5.2.A. SR 09-10-2007REQUEST FOR ACTION
To Item Number
Ci Council 5.2.A
Agenda Section Meeting Date Prepared by
Worksession September 10, 2007 Bill Maertz, Parks and Recreation
Director
Item Description Reviewed by
Malmstrom Property Purchase Agreement Lori ohnson, Ci Administrator
Reviewed by
Action Requested
Request approval of Malmstrom property purchase agreement.
Background/Discussion
The City Council approved the purchase of an 18-acre parcel of land owned by the Malmstrom family as
part of the 2007 park dedication budget. This parcel is adjacent to Woodland Trails and connects the
Ridgewood and Brentwood neighborhoods to Woodland Trails Park. In addition it serves as a buffer
from land uses to the north.
After the Council approved this purchase it came to light that the gravel mine to the north would need
more land for a buffer. A revised 14.79 acre parcel was created which allows for this buffer and reduces
the overall purchase price. In addition, due to budget limitations, staff is recommending crediting the
Malmstroms park dedication fox ten future residential lots in exchange for a price reduction of $33,000.
Financial Impact
See attached payment schedule.
Attachments
^ Payment Schedule
^ Parcel Exhibit
^ Purchase Agreement
^ Site Location Map
Action Motion by Second by Vote
Follow Up
C:\Documents and Settings\jmiller\Local Settings\Temporary Internet Files\OLK3E\Malmstron 5 2 A Action Request (2).doc
DG3af~ u
Malmstrom Property
fwstlmated Amortization
Purchase Price $ 406,725.00 /~ Park Dedic
Credits 33,000.00 ~\ 10 lots
Principal 373,725.00 ~ v 3300
Annuallnterest 5.00% ~ $ 33,001
Term (years) 5.D ~1 ~
Vl
Beginning
Principal Interest
Year Balance Due
10/1/2007 $ 373,725.00 $ - $
10/1/2008 325,380.D0 16,269.00
1011!2009 244,035.00 12,201.75
1011!2010 162,690.00 8,134.50
10/1!2011 81,345.00 4,067.25
$ 40,672.50 $
All Payments including credits
f oavment of X48.345 would be made when agreement is
Total
Principal Annual
Due Payment
48,345.00 $ 48,345A0 '
81,345.00 87,614.00
81,345.00 93,546.75
81,345.00 89,479.50
81,345.00 85,412.25
373.725.00 $ 414.397.50
447,397.50 ~
a full year of interest would not accrue.
~ ~1
<<~ ~Q~
S:1f=1iVAtJGE1MalmstromPropertyGontract for Deed
8/1/2007
100 0 lUU 200
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SCA_E .N FE'Ef
PURCHASE AGREEMENT
THIS AGREEMENT (Agreement), effective , 2007 ("Effective
Date") is made by and between Walter O. Malmstrom, a married individual, Sheila M. Gahr, a
married individual and Sharon J. Bastian, a married individual (collectively "Seller") and the
City of Elk River, a Minnesota Municipal Corporation, ("Buyer" or "City").
RECITALS
(Rl) Seller owns certain real property located in the City of Elk River, Sherburne County,
Minnesota, consisting of approximately Fourteen and Seventy-nine one hundredths
(14.79) acres of land, legally described on Exhibit "A" attached hereto, herein "Property".
(R2) Seller desires to sell and Buyer desires to purchase the Property upon the terms and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby expressly acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, for the purposes of this Agreement the
following terms shall have the meanings set forth in this Article:
1.1 Closing Date. The term "Closing Date" shall mean October 15, 2007, or any
other date approved in writing by Buyer and Seller for the closing with respect to
the purchase and sale of the Property.
1.2 Title Commitment. The term "Title Commitment" shall mean a title commitment
with respect to the Property to be issued by the Title Company.
1.3 Title Company. The term "Title Company" shall mean Old Republic National
Title Insurance Company, 400 Second Avenue South, Minneapolis, Minnesota
55401.
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ARTICLE II
PURCHASE PRICE/ADJUSTMENTS/
PAYMENT/EARNEST MONEY/ PROBATIONS/RESERVATION
2.1 Purchase Price. Buyer shall pay to Seller, as consideration for the conveyance of
the Property, approximately four hundred six thousand seven hundred and twenty-
five dollars and no/100 ($406,725.00), the ("Purchase Price"), subject to
adjustments, prorations and allocations, as hereinafter provided.
2.1.1 $48,345.00 of the purchase price shall be paid in cash at the time of
closing. The earnest money to be paid by Buyer pursuant to the terms set
forth in Section 2.3 shall be credited toward the payment of the purchase
price at the time of closing.
2.1.2 $33,000.00 of the purchase price will be paid in park dedication credits for
a miximum often residential lots and will be provided by the Buyer at the
time of closing. These credits will be transferable by Seller with Seller's
remaining land and will provide park dedication relief for a maximum of
ten residential lots.
2.1.3 The balance of the Purchase Price, approximately $325,000.00, shall be
paid in four equal annual installments of $81,345.00 along with simple
interest at 5% per annum and shall be evidenced by a note substantially in
the form of Exhibit B to be executed at closing.
2.2 Prorations and Allocations. Seller and Buyer shall make prorations and
allocations of the following expenses, with respect to the Property:
2.2.1 Real Estate Taxes and Special Assessments.
2.2.1.1 Real Estate Taxes. General real estate taxes (i) payable in the
years prior to the year of closing will be paid by Seller, (ii) payable
in the year of closing shall be prorated by Seller and Buyer as of
the Closing Date, based upon a calendar year; and (iii) payable in
the year following the year of closing shall be paid by Buyer.
2.2.1.2 Special Assessments. Seller shall pay any special assessments
levied or pending against the Subject Property as of the Effective
Date, or that become levied or pending after the Effective Date of
this Agreement, including, but not limited to, area wide
transportation charges and area charges for sanitary sewer, storm
sewer and trunk water charge, if any.
2.2.2 Title Insurance. Seller shall pay the title insurance commitment fee and
Buyer will pay all costs of the owner's Title Policy and all supplements
and endorsements thereto.
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2.2.3 Closing Fee. Buyer and Seller will pay split any reasonable and
customary closing fee or charge imposed by any closing agent designated
by the Title Company.
2.2.4 Deed Tax. Buyer shall pay all state deed tax regarding the Warranty Deed
to be delivered by Seller pursuant to this Agreement.
2.2.5 Recording. Seller will pay the cost of recording any documents
necessary to clear title and Buyer shall pay the cost of recording the
Warranty Deed.
2.2.6 Attorne. sees. In any litigation, arbitration or similar proceeding to
resolve a dispute between Seller and Buyer arising under or relating to this
Agreement, the prevailing party shall be entitled to recover its reasonable
costs, including reasonable attorney's fees, from the other party as
determined by the court, arbitrator or other decision maker.
2.2.7 Other Costs. All other costs shall be allocated in accordance with the
customs prevailing in similar transactions in the Twin Cities area.
2.3 Earnest Money. Buyer shall, upon execution and delivery of this Agreement,
deposit the sum of Ten Thousand Dollars ($10,000.00) as "Earnest Money" with
the Title Company, to be held, retained or refunded as follows:
2.3.1 Deposit. The Earnest Money shall be deposited in an interest bearing
account, in Buyer's name and for its account with the Title Company.
2.3.2 Default by Buffer. In the event of a default by Buyer, the Earnest Money
and all interest earned on the Earnest Money shall be retained by Seller
free from all claims of Buyer.
2.3.3 Termination by Bum. If Buyer terminates this Agreement by reason of
Seller's default or, if Buyer terminates this Agreement pursuant to Section
4.1, 4.3.1 or Article IX hereof, then, and only then, the Earnest Money
shall be refunded to Buyer.
2.3.4 Other Cases. In all other cases, all of the Earnest Money and all interest
thereon shall be retained by Seller.
ARTICLE III
ACCESS TO PROPERTY, INDEMNITY,
REPORTS, SURVEY AND GRADING PLAN
3.1 Access to Property/Indemnity. Seller shall allow Buyer and Buyer's
representatives access to the Property for the limited purpose of making such
inspections, tests and verifications as they shall deem reasonably necessary;
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however, Buyer (i) shall pay all costs and expenses of such investigations, tests or
verifications; (ii) shall indemnify and hold Seller and the Property harmless from
all losses, liabilities, cost and expenses relating to the activities of Buyer and/or its
representatives, which indemnity shall survive the Closing and/or the termination
of this Agreement; and (iii) shall return the Property to the same condition as it
was prior to said testing. Buyer shall provide Seller with a copy of all reports at
no cost to Seller.
3.2 Survey. Seller shall deliver to Buyer any survey in its possession within 10 days
after the effective date hereof. Buyer shall be responsible for obtaining any
additional survey it requires. (the "Survey").
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING/TERMINATION
4.1 Buyer's Conditions Precedent. The obligations of Buyer under this Agreement are
subject to the following conditions precedent which, prior to the Closing Date, shall
have either been waived in writing by Buyer or shall have been determined, in
Buyer's sole discretion and at Buyer's sole expense, to have been satisfied:
4.1.1 The representations and warranties contained in this Agreement must be
true now and on the Closing Date as if made on the Closing Date.
4.1.2 Title shall have been found acceptable, or been made acceptable, in
accordance with the requirements and terms of this Agreement and the
Title Company shall agree at the closing to issue the Owner's Policy
contemplated in the Commitment as of the date of recording the warranty
deed.
4.1.3 Seller shall perform all of the obligations required to be performed by
Seller under this Agreement as and when required by this Agreement.
4.1.4 Buyer shall have determined on or before the Closing Date, that it, in its
sole discretion, is satisfied with the results of and matters disclosed by soil
tests, engineering inspections, hazardous waste and environmental reviews
of the Property. All such tests, inspections and reviews are to be obtained
at Buyer's expense. Buyer shall select each of the companies to conduct
the above tests, inspections and reviews.
If any such condition precedent has not been satisfied within the allowable times
specified above, then this Agreement maybe terminated, at Buyer's option, by written
notice from Buyer to Seller. In the absence of a written notice from Buyer to Seller,
the conditions precedent shall be deemed automatically waived by Buyer. Upon such
termination, the earnest money shall be released to Buyer and upon such return,
neither party will have any further rights or obligations regarding this Agreement or
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the Property and the parties agree to execute a Termination of Purchase Agreement.
All of the conditions precedent set forth in this paragraph above are specifically stated
and agreed to for the sole and exclusive benefit of the Buyer and the Buyer shall have
the right to unilaterally waive any condition precedent by written notice to Seller.
4.2 Seller's Conditions Precedent The Obligations of Seller under this Agreement are
subject to the following conditions precedent:
4.2.1 The Buyer shall have performed all of the obligations required to be
performed by Buyer under this Agreement as and when required by this
Agreement.
4.3 Termination. This Agreement shall continue in full force and effect unless terminated
within the following times:
4.3.1 If all of the Conditions Precedent have not been timely satisfied then, this
Agreement maybe terminated, at the option of Buyer, by written notice
from Buyer to Seller within ten (10) days prior to the date set out in
Section 4.1 or prior if the failure of a Condition Precedent shall be known.
4.3.2 Unless terminated within the time and in the manner provided above, the
Conditions Precedent shall be conclusively considered to be satisfied or
waived and this Agreement shall continue in full force and effect.
4.4 Effects of Termination. Upon any such termination, except for disposition of the
Earnest Money (which is treated in Section 2.3 hereof), neither party will have any
further rights or obligations regarding this Agreement or the Property excepting only
the indemnification obligations contained in Section 3.1 and Article XI hereof.
4.5 Waiver. All the Conditions Precedent to Closing set forth in this Agreement are
specifically stated and agreed to be for the sole and exclusive benefit of the Buyer,
and the Buyer, shall have the right to unilaterally waive any Condition Precedent by
written notice to the Seller within the times provided above.
ARTICLE V
REPRESENTATIONS AND WARRANTIES, COVENANTS,
AND INDEMNIFICATION
The following representations and warranties are made by the Seller and Buyer.
5.1. Representations and Warranties b Ste. Seller represents and warrants to
Buyer as of the Effective Date, the Closing Date and all dates in between, as
follows:
5.1.1. To the best of Seller's knowledge, there are no parties other than the City,
its Park Department and it authorized park users, in possession of any part
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of the Property, and there are no rights of possession which have been
granted to any third party whatsoever except than to the City, its Park
Department and it authorized park users.
5.1.2. To the best of Seller's knowledge, the Property is in compliance, in all
material respects, with all applicable statutes, ordinances, codes, and all
rules and regulations of all governmental and quasi-governmental
authorities with jurisdiction over the Property. Seller has received no
written notice of any violation of any of the foregoing.
5.1.3. To the best of Seller's knowledge the Property and its existing and all
prior uses comply and have at all times complied with, and Seller is not in
violation of, has not violated, in connection with its ownership, use,
maintenance or operation of the Property and the conduct of the business
related thereto, any applicable federal, state, county or local statutes, laws,
regulations, rules, ordinances, codes, standards, orders, licenses or permits
of any governmental authorities relating to environmental matters (being
hereinafter collectively referred to as the "Environmental Laws"),
including by way of illustration and not by way of limitation, (A) the
Clean Air Act, the federal Water Pollution Control Act of 1972, the
Resource Conservation and Recovery Act of 1976, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Toxic Substances Control Act, the Minnesota Environmental Response
and Liability Act (including any amendments or extensions thereof and
any rules, regulations, standards or guidelines issued pursuant to any of
said Environmental Laws), and (B) all other applicable environmental
standards or requirements. Without limiting the generality of the
foregoing to the best of Seller's knowledge: (i) neither Seller, its agents,
employees and independent contractors nor any tenant, has operated the
Property for the purpose of disposing of petroleum products or any
"hazardous material," as defined in said Environment Laws, other toxic
dangerous or hazardous chemicals, materials, substances, pollutants and
wastes, or any chemical, material or substance exposure to which is
prohibited, limited or regulated by any federal, state, county, regional or
local authority (all the foregoing being hereinafter collectively referred to
as "Hazardous Materials"); (ii) there are no existing or pending remedial
actions or other work, repairs, construction or capital expenditures with
respect to the Property in connection with the Environmental Laws, nor
has Seller received any notice of any of the same; (iii) no Hazardous
Materials have been or will be released into the environment, or have been
or will be deposited, spilled, discharged, placed or disposed of at, on, or
adjacent to the Property, nor has the Property been used at any time by any
person as a landfill or a disposal site for Hazardous Materials or for
garbage, waste or refuse of any kind; (iv) there are no electrical
transformers or other equipment containing dielectric fluid containing
Page 6
polychlorinated biphenyls in excess of 50 parts per million located in, on
or under the Property, nor is there any friable asbestos contained in, on or
under the Property; (v) there are no locations off the Property where
Hazardous Materials generated by or on the Property have been treated,
stored, deposited or disposed of; (vi) the sale of the Property by Seller to
Buyer does not require notice to or the prior approval, consent or
permission of any federal, state or local governmental agency, body, board
or official; and (vii) no notices of any violation of any of the matters
referred to in the foregoing subparagraphs relating to the Property or its
use have been received by Seller and there are no writs, injunctions,
decrees, orders or judgments outstanding, no lawsuits, claims, proceedings
or investigations pending or threatened, relating to the ownership, use,
maintenance or operation of the Property, nor is there any basis for any
such lawsuit, claim, proceeding or investigation being instituted or filed.
Buyer acknowledges that Seller or related entities, agents or designees and
previous land owners are in the mining business and that the Property, and
adjacent property owned by Seller, has been used by Seller or related
entities, agents or designees for mining activities. Buyer acknowledges
that Seller intends to use adjacent lands for gravel mining subject to
compliance with zoning and other ordinances and receipt of the necessary
permits and approvals.
5.1.4. To the best of Seller's knowledge, there are no others wells on the
Property.
5.1.5. There is no demand, proceeding, claim, suit, litigation, or other action
pending or, to Seller's knowledge, threatened against Seller in connection
with or related to the Property.
5.1.6. Seller is not a "foreign person" as that term is defined under Internal
Revenue Code § 1445(F)(3) and the sale of the Property is not subject to
any withholding requirements imposed by the Internal Revenue Code,
including, without limitation, § 1445(F)(3)
5.1.7. No action in condemnation is now pending or, to Seller's knowledge,
contemplated against the Property.
5.1.8. All labor and/or materials which have been furnished to the Property by or
on behalf of Seller have been fully paid for or will be fully paid for prior
to the Closing Date so that no lien for such labor or materials rendered can
be asserted against the Property.
5.1.9. There is no "individual sewage treatment system" within the meaning of
Minn. Stat. § 115.55 on or serving the Property. No sewage is generated
at the Property.
Page 7
5.1.10. Seller shall give Buyer prompt written notice of any matter coming to the
attention of Seller which, to Seller's knowledge, would affect or change
any of the foregoing representations and warranties. In the event any of
the foregoing representations is not in any material respect true as of the
Closing Date, Buyer may, without waiving any other right of remedy it
may have, terminate this Agreement by notice to Seller.
5.1.11. The representations and warranties set forth in this paragraph shall be
continuing and 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 said representations
and warranties shall survive the Closing. Seller agrees to indemnify and
hold Buyer harmless from and against and to reimburse Buyer with
respect to any and all claims, demands, causes of action, loss, damage,
liabilities, and costs (including attorney's fees and court costs) asserted
against or incurred by Buyer caused by the breach of any representation,
warranty or covenant as set forth in this paragraph. Seller's obligations
and liabilities under this paragraph shall be limited to Buyer's actual,
direct damages caused by Seller's breach, and in no event shall Seller be
liable for lost profits or other consequential damages.
5.2. Representations and Warranties by Buyer. Buyer represents and warrants to
Seller as of the Effective Date, the Closing Date and all dates in between, as
follows:
5.2.1. Buyer is duly incorporated and qualified to transact business in the State of
Minnesota; Buyer has the requisite corporate power and authority to enter
into and perform this Agreement.
ARTICLE VI
TITLE EXAMINATION
Examination of title to Property will be conducted as follows:
6.1 Title Commitment. Buyer shall obtain a commitment ("Title Commitment") from
the Title Company for an ALTA Form of Owner's Policy of Title Insurance in the
amount of the Purchase Price, wherein the Title Commitment will commit the
Title Company to insure title to the Property at the Closing.
6.2 Title Examination.
6.2.1 Objections. Buyer shall have twenty (20) days, after it has received (i) the
Title Commitment and the Survey, and (ii) all documents shown as
exceptions therein, to make written objections to title of the Property
("Objections") and the failure by Buyer to make any such Objections
within such time period will constitute a waiver of all Objections.
Notwithstanding the foregoing, all mortgage liens affecting the Real
Page 8
Property shall be paid and satisfied by Seller at Closing and shall not
constitute matters to which Buyer shall be required to object.
6.2.2 Cure of Objections/Non-Cure Notice. Seller will have thirty (30) days
after receipt of any Objections to cure the Objections, during which period
the Closing will be postponed as necessary; provided, however, that if
Seller gives Buyer written notice (a "Non-Cure Notice") within said thirty
(30) day period that Seller cannot or will not cure specified Objections,
then this Agreement shall terminate, unless within ten (10) business days
after receiving the Non-Cure Notice Buyer gives Seller written notice that
Buyer is waiving the Objections specified in the Non-Cure Notice, which
items or matters subject to the Objection(s) shall then also become a
Permitted Encumbrance(s). In any event, Seller shall cure any objection
that can be cured solely by the payment of money. If the Purchase
Agreement is terminated because the Seller cannot or will not cure
specified Objections, then the Earnest Money shall be returned to the
Buyer.
ARTICLE VII
SELLER'S CLOSING DOCUMENTS
On the Closing Date, Seller shall deliver to Buyer the following (collectively, "Seller's
Closing Documents"):
7.1 Deed. A Warranty Deed conveying the Property to Buyer, free and clear of all
encumbrances, except the Permitted Encumbrances, in a form reasonably
acceptable to the Buyer and the Title Company.
7.2 Well Disclosure. Seller will provide Buyer with a well disclosure statement as
required by Minnesota State law or a statement that there is no well.
7.3 Title Documents. An Affidavit of Seller stating that on the Closing Date there are
no outstanding, unsatisfied judgments, tax liens or bankruptcies against or
involving Seller or the Property; that Seller has not caused or allowed any work
on the Property for which payment has not been made; and that there are no other
unrecorded interests in the Property and such other Affidavits and documents as
maybe reasonably required by Title Company or Buyer in order to record Seller's
Deed and issue the Title Policy required by this Agreement.
ARTICLE VIII
BUYER'S CLOSING DOCUMENTS
On the Closing Date, Buyer will duly execute and/or deliver to Seller the following
(collectively, "Buyer's Closing Documents"):
Page 9
8.1 Purchase Price. The full Purchase Price (less Earnest Money and Park Dedication
Credits), by wire transfer of U.S. funds, or by certified check (or other
immediately available funds) to be payable to Seller or to Seller's account or as
Seller may otherwise direct.
8.2 Promissor.~. The City shall execute and deliver the Promissory Note in the
form and content of Exhibit "B" attached hereto and made a part hereof,
evidencing the Buyer's remaining obligations under this Agreement.
8.3 Other Costs and Expenses. Payment for all other costs and expenses to be paid by
Buyer pursuant to this Agreement.
8.4 Other Documents. Such other documents as the Title Company or Seller shall
reasonably request to implement the within described transaction.
ARTICLE IX
CONDEMNATION
If, prior to the Closing Date, eminent domain proceedings are commenced against all or
any part of the Property, Seller shall immediately give notice to Buyer of such fact and at Buyer's
option (to be exercised within thirty (30) days after receipt of Seller's notice), this Agreement
shall terminate, in which event neither party will have further obligations under this Agreement.
If Buyer shall fail to give such notice of termination within such time, then there shall be no
reduction in the Purchase Price and Seller shall assign to Buyer at the Closing Date all of Seller's
right, title and interest in and to any award made or to be made in the condemnation proceedings
in connection with the Property.
ARTICLE X
BROKER'S COMMISSION
Each party hereto warrants that it has not incurred any real estate brokerage fees, finder's
fees, loan brokerage fees, or any other fees to any third party in connection with this purchase
and sale.
ARTICLE XI
MUTUAL INDEMNIFICATION
Seller and Buyer agree to indemnify each other against, and hold each other harmless
from, all liabilities, claims, losses, damages, costs and expenses (including reasonable attorneys'
fees in defending against claims) arising out of activities or agreements in regard to the Property
whether before or after the Closing Date. Such right to indemnification will not arise to the
extent that the claim for indemnification arises out of the act or neglect of the party seeking
indemnification. This Article shall survive the Closing or the termination of this Agreement for
one year.
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ARTICLE XII
ASSIGNMENT
Neither party may assign, or sell for profit or otherwise, its rights under this Agreement
with the prior written consent of the other party before or after the Closing Date.
ARTICLE XIII
NOTICES
All notices, demands, consents, requests, or other communications provided for or
permitted to be given pursuant to this Agreement shall be in writing and shall be sent to the
address set forth below for the receiving party by any of the following means: (i) personal
service; (ii) courier; or (iii) if being delivered or sent to an address that is within the same
country from which the notice is being sent, by certified (or equivalent) or registered mail,
postage prepaid, return receipt requested.
Buyer: The City of Elk River
13065 Orono Parkway
Elk River, Minnesota
With Copy To: Gray Plant Mooty
500 IDS Center
80 South Eight Street
Minneapolis, MN 55402
Attn: Charles D. Wilson
Seller: Walter O. Malmstrom
16011 Harrow Avenue North
Hugo MN 55038
Sheila Gahr
12060 Florida Avenue North
Champlin MN 55316
Sharon Bastian
1120 Prairie Street
Northfield MN 55057
With Copy To: Robb L. Olson
Robb Olson Law Office, PLLC
4886 Hwy. 61, Suite 102
White Bear Lake, MN 55110
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If to Title
Company: Old Republic National Title Company
400 Second Avenue South
Minneapolis, MN 55401
Attn: Rick Zilka
ARTICLE XIV
MISCELLANEOUS
14.1 Force Majeure. Any prevention, delay, or stoppage because of strikes, lockouts,
other labor disputes, material shortages, embargoes, civil unrest, governmental
regulations, enemy or hostile governmental action, judicial order, public
emergency, weather, fire, earthquake, other Acts of God, and other causes beyond
the reasonable control of the party obligated to perform, will extend the period for
performance of any act required by a party (except for payment obligations
imposed pursuant to this Agreement), including the time required for satisfaction
of any condition, for the period of the delay provided, however (i) the
unavailability of financing shall not qualify for force majeure treatment and (ii) the
affected party shall give reasonable written notice to the other of the occurrence
causing such delay and shall include in such notice, if known, the date by which
the delayed obligation will be performed.
14.2 Construction. This Agreement shall be governed by and construed under the laws
of the State ofMinnesota. All captions in this Agreement are for reference only.
14.3 No Merger. The obligations, covenants, representations, and warranties, and the
remedies for breach thereof, set forth in this Agreement shall survive the closing
and shall not merge with transfer of title but shall remain in effect until fulfilled.
14.4 Confirmation of Termination. If this Agreement terminates, Buyer agrees to
execute and deliver to Seller a quit claim deed for the Property and such execution
and delivery shall be a condition precedent to the return of any Earnest Money, to
the extent any Earnest Money is to be refunded to Buyer.
14.5 Location of Closing. The Closing shall take place at the office of the Title
Company, or at such other place as maybe agreed to by the parties.
14.6 Binding_Effect. This Agreement binds and benefits the parties and their
successors and assigns.
ARTICLE XV
ENTIRE AGREEMENT; NO MODIFICATIONS
This Agreement, together with the attached Exhibits "A" and "B" constitutes the entire
Page 12
agreement of the Seller and Buyer with respect to the purchase and sale of the Property. This
Agreement may not be modified or amended except in a writing signed by Seller and Buyer.
ARTICLE XVI
DEFAULT
If either party defaults in the performance of any of the party's obligations under this
Agreement and remains in default for ten (10) days after delivery of written notice of default,
then the non-defaulting party may terminate this Agreement by written notice to the other party.
ARTICLE XVII
POST CLOSING OBLIGATIONS
The Buyer agrees to erect a plaque recognizing the park as the former site of the
Malmstrom Farm. The wording of the plaque would be developed in consultation with the
Seller. Final decisions regarding the wording and location of the plaque shall be made by the
Buyer.
The Seller agrees to provide access to the new park being established on the Property
from Seller's remaining property located to the north of the Property at such future date as the
Seller's remaining property to the north is platted. Attached hereto as Exhibit C is a sketch
showing one possible layout of Seller's remaining property and access point to the park. Exhibit
C is intended only as an illustration of the type and location of the access contemplated by the
parties and not as a limitation on Seller's future use or development of its remaining property.
Such access shall be in a form reasonably acceptable to Buyer.
The obligations set forth in this Article shall survive closing.
[Signatures on following page)
Page 13
IN WITNESS WHEREOF, the parties hereto have duly executed this Purchase
Agreement the day and year first above written.
BUYER
CITY OF ELK RIVER
a Minnesota municipal corporation
SELLER
WALTER O. MALMSTROM
By:
Its:
Spouse
SHEILA M. GAHR
By' Spouse
Its:
SHARON BASTIAN
Spouse
Page 14
EXHIBIT "A"
Legal Description
That part of the South 700.00 feet of the Northeast Quarter of the Southeast Quarter of Section
21, Township 33, Range 26, Sherburne County, Minnesota, which lies Westerly of the centerline
of Sherburne County Road No. 77
Page 15
EXHIBIT "B"
Promissory Note
Page 16
PROMISSORY NOTE
$325,000.00 Elk River, Minnesota
Date: ,
Maker: The City of Elk River a municipal corporation
FOR VALUE RECEIVED, the Maker promises to pay to Walter O. Malrnstrom, Sheila M. Gahr and
Sharon J. Bastian (the "Lender"), at its office in ,Minnesota, or at such other place as any present or
future holder of this Note may designate from time to time, the principal amount of $330,000, or so much thereof as
is advanced and remains outstanding as shown in the records of the holder of this Note, plus interest thereon from
the date on which the same is advanced until this Note is fully paid, computed on the basis of the actual number of
days elapsed and a 360-day year.
Interest: The interest rate under this Note is:
A fixed rate of 5% per annum.
Payments: The Maker shall make the following payments of principal and interest under this Note.
Four (4) payments each due and payable as follows:
Payment 1. October 1, 2008 $97,614.00
Payment 2. October 1, 2009 $93,546.75
Payment 3. October 1, 2010 $89,479.50
Payment 4. October 1, 2011 $85,412.25
Additional Interest
Notwithstanding the foregoing, after the occurrence of an Event of Default and until such Event of Default
is cured, the interest rate under this Note shall automatically increase to an interest rate that is 5% per
annum in excess of the interest rate otherwise in effect.
Other Provisions
At the option of the holder of this Note, any payment under this Note may be applied first to the payment of
charges, fees and expenses (other than principal and interest) under this Note, second to the payment of interest
accrued through the date of payment, and third to the payments of principal under this Note in inverse order of
maturity. Also, at the option of the holder of this Note, if there is any overpayment of interest under this Note, the
holder of this Note may hold the excess and apply it to future interest accruing under this Note.
The occurrence of any of the following events shall constitute an Event of Default under this Note:
(i) any breach or default in the payment or performance of this Note; or
(ii) any commencement of any proceeding under any bankruptcy, insolvency, receivership,
dissolution, liquidation or similar law by or against any such Maker, endorser, guarantor, surety or
other person or entity; or
(iii) any such Maker, endorser, guarantor, surety or other person or entity takes any action to revoke or
terminate any agreement, liability or security in favor of the holder of this Note; or
Page 17
(iv) any statement, representation or warranty made by any such Maker, endorser, guarantor, surety or
other person or entity (or any representative of any such Maker, endorser, guarantor, surety or
other person or entity) to the holder of this Note at any time shall be incorrect or misleading in any
material respect when made; or
(v) the holder of this Note shall in good faith believe that the prospect of due and punctual payment or
performance of this Note or the due and punctual payment or performance of any other note,
obligation, mortgage, deed of trust, assignment, guaranty, or other agreement heretofore, herewith
or hereafter given to or acquired by the holder of this Note in connection with this Note is
impaired.
Upon the commencement of any proceeding under any bankruptcy law by or against any such Maker,
endorser, guarantor, surety or other person or entity, the unpaid principal balance of this Note plus accrued interest
and all other charges, fees and expenses under this Note shall automatically become immediately due and payable in
full, without any declaration, presentment, demand, protest, or other notice of any kind. Upon the occurrence of any
other Event of Default and at any time thereafter, the then holder of this Note may, at its option, declare this Note to
be immediately due and payable in full and thereupon the unpaid principal balance of this Note plus accrued interest
and all other charges, fees and expenses under this Note shall immediately become due and payable in full, without
any presentment, demand, protest or other notice of any kind.
The Maker: (i) waives demand, presentment, protest, notice of protest, notice of dishonor and notice of
nonpayment of this Note; (ii) agrees to promptly provide the holder of this Note from time to time with the Maker's
financial statements and such other information respecting the financial condition, business and property of the
Maker as the holder of this Note may request, in form and substance acceptable to the holder of this Note; (iii)
agrees to pay on demand all fees, costs and expenses of the holder of this Note in connection with this Note and any
transactions and matters relating to this Note, including but not limited to audit fees and expenses and reasonable
attorneys' fees and legal expenses, plus interest on such amounts at the rate set forth in this Note; and (iv) consents
to the personal jurisdiction of the state and federal courts located in the State of Minnesota in connection with any
controversy related in any way to this Note or any transaction or matter relating to this Note, waives any argument
that venue in such forums is not convenient, and agrees that any litigation initiated by the Maker against the Lender
or any other holder of this Note relating in any way to this Note or any transaction or matter relating to this Note,
shall be venued in either the District Court of Sherburne County, Minnesota, or the United States District Court,
District of Minnesota. Interest on any amount under this Note shall continue to accrue, at the option of the holder of
this Note, until such holder receives final payment of such amount in collected funds in form and substance
acceptable to such holder.
No waiver of any right or remedy under this Note shall be valid unless in writing executed by the holder of
this Note, and any such waiver shall be effective only in the specific instance and for the specific purpose given. All
rights and remedies of the holder of this Note shall be cumulative and may be exercised singly, concurrently or
successively. The Maker, if more than one, shall be jointly and severally liable under this Note, and the term
"Maker", wherever used in this Note, shall mean the Maker or any one or more of them. All references in this Note
to the holder of this Note shall mean the Lender and any and all other present and future holders of this Note. This
Note shall bind the Maker and the heirs, representatives, successors and assigns of the Maker. This Note shall
benefit the holder of this Note and its successors and assigns. This Note shall be governed by and construed in
accordance with the internal laws of the State of Minnesota (excluding conflict of law rules).
THE MAKER REPRESENTS AND WARRANTS TO THE LENDER AND AGREES THAT THE
MAKER HAS READ ALL OF THIS NOTE AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
NOTE.
THE CITY OF ELK RIVER
a municipal corporation
Page 18
By _
Title
GP:2065955 v3
By _
Title
Page 19
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