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2. HRSR 04-14-2020 Request for Action To Item Number Housing and Redevelopment Authority 2. Agenda Section Meeting Date Prepared by General Business April 14, 2020 Amanda Othoudt, ED Director Item Description Reviewed by 406 Main Street Purchase Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, a resolution authorizing the execution a purchase agreement for 406 Main Street, Elk River. Background/Discussion At their November 7, 2016, meeting, the HRA expressed interest in purchasing residential properties along east Main Street connecting to Highway 169 for a potential redevelopment project that would align with the Mississippi Connections Plan. The HRA obtained an appraisal for the property located at 406 Main Street and directed staff to negotiate a purchase agreement with the seller. A purchase offer agreement was reached with the seller contingent upon approval by the HRA at a public meeting and inspection of the property. Financial Impact Earnest money of $1,000 will be deposited at Sherburne County Abstract and Title and will draw upon the HRA reserve account. The remaining balance of $229,000 will be paid from the HRA reserve account upon closing. Attachments  Resolution  Purchase Agreement for 406 Main Street The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER, MINNESOTA RESOLUTION NO 20-03 RESOLUTION APPROVING THE PURCHASE OF CERTAIN PROPERTY LOCATED AT: 406 MAIN STREET NW, ELK RIVER, MN WHEREAS, the Housing and Redevelopment Authority of the City of Elk River (the “Authority”) is authorized pursuant to Minnesota Statutes, Section 469.001 to 469.047, to acquire and convey real property and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, to facilitate redevelopment of certain property in the City of Elk River, Minnesota (the “City”), the Authority proposes to enter into a Purchase Agreement (the “Purchase Agreement”) between the Authority and _________________________, Trustee of the Cora Smith Trust under trust agreement dated ___________ and any amendments thereto (the “Seller”), under which, among other things, the Seller will convey the property located in the City at: 406 Main Street NW, situated in the State of Minnesota, County of Sherburne, and which is legally described as follows: LOT 11 & THAT PT OF LOT 12 LYING W OF E 4.50 FT OF LOT 12, BLK 1, of Auditor’s Subdivision No. 5, Sherburne County, Minnesota. (the “Property”) to the Authority; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Elk River, Minnesota as follows: 1. The Authority hereby approves the Agreement in substantially the form presented to the Board, including the acquisition of the Property by the Authority, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the Agreement by those officials shall be conclusive evidence of their approval. 2. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Agreement as a whole, including without limitation, execution of any documents to which the Authority is a party referenced in or attached to the Agreement, and other documents necessary to convey the Property to the Authority, all as described in the Agreement. Approved by the Board of Commissioners of the Housing and Redevelopment Authority of th the City of Elk River this 14 day of April, 2020. President ATTEST: Executive Director 2 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (this “Agreement”) is made as of this 14day of April, 2020by and betweenTim Smith, Trustee of the Cora Smith Trust under trust agreement dated May 14, 2001and any amendments thereto (the “Seller”) and the Housing and Redevelopment Authority of 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 ofproperty located at 406 Main Street NW, Elk River, Minnesota, which is legally described on the attached Exhibit A(the “Property”). AGREEMENT 1.Offer/Acceptance for Sale of Property. The Seller agrees to sell to the Buyer the Property and the Buyer agrees to purchase the same, according to the terms of this Agreement. 2.Purchase Price for Property and Terms. A.PURCHASE PRICE: The total purchase price for the Property is Two Hundred Thirty Thousand and 00/100ths Dollars ($230,000.00) (the “Purchase Price”). B.TERMS: (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 the 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 Trustee’s 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. 1 c.Public utility and drainage easements of record which will not interfere with the Buyer’s intended use of the Property. (4):DOCUMENTS TO BE DELIVERED AT CLOSING BY THE SELLER. In addition to the Trustee’s 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 Buyermay 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.” The Seller agrees to have all wells located on the Property, which are not in use, sealed by a licensed well contractor at the Seller’s expense. The Seller agrees to escrow funds on the Closing Date for the purpose of locating and sealing wells if circumstances prohibit locating and sealing wells prior to closing. f.Methamphetamine Disclosure Certificate. g.Waiver of Relocation Benefits in the form attached hereto as Exhibit C. h.Escrow and Occupancy Agreement in the form attached hereto as Exhibit B. i.Any other documents reasonably required by the Buyer’s title insurance company or attorney to evidence that title to the 2 Property is marketable and that the Seller has complied with the terms of this Agreement. 3.Contingencies.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, or inspection reports of the Property conducted pursuant tothis Agreement are satisfactory totheBuyer; and c.Approval of this Agreement by the Housing and Redevelopment Authority. The Buyer shall have until the Closing Date to remove the foregoing contingencies. The contingencies at a.andb.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. and c. areduly satisfied or waived, the Buyerand the Seller shall proceed to close the transaction as contemplated herein. If one or more of the Buyer’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. 4.Title Examination/Curing Title Defects. As soon as reasonably possible after execution of this Agreementby both parties, (a)The Sellershall surrender any abstract of title and a copy of any owner’s title insurance policy for the property, if intheSeller’spossession or control, to theBuyeror to the Buyer’sdesignated title service provider; and (b)The Buyershall obtain the title evidence determined necessary or desirable by the Buyer. The Buyershall have 10 days from the date it receives such title evidenceand a fully executed Purchase Agreementto raise any objections to title it may have. Objections not made within such time will be deemed waived. The Sellershall have 15days from the date of such objection to affect a cure; provided, however, that the Sellershall have no obligation to cure any objections, and may inform the Buyerof such. The Buyermay 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. 5.EnvironmentalInvestigation. The Seller warrantsthat the Property has not been used for production, storage, deposit,or disposal of any toxic or hazardous waste or substance, 3 petroleum product,or asbestos product during the period of timetheSellerhas owned the Property. The Seller further warrantsthat the Seller hasno 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 datetheSeller purchased the Property. The Seller represesents that there are no underground fuel storage tanks on the Property. The Seller hereby grantstotheBuyer andthe Buyer’s agents a license to enter and evaluate the Property for the purpose of conducting an environmentalassessment. Further,theBuyeror 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 astheBuyer 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 oftheBuyer,the Buyerat its sole discretion may cancel this Agreement. If the Buyer cancels this Agreement pursuant to this provision,theBuyershall restore the Property to its original condition or nearly so as is reasonably practicable. 6.Real Estate Taxesand Special Assessments. 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 assessment 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. 7.ClosingDate. The Closing Date will be on or before May 1, 2020. Delivery of all papers and the closing shall be made at the officesof the 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. 8.Possession/Utilities/Removal of Property/Escrow. (a)Possession.The Buyer agrees to allow CRAG Enterprises, LLC, the current occupant of the Property, to remain on the Property after the Closing Date pursuant to the Escrow and Occupany Agreement set forth in Exhibit Bof this Agreement. The Seller agrees that, at closing, the Buyer may retain $5,000from the purchase price of the Property as an escrow for payment of the Buyer’s necessary actual out-of-pocket expenses related to personal property removal, disposal charges, and utility charges. The retained amount, less deductions provided for in this paragraph, will be delivered to the Seller no later than 60 days following the date of delivery of possession. Said funds shall be held by Kennedy & Graven, Chartered, asEscrow Agent pursuant to the terms of the Escrow and Occupancy Agreement. The Buyer’s ability to deduct 4 amounts due under this paragraph from the retained escrow is not exclusive but is in addition to the Buyer’s rights at law and equity to collect such amounts from the Seller. The Seller is responsible for the amounts due under this paragraph even if: (i) the Buyer neglects to deduct the amount from escrow; or (ii) the escrowed amount is insufficient to pay all amounts due under this paragraph. (b)Utilities.Seller agrees to pay for all utilty services to the Property through the last date of CRAG Enterprises, LLC’s occupancy. Utilty services include, but are not limited to, the following: sewer, water, gas, electricity, telephone, garbage collection, Internet, and cable/satellite television. (c)Personal Property and Debris.The Seller must remove all debris and personal property not included in this sale, including, all window treatments, and furniture from the Property no later than the last date of CRAG Enterprises, LLC’s occupancy. The Seller may remove all appliances. 9.Seller Warranties.The Seller hereby represents and warrants to the Buyer as of the Closing Date that: (a)Title.The Seller has good, indefeasible and marketable fee simple title to the Property. (b)Condemnation.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. (c)Defects.The Seller is not aware of any latent or patent defects in the Property, such as sinkholes, weak soils, or unrecorded easements and restrictions. (d)Legal Compliance.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, and restrictions. (e)Legal Capacity.The Seller hasthe legal capacity to enter into this Agreement.The Seller hasnot 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. (f)Sewer and Water.The Seller warrants that the Property is connected to City sewer andCity water. (g) Mechanics’ Liens. 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. 5 (h) Legal Proceedings. There are no legal actions, suits or other legal or administrative proceedings, pending or threatened, that affect the Property or any portion thereof; and the Seller hasnoknowledge that any such action is presently contemplated. (i)Leases.The Seller represents that other than CRAG Enterprises, LLC, who is currently occupying the Property, there are no third parties in possession of the Property, or any part thereof; and that there are no leases, oral or written affecting the Property or any part thereof. (j)Broker Commission. 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 partyagainst 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. (k)Structures.The Seller warrants that the buildings,if any, are entirely within the boundary lines of the Property. The parties acknowledge thatthe Property is being sold in “as is” condition relating to the structural, operational, and mechanical systems. (l)Foreign Status.The Seller isnota“foreign personor entity” as such term is defined in the Internal Revenue Code. (m)Methamphetamine Production.To the best of the Seller’sknowledge, methamphetamine production has not occurred on the Property. (n)Refuse and Hazardous Materials.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, lawfulor 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; 6 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. The term “Hazardous Materials”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. The Seller’s representations and warranties set forth in this Section shall be continuing and are deemed to be material to the Buyer’s execution of this Purchase Agreement and the Buyer’s performance of its obligations hereunder. All such representations and warranties shall be true and correct on and as of the Closing Date with the same force and effect as if made at that time; and all of such representations and warranties shall survive the closing and any cancellation or termination of this Purchase Agreement, and shall not be affected by any investigation, verification or approval by any party hereto or by anyone on behalf of any party hereto.The Seller agrees to defend, indemnify, and hold the Buyer harmless for, from, and against any loss, costs, damages, expenses, obligations, and attorneys’ fees incurred should an assertion, claim, demand, action, or cause of action be instituted, made, or taken, which is contrary to or inconsistent with the representations or warranties contained herein. 10.Closing Costs/Recording Fees/Deed Tax. The Buyer will pay: (a) title insurance premium costs; (b) the cost to record its deed from the Seller under this Agreement; (c) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close this transaction contemplated by this Agreement; and (d) any survey or environmental investigation costs incurred by it. The Seller willpay:(a) any transfer/deedtaxesand 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; (c) title commitment fee; (d) title search and examination costs; and (e) one-half of the closing fee 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. 11.Inspections.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 testingas the Buyer shall elect; provided, that the Seller is given at least 24 hours’ notice. 12.Risk of Loss. If there is any loss or damage to the Property between the date hereof 7 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. 13.Default/Remedies.If the Buyerdefaults in any of the covenants herein,theSeller may terminate this Agreement, and on such termination all payments made hereunder shall be retained bytheSelleras 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 eventtheBuyerdefaults in its performance of the terms of this Agreement and Notice of Cancellation is served upontheBuyerpursuant to Minn. Stat. Section 559.21, the termination period shall be thirty (30) days as permitted by Minn. Stat., Section 559.21, Subd. 4. 14.Notice.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 thesame 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:Cora Smith Trust Attn:Tim Smith, Secretary/Treasurer 406 Main Street NW Elk River, MN 55330 BUYER:Housing and Redevelopment Authority of the City of Elk River Attn: Amanda Othoudt 13065 Orono Parkway Elk River, MN 55330 BUYER’SKennedy & Graven, Chartered COUNSEL:ATTN: Sarah Sonsalla 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 15.Relocation Benefits. The SelleracknowledgesthattheSellerinitiated negotiations with the Buyer for the transaction contemplated by this Purchase Agreement, and that this transaction is not made under threat of condemnation bytheBuyer. The Seller agreesto waive any and all relocation benefits, assistance and services to whichtheSellermight otherwise be eligible. The Selleragreesto provide totheBuyer at closing an executed waiver of relocation benefits in substantially the form of the attached Exhibit C. 16.Entire Agreement. This Agreement, exhibits, and other amendments signed by the parties, shall constitute the entire Agreement between the Seller and the Buyer and supersedes any 8 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 Housing and Redevelopment Authority. 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. 17.Survival.Notwithstanding any other provisions of law or court decision to the contrary, the provisions of this Agreement shall survive closing. 18.Binding Effect.This Purchase Agreement binds and benefits the parties and their heirs, successors and assigns. 9 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above. Buyer: Seller: Housing and Redevelopment AuthorityCora Smith Trust Under Trust Agreement Dated May 14, 2001, and any amendments By: ________________________________thereto Its HRA Chair By:________________________________ And by: _____________________________ Its Executive Director Its: Trustee 10 EXHIBIT A Legal Description of the Property Lot 11 and that part of Lot 12 lying Westerly of the East 4.50 feet of Lot 12, Block 1 of Auditors Subdivision No. 5, according to the recorded plat thereof, Sherbune County, Minnesota. A-1 EXHIBIT B Form of Escrow and Occupancy Agreement THIS AGREEMENT entered into this 14day of April, 2019, byTim Smith, Trustee of the Cora Smith Trust under trust agreement dated May 14, 2001 and any amendments thereto (the “Trust”) and CRAG Enterprises, LLC, a Minnesota limited liability company (“CRAG”)(together, “Occupants” or “Grantees”), and theHousing and Redevelopment Authority of the City of Elk River, a public body corporate and politic under the laws of the State of Minnesota (“Grantor”) and KENNEDY & GRAVEN, CHARTERED (“Escrow Agent” or “Agent”). BACKGROUND The Trust has, as of the date of this Agreement,sold and conveyed to Grantor the following described tract of land including improvements located thereon: Lot 11 and that part of Lot 12 lying Westerly of the East 4.50 feet of Lot 12, Block 1 of Auditors Subdivision No. 5, according to the recorded platthereof, Sherbune County, Minnesota (the “Property”). CRAG is an occupant of the Property. Although the sale and conveyance of the Property transferred to Grantorthe exclusive title and right to possession, the parties have agreed that Grantor will, subject to the terms and conditions of this Agreement, grant to CRAGthe right to continue to occupy the Property. RECITALS NOW, THEREFORE, in consideration of the mutual covenants and stipulations hereinafter contained, the parties hereto agree as follows: 1.Grant of Occupancy. Grantor hereby grants and CRAG hereby acceptthe right to occupy the Property commencing on the date of this Agreement. CRAG shall giveGrantor 30 days’ written notice when it intends to vacate the Property. 2.Grantee Acknowledgment. Grantees acknowledgethat this grant of occupancy constitutes the sole and exclusive right of CRAGto occupy the Property from and after the date of thisAgreement, and further acknowledges that absent further written agreement of the parties, Granteesshall have no right to further occupy the Property upon and after the termination of this Agreement. 3.Rent.CRAGmay occupy the Property without payment of rent to Grantor. 4.No Damage. Grantees agreenot to cause damage to the Property or to any structure or improvement located on the Property and agreeto deliver possession of the Property to the Grantor B-1 in substantially the same condition as existed on the date the parties entered into the Agreement. Grantees shall remove all personal property, trash, and debris from the Property upon delivery of possession of the Property to the Grantor. 5.Utility Bills. Grantees agreeto pay for all utility services to the Property through the last day of CRAG’soccupancy. Utility services include, but are not limited to, the following: sewer, water, electricity, gas, telephone, garbage collection, Internet, and cable/satellite television. 6.Escrow.(a) Upon closing on the sale of the Property and execution of this Agreement,the Trust agreesto deposit into escrow the sum of $5,000(the “Escrowed Funds”) from the Trust’sproceeds from the sale of the Property, to be held by Agent in a non-interest bearing account.Said Escrowed Funds are to be used by Agent for the payment of unpaid utility charges for services provided to the Property and for theGrantor’s necessary actual out-of-pocket expenses relating to personal property and debris removal and disposal charges. (b)Within 10 days after vacation of the Property by CRAG, Grantor shall provide to Agent (with copy to Grantees) evidence of expenses incurred by Grantor for payment of utility charges for services provided to the Propertyand any out-of-pocket expenses relating to personal property and debris removal and disposal charges. Agent shall reimburse Grantor for the utility charges andotherincurred expenses from the Escrowed Funds within seven days following receipt of such evidence from Grantor. (c)Agent shall deliver to Grantee the balance of the Escrowed Funds on deposit, less deductions provided for in paragraph 6 (b) above, no later than 60 days following vacation of the Property by Grantees. 7.Escrow Agent Liability. The sole duties of Escrow Agent shall be those described herein, and Escrow Agent shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Escrow Agent may conclusively rely upon and shall be protected in acting on any notice believed by it to be genuine and to have been signed or presented by the proper party or parties, consistent with reasonable due diligence on Escrow Agent’s part. Escrow Agent shall have no duty or liability to verify any such notice, and its sole responsibility shall be to act expressly as set forth in this Escrow and Occupancy Agreement. 8.Insurance. Grantees acknowledgethat Grantees aresolely responsible for loss or damage to personal property located on the Property; and hereby indemnify, defend, and hold harmless the Housing and Redevelopment Authority of the City of Elk River, its officials, agents, and employees from any claims for loss or damage to such personal property. Grantees certify and understandthat obtaining insurance coverage for such personal property shall be Grantees’ sole responsibility. Grantees acknowledge and understandthat any liability insurance obtained by Grantor with respect to the Property will in no way insure or protect Granteesfrom liability claims which may be made against Grantees. 9.Liens and Encumbrances. Grantees agreethat during the term of this Agreement Granteesshall not permit or suffer any liens or encumbrances to be placed against the Property, B-2 nor shall Granteesduring such term engage in any activity which could cause or result in the placement of any liens or encumbrances against Property. Grantees also agreeto indemnify and hold Grantor harmless from any lien or encumbrance placed upon the Property as a result of Grantees’violation of the provisions of this paragraph. 10.Modification or Alteration. Grantees agreethat, absent the specific written consent of Grantor, Granteeswill not make any modifications, alterations,orimprovements to the Property during the term of this Agreement. 11.Repair and Maintenance. Grantees agreethat during the term of this Agreement Grantees will, at Grantees’sole cost and expense, keep the building, improvements, and grounds, electrical, plumbing, heating, and air conditioning systems, and all appliances, which have been sold to Grantor, in a reasonable state of repair and appearance. Granteesshall not, however, be required to repair conditions of any of the above-described items which existed at the time the Property was purchased by Grantor. 12.Removal of Property upon Termination. This Agreement includes the right of Granteesto continue to keep on the Property all items of personal property which have not been sold to Grantor. Grantees agreethat not later than the last day of this Agreement, theywill have removed all such items of personal property. Items not removed by such date shall be forfeited to Grantor. 13.Final UtilityService. Grantees agreeto notify proper utility companies at least two weeks in advance the date of final occupancy on the Property for final billing purposes. Grantees agreethat payment of final utility bills is the responsibility of Grantees. 14.Exclusive Nature of Grant. The grant of occupancy given herein is exclusive to Granteesand may not be assigned or transferred.Grantees shall not allow any third parties to occupy or rent the Property during the term of this Agreement, including, but not limited to, allowing the Property to be used as a short term or vacation rental (i.e. VRBO, Airbnb, etc.). 15.Notices to be sent to the parties to this Agreement shall be sent by mail or personal delivery to: GRANTEES:Cora Smith Trust Attn:Tim Smith, Secretary/Treasurer 406 Main Street NW Elk River, MN 55330 CRAG Enterprises, LLC Attn: Tim Smith 406 Main Street NW Elk River, MN 55330 B-3 GRANTOR:Housing and Redevelopment Authority of the City of Elk River Attn: Amanda Othoudt 13065 Orono Parkway Elk River, MN 55330 AGENT:Kennedy & Graven, Chartered Attn: Sarah Sonsalla 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 IN TESTIMONY WHEREOF, the parties hereto have set their hands as of the day and year first above written. B-4 GRANTEES Cora Smith Trust Under Trust Agreement Dated May 14, 2001, and any amendments thereto By:________________________________ Its: Trustee CRAG Enterprises, LLC By: _________________________________ Its: _________________________________ GRANTOR HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER By: Its:HRA Chair By: Its:Executive Director AGENT: Kennedy & Graven, Chartered By ___________________________ Its ___________________________ B-5 EXHIBIT C FORM OF WAIVER OF RELOCATION BENEFITS The undersigned acknowledge that wemet with a representative of the Housing and Redevelopment Authority of the City of Elk River, Minnesota(HRA) on _______________, 2020. The representative, Amanda Othoudt, explained that in theevent that the HRA acquires the property located at 406 Main Street NW, Elk River, Minnesota, the Trust maybe entitled to certain relocation benefits, in addition to the amount of money being paid to the Trust to acquire its property. These benefits may include: 1.Moving Expenses: a.A payment for actual reasonable moving expenses; or b.A fixed payment determined in accordance with the applicable schedule approved by the Federal Highway Administration. 2.Replacement Housing Payment: A 180-day homeowner is eligible to receive a replacement housing payment to cover the following costs: a.If the homeowner must pay more to buy a comparable replacement home than homeowner receives for the property, then homeowner may be compensated for the difference. b.Homeowners may be entitled to compensation for incidental and closing expenses related to the purchase of a decent, safe, and sanitary replacement home, such as recording fees, title insurance, appraisal, and inspection fees. c.If a homeowner must pay a higher interest rate on a mortgage to finance the purchase of a replacement home than the rate on the mortgage of the property, then homeowner may be entitled to compensation for increased mortgage interest costs. 3.Other Relocation Assistance: This includes referrals and other assistance to help the owner(s) relocate to a comparable decent, safe, and sanitary dwelling. These payments and services are required under the regulations of the Department of Housing and Urban Development (HUD). The owner(s) cannot be required to move from his/her home unless he/she is given reasonable opportunities to relocate to a comparable decent, safe,and sanitary dwelling unit that he/she can afford. C-1 Finally, it was explained to the Trustthat the Uniform Relocation Assistance and Real Property Acquisition Policies Actof 1970 as amended, entitles usto theTrust torelocation benefits; and if the Trust signs this waiver, itwill be waiving those relocation benefits. After having these benefits explained to the Trust, the Trustagreesto waive them. In signing this waiver, the Trustacknowledgesthatno threats have been made to the Trust, either expressly or by implication thatthe Trust’sproperty will be taken from itthrough condemnation. If after signing this waiver, the Trustattemptstocollect relocation benefits, the Trustwill have to prove that, contrary to what with Trust is agreeing to in this waiver, the Trust’swaiver of relocation benefits was not entered into voluntarily. This wavier is conditioned upon the Housing and Redevelopment Authority of the City of Elk River purchasing the Trust’sproperty for the gross purchase price of $230,000.00. If this commitment to the Trust is not fulfilled, this waiver is null and void. _________________ Date CORA SMITH TRUST UNDER TRUST AGREEMENT DATEDMay 14, 2001 AND ANY AMENDMENTS THEREO By: Its: Trustee WITNESS: C-2