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4.6. SR 08-21-2017 Request for Action To Item Number Mayor and City Council 4.6 Agenda Section Meeting Date Prepared by ConsentAugust 21, 2017Colleen Eddy, Economic Development Specialist Item Description Reviewed by Purchase Agreement for 706 Quinn Avenue Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, the purchase agreement for 706 Quinn Avenue NW. Background/Discussion At the August 7, 2017, meeting, Council approved a Purchase Agreement for 706 Quinn Avenue NW. After approval, the seller, Quinn Avenue LLC, requested a couple revisions to the document, including but not limited to, items under, Condemnation, Legal Compliance, and Leases. The revisions have little impact to the city and address the tenant’s lease termination. The Purchase Agreement is in conjunction with the Truck Stop project and the creation of the redevelopment TIF district. Financial Impact Earnest money of $1,000 for 706 Quinn, to be deposited with Sherburne County Abstract and Title. Attachments  Redline Copy of Agreement  Final Agreement The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the “Agreement”) is made as of this ____ day of August ___, 2017, by and between Quinn Avenue, LLC, a limited liability company in the state of Minnesota (the “Seller”) and the City of Elk River, a public body corporate and politic under the laws of the State of Minnesota (the “Buyer”). RECITALS The Seller is the owner of property located at 706 Quinn Avenue NW, Elk River, Minnesota, which is legally described on the attached Exhibit A (the “Property”). AGREEMENT Offer/Acceptance for Sale of Property. 1.The Seller agrees to sell to Buyer the Property and Buyer agrees to purchase the same, according to the terms of this Agreement. Purchase Price for Property and Terms. 2. PURCHASE PRICE: A.The total purchase price for the Property is Two Hundred and Eighty Two Thousand, Five Hundred and 00/100ths Dollars ($282,500) (the “Purchase Price”). TERMS: B. (1): EARNEST MONEY. The sum of One Thousand Dollars ($1,000) (the “Earnest Money”) shall be paid by the Buyer to the Seller, receipt of which is hereby acknowledged by the Seller. (2):BALANCE DUE SELLER. The Buyer agrees to pay by check or electronic transfer of funds on the date of closing on the Property (the “Closing Date”) any remaining balance of the Purchase Price due to Seller according to the terms of this Agreement. (3): DEED/MARKETABLE TITLE. Subject to performance by the Buyer, the Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Property to the Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. c. Public utility and drainage easements of record which will not interfere with the Buyer’s intended use of the Property. 1 505045v34 SJS EL185-13 (4): DOCUMENTS TO BE DELIVERED AT CLOSING BY THE SELLER. In addition to the Warranty Deed required at paragraph 2B(3) above, the Seller shall deliver to the Buyer: a. Standard form Affidavit of Seller. b. A “bring-down” certificate, certifying that all of the warranties made by Seller in this Agreement remain true as of the Closing Date. c. Certificate that the Seller is not a foreign national. d. If an environmental investigation by or on behalf of the Buyer discloses the existence of petroleum product or other pollutant, contaminant or other hazardous substance on the Property, either (i) a closure letter from the Minnesota Pollution Control Agency (MPCA) or other appropriate regulatory authority that remediation has been completed to the satisfaction of the MPCA or other authority; or (ii) Agreement for remediation/indemnification and security as the Buyer may require. e. Well disclosure certification, if required, or, if there is no well on the Property, the Warranty Deed given pursuant to paragraph 2B(3) above must include the following statement: “The Seller certifies that the Seller does not know of any wells on the described real property.” f. Methamphetamine Disclosure Certificate. g. Any other documents reasonably required by the Buyer’s title insurance company or attorney to evidence that title to the Property is marketable and that the Seller has complied with the terms of this Agreement. Contingencies. 3.TheBuyer’s obligation to buy is contingent upon the following: a.The Buyer’s determination of marketable title pursuant to paragraph 4 of this Agreement; b.The Buyer’s determination, in its sole discretion, that the results of any environmental investigation of the Property conducted pursuant to this Agreement are satisfactory to the Buyer; and c.Approval of this Agreement by the City Council; and d.Termination by Seller of the lease affecting the Property. 2 505045v34 SJS EL185-13 The Buyer shall have until the Closing Date to remove the foregoing contingencies. The contingencies at a., b., and bd. are solely for the benefit of the Buyer and may be waived by the Buyer. The contingency at c. may not be waived by either party. If the Buyer or its attorney gives written notice to the Seller that the contingencies at a., b., c., and cd. are duly satisfied or waived, the Buyer and the Seller shall proceed to close the transaction as contemplated herein. If one or more of the Buyer’s or the Seller’s contingencies is not satisfied, or is not satisfied on time, and is not waived, this Agreement shall thereupon be void at the written option of the Buyer and the Seller shall return the Earnest Money to the Buyer, and the Buyer and the Seller shall execute and deliver to each other a termination of this Agreement. As a contingent Agreement, the termination of this Agreement is not required pursuant to Minnesota Statutes, Section 559.21, et. seq. Title Examination/Curing Title Defects. 4.As soon as reasonably possible after execution of this Agreement by both parties, (a)The Seller shall surrender any abstract of title and a copy of any owner’s title insurance policy for the property, if in the Seller’s possession or control, to the Buyer or to the Buyer’s designated title service provider; and (b)The Buyer shall obtain the title evidence determined necessary or desirable by the Buyer. The Buyer shall have 20 days from the date it receives such title evidence and a fully executed Purchase Agreement to raise any objections to title it may have. Objections not made within such time will be deemed waived. The Seller shall have 90 days from the date of such objection to affect a cure; provided, however, that the Seller shall have no obligation to cure any objections, and may inform the Buyer of such. The Buyer may then elect to close notwithstanding the uncured objections or declare this Agreement null and void, and the parties will thereby be released from any further obligation hereunder. Environmental Investigation. 5.The Seller warrants that the Property has not been used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product during the period of time the Seller has owned the Property. The Seller further warrants that the Seller has no knowledge or information of any fact which would indicate the Property was used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product prior to the date the Seller purchased the Property. Notwithstanding the above, the Seller’s warranty regarding petroleum products does not preclude the presence of heating oil or other similar products used as a heating fuel for the dwelling but the Seller does warrant that if there was a fuel tank on the Property used for the storage of heating oil or other similar product, the Seller has no knowledge of any leak in the tank or contamination caused thereby. The Seller hereby grants to the Buyer and the Buyer’s agents a license to enter and evaluate the Property for the purpose of conducting an environmental assessment. Further, the Buyer or the Buyer’s agent shall have the right pursuant to the license to bring persons and equipment onto the 3 505045v34 SJS EL185-13 Property, make inspections and perform tests and analyses as the Buyer may deem reasonable to determine the presence of any toxic or hazardous waste, substance, or petroleum product or asbestos product, and ascertain soil conditions on the Property. The Buyer shall bear the cost of the environmental assessment. If the results of the environmental assessment are not to the satisfaction of the Buyer, the Buyer at its sole discretion may cancel this Agreement. If the Buyer cancels this Agreement pursuant to this provision, the Buyer shall restore the Property to its original condition or nearly so as is reasonably practicable. Real Estate Taxes and Special Assessments. 6.Real estate taxes payable in the year of closing will be pro-rated between the Buyer and the Seller to the Closing Date. The Seller shall pay all real estate taxes payable in previous years, the entire unpaid balance of special assessments, and all installments of special assessments levied and pending, including special assessments installments payable after the year of closing. The Seller also agrees to pay all assessments related to service charges furnished to the Property prior to the Closing Date (e.g., delinquent water or sewer bills, removed or diseased trees), including those charges levied, pending, or certified to taxes payable in the year of closing. If closing occurs prior to the date the amount of real estate taxes due in the year of closing are available from Sherburne County, the current year’s taxes will be pro-rated based on the amount due in the prior year. Closing Date. 7.The Closing Date will be on or before ________ __,September 1, 2017. Delivery of all papers and the closing shall be made at the offices of Buyer, 13065 Orono Parkway, Elk River, MN 55330, or at such other location as is mutually agreed upon by the parties. All deliveries and notices to the Buyer shall be made to the above address and marked to the attention of Amanda Othoudt. Possession/Utilities/Removal of Property/Escrow. 8. Possession. (a) The Seller agrees to deliver possession not later than the Closing Date. Utilities. (b) City water and sewer charges, electricity and natural gas charges, fuel oil and liquid petroleum gas shall be pro-rated between the parties as of the Closing Date. The Seller shall arrange for final readings as of the Closing Date. Fixtures and Materials. (c) The Seller shall have the opportunity to salvage any fixtures or materials from the building on the Property provided that the building is left secure and provided that the removal does not create any hazardous conditions. The Seller assumes all risk in undertaking any salvage operations. The Seller shall pay for all costs of salvage operations in full prior to closing and shall not permit the attachment of any lien or encumbrance on the Property as a result of this or other work thereon. Personal Property and Debris. (d) The Seller must remove all debris and personal property not included in this sale, including, all window treatments, appliances, and furniture from Inspection. the Property prior to closing The Buyer may inspect the Property immediately prior to closing in order to ensure that removal of all debris and personal property has been completed. Seller Warranties. 9. The Seller hereby represents and warrants to the Buyer as 4 505045v34 SJS EL185-13 of the Closing Date that: Title. (a) The Seller has good, indefeasible and marketable fee simple title to the Property. Condemnation. (b) There is no pending or, to the actual knowledge of the Seller, threatened condemnation or similar proceeding affecting the Property or any portion thereof, and the Seller has no actual knowledge that any such action is contemplated. Legal Compliance. (c) The Seller has complied with all applicable laws, ordinances, regulations, statutes, rules and restrictions pertaining to and affecting the Property and the Seller shall continue to comply with such laws, ordinances, regulations, statutes, rules Legal Capacity. and restrictions.(d) The Seller has the legal capacity to enter into this Agreement. The Seller has not filed, voluntarily or involuntarily, for bankruptcy relief within the last year under the United States Bankruptcy Code, nor has any petition for bankruptcy or receivership been filed against the Seller within the last year. Sewer and Water. (ec) TheTo the best of the Seller warrants that’s knowledge, the Property is connected to City sewer and City water. Mechanics’ Liens. (fd) TheSeller warrants that, prior to the closing, the Seller shall pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure upon or improvement to the Property which the Seller ordered or undertook. Legal Proceedings. (ge) There are no pending legal actions, suits or other legal or administrative proceedings, pending or threatened, that affect the Property or any portion thereof; and the Seller has no knowledge that any such action is presently contemplated. Leases. (hf) The Seller represents that the Property is currently being leased to _____________. The Seller has providedwill provide the tenant with the required notice of its intent to terminate the lease. The Seller represents that the lease will be terminated prior to the Closing Date and will terminate the lease upon receiving written notice from the Buyer that the contingences set forth in Section 3, paragraphs a., b., and c. have been either satisfied or waived by the Buyer. With the exception of this lease, the Seller represents that there are no other third parties in possession of the Property, or any part thereof; and that there are no other leases, oral or written affecting the Property or any part thereof. Broker Commission. (ig)The Buyer represents to the Seller that it has not utilized the services of any real estate broker or agent in connection with this Agreement or the transaction contemplated by this Agreement. TheSellerrepresents to the Buyer that the Seller has not utilized the services of any real estate broker or agent in connection with this Agreement or the transaction contemplated by this Agreement. Each party agrees to indemnify, defend, and hold harmless the other party against and in respect of any such obligation and liability based in any way upon agreements, arrangements, or understandings made or claimed to have been made by the party with any third person. 5 505045v34 SJS EL185-13 Structures. (jh) TheTo the best of the Seller’s knowledge, the Seller warrants that the buildings, if any, are entirely within the boundary lines of the Property. The parties acknowledge that the Property is being sold in “as is” condition relating to the structural, operational, and mechanical systemsin all aspects. Foreign Status. (ki) The Seller is not “foreign person” as such term is defined in the Internal Revenue Code. Methamphetamine Production (lj) . To the best of the Seller’s knowledge, methamphetamine production has not occurred on the Property. Refuse and Hazardous Materials (mk) . The Seller has not performed and has no actual knowledge of any excavation, dumping or burial of any refuse materials or debris of any nature whatsoever on the Property. To the Seller’s best actual knowledge and belief, there are no “Hazardous Materials” (as hereinafter defined) on the Property that would subject the Buyer to any liability under either federal or state laws, including, but not limited to, the disposal of any foreign objects or materials upon or in the Property, lawful or otherwise. Without limiting the generality of the foregoing, the Seller represents and warrants to the Buyer that, to the Seller’s best actual knowledge and belief: 1. The Property is not now and has never been used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, process or in any manner deal with Hazardous Materials; 2. No Hazardous Materials have ever been installed, placed, or in any manner handled or dealt with on the Property; 3. There are no underground or aboveground storage tanks on the Property; 4. Neither the Seller nor any prior owner of the Property or any tenant, subtenant, occupant, prior tenant, prior subtenant, prior occupant or person (collectively, “Occupant”) has received any notice or advice from any governmental agency or any other Occupant with regard to Hazardous Materials on, from or affecting the Property. “Hazardous Materials” The term as used herein includes, without limitation, gasoline, petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos or any material containing asbestos, or any other substance or material as may be defined as a hazardous or toxic substance by any federal, state or local environmental law, ordinance, rule, or regulation including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act, as amended (42 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S. C. Section 1251, et seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.) and in the regulations adopted and publications promulgated pursuant thereto. 6 505045v34 SJS EL185-13 “AS IS, WHERE IS.” 10. The Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property “AS IS” with no right of set off or reduction in the Purchase Price. Such sale shall be without representation of warranties, express or implied, either oral or written, made by the Seller or any officer, employee, or agent of the Seller with respect to the physical condition of the Property, with respect to the compliance of the Property or its operation with any laws, ordinances, or regulations of any government or other body, except as stated above. The Buyer acknowledges and agrees that the Seller has not made and does not make any representations, warranties, or covenants of any kind or character whatsoever, whether expressed or implied, with respectincluding, but not limited to, to warranty of income potential, operating expenses, uses, habitability, tenant ability, or suitability for any purpose, merchantability, or fitness of the Property for a particular purpose, all of which warranties the Seller hereby expressly disclaims, except as stated above. Closing Costs/Recording Fees/Deed Tax. 11.The Buyer will pay: (a) title insurance premium costs; (b) the recording fee for the deed transferring title to the Buyer; and (c) any survey or environmental investigation costs incurred by it. The Buyer will also pay all other fees normally paid by sellers, including (a) any transfer taxes, recording fees and Well Disclosure fees required to enable the Buyer to record its deed from the Seller under this Agreement; (b) fees and charges related to the filing of any instrument required to make title marketable; and (c) title evidence and updating costs. The Buyer will also pay all closing fees charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Agreement. Each party shall pay its own attorney fees. Inspections. 12.From the date of this Agreement to the Closing Date, the Buyer, its employees and agents, shall be entitled to enter upon the Property to conduct such surveying, inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and testing of groundwater monitoring wells, as the Buyer shall elect; provided, that the Seller is given at least 24 hours’ notice before entering the Property. Relocation Benefits; Indemnification. 13.The Seller acknowledges that the Seller and its tenant are being displaced from the Property as a result of the transaction contemplated by this Purchase Agreement and that the Seller and its tenant are eligible for relocation assistance and benefits and that the Purchase Price includes compensation for any and all relocation assistance and benefits for which the Seller and its tenant may be eligible and the Seller agrees to waive any and all further relocation assistance benefits. The Seller agrees to provide a waiver of relocation benefits signed by its tenant prior to the Closing Date. The provisions of this paragraph shall survive closing of the transaction contemplated by this Purchase Agreement. Risk of Loss. 14.If there is any loss or damage to the Property between the date hereof and the Closing Date, for any reason including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on the Seller. If the Property is destroyed or substantially damaged before the Closing Date, this Agreement may become null and void, at the Buyer’s option. At the request of the Buyer, the Seller agrees to sign a cancellation of Agreement. Default/Remedies. 15. If the Buyer defaults in any of the covenants herein, the Seller may terminate this Agreement, and on such termination all payments made hereunder shall be 7 505045v34 SJS EL185-13 retained by the Seller as liquidated damages, time being of the essence. This provision shall not deprive either party of the right to enforce specific performance of this Agreement, provided this Agreement has not terminated and action to enforce specific performance is commenced within six months after such right of action arises. In the event the Buyer defaults in its performance of the terms of this Agreement and Notice of Cancellation is served upon Buyer pursuant to Minn. Stat. Section 559.21, the termination period shall be thirty (30) days as permitted by Minn. Stat., Section 559.21, Subd. 4. Notice. 16.Any notice, demand, request or other communication which may or shall be given or served by the parties, shall be deemed to have been given or served on the date the same is personally served upon one of the following indicated recipients for notices or is deposited in the United States Mail, registered or certified, return receipt requested, postage prepaid and addressed as follows: SELLER: Quinn Avenue, LLC Attn: Nathan Snyder th 4679 137 Street W13461 Georgia Circle Apple Valley, MN 55124 BUYER: City of Elk River Attn: Amanda Othoudt 13065 Orono Parkway Elk River, MN 55330 AGENT: Kennedy & Graven, Chartered ATTN: Jenny Boulton 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Entire Agreement. 17.This Agreement, Exhibit, and other amendments signed by the parties, shall constitute the entire Agreement between the Seller and the Buyer and supersedes any other written or oral agreements between the parties relating to the Property. This Agreement can be modified only in a writing properly signed on behalf of the Seller and the Buyer; except that the Closing Date may be extended up to six months by written agreement of the Seller and the Buyer without further approval by the City Council. The Buyer’s staff is hereby authorized to execute agreements to extend the Closing Date up to six months from the Closing Date at paragraph 7 above. Survival. 18.Notwithstanding any other provisions of law or court decision to the contrary, the provisions of this Agreement shall survive closing. Binding Effect. 18.This Purchase Agreement binds and benefits the parties and their heirs, successors and assigns. 8 505045v34 SJS EL185-13 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above. Buyer: Seller: City of Elk River By: ________________________________ ________________________________ Its Mayor Quinn Avenue, LLC And by: _____________________________ ________________________________ Its City Clerk 9 505045v34 SJS EL185-13 EXHIBIT A Legal Description of the Property Lot 6 of Auditors Subdivision No. 3, according to the recorded plat thereof, Sherbune County, Minnesota. A-1 505045v34 SJS EL185-13 Document comparison by Workshare Compare on Wednesday, August 16, 2017 2:06:11 PM Input: Document 1 ID PowerDocs://DOCSOPEN/505045/3 Description DOCSOPEN-#505045-v3-706_Quinn_Purchase_Agreement Document 2 ID PowerDocs://DOCSOPEN/505045/4 Description DOCSOPEN-#505045-v4-706_Quinn_Purchase_Agreement Rendering set Standard Legend: Insertion Deletion Moved from Moved to Style change Format change Moved deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 31 Deletions 34 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 65 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the “Agreement”) is made as of this ____ day of August, 2017, by and between Quinn Avenue, LLC, a limited liability company in the state of Minnesota (the “Seller”) and the City of Elk River, a public body corporate and politic under the laws of the State of Minnesota (the “Buyer”). RECITALS The Seller is the owner of property located at 706 Quinn Avenue NW, Elk River, Minnesota, which is legally described on the attached Exhibit A (the “Property”). AGREEMENT Offer/Acceptance for Sale of Property. 1.The Seller agrees to sell to Buyer the Property and Buyer agrees to purchase the same, according to the terms of this Agreement. Purchase Price for Property and Terms. 2. PURCHASE PRICE: A.The total purchase price for the Property is Two Hundred and Eighty Two Thousand, Five Hundred and 00/100ths Dollars ($282,500) (the “Purchase Price”). TERMS: B. (1): EARNEST MONEY. The sum of One Thousand Dollars ($1,000) (the “Earnest Money”) shall be paid by the Buyer to the Seller, receipt of which is hereby acknowledged by the Seller. (2):BALANCE DUE SELLER. The Buyer agrees to pay by check or electronic transfer of funds on the date of closing on the Property (the “Closing Date”) any remaining balance of the Purchase Price due to Seller according to the terms of this Agreement. (3): DEED/MARKETABLE TITLE. Subject to performance by the Buyer, the Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Property to the Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. c. Public utility and drainage easements of record which will not 1 505045v4 SJS EL185-13 interfere with the Buyer’s intended use of the Property. (4): DOCUMENTS TO BE DELIVERED AT CLOSING BY THE SELLER. In addition to the Warranty Deed required at paragraph 2B(3) above, the Seller shall deliver to the Buyer: a. Standard form Affidavit of Seller. b. A “bring-down” certificate, certifying that all of the warranties made by Seller in this Agreement remain true as of the Closing Date. c. Certificate that the Seller is not a foreign national. d. If an environmental investigation by or on behalf of the Buyer discloses the existence of petroleum product or other pollutant, contaminant or other hazardous substance on the Property, either (i) a closure letter from the Minnesota Pollution Control Agency (MPCA) or other appropriate regulatory authority that remediation has been completed to the satisfaction of the MPCA or other authority; or (ii) Agreement for remediation/indemnification and security as the Buyer may require. e. Well disclosure certification, if required, or, if there is no well on the Property, the Warranty Deed given pursuant to paragraph 2B(3) above must include the following statement: “The Seller certifies that the Seller does not know of any wells on the described real property.” f. Methamphetamine Disclosure Certificate. g. Any other documents reasonably required by the Buyer’s title insurance company or attorney to evidence that title to the Property is marketable and that the Seller has complied with the terms of this Agreement. Contingencies. 3.TheBuyer’s obligation to buy is contingent upon the following: a.The Buyer’s determination of marketable title pursuant to paragraph 4 of this Agreement; b.The Buyer’s determination, in its sole discretion, that the results of any environmental investigation of the Property conducted pursuant to this Agreement are satisfactory to the Buyer; c.Approval of this Agreement by the City Council; and 2 505045v4 SJS EL185-13 d.Termination by Seller of the lease affecting the Property. The Buyer shall have until the Closing Date to remove the foregoing contingencies. The contingencies at a., b., and d. are solely for the benefit of the Buyer and may be waived by the Buyer. The contingency at c. may not be waived by either party. If the Buyer or its attorney gives written notice to the Seller that the contingencies at a., b., c., and d. are duly satisfied or waived, the Buyer and the Seller shall proceed to close the transaction as contemplated herein. If one or more of the Buyer’s or the Seller’s contingencies is not satisfied, or is not satisfied on time, and is not waived, this Agreement shall thereupon be void at the written option of the Buyer and the Seller shall return the Earnest Money to the Buyer, and the Buyer and the Seller shall execute and deliver to each other a termination of this Agreement. As a contingent Agreement, the termination of this Agreement is not required pursuant to Minnesota Statutes, Section 559.21, et. seq. Title Examination/Curing Title Defects. 4.As soon as reasonably possible after execution of this Agreement by both parties, (a)The Seller shall surrender any abstract of title and a copy of any owner’s title insurance policy for the property, if in the Seller’s possession or control, to the Buyer or to the Buyer’s designated title service provider; and (b)The Buyer shall obtain the title evidence determined necessary or desirable by the Buyer. The Buyer shall have 20 days from the date it receives such title evidence and a fully executed Purchase Agreement to raise any objections to title it may have. Objections not made within such time will be deemed waived. The Seller shall have 90 days from the date of such objection to affect a cure; provided, however, that the Seller shall have no obligation to cure any objections, and may inform the Buyer of such. The Buyer may then elect to close notwithstanding the uncured objections or declare this Agreement null and void, and the parties will thereby be released from any further obligation hereunder. Environmental Investigation. 5.The Seller warrants that the Property has not been used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product during the period of time the Seller has owned the Property. The Seller further warrants that the Seller has no knowledge or information of any fact which would indicate the Property was used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product prior to the date the Seller purchased the Property. Notwithstanding the above, the Seller’s warranty regarding petroleum products does not preclude the presence of heating oil or other similar products used as a heating fuel for the dwelling but the Seller does warrant that if there was a fuel tank on the Property used for the storage of heating oil or other similar product, the Seller has no knowledge of any leak in the tank or contamination caused thereby. The Seller hereby grants to the Buyer and the Buyer’s agents a license to enter and evaluate the 3 505045v4 SJS EL185-13 Property for the purpose of conducting an environmental assessment. Further, the Buyer or the Buyer’s agent shall have the right pursuant to the license to bring persons and equipment onto the Property, make inspections and perform tests and analyses as the Buyer may deem reasonable to determine the presence of any toxic or hazardous waste, substance, or petroleum product or asbestos product, and ascertain soil conditions on the Property. The Buyer shall bear the cost of the environmental assessment. If the results of the environmental assessment are not to the satisfaction of the Buyer, the Buyer at its sole discretion may cancel this Agreement. If the Buyer cancels this Agreement pursuant to this provision, the Buyer shall restore the Property to its original condition or nearly so as is reasonably practicable. Real Estate Taxes and Special Assessments. 6.Real estate taxes payable in the year of closing will be pro-rated between the Buyer and the Seller to the Closing Date. The Seller shall pay all real estate taxes payable in previous years. The Seller also agrees to pay all assessments related to service charges furnished to the Property prior to the Closing Date (e.g., delinquent water or sewer bills, removed or diseased trees), including those charges levied, pending, or certified to taxes payable in the year of closing. If closing occurs prior to the date the amount of real estate taxes due in the year of closing are available from Sherburne County, the current year’s taxes will be pro-rated based on the amount due in the prior year. Closing Date. 7.The Closing Date will be on or before September 1, 2017. Delivery of all papers and the closing shall be made at the offices of Buyer, 13065 Orono Parkway, Elk River, MN 55330, or at such other location as is mutually agreed upon by the parties. All deliveries and notices to the Buyer shall be made to the above address and marked to the attention of Amanda Othoudt. Possession/Utilities/Removal of Property/Escrow. 8. Possession. (a) The Seller agrees to deliver possession not later than the Closing Date. Utilities. (b) City water and sewer charges, electricity and natural gas charges, fuel oil and liquid petroleum gas shall be pro-rated between the parties as of the Closing Date. The Seller shall arrange for final readings as of the Closing Date. Fixtures and Materials. (c) The Seller shall have the opportunity to salvage any fixtures or materials from the building on the Property provided that the building is left secure and provided that the removal does not create any hazardous conditions. The Seller assumes all risk in undertaking any salvage operations. The Seller shall pay for all costs of salvage operations in full prior to closing and shall not permit the attachment of any lien or encumbrance on the Property as a result of this or other work thereon. Inspection. (d) The Buyer may inspect the Property immediately prior to closing. Seller Warranties. 9. The Seller hereby represents and warrants to the Buyer as of the Closing Date that: 4 505045v4 SJS EL185-13 Title. (a) The Seller has good, indefeasible and marketable fee simple title to the Property. Legal Capacity. (b) The Seller has the legal capacity to enter into this Agreement. The Seller has not filed, voluntarily or involuntarily, for bankruptcy relief within the last year under the United States Bankruptcy Code, nor has any petition for bankruptcy or receivership been filed against the Seller within the last year. Sewer and Water. (c) To the best of the Seller’s knowledge, the Property is connected to City sewer and City water. Mechanics’ Liens. (d) TheSeller warrants that, prior to the closing, the Seller shall pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure upon or improvement to the Property which the Seller ordered or undertook. Legal Proceedings. (e) There are no pending legal actions, suits or other legal proceedings that affect the Property or any portion thereof; and the Seller has no knowledge that any such action is presently contemplated. Leases. (f) The Seller represents that the Property is currently being leased to _____________. The Seller will provide the tenant with required notice of its intent to terminate the lease and will terminate the lease upon receiving written notice from the Buyer that the contingences set forth in Section 3, paragraphs a., b., and c. have been either satisfied or waived by the Buyer. With the exception of this lease, the Seller represents that there are no other third parties in possession of the Property, or any part thereof; and that there are no other leases, oral or written affecting the Property or any part thereof. Broker Commission. (g)The Buyer represents to the Seller that it has not utilized the services of any real estate broker or agent in connection with this Agreement or the transaction contemplated by this Agreement. TheSellerrepresents to the Buyer that the Seller has not utilized the services of any real estate broker or agent in connection with this Agreement or the transaction contemplated by this Agreement. Each party agrees to indemnify, defend, and hold harmless the other party against and in respect of any such obligation and liability based in any way upon agreements, arrangements, or understandings made or claimed to have been made by the party with any third person. Structures. (h) To the best of the Seller’s knowledge, the Seller warrants that the buildings, if any, are entirely within the boundary lines of the Property. The parties acknowledge that the Property is being sold in “as is” condition in all aspects. Foreign Status. (i) The Seller is not “foreign person” as such term is defined in the Internal Revenue Code. Methamphetamine Production (j) . To the best of the Seller’s knowledge, methamphetamine production has not occurred on the Property. 5 505045v4 SJS EL185-13 Refuse and Hazardous Materials (k) . The Seller has not performed and has no actual knowledge of any excavation, dumping or burial of any refuse materials or debris of any nature whatsoever on the Property. To the Seller’s best actual knowledge and belief, there are no “Hazardous Materials” (as hereinafter defined) on the Property that would subject the Buyer to any liability under either federal or state laws, including, but not limited to, the disposal of any foreign objects or materials upon or in the Property, lawful or otherwise. Without limiting the generality of the foregoing, the Seller represents and warrants to the Buyer that, to the Seller’s best actual knowledge and belief: 1. The Property is not now and has never been used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, process or in any manner deal with Hazardous Materials; 2. No Hazardous Materials have ever been installed, placed, or in any manner handled or dealt with on the Property; 3. There are no underground or aboveground storage tanks on the Property; 4. Neither the Seller nor any prior owner of the Property or any tenant, subtenant, occupant, prior tenant, prior subtenant, prior occupant or person (collectively, “Occupant”) has received any notice or advice from any governmental agency or any other Occupant with regard to Hazardous Materials on, from or affecting the Property. “Hazardous Materials” The term as used herein includes, without limitation, gasoline, petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos or any material containing asbestos, or any other substance or material as may be defined as a hazardous or toxic substance by any federal, state or local environmental law, ordinance, rule, or regulation including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act, as amended (42 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S. C. Section 1251, et seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.) and in the regulations adopted and publications promulgated pursuant thereto. “AS IS, WHERE IS.” 10. The Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property “AS IS” with no right of set off or reduction in the Purchase Price. Such sale shall be without representation of warranties, express or implied, either oral or written, made by the Seller or any officer, employee, or agent of the Seller with respect to the physical condition of the Property, with respect to the compliance of the Property or its operation with any laws, ordinances, or regulations of any government or other body, except as stated above. The Buyer acknowledges and agrees that the Seller has not made and does not make any representations, warranties, or covenants of any kind or character whatsoever, whether expressed or implied, including, but not limited to, to warranty of income potential, operating expenses, uses, habitability, tenant ability, 6 505045v4 SJS EL185-13 or suitability for any purpose, merchantability, or fitness of the Property for a particular purpose, all of which warranties the Seller hereby expressly disclaims, except as stated above. Closing Costs/Recording Fees/Deed Tax. 11.The Buyer will pay: (a) title insurance premium costs; (b) the recording fee for the deed transferring title to the Buyer; and (c) any survey or environmental investigation costs incurred by it. The Buyer will also pay all other fees normally paid by sellers, including (a) any transfer taxes, recording fees and Well Disclosure fees required to enable the Buyer to record its deed from the Seller under this Agreement; (b) fees and charges related to the filing of any instrument required to make title marketable; and (c) title evidence and updating costs. The Buyer will also pay all closing fees charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Agreement. Each party shall pay its own attorney fees. Inspections. 12.From the date of this Agreement to the Closing Date, the Buyer, its employees and agents, shall be entitled to conduct such surveying, inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and testing of groundwater monitoring wells, as the Buyer shall elect; provided, that the Seller is given at least 24 hours’ notice before entering the Property. Relocation Benefits; Indemnification. 13.The Seller acknowledges that the Seller and its tenant are being displaced from the Property as a result of the transaction contemplated by this Purchase Agreement and that the Seller and its tenant are eligible for relocation assistance and benefits and that the Purchase Price includes compensation for any and all relocation assistance and benefits for which the Seller and its tenant may be eligible and the Seller agrees to waive any and all further relocation assistance benefits. The Seller agrees to provide a waiver of relocation benefits signed by its tenant prior to the Closing Date. The provisions of this paragraph shall survive closing of the transaction contemplated by this Purchase Agreement. Risk of Loss. 14.If there is any loss or damage to the Property between the date hereof and the Closing Date, for any reason including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on the Seller. If the Property is destroyed or substantially damaged before the Closing Date, this Agreement may become null and void, at the Buyer’s option. At the request of the Buyer, the Seller agrees to sign a cancellation of Agreement. Default/Remedies. 15. If the Buyer defaults in any of the covenants herein, the Seller may terminate this Agreement, and on such termination all payments made hereunder shall be retained by the Seller as liquidated damages, time being of the essence. This provision shall not deprive either party of the right to enforce specific performance of this Agreement, provided this Agreement has not terminated and action to enforce specific performance is commenced within six months after such right of action arises. In the event the Buyer defaults in its performance of the terms of this Agreement and Notice of Cancellation is served upon Buyer pursuant to Minn. Stat. Section 559.21, the termination period shall be thirty (30) days as permitted by Minn. Stat., Section 559.21, Subd. 4. Notice. 16.Any notice, demand, request or other communication which may or shall be given or served by the parties, shall be deemed to have been given or served on the date the same 7 505045v4 SJS EL185-13 is personally served upon one of the following indicated recipients for notices or is deposited in the United States Mail, registered or certified, return receipt requested, postage prepaid and addressed as follows: SELLER: Quinn Avenue, LLC Attn: Nathan Snyder 13461 Georgia Circle Apple Valley, MN 55124 BUYER: City of Elk River Attn: Amanda Othoudt 13065 Orono Parkway Elk River, MN 55330 AGENT: Kennedy & Graven, Chartered ATTN: Jenny Boulton 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Entire Agreement. 17.This Agreement, Exhibit, and other amendments signed by the parties, shall constitute the entire Agreement between the Seller and the Buyer and supersedes any other written or oral agreements between the parties relating to the Property. This Agreement can be modified only in a writing properly signed on behalf of the Seller and the Buyer; except that the Closing Date may be extended up to six months by written agreement of the Seller and the Buyer without further approval by the City Council. The Buyer’s staff is hereby authorized to execute agreements to extend the Closing Date up to six months from the Closing Date at paragraph 7 above. Survival. 18.Notwithstanding any other provisions of law or court decision to the contrary, the provisions of this Agreement shall survive closing. Binding Effect. 18.This Purchase Agreement binds and benefits the parties and their heirs, successors and assigns. 8 505045v4 SJS EL185-13 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above. Buyer: Seller: City of Elk River By: ________________________________ ________________________________ Its Mayor Quinn Avenue, LLC And by: _____________________________ ________________________________ Its City Clerk 9 505045v4 SJS EL185-13 EXHIBIT A Legal Description of the Property Lot 6 of Auditors Subdivision No. 3, according to the recorded plat thereof, Sherbune County, Minnesota. A-1 505045v4 SJS EL185-13