`e�`i�' i9 I - ip 7 a // it, NI �T----rte - M — — ��a II I i��, ii„ by --J— _ j I Y i 1 I li: � jYji L�1 ;i 1 16 1 5FQf -aaa INN ���� LEI fi"� � o I � IR 5 11 a'" rz ' Jig IP g c .11III. 1787610v6 • EXHIBIT B GRADING PLAN „if. pl... . . b ,..1.'-'' ' 1{ Ti ,� r i r 'I'l i ) i .. f i i '' ''AIII��11,y/ ," ,./ ' '0‘k''', ',4; 1 i� i l i _ . .,..: fes . i. ! s _____:,,, 2 ,,-- / /� III ` ✓ �� m ..,,,:.,:". 1„ Ai . ., ''' '-' A _ Z. '' /fir- `"'%�� ��,,,../ )IIII;iejr400Mi: il -. Jill/ /:-.:/ (// : ..;7 16111101A"), „/ is --. �g �pp kill yxs 6457 R�M�G3 d P .1.,137,11111:3, i ruRoir wt '�0'iwrw�'"Rr asx] rt ry x.csnoR g??3 � L QR©IIMIIGUSit AUK a�a Maa n a wno &r;' ;11111 11 9Y]1 PGS(iIGGJG�1f 3S7®G3LelDD GG I®P�AfJ � GS� JOSS N.ANDERSON r-1� 0]-19-1005 ]5pls o.x uc ro 1787610v6 BA • S EXHIBIT C PROPOSED LOCATIONS OF EASEMENT AREAS FOR JOINT ACCESS ID EASEMENTS ON NORTH AND SOUTH BOUNDARY LINES OF PROPERTY 1787610v6 2 • o ..° , - fib, , ° KK -----TRUCK STAGING' "" }. _ r I. ; ,,,,° W w mss' I; .1 r 75 T GAS LINE EASEMENT I, 1I ... P 0 e • .;',.-t G'..) ----- -.....,-; , ; k .k1' ,l''" - :' ,,,' E. 4.11MO -, ,. E I op 4%1 I; rn. II # i s. NY M i ,.,,'ll,.;''',,'„..'„Cr)-- 1 l' „, p ` j. k Z w t " 1.1 } as �. ..xrR.. ' . ... acr x A 4s r�. ARK " .10 f. .� NORTI I EL.ESR SIRSESS,MINNESOTA Itiver L m .__W", ,, ., ,, :f 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. om E. Bauer and I. Rikki Bauer husband and wife, as joint tenants, 26608 Pierce Circle, Murrieta, CA 92562 (collectively, 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 2, Block 2, on the Preliminary Plat of NORTHSTAR BUSINESS PARK, Sherburne County, Minnesota, a copy of which is attached as Exhibit A(the "Property"). The property is vacant land and has an area of approximately 2.64 acres. 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 1787623v4 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 TWO HUNDRED TWENTY NINE THOUSAND NINE HUNDRED NINETY SIX AND 80/100 Dollars ($229,996.80) (the "Purchase Price 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 the 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. On or before August 8, 2005 Buyer must deliver plans for the improvements Buyer intends to construct on the Property("the Plans") to Seller for review as required by Minnesota Statutes, Section 469.105, Subd. 7. The Plans 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 must be as detailed as the Plans that the City of Elk River requires in connection with the issuance of a building permit. The Plans must provide for the construction of the improvements described therein in a manner that conforms to all applicable federal, state and local laws, statutes, ordinances and regulations. Seller must notify Buyer, within ten(10)business days of Buyer's submission of complete Plans to Seller, that Seller either approves or rejects the Plans. If Seller does not notify Buyer within the ten(10)business day period that it has approved or rejected the Plans, Seller is deemed to have approved the Plans. Seller must include in any written notice rejecting the Plans, in whole or in part, specifics as to Seller's basis for rejecting the Plans. If Seller notifies Buyer that Seller is rejecting the Plans, in whole or in part, Buyer must submit new or revised Plans to the Seller within twenty(20) days after Buyer receives written notification from Seller of Seller's rejection of the Plans. Within five (5)business days after Buyer's submission of new or revised Plans to Seller, Seller must • notify Buyer that Seller either approves or rejects the new or revised Plans. If Seller does not notify Buyer within the five (5)business day period that is has approved or rejected the new or 1787623v4 2 • revised Plans, Seller is deemed to have approved them. Seller's approval of Buyer's Plans pursuant to this Section 7 constitutes approval for purposes of this Agreement only. Seller's review and approval or disapproval of Plans 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 continue to apply until Seller has approved the Plans. If Seller has not approved Plans 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; 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 devote the Property to its intended use as a manufacturing facility or begin work on the improvements described in Plans Seller has approved pursuant to Section 7; 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 • unreasonably withhold or delay; and 1787623v4 3 • f. A right of re-entry for breach of either of the covenants described in Subsections 9(e)(i) or 9(e)(ii). If Buyer violates either of the covenants set forth in Subsection 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 foregoing is Seller's sole and exclusive remedy in the event of a breach of the covenants described in Subsections 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 secures to finance the construction of the improvements described in the Plans 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 September 30, 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 Blank 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; (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; (v) provide Buyer with an executed Survey, as defined in Section 12; and 1787623v4 4 (vi) 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 charges for any endorsements to Buyer's title insurance policy that Buyer elects to purchase; the recording fee due upon the recording of 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 fourteen(14) days of the date of this Agreement, Seller must, at Seller's sole cost and expense, deliver to Buyer a commitment from Sherburne County Abstract& Title, as agent for Old Republic National Title Insurance Company("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 BDM Consulting Engineers, PLC and instruct BDM Consulting Engineers, PLC to prepare ALTA/ACSM survey (the "Survey") of the Property(the"Survey") and to deliver the Survey to Buyer. Seller will instruct BDM Consulting Engineers, PLC to certify the Survey to Seller, Buyer, Title and, if requested by Buyer, Buyer's lender. Buyer understands that BDM Consulting Engineers,PLC will not be able to sign the Survey until the Plat of NORTHSTAR BUSINESS PARK is recorded, and Buyer agrees to use the unsigned Survey for purposes of Buyer's examination of title to the Property pursuant to Section 13, subject to Seller's obligation to provide a signed copy of the Survey to Buyer at closing pursuant to Section 11(a)(v). Seller will pay the cost of the 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 thirty(30)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 9(a), 9(b), 9(e) and 9(f) 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 1787623v4 5 • forth above, is a Permitted Encumbrance. 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 of Closing, including special assessments certified for payment with the current year's • real estate taxes; and 1787623v4 6 • c. Buyer and Seller must pro rate the real estate taxes, if any, which are payable with respect to the Property in the year of closing on a per-diem basis using a 411 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 final 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 and there are no individual sewage treatment systems 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 the 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 Substances" also includes asbestos,polychlorinated biphenyls,petroleum, including crude oil or any 1787623v4payable • 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 not engaged a real estate agent in connection with 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: 1787623v4 8 • 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 111° 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 manufacturing facility; d. before the Date SellerofClosing;'s recording of the plat of NORTHSTAR BUSINESS PARK on or e. The City of Elk River and Sherburne County having adopted appropriate tax abatement financing resolutions approving the tax abatement financing and the 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; 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 manufacturing facility; and h. The City of Elk River having completed its grading of the Property pursuant to the Preliminary Grading Plan for Northstar Business Park prepared by BDM Consulting Engineers, PLC and dated July 19, 2005, a copy of which is attached as Exhibit B, on or before the Date of Closing. 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), 18(g) or 18(h), 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), 1787623v4 9 • 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 0 • Sections 18(d), 18(e), 18(f), 18(g) or 18(h). Buyer's right to exercise the contingencies described in this 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 on or before August 8, 2005; b. No taxpayer filing an appeal within the twenty(20) day time period described in Minnesota Statutes, Section 469.105, Subd. 3; c. Buyer having submitted and Seller having approved Plans pursuant to Section 7 on or before the Date of Closing; and d. The City of Elk River having completed its grading of the Property pursuant to the Grading Plan for Northstar Business Park prepared by BDM Consulting Engineers, PLC dated July 19, 2005, a copy of which is attached as Exhibit B, 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 the effective date 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. Buyer has indicated that Buyer may want to assign Buyer's rights and obligations under this Agreement to the trustees of Buyer's family trust, and Seller agrees that Seller will consent to any such assignment. 1787623v4 10 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 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: (1) 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. 1787623v4 11 • 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 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 Oil° 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: 1787623v4 12 Attorney for Buyer: Dirck J. Edge 40880 Via Los Altos Temecula, CA 92591 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. 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. . 1787623v4 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 • S 1787623v4 14 1()Dated: 8 t BITYER: TOM E. BAUER AND I. RIKKI BAUER ' )C4/ACIIM Tom E. Bauer T I. Rikki Bauer • • 1787623v4 15 EXHIBIT A IR:LIM:NARY PLAT i Pi .": ,-- , 7" / Y" — lel / ` // !, // �/ I YC 3�9 ',III \ '(/ / f / \F I1Y 10,0"I � /�\ / / d I f., /{ F! I / / '5\'\ - I I / �._ �f / tom. —w ! 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NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Elk River as follows: Section 1. The Board of Commissioners hereby determines that the sale is advisable and approves the Purchase Agreement in substantially the form submitted, and the President,Vice President and Executive Director are hereby authorized and directed to execute the Purchase Agreement on behalf of the Authority; and Section 2. The decision to sell the property is placed on the records of the Authority as of the date hereof. The motion for adoption of the foregoing resolution was duly seconded by member and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: and the following voted against same: 1793243v1 . STATE OF MINNESOTA COUNTY OF SHERBURNE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER I, the undersigned,being the duly qualified and acting Executive Director of the Economic Development Authority of the City of Elk River, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners of the Economic Development Authority of the City of Elk River held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing the Execution of a Purchase Agreement. WITNESS my hand as such Executive Director of the Economic Development Authority of the City of Elk River this day of August, 2005. Executive Director • 1793243v1 • EXTRACT OF MINUTES OF MEETING OF THE BOARD OF COMMISSIONERS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF ELK RIVER HELD: August 8, 2004 Pursuant to due call and notice thereof, a regular meeting of the Board of Commissioners of the Economic Development Authority of the City of Elk River, Hennepin County,Minnesota, was duly called and held at the City Hall in said City on Monday, the 8th day of August, 2005, at o'clock p.m. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT WHEREAS, the Economic Development Authority of the City of Elk River,Minnesota (the "Authority")has caused to be re ared a Purchase Agreement (the "Purchase Agreement") between the Authority and 'Brien Holdings, LLC>i Minnesota limited liability company(the "Developer") in connection with the sale of certain real property by the Authority to the Developer(the "Project") under Minnesota Statutes, Section 469.105. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Elk River as follows: Section 1. The Board of Commissioners hereby determines that the sale is advisable and approves the Purchase Agreement in substantially the form submitted, and the President, Vice President and Executive Director are hereby authorized and directed to execute the Purchase Agreement on behalf of the Authority; and Section 2. The decision to sell the property is placed on the records of the Authority as of the date hereof. The motion for adoption of the foregoing resolution was duly seconded by member and, discussion thereof, and upon a vote being taken thereof, the following voted in favor thereofafter :full • and the following voted against same: 1793241x1 STATE OF MINNESOTA COUNTY OF SHERBURNE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER I, the undersigned,being the duly qualified and acting Executive Director of the Economic Development Authority of the City of Elk River,Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners of the Economic Development Authority of the City of Elk River held on the date therein indicated, which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing the Execution of a Purchase Agreement. WITNESS my hand as such Executive Director of the Economic Development Authority of the City of Elk River this day of August, 2005. • Executive Director, • 1793241x1 • EXTRACT OF MINUTES OF MEETING OF THE BOARD OF COMMISSIONERS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF ELK RIVER HELD: August 8, 2004 Pursuant to due call and notice thereof, a regular meeting of the Board of Commissioners of the Economic Development Authority of the City of Elk River, Hennepin County, Minnesota, was duly called and held at the City Hall in said City on Monday, the 8th day of August, 2005, at o'clock p.m. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT WHEREAS, the Economic Development Authority of the City of Elk River, Minnesota (the "Authority")has caused to be re ared Purchase A eement(the "Purchase Agreement") between the Authority and edical Extrusion Technolo Inc. a California corporation(the "Developer"), or a related entity to the Developer, in connection with the sale of certain real property by the Authority to the Developer(the "Project") under Minnesota Statutes, Section 469.105. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Elk River as follows: Section 1. The Board of Commissioners hereby determines that the sale is advisable and approves the Purchase Agreement in substantially the form submitted, and the President,Vice President and Executive Director are hereby authorized and directed to execute the Purchase Agreement on behalf of the Authority; and Section 2. The decision to sell the property is placed on the records of the Authority as of the date hereof. The motion for adoption of the foregoing resolution was duly seconded by member and, after full discussion thereof, and upon a vote being taken thereof, the following voted in favor thereof: • and the following voted against same: 1792351v1 • STATE OF MINNESOTA COUNTY OF SHERBURNE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER I, the undersigned,being the duly qualified and acting Executive Director of the Economic Development Authority of the City of Elk River, Minnesota, DO HEREBY CERTIFY that I have carefully compared the attached and foregoing extract of minutes with the original minutes of a meeting of the Board of Commissioners of the Economic Development Authority of the City of Elk River held on the date therein indicated,which are on file and of record in my office, and the same is a full, true and complete transcript therefrom insofar as the same relates to a Resolution Authorizing the Execution of a Purchase Agreement. WITNESS my hand as such Executive Director of the Economic Development Authority of the City of Elk River this day of August, 2005. • Executive Director • 1792351v1