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2.0 SR 06-30-2021 The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: August 2020 Request for Action To Mayor and City Council Item Number 2.0 Agenda Section General Business Meeting Date June 30, 2021 Prepared by Cal Portner, City Administrator Item Description Pinewood Golf Course Conveyance and Interim Management Agreement Reviewed by Peter Beck, City Attorney Reviewed by Andrea McDowell Poehler, City Attorney Action Requested Approve, by resolution, the termination of Resolution 21-40, a purchase agreement with Baer Necessities, LLC for the Purchase of Pinewood Golf Course, an interim management agreement with Baer Necessities, LLC for Pinewood Golf Course and authorize the execution of a sale of Pinewood Golf Course to Baer Necessities by the Mayor, City Administrator and City Clerk. Background/Discussion Baer Necessities, LLC, represented by Jennifer Abrahamson has agreed to purchase and operate Pinewood Golf Course following a Request for Proposals submission that was accepted by the City Council. The Elk River Country Club was notified on March 12, 2021, the city desired to terminate the management agreement with the club. The Elk River Country Club expressed a desire to turn the course over on June 30, 2021. On June 7, 2021, the City Council approved a Resolution of Conveyance and Purchase Agreement (Elk River Resolution 21-40) with AJT Holdings, LLC. AJT Holdings did not execute the agreement. The purchaser has assembled a new holding group and desires to execute the purchase of the golf course from the city. Because the final sale closing will not happen for a couple of weeks, an interim management agreement will be required to keep the course open. The agreement is very similar to the approved former agreement with the Elk River Country Club in 2019. Financial Impact The purchaser agrees to pay $420,000 for Pinewood Golf Course. They have provided $5,000.00 in earnest money for the purchase and agrees to pay $95,000.00 at closing and the remaining $320,000 in fifteen (15) equal payments annually along with an interest rate of four (4%) percent per annum on August 1st of each year. Mission/Policy/Goal The Elk River Mission Attachments  Resolution 216352v1 Resolution 21-_48_ A Resolution Repealing Resolution No. 21-40 and Approving a Conveyance of Pinewood Golf Course to Baer Necessities, LLC WHEREAS, the City of Elk River (“City”) approved a Purchase Agreement for the conveyance of the Pinewood Golf Course to AJT Holdings, LLC (“AJT”) by Resolution No. 21-40 (“AJT Agreement”); and WHEREAS, AJT failed to execute the AJT Agreement and notified the City Administrator that AJT does not intend to execute the AJT Agreement; and WHEREAS, the City desires to repeal its approval of the AJT Agreement under Resolution No. 21-40, in order to move forward with a Purchase Agreement (“Purchase Agreement”) for the conveyance of the Pinewood Golf Course to Baer Necessities, LLC (“Purchaser”) in accordance with the terms of the Purchase Agreement between the City and Purchaser attached hereto as Exhibit A, under substantially similar terms as the proposed AJT Agreement; and WHEREAS, in expectation of the closing of the AJT Agreement, the City also terminated the agreement with Elk River Country Club, Inc. (“ERGC”) for the management of the Pinewood Golf Course (“ERGC Management Agreement”), effective the date of closing under the AJT Agreement; and WHEREAS, with the termination of the ERGC Management Agreement, the City will need an operator of the Pinewood Golf Course and desires to enter into an Interim Management Agreement with the Purchaser until the Closing pursuant to the terms set forth in the Interim Management Agreement attached hereto as Exhibit B. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota, as follows: 1. Resolution No 21-40 approving the AJT Agreement is hereby repealed. 2. The Purchase Agreement is hereby approved; 3. The Interim Management Agreement is hereby approved; and 4. The Mayor, City Administrator, and City Clerk are hereby authorized to execute and deliver all necessary documents required under the terms of the Purchase Agreement and Interim Management Agreement. Passed and adopted this 30th day of June 2021. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk 216352v1 EXHIBIT A PURCHASE AGREEMENT 214273v12 PURCHASE AGREEMENT THIS AGREEMENT (“Agreement”), executed _______________________, 2021 by and between the City of Elk River, a Minnesota municipal corporation, (“Seller”) and Baer Necessities, LLC, a Minnesota limited liability company (“Purchaser”). Recitals A. Seller owns and operates the Pinewood Golf Course on property located in the City of Elk River, Minnesota, as legally described on the attached Exhibit A, together with all easements, rights, and appurtenances (the “Property”). B. Seller hereby agrees to sell, and Purchaser hereby agrees to purchase the Property and certain of the assets used in connection with the operation of the golf course, subject to and upon the terms hereinafter set forth NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Conveyance. Seller hereby sells to Purchaser and Purchaser hereby purchases from Seller, free from all liabilities, liens, and encumbrances, except as set forth in this Purchase Agreement, the entire business (except as otherwise provided) of the Pinewood Golf Course, including: a. The Property described on Exhibit A which is attached hereto and thereby made a part hereof. b. The maintenance equipment, tools, furniture, and supplies described on Exhibit B which is attached hereto and thereby made a part hereof. c. All rights to use the name “Pinewood Golf Course.” 2. Purchase Price. Purchaser agrees to pay Seller Four Hundred Twenty Thousand and no/100 ($420,000.00) Dollars as the purchase price for the real property and all the assets and rights being sold hereunder. The purchase price shall be paid as follows: a. Earnest money of Five Thousand and no/100 ($5,000.00) Dollars shall be deposited with the City upon execution by Buyer and Seller of this Agreement, to be applied to the Purchase Price at closing; b. Ninety-Five Thousand Dollars and no/100 ($95,000.00) Dollars payable in cash at closing; and 214273v12 2 c. The balance pursuant to a Contract for Deed (Minnesota Uniform Conveyancing Form No. 56-M), to be delivered by Purchaser to Seller at closing. The principal balance of the Contract for Deed shall be amortized over fifteen (15) years and shall be paid, together with interest thereon at the rate of four (4%) percent per annum, from the date of closing as follows: (i) The annual payment of principal and interest shall be divided in fifteen (15) equal installments and each installment shall be paid by Purchaser to Seller on August 1st of each year beginning July, 2022. (ii) The entire principal balance of the Contract for Deed, together with all accrued interest thereon, shall be due and payable in full on August 1, 2037. (iii) Seller shall give Purchaser written notice of any intent on the part of Seller to transfer or assign the Contract for Deed. 3. Allocation of Purchase Price. At the time of closing, Purchaser shall provide an allocation of the purchase price among the following categories:  Land  Buildings and structures  Land improvements  Maintenance equipment, tools, furniture, and supplies  Goodwill 4. Liabilities Assumed by Purchaser. Seller acknowledges that except for the assumed obligations expressly assumed pursuant to Section 3 hereof, the Purchaser is not assuming and shall not assume any other liability or obligation of Seller. 5. Title Examination. Seller, at its expense, shall within a reasonable time after the execution of this Agreement, furnish a title insurance commitment in the full amount of the purchase price issued by Land Title, Inc., certified to date to include proper searches covering bankruptcies, state and federal judgments and liens, by which said company commits to issue its policy of title insurance that insures that at closing Purchaser shall have good, marketable and insurable title of record to the Property, free and clear of all liens, encumbrances, leases, claims and charges (except permitted encumbrances). Purchaser shall be allowed ten (10) business days after receipt of the title commitment for examination of title and making any objections, which shall be made in writing or deemed waived. If any objection is so made, Seller shall have ten (10) business days from receipt of Purchaser’s written title objections to notify Purchaser of Seller’s intention to make title marketable within one hundred twenty (120) days from Seller’s receipt of such written objections. If notice is given, payments hereunder required shall be postponed pending correction 214273v12 3 of title, but upon correction of title within ten (10) days after written notice to Purchaser, the parties shall perform the Agreement according to its terms. If no such notice is given, or if notice is given but title is not corrected within the time provided for, this Agreement shall be null and void, at the option of Purchaser, and in such case, neither party shall be liable for damages hereunder to the other. In the event that Purchaser cancels this Agreement because of uncorrected title matters, all Earnest Money shall be refunded to Purchaser, and Purchaser and Seller agree to sign a Cancellation of Purchase Agreement. 6. Conveyance and Title - Property. Subject to performance by the Purchaser, Seller agrees to execute and deliver a recordable Contract for Deed conveying marketable title to the Property, subject only to the following exceptions: a. Building and zoning laws, ordinances and state and federal regulations. b. Restrictions relating to the use or improvement of the Property that do not affect Purchaser’s intended use. c. Permitted encumbrances. d. Reservation of minerals and mineral rights to the State of Minnesota. e. Utility and drainage easements which do not interfere with present improvements. f. Restrictive Covenant attached hereto as Exhibit C, which may be revised to reflect a date that is 15 years from the actual date of Closing. 7. Conveyance and Title – Inventory. Seller agrees to execute a deliver a Bill of Sale conveying title to the following items, free from all liabilities, liens, and encumbrances: a. The maintenance equipment, tools, furniture, and supplies described on Exhibit B. b. The name “Pinewood Golf Course.” 8. Closing. The closing of the transaction will take place on the earlier of September 30, 2021 or 15 days following completion of the Seller’s obligations under Paragraph 18 (“Date of Closing”) and shall take place at the offices of the Title Company or such other location mutually agreed upon by the parties and may be completed through escrow of closing documents and funds with the Title Company. 9. Real Estate Taxes and Special Assessments. a. Real Estate Taxes Payable in the Year of Closing. Real estate taxes payable in the year of closing shall be prorated between Seller and Purchaser on a per diem basis to the Date of Closing. 214273v12 4 b. Deferred Real Estate Taxes. Seller shall pay on the Date of Closing any deferred real estate taxes (including “Green Acres” taxes under Minn. Stat. §273.111) payment of which is required as a result of the closing of this sale and the recording of the deed. c. Special Assessments. Seller shall pay all levied special assessments as of the date of closing. d. Taxes and Special Assessments in the Years Following Closing. Purchaser shall pay real estate taxes payable in the years following the Date of Closing and special assessments payable therewith, the payment of which is not otherwise provided herein. Seller makes no representation concerning the amount of future real estate taxes or of future special assessments. 10. Possession. Possession of the Property shall be delivered to Purchaser at the closing. 11. Representations and Warranties of Seller. Seller represents and warrants to Purchaser: a. Seller is a municipal corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota and has the corporate power to own or lease its assets and to carry on its business as it is now being conducted. b. The execution, delivery and performance of this Agreement by Seller has been duly authorized by Seller’s City Council. d. There has been no material adverse change in the business, prospects, assets, and financial condition of Pinewood Golf Course since the date of the latest of the Financial Statements. e. Seller owns and has good and marketable title, free and clear of all liens, security interests and encumbrances, to all rights and assets being sold hereunder. f. To the best of Seller’s knowledge, the operations of Pinewood Golf Course as it is presently being conducted under the Management Agreement with the Elk River Country Club, Inc., do not violate any applicable federal, state, or local law, statute, ordinance, regulation or order and Seller has not received any notice of a possible violation thereof. g. There are no actions, suits or proceedings pending or threatened against or affecting either Seller or Pinewood Golf Course. 214273v12 5 h. Seller is not a party to any contract, agreement, or restriction, whether written or oral, which would limit or restrict the ability of Purchaser to operate Pinewood Golf Course as it is presently being conducted. i. To the best of Seller’s knowledge, neither this Purchase Agreement nor any of the exhibits attached hereto contain any false or misleading statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not false or misleading. There is no fact within the special knowledge of Seller which has not been disclosed herein or in writing by it to the Purchaser and which may, insofar as Seller can now foresee, adversely affect Purchaser’s ability to conduct the Pinewood Golf Course as it is presently being conducted. j. To the best of Seller’s knowledge, the Property has been operated under to its Management Agreement with the Elk River Golf Club in compliance with all applicable federal, state, and local environmental laws, ordinances, rules, and regulations relating to the handling, storage and disposal of hazardous and toxic wastes and substances, petroleum products and other regulated substances. Seller’s operation of the Property is now and shall on the Date of Closing be in compliance with all such environmental laws, ordinances, rules and regulations, including but not limited to the maintenance of all required permits and approvals. Seller has not used or stored hazardous wastes or substances, petroleum products and other regulated substances on the Property, nor has Seller discharged or released any such substances upon the Property, including, but not limited to, underground injection of such substances, in violation of any federal, state or local environmental law, ordinance, rule or regulation. To the best of Seller’s knowledge, no other party has engaged in any such use, storage, discharge, or release. k. An “individual sewage treatment system” (as defined in Minnesota Statutes Section 115.55, subd. 1(g)) is located on the Property; l. A “well” (as defined in Minnesota Statutes Section 103L.005, subd. 21 is located on the Property. Notwithstanding the foregoing, in the event Purchaser, prior to Closing, has actual knowledge of any fact or circumstance which would give rise to a breach of any of Seller’s representations and warranties and Purchaser nonetheless proceeds with Closing, then Purchaser shall be deemed to have waived any claim of breach or violation of such representation(s) and warranty(ies) due to the existence of such fact or circumstance, and Seller’s representations and warranties shall be deemed to have been modified by such fact or circumstance. For purposes of this Agreement and any document delivered at Closing, whenever the phrase “to the best of Seller’s knowledge” or the “knowledge” of Seller or words of similar 214273v12 6 import are used, they shall be deemed to refer only to the actual knowledge of Calvin Portner, Seller’s City Administrator, as of the Effective Date (or, for purposes of the Seller’s Certificate, as of the Closing Date), without any requirement of independent investigation having been made or any duty to investigate, and shall not be deemed to include any implied, imputed or constructive knowledge of Calvin Portner or any other person or entity. 12. Representations, Warranties of Purchaser. Purchaser is a limited liability company duly organized and in good standing in the State of Minnesota. Purchaser has the requisite power and authority to enter into and perform the terms of this Agreement. The execution and delivery of this Agreement and the consummation of the transaction contemplated by this Agreement have been duly authorized by all necessary parties and no other proceeding or consent on the part of Purchaser is necessary in order to permit Seller to consummate the transaction contemplated by this Agreement. 13. Indemnification. The parties agree to and shall indemnify the other party, its successors, and assigns, against any and all damages resulting from any breach by the party of any representation, warranty or agreement set forth in this Purchase Agreement or the untruth or inaccuracy thereof, including but not limited to all statements contained in the financial statements and disclosure statements. This indemnity shall survive the closing for a period of 2 years. 14. Seller’s Closing Documents. At closing, Seller shall execute and deliver to Purchaser the following: a. Contract for Deed. Statutory Contract for Deed in recordable form including the relevant terms of this Agreement and which is reasonably satisfactory to Seller. b. Well Disclosure Certificate. c. Bill of Sale. d. Certificate of Non-Foreign Status. e. Seller’s Affidavit. A standard form Affidavit by Seller indicating that on the date of closing there are no outstanding unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Property. f. Other Documents. All other documents reasonably determined by either party or the title insurance company to be necessary to transfer and provide title insurance for the Property. 15. Purchaser’s Closing Documents. At closing, Purchaser shall execute and deliver to Seller the following: 214273v12 7 a. Contract for Deed. Statutory Contract for Deed in recordable form including the relevant terms of this Agreement and reasonably satisfactory to Purchaser. b. Purchaser’s Affidavit. A standard form Affidavit by Purchaser indicating that on the date of closing there are no outstanding unsatisfied judgments, tax liens or bankruptcies against or involving Purchaser. c. Other Documents. All other documents reasonably determined by either party or the title insurance company to be necessary to transfer and provide title insurance for the Property. 16. Closing Costs. The costs relating to this transaction shall be paid as follows: Seller shall pay: a. Deed transfer tax. b. One-half (1/2) of the closing fee. c. Issuance of title insurance commitment. Purchaser shall pay: a. One-half (1/2) of the closing fee. b. Recording fee for the Contract for Deed. c. Premium for owner’s title insurance. 17. Contingencies. The following items are contingencies to this Agreement. If the contingencies are not performed, satisfied, or waived prior to the Date of Closing in the sole judgment of Purchaser, then this Agreement may be terminated at Purchaser’s option by written notice from Purchaser to Seller and the Earnest Money will be refunded to Purchaser. All the contingencies set forth in this Agreement are specifically stated and agreed to be for the sole and exclusive benefit of the Purchaser, and only Purchaser shall have the right to unilaterally waive any contingency by written notice to the Seller. In the event that Purchaser rightfully terminates this Agreement, Seller shall promptly refund to Purchaser all earnest money paid hereunder, together with any interest actually earned thereon. a. Within seven (7) days following the execution of this Purchase Agreement, Seller shall deliver to Purchaser each of the following items, all of which must be acceptable to Purchaser in the exercise of its sole discretion. If any such documentation or information shows a material adverse change not acceptable to Purchaser, in Purchaser’s sole discretion, Purchaser may terminate this Agreement. i. Copies of all existing service and utility contracts, permits, licenses, service agreements, contracts for the purchase of equipment and materials, management agreements, leases, 214273v12 8 advertising agreements and contracts with governmental or regulatory agencies affecting the Property or the operation and maintenance thereof. 18. Access to Property. Seller shall allow Purchaser and its agents access to the Property for an inspection thereof. Purchaser may conduct soil tests, soil borings and other tests of the Property. As a condition of such entry, Purchaser indemnifies and saves Seller harmless from and against any liability (including liability for bodily injury, death, and reasonable attorneys' fees) and any mechanic lien attaching to the Property as a result of the work performed in making any such inspection. If, as a result of Purchaser’s inspection of the Property and such documents, Purchaser, for any reason, is dissatisfied with the Property or such documents, Purchaser shall have the absolute right to terminate this Agreement. Not later than thirty (30) days after execution hereof, Purchaser shall deliver notice to Seller of its decision (the "Notice of Decision") to either exercise their right of termination or to continue this Agreement. If this Agreement is so terminated, neither party shall have any further rights or obligations hereunder, except that Purchase will be entitled to the return of the Earnest Money. 19. Well and Septic Systems. The Seller agrees to disconnect the well and septic to the Clubhouse located on the Property and to connect the Clubhouse to the city water and sewer system and to cap the septic system at Seller’s cost prior to closing. 20. “AS-IS” Sale. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PURCHASER ACKNOWLEDGES AND AGREES THAT, UPON THE CLOSING, SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY IN ITS “AS IS, WHERE IS, WITH ALL FAULTS” CONDITION, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO ALL STRUCTURES, FIXTURES, PERSONAL PROPERTY AND EQUIPMENT INCLUDED IN THE CONVEYANCE CONTEMPATED UNDER THIS AGREEMENT. BUYER FURTHER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS AND TAKES INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD “AS IS, WHERE IS, WITH ALL FAULTS.” PURCHASER REPRESENTS TO SELLER THAT, PRIOR TO CLOSING, PURCHASER WILL HAVE CONDUCTED SUCH INVESTIGATIONS OF THE PROPERTY, STRUCTURES, FIXTURES, PERSONAL PROPERTY AND EQUIPMENT INCLUDED IN THIS CONVEYANCE, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE 214273v12 9 CONDITION OF THE PROPERTY AND/OR THE EXISTENCE OR NONEXISTENCE OF ANY CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS MATERIALS ON OR DISCHARGED FROM THE REAL PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT THERETO. UPON CLOSING, PURCHASER ACKNOWLEDGES THAT IT WILL BE ACQUIRING THE PROPERTY SUBJECT TO ALL SUCH ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS AND OTHER MATTERS THAT MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS. 21. Default. If either party shall default in any of their respective obligations under this Purchase Agreement, the other party, by notice to such defaulting party specifying the nature of the default and the date on which this Purchase Agreement shall terminate (which date shall not be less than thirty (30) days after the giving of such notice), may terminate this Purchase Agreement, and upon such date, unless the default so specified shall have been cured, this Purchase Agreement shall terminate. In the case of any default by the Seller or Purchaser, the non-defaulting party’s sole and exclusive remedy shall be termination of this Purchase Agreement as provided above, except that the Earnest Money shall be returned to Purchaser in the event of a default by Seller 22. Management Contract. At the time of closing, Seller will have terminated the management contract with Elk River Golf Club for the management of Pinewood Golf Course. 23. Notices. All notices, demands and requests which may be given, or which are required to be given by one party to the other shall be in writing, sent by United States Mail, postage prepaid, certified with return receipt requested as follows: If to Seller: City of Elk River 13065 Orono Parkway Elk River, Minnesota 55330 Attn: City Administrator With copy to: Andrea McDowell Poehler Campbell Knutson, P.A. Grand Oak Officer Center I 860 Blue Gentian Road, Ste. 290 Eagan, Minnesota 55121 214273v12 10 If to Purchaser: Baer Necessities, LLC 14440 145th Court NW Elk River, MN 55330 Attn: Jennifer Abrahamson 24. Assignment. Purchaser may assign its rights under this Agreement or the Contract for Deed described 2(b) herein. Purchaser shall provide fifteen (15) days advanced, written notice of any such assignment and any assignee shall be bound by Purchaser’s obligation under this Agreement and the Contract for Deed. 25. Survival. All of the terms of this Agreement will survive and be enforceable after the Closing, except as otherwise provided. 26. Captions. The paragraph heading or captions appearing in this Agreement are for convenience only, are not a part of this Agreement and are not to be considered in interpreting this Agreement. 27. Entire Agreement; Modification. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the Property. There are no verbal agreements that change this Agreement and no waiver of any of its terms will be effective unless in a writing executed by the parties. 28. Brokers. Seller and Purchaser each represent and warrant to the other party that it has dealt with no brokers, finders, or the like in connection with this Agreement or the transactions contemplated hereby. Seller and Purchaser agree to indemnify and defend each other against, and hold each other harmless from, all claims, damages, costs, and expenses of or for any fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, if and to the extent the representation and warranty made by such party in the immediately preceding sentence is not true. 29. Binding Effect. This Agreement binds and benefits the parties and their heirs, representatives, successors, and assigns. 30. Governing Law. This Agreement has been entered into in the State of Minnesota and shall be governed by and construed in accordance with the laws of the State of Minnesota. 31. Relationship Between Seller and Purchaser. Nothing in this Agreement shall be construed as creating a joint venture between the Seller and Purchaser or any relationship other than that of the Seller and Purchaser. 32. Time is of the Essence. Time is of the essence in this Agreement. 214273v12 11 33. Force Majeure. If by reason of any event of Force Majeure (defined below) either party to this Agreement is prevented, delayed or stopped from performing any act which such party is required to perform under this Agreement, the deadline for performance of such act by the party obligated to perform shall be extended for a period of time equal to the period of prevention, delay or stoppage resulting from the Force Majeure event. As used in this Agreement, the term “Force Majeure” shall include, but not be limited to, fire or other casualty, bad weather, pandemic, inability to secure materials, strikes or labor disputes (over which the obligated party has no direct or indirect bearing in the resolution thereof, or if said party does have such bearing, said dispute occurs despite said party’s good faith efforts to resolve the same), acts of God, acts of the public enemy or other hostile governmental action, civil commotion, governmental restrictions, regulations or controls affecting, and/or other events over which the party obligated to perform (or its contractor or subcontractors) has no control. 214273v12 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. SELLER: CITY OF ELK RIVER BY: John J. Dietz, Mayor AND:_____________________________________ Tina Allard, City Clerk PURCHASER: BAER NECESSITIES, LLC BY: Jennifer Abrahamson, Chief Manager 214273v12 EXHIBIT A Legal Description Outlot B, PINEWOOD, Sherburne County, Minnesota Outlot A, PINEWOOD, Sherburne County, Minnesota 214273v12 EXHIBIT B Maintenance Equipment, Tools, Furniture and Supplies 214273v12 15 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 214273v12 EXHIBIT C Restrictive Covenant The Property shall be used solely as a 9-hole golf course and related accessory activities until June 30, 2036. 216352v1 EXHIBIT B MANAGEMENT AGREEMENT 1 PINEWOOD GOLF INTERIM MANAGEMENT AGREEMENT THIS AGREEMENT (“Agreement”) effective July 1, 2021, by and between the City of Elk River, a Minnesota municipal corporation, at 13065 Orono Parkway, Elk River, Minnesota 55330 (hereinafter "City") and Baer Necessities LLC, a Minnesota Limited Liability Company at 14440 145th Court NW, Elk River, Minnesota 55330 (hereinafter " Operator"). WHEREAS, the City owns Pinewood Golf Course at 18150 Waco Street NW, Elk River, Minnesota 55330 ("Golf Course" or "Pinewood"). Pinewood is a 9-hole executive course with a 1,700 square foot clubhouse and a pole barn maintenance building; and WHEREAS, the City has entered into a purchase agreement with Operator to; and WHEREAS, the purpose of this Agreement is to engage Operator between the date hereof and the date of Operator’s acquisition of the Golf C ourse; and WHEREAS, during the effective dates of this Agreement, the Operator will retain all revenues from the Golf Course and pay all expenses relating to the operation of the Golf Course. NOW, THEREFORE, the City and the Operator, for the consideration of $1 do hereby mutually agree as follows: 1. Management. The City appoints the Operator as the manager of the Pinewood Golf Course (hereinafter "Golf Course") in accordance with the terms of this Agreement. This appointment is for the purpose of operating, managing, and maintaining the Golf Course. The Golf Course shall be deemed to include the equipment listed on Exhibit A, which shall be maintained by the Operator in as good working condition as of the commencement date of this Agreement, reasonable wear and tear excepted. The equipment may only be used by the Operator for use on the Pinewood Golf Course. 2. Standards of Operation. Operator represents and warrants to City that it shall maintain an efficient and high-quality operation at the Golf Course comparable to other similar golf courses. 3. Term. This agreement shall be for a period commencing on the date first set forth above and ending on the earlier of 1) the date Operator closes on its acquisition of the Golf Course; or 2) the 31st day of July, 2021; provided however that the City may terminate this Agreement at will immediately and without cause, by delivery (by mail or by personal service) to Operator (at its address stated hereinabove) of a notice of the City's termination of this Agreement. If this Agreement expires or is terminated the Operator shall, at its own cost and expense, immediately remove all its personal property from the Golf Course, and quit and surrender possession thereof to the City, in good order and condition. This agreement allows the City to terminate at will. This Agreement may be extended, but only by written Agreement signed by both parties. 2 4. Legal Compliance. The Golf Course shall be used, occupied, operated, maintained, and repaired to be in compliance with all statutes, ordinances, codes, rules and regulations. The Operator shall maintain sole and complete discretion to determine and employ whatever methods, practices, and procedures it deems appropriate to assure the Golf Course remains in compliance with all stated statutes, ordinances, local laws, codes, rules, and regulations. 5. Indemnity. The Operator must defend, indemnify, and hold harmless the City and its officials, employees, and agents and from any and all suits, claims, actions or causes of action of every name and description brought against City for or on account of any death, injuries or damage received or sustained by any party or parties from the negligence, gross negligence or willful misconduct of the Operator arising from the Operators use of this agreement. 6. Insurance. The Operator shall take out and maintain during the term of this agreement such commercial liability insurance as shall protect the Operator and the City from claims for damages for personal and bodily injury including accidental death, as well as from claims for property damage, which may arise from operations under this agreement. The City shall be named as an additional insured on the commercial liability policy on a primary and non-contributory basis. The Operator shall provide the City a certificate of insurance evidencing the required insurance coverage in a form acceptable to City. Such insurance shall be written for amounts not less than: a) Commercial General Liability: A single limit policy in the amount of at least $2,000,000.00 per occurrence for death or bodily injury and property damage liability claims, public liability insurance, blanket contractual liability, broad form property damage liability and fire legal liability. b) Commercial Automobile Liability Insurance. The Operator is required to maintain insurance protecting it from claims for damages for bodily injury and property damage resulting from the ownership, operation, maintenance or use of automobiles which may arise from operations under this agreement. Minimum limits are as follows: $1,000,000 per occurrence Combined Single Limit for Bodily Injury and Property Damage. In addition, the following coverages shall be included: Owned Hired, and Non-owned Automobiles. c) Workers Compensation Insurance: The Operator shall maintain Workers Compensation insurance for its employees during the life of this agreement in accordance with the statutory requirements of the State of Minnesota. In addition, Employer's Liability Insurance shall be provided with minimum limits are follows: $500 ,000 - Bodily Injury by Disease per employee $500,000 - Bodily Injury by Disease aggregate $500,000 - Bodily Injury by Accident d) The Operator shall maintain a blanket faithful performance bond of $250,000 that covers thefts by the Operator and the Operator' s employees. The Operator shall furnish a copy of the above-described insurance policies (or a certificate showing the issuance thereof) to the City and shall also name the City as the additional insured in 3 the Commercial General Liability and Commercial Automobile Liability policies on a primary and non-contributory basis. The Operator's policies and Certificate of Insurance shall contain a provision that coverage afforded under the policies shall not be cancelled without at least thirty (30) days' advanced written notice to the City, or ten (10) days ' written notice for non-payment of premium. An Umbrella or Excess Liability insurance policy may be used to supplement the Operator' s policy limits on a follow-form basis to satisfy the full policy limits required by this agreement. If the Operator obtains a license to sell beer, wine or intoxicating liquor on the golf course premises, the Operator, at its expense, shall be required to maintain liquor liability insurance in the minimum amount of $1,000,000 for bodily injury, destruction of property of others, loss of means of support, and other pecuniary loss in any one occurrence. The City shall be endorsed as an additional insured. 7. Damage/Injury. The Operator agrees to reimburse the City for any and all damages or injury to any real property or personal property of the City that may arise, directly or indirectly, from the intentional or negligent, acts or omissions of the Operator, its agents or employees. Any accident involving significant property damage or bodily harm occurring at the Golf Course property shall be reported to the Park and Recreation Director as soon as possible and not later than twenty-four (24) hours from the time of such accident. A detailed, written report shall be submitted to the Park and Recreation Director as soon as possible and not later than three (3) business days after the date of such accident. 8. Independent Contractor. The City hereby retains Operator as an independent contractor upon the terms and conditions set forth in this Agreement. Operator is not an employee of the City and is free to contract with other entities as provided herein. Operator shall be responsible for selecting the means and methods of performing the work. Operator shall furnish any and all supplies, equipment (except as indicated on Exhibit A), and incidentals necessary for Operator' s performance under this Agreement. Operator agrees that Operator shall not at any time or in any manner represent that Operator or any of Operator's agents or employees are in any manner agents or employees of the City. Operator shall be exclusively responsible under this Agreement for Operator's and Operator's employees FICA payments, workers compensation payments, unemployment compensation payments, withholding amounts, and/or self-employment taxes if any such payments, amounts, or taxes are required to be paid by law or regulation. 9. Employees. The Operator, in its sole and absolute discretion, shall hire its own staff to operate, manage and maintain the Golf Course. The Operator shall be solely responsible for determining staffing levels and qualifications and setting its employees' compensation, benefits, hours, and all other terms of employment. 10. Notices. Any and all notices and payments required hereunder shall be addressed to the parties at their respective addresses listed on page 1 hereof, or to such other address as may hereafter be designated in writing by either party hereto. 11. Maintenance. The Operator agrees to maintain the Golf Course and cause any required repairs to be made at Operator's expense. If this Agreement expires or is terminated by city, Operator shall deliver up the Golf Course in good order and condition. The clubhouse shall be returned to the City in substantially the same state that it was received by the Operator; reasonable wear and tear 4 excepted. The Operator shall maintain the Golf Course under the standards set forth in Exhibit B. The Operator, however, in its sole discretion, shall determine what manners and procedures shall be employed to meet those standards. The Operator, in its sole discretion, has the right to sell and place signage on the Golf Course at each tee box, attached to the hole designation. 12. Accounting Standards. Operator shall maintain accounting records relating to the Golf Course using accounting practices in accordance with generally accepted accounting principles (GAAP). While the City is not requesting operating statements to be regularly furnished, the Operator shall keep detailed records of all revenues and expenses as are necessary to reflect the results of the operation of the Golf Course, including bills and invoices for supplies and services. 13. Revenue. All Revenues that the Operator receives from the management and operation of the Golf Course shall accrue to the Operator. 14. Payment. All operating losses are the responsibility of the Operator except as specifically provided herein, the City will not compensate the Operator for any expenses the Operator occurs. 15. Concessions. The Operator shall provide the following concessions during the operating season: a. Golf balls, t-shirts, golf polos, sweatshirts, and hats. b. Soda, candy, chips and packed sandwiches and other products. 16. Advertising. The Operator-shall provide the following advertising and promotion: a. Star News for league formation and member ship. b. Manage the current Pinewood Golf Course Facebook page but may not delete any old posts, photos, or videos. 17. Utilities and Operating Expenses. The Operator shall at its own expense be responsible for the following payments and obligations: a. All utilities, including gas, electric, water, cable, television, internet, and telephone service (internet/telephone provided and payable to the City). b. Burglar alarm and monitoring system. c. Irrigation and pump maintenance and the payment of contract fees for same, including winterization and annual fall blow out. 18. Fees. The Operator, in its sole discretion, may set the fees for use of the Golf Course. The Operator, in its sole discretion, shall set the fees for tournament play. 19. Log. The Operator shall create and maintain a general maintenance log of all equipment listed in Exhibit A, attached hereto, and made a part hereof. The City may request a copy of this log. 20. Repairs and Replacement. The Operator shall be financially responsible for all equipment maintenance and repairs. If the Operator decides to use the City for any repairs or 5 maintenance, they will be charged and invoiced for such services. This is for City equipment listed in Exhibit A and for any future purchases or replacement Capital improvements and equipment replacement will be agreed upon by the City and the Operator and shall be the responsibility of the City. The Operator shall, however, be responsible for any repairs or replacements due to any negligence or willful misconduct. 21. Controlling Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. In the event of litigation, the exclusive venue shall be in the District Court of the State of Minnesota for Sherburne County Minnesota. 22. Minnesota Government Data Practices Act. Operator must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to (1) all data provided by the City pursuant to this Agreement, and (2) all data, created, collected, received, stored, used, maintained, or disseminated by Operator pursuant to this Agreement. Operator is subject to all the provisions of the Minnesota Government Data Practices Act, including but not limited to the civil remedies of Minnesota Statutes Section 13.08, as if it were a government entity. In the event Operator receives a request to release data, Operator must immediately notify City. City will give Operator instructions concerning the release of the data to the requesting party before the data is released. Operator agrees to defend, indemnify, and hold City, its officials, officers, agents, employees, and volunteers harmless from any claims resulting from Operator's officers', agents’, city' s, partners', employees’, volunteers‘, assignees' or subcontractors' unlawful disclosure and/or use of protected data. The terms of this paragraph shall survive the cancellation or termination of this Agreement. 23. Assignment. The Operator shall not assign this agreement, or its rights, title, or interest herein without the express prior written consent of the City. CITY OF ELK RIVER By: _____________________________________ John J. Dietz, Mayor By: ________________________________ Tina Allard, City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF SHERBURNE ) The foregoing instrument was acknowledged before me this ________ day of _______ 2021 by John J. Dietz and Tina Allard, respectively the Mayor and City Clerk of the City of Elk River, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. ___________________________________ Notary Public 6 BAER NECESSITIES, LLC By: ____________________________ Jennifer Abrahamson Title: __________________________ STATE OF MINNESOTA ) ) ss. COUNTY OF SHERBURNE ) . The foregoing instrument was acknowledged before me this ________ day of _____________ by _______________ of Baer Necessities, LLC on behalf of the limited liability corporation. ___________________________________ Notary Public 7 Exhibit A Equipment provided by City Unit Number Make Model Hours Serial Number 2019 Estimated Value 784P Toro Groundsmaster 3500-D 2526 308-260000452 $31,385 782P Toro Reelmaster 5200-D no-meter 03540- 260000253 $35,200 783P Toro Greensmaster 3150-Q 1470 0357- 260000691 $27,765 786P Toro Greensmaster 3150-Q 305 04358- 313000251 $27,765 781P Toro Workman 247 07277- 260000717 $9,975 785P Cushman Turf-Truckster 60 99006290 $13,000 Toro Greens Aerator no meter 09120-60403 $4,000 Lely Fertilizer Spreader no meter 2.32021E+13 $3,000 Club Car Utility Cart no meter No number present $12,000 EZGO TXT Golf Cart no meter 2288571 $3,540 EZGO TXT Golf Cart no meter 2288547 $3,540 EZGO TXT Golf Cart no meter 2289143 $3,540 EZGO TXT Golf Cart no meter 2289178 $3,540 EZGO TXT Golf Cart no meter 2289146 $3,540 EZGO TXT Golf Cart no meter 2289893 $3,540 EZGO TXT Golf Cart no meter 2289174 $3,540 EZGO TXT Golf Cart no meter 2288522 $3,540 EZGO TXT Golf Cart no meter 2289553 $3,540 EZGO TXT Golf Cart no meter 2289131 $3,540 EZGO TXT Golf Cart no meter 2289130 $3,540 8 Exhibit B Maintenance Standards Maintenance • Maintenance Equipment o Operator may use the current equipment allocated at Pinewood by the City to upkeep the course to the standard listed below. Any additional equipment that is needed in the joint determination of the City and Operator shall be provided by City. • Greens o Mowed daily to keep constant speed and conditions. o Topdressing and fertilizing will be scheduled by Jon Va1ty, depending upon the turf condition starting the year coming out of the winter. o Topdressing • Aerification will take place in the late fall and be top dressed in the spring-Fairways, Rough, Edging, and Tees o Mowed 3 to 4 times a week. o Fertilizing will be scheduled based on weather and turf conditions. o Use of 1PM (ingrate pest management). Pesticide and fertilizer may only be used by a certified pesticide licensed company when needed, not a static plan. • Weed control of all the grounds. • Irrigation will be maintained with same parts as presently used and blown out each fall during late October. • Equipment repairs and- maintenance will be performed by Operator. • The parties understand that there may be additional capital improvements required to make the facility fit for public use. Any capital improvements required will be paid by the City. Operator can assist in bidding it out to make sure to keep cost down. Clubhouse • Clubhouse must be maintained in proper condition in accordance with the state health and safety guidelines. • Each day the closing worker will have a checklist to complete and make sure that the clubhouse area is set for the next day. o Wipe down all tables. o Empty all garbage receptacles. o Turn off coffee warmer and coffee machine. o Clean coffee machine and coffee pots. 9 o Put hot dog condiments (onions, relish, etc.) in cooler. o Fill pop cooler. o Empty popcorn machine and clean out. o Stock bar (napkins, straws, swords, chips, cups, lids, etc.) o Take roller off on hot dog machine, wash it, and wash inside. o Dishes are done and put away. o Make sure all lights are turned off, upstairs and down. o Make sure windows are shut. o Make sure all doors are locked. o Check patio for garbage and make sure patio is arranged for next day. o Vacuum. o Count cash box in office and deposit in safe. o Close out credit card machine.