6.9. SR 4-15-2002Item 6.9.
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Mayor and City Council
Michele McPhers6a/Director of Planning
April 15, 2002
Consider Land Exchange Agreement with D.R. Horton
Request
The Council is asked to consider a land exchange agreement with D.R. Horton which will
exchange Outlot K for Outlots A and B of Elk River Crossing, vacated 179th Avenue, and
the remnant of the George Deschene property.
Attachments
· Memo from the City Attorney
· Exchange Agreement
· Location Map
Analysis
As the Council is aware, D.R. Horton was required, as part of the approval process for Trott
Brook Farms South, to offer to purchase Outlots A and B, Elk River Crossing and the right-
of-way of 179th Avenue, as these areas were included as part of the preliminary and final
plats for their development proposal. On December 21, 2001 the City received a letter of
intent to purchase those parcels from D.R. Horton. Once the City received the intent to
purchase request, staff countered with a consideration of a land exchange for Outlot K of
Trott Brook Farms. This outlot proved interesting to the Park and Recreation Commission
during the original Trott Brook Farms approval process as a potential park.
Subsequent discussions lead to the drafting of the attached exchange agreement for the
City's consideration. The Council initially granted consent for staff to continue discussions
with D.R. Horton regarding this proposal at their February 11, 2002 meeting. The Park and
Recreation Commission endorsed the land exchange at their February 13, 2002 meeting, and
the Planning Commission found that the land exchange was consistent with the
Memo to Mayor/City Council
April 15, 2002
Page 2
Comprehensive Plan. On March 18, 2002 the City Council conducted a public hearing as
required by State Statute for the sale of excess property. There were no public comments.
The areas of the parcels to be exchanged are as follows:
Outlot A, Elk River Crossing
Outlot B, Elk River Crossing
179~h Avenue
George Deschene remnant
Outlot K, Trott Brook Farms
2.24 acres
.26 acres
3600 square feet (approximate)
6 acres, is proposed to be included in Marshes
of Trott Brook Farms, 10 townhome units.
23.15 acres (10.38 upland, 12.77 wetland)
The City Attorney has reviewed the exchange document and found no issues with it. There
are closing dates contained within the document that will need to be changed.
Recommendation
Staff recommends that the City Council approve the exchange agreement and allow its
execution by the Mayor once the required changes have been made.
S:\PLANNING\MICHMC\CCREPRTS\LandExchange.doc
GRAY, PLANT, MOOTY, MOOTY & BENNETT, P.A. ATTORNEYS ATLAW
3400 CITY CENTER
33 SOUTH SIXTH STREET
MINNEAPOLIS, MN 55402-3796
612 343-2800
FAX: 612 333-0066
www.gpmlaw.com
MEMORANDUM
TO:
Michele McPherson
FROM: Charles Wilson
D.R. Horton Exchange Agreement
DATE: April 10, 2002
This memorandum is in response to the Council's request for an opinion
regarding the Exchange Agreement. I have reviewed a copy of the Exchange Agreement
and believe that it would be appropriate for the Council to execute the agreement if it
meets with their approval.
The Exchange Agreement is structured like a real estate purchase agreement in
which the City of Elk River is acquiring land and paying for it with other land rather than
money. All of the standard protections for the purchaser are included in the Exchange
Agreement.
This Exchange Agreement contains three principal conveyances (Articles 1-3):
1. The exchange (swap) of certain identified land between the City of Elk
River and D.R. Horton, Inc.-Minnesota.
The conveyance of a 50-foot wide strip of land extending from Olson
Street to Outlot K from D.R. Horton to The City of Elk River in partial
fulfillment of D.R. Horton's park dedication fees.
3. The vacation of that portion of 179th Avenue Northwest that is included in
the land the City of Elk River is exchanging under the agreement.
No money is to change hands under this agreement (Article 4).
Each party is obligated to try to clear the title of any items to which the other side
objects. This obligation is limited to the expenditure of $10,000 for defects not caused by
the selling party. Each party must cure defects caused by itself, regardless of expense. If
the title is not cleared, the objecting party may either waive the objection and close or
terminate the Agreement.
-1-
In addition, each party may rely on the warranties set forth in Article 9. These
warranties will survive closing by one year. Each party indemnifies the other against a
breach of these warranties.
GP:881639 vl
-2-
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Contract") is entered into by and between the City
of Elk River, a municipal corporation under the laws of the State of Minnesota, ("Elk River")
and D.R. HORTON, INC.-MINNESOTA, a Delaware corporation, ("ttorton") (together, Elk
River and Horton are the "Parties" and individually a "Party"), effective the date hereof.
RECITALS
A. Elk River owns certain real property located in Elk River (the "City"), Sherburne
County (the "County"), Minnesota which is depicted on Exhibit A and described on Exhibit B
attached hereto and hereby incorporated by this reference (the "Elk River Exchange Parcels").
B. Horton owns certain real property located in the City and County, which is
depicted on Exhibit C and described on Exhibit D attached hereto and hereby incorporated by
this reference (the "Horton Exchange Parcels"). Horton also owns land depicted on Exhibit C
and referred to as "Trott Brook Farms Future Development Area".
C. Horton is currently in the process of developing Trott Brook Farms Future
Development Area as a mixed-density residential development and desires to acquire real
property from Elk River for purposes of further expanding its development, including the
construction of ponds and other improvements.
D. Horton desires to acquire from Elk River the Elk River Exchange Parcels and Elk
River desires to acquire from Horton the Horton Exchange Parcels on the terms and subject to
the conditions set forth in this Contract. The Elk River Exchange Parcels and the Horton
Exchange Parcels are sometimes referred to herein collectively as the "Exchange Parcels". As
the context may require, a Party conveying Exchange Parcels shall be referred to in this Contract
as a "transferring Party" and a Party acquiring Exchange Parcels shall be referred to as an
"acquiring Party".
AGREEMENT
1. PROPERTY TO BE CONVEYED.
a. Elk River Exchange Parcels. Subject to the terms and conditions of this
Contract, Elk River hereby agrees to transfer and convey unto Horton, and Horton agrees to
acquire and take from Elk River, the Elk River Exchange Parcels, together with all
improvements thereon and all rights and appurtenances pertaining thereto.
b. Horton Exchange Parcels. Subject to the terms and conditions of this Contract,
Horton hereby agrees to transfer and convey unto Elk River, and Elk River agrees to acquire and
take from Horton, the Horton Exchange Parcels, together with all improvements thereon and all
rights and appurtenances pertaining thereto.
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2. OUTLOT K. Horton intends to plat that portion of the Trott Brook Farms Future
Development Area lying adjacent to Outlot K in substantial accordance with the Preliminary
Plat. Horton agrees to include a fifty (50) foot wide strip of land extending from Olson Street to
Outlet K in its plat of such land. This strip of land will be for the purpose of allowing access to
Outlot K from Olson Street. The strip of land will be conveyed to Elk River in partial fulfillment
of Horton's park dedication fees, and for such purposes shall be valued at $
3. VACATION OF 179th AVENUE NORTHWEST RIGHT OF WAY. Elk River
agrees to vacate that portion of 179th Avenue Northwest that is included as part of the Elk River
Exchange Parcels, as described in Exhibit D, prior to the Closing Date.
4. CONSIDERATION. In addition to the mutual covenants and agreements contained
herein, the Parties agree that the consideration for Horton's acquisition of the Elk River
Exchange Parcels shall be conveyance of the Horton Exchange Parcels to Elk River and the
consideration for Elk River's acquisition of the Horton Exchange Parcels shall be conveyance of
the Elk River Exchange Parcels to Horton. It is understood that the Parties will not exchange
monetary consideration as part of this transaction.
5. TITLE EVIDENCE.
a. Title Evidence. Upon execution of this contract, each transferring Party shall
deliver to the acquiring Party any abstract of title, survey, registered property abstract, title
insurance commitment or policy or other evidence of title relating to such Party's Exchange
Parcels that each transferring Party has in its possession.
b. Surveys. Each acquiring Party may, at its own expense, obtain a current survey
of the Exchange Parcels to be acquired by such Party.
c. Title Commitments. Within thirty (30) days after the effective date hereof, each
acquiring Party may, at its own expense, obtain:
(1)
a title commitment ("Title Commitment") covering the Exchange Parcels
to be acquired by such Party, binding DRH Title Company of Minnesota (
"Title Company'') to issue at Closing a current form ALTA Owner's
Policy of Title Insurance as described in Section 5.d below; and
(2)
true, correct, and legible copies of any and all instruments referred to in
the Title Commitment as constituting exceptions or restrictions upon title,
except that copies of any liens which are to be released at Closing may be
omitted.
d. Title Policy. As conditions precedent to Horton's obligation to acquire the Elk
River Exchange Parcels and Elk River's obligation to acquire the Horton Exchange Parcels, on
the date of Closing, Title Company shall be irrevocably committed to issue to each acquiring
Party an Owner's Policy of Title Insurance in the amount of $ , which the parties
agree isthe value of the Exchange Parcels, with standard exceptions for mechanic's liens, parties
2174122vl 2
in possession and survey deleted, insuring marketable title to the Elk River Exchange Parcels as
being vested in Horton and insuring marketable title to the Horton Exchange Parcels as being
vested in Elk River, subject only to the Permitted Exceptions as defined below (each a "Title
Policy").
6. TITLE APPROVAL PERIOD.
a. Objections. Horton shall have seven (7) days after the receipt of the last of the
Title Commitment for the Elk River Exchange Parcels to review them and to deliver in writing to
Elk River such objections as Horton may have to anything contained therein ("Horton's
Objections"). Elk River shall have seven (7) days after the receipt of the last of the Title
Commitment for the Horton Exchange Parcels to review them and to deliver in writing to Horton
such objections as Elk River may have to anything contained therein ("Elk River's Objections").
Collectively, Horton's Objections and Elk River's Objections shall be referred to as the
"Objections".
b. Additional Exceptions. If an acquiring Party receives notice or otherwise
discovers that title to the Exchange Parcels to be acquired by such Party is subject to any
additional exceptions not disclosed by the Title Commitment ("Additional Exceptions"), that
Party shall notify the other of its objection(s) in writing within ten (10) days after the acquiring
Party receives notice of any such Additional Exception. Upon such notice, the Additional
Exception shall be deemed an Objection subject to Sections 6.c and 6.d.
c. Obligation to Cure Objections. Each transferring Party shall in good faith
attempt to satisfy prior to Closing all Objections made by the acquiring Party and to cause the
Title Company to revise the Title Commitment to reflect such satisfaction.
No transferring Party shall be obligated to expend in excess of Ten
Thousand and No/100 Dollars ($10,000.00) in order to cure Objections
which are not caused by such Party.
(2)
Each transferring Party shall be required to cure any Objections which are
caused by it, regardless of the cost to cure such Objections.
(3)
Neither transferring Party shall encumber its Exchange Parcels other than
with encumbrances which provide for release thereof at Closing in
accordance with this Contract and neither Party will allow a formal notice
of default to remain uncured with regard to such encumbrances.
d. Rights if Transferring Party Fails to Cure Objections. If a transferring Party
delivers written notice to an acquiring Party on or before the Closing Date that the transferring
Party is unable to satisfy any Objection, or if, for any reason, the transferring Party is unable to
convey title in accordance with Section 5, the acquiring Party may, in addition to its other
remedies hereunder, elect to do any of the following:
(1) waive such Objection and accept such title as the transferring Party is able
2174122vl 3
to convey; or
(2)
terminate this Contract by written notice to the transferring Party pursuant
to Section 14.
e. Permitted Exceptions. The following shall be deemed to be "Permitted
Exceptions":
(1)
any item disclosed by the Title Commitment or Survey and any Additional
Exception to which an acquiring Party does not object;
(2) zoning ordinances; and
(3) the lien for current taxes.
7. INSPECTION PERIOD.
a. Engineering and Feasibility Study. Each acquiring Party, at its expense, may
conduct such studies of the Exchange Parcels to be acquired as such acquiring Party shall desire,
including without limitation, architectural, geotechnical, environmental, marketing, engineering
and financial feasibility studies, and Horton shall utilize the results of such studies to determine
whether or not the Exchange Parcels are suitable to Horton.
(1)
In the event that Horton determines in its sole judgment and discretion that
the Exchange Parcels are suitable to Horton, Horton shall send written
notice (the "Notice of Suitability") to Elk River on or before February 27,
2002.
(2)
If Horton fails to send to Elk River the Notice of Suitability on or before
the date specified in subparagraph (1) above, and such failure continues
fpr a period of ten (10) days after written notice from the transferring
Party, this Contract shall automatically terminate pursuant to Section 14.
(3)
Notwithstanding anything contained herein to the contrary, the Notice of
Suitability from Horton shall not be effective unless signed by any one of
Donald R. Horton, Donald J. Tomnitz or George Seagraves, each in his
capacity as an officer of Horton.
b. Environmental Investigation.
Environmental Reports. Each acquiring Party may obtain, at its
expense, an environmental engineering report (or reports) addressed to
itself, the form and content of which and the individual or firm preparing
the report(s) being acceptable to such acquiring Party, presenting the
results of an investigation of the Exchange Parcels to be acquired, and
such property in the vicinity of the Exchange Parcels as may be
appropriate in such acquiring Party's discretion in light of the intended use
2174122vl 4
of the Exchange Parcels, with regard to the existence, generation,
processing, storing, disposal, release, or discharge of any Hazardous
Substances, from, on, under, about, or in the vicinity of the Exchange
Parcel, and Environmental Laws relating to Hazardous Substances
affecting the Exchange Parcels, and relating to the existence of any
wetlands or threatened, endangered, or protected species or habitats or
items of archeological significance on or near the Exchange Parcels,
which investigation is commonly referred to as a "Category I", "Phase I",
or "Level I" environmental audit, ("Phase I"), and such further
investigations and/or reports as the acquiring Party may require due to the
results obtained in the Phase I, (collectively, the "Environmental
Reports").
(2)
Termination. In the event the acquiring Party is not satisfied with the
results of such investigation(s) and report(s), or if there is an adverse
change in the condition of the Exchange Parcels before Closing, the
acquiring Party may terminate this Contract pursuant to Section 14 of this
Contract.
(3)
Contingency. Each Party's obligation to close hereunder is expressly
contingent upon the acquiring Party's satisfaction, in its sole discretion,
with the results of the environmental investigation, and upon there having
been no adverse change in the condition of the Exchange Parcels or the
property in the vicinity of the Exchange Parcels as such condition was
reflected in such investigation.
(4)
Hazardous Substances and Environmental Laws. As used in this
Contract, "Hazardous Substance," shall mean and include all hazardous
or toxic substances, wastes or materials, any pollutants or contaminates
(including, without limitation, asbestos and raw materials which include
hazardous constituents, radon and urea formaldehyde), and any other
similar substances, or materials which are included or regulated by any
local, state, or Federal law, rule or regulation pertaining to environmental
regulation, contamination, clean-up or disclosure, including, without
limitation, the Comprehensive Environmental Response Compensation
and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Reco.very
Act, the Toxic Substances Control Act and the Federal Insecticide,
Fungicide and Rodenticide Act, as amended, (collectively,
"Environmental Laws").
c. Right to Enter Property. Each acquiring Party and its employees and agents
shall have the right and permission from and after the date hereof to enter upon the Exchange
Parcels to be acquired, at all reasonable times and from time to time, for the purpose of making
all soil, drainage, utilities, traffic, and other tests and investigations desired in connection with its
evaluation of the Exchange Parcels and in connection with the engineering, feasibility and
2174122vl 5
environmental studies described above.
d. Indemnification. Each acquiring Party shall indemnify and hold the transferring
Party and the transferring Party's Exchange Parcels harmless from and against any damages,
losses, liens (including mechanic's liens), fines, penalties, or claims arising out of or relating to
the inspection activities of such acquiring Party, its employees, agents and contractors.
8. NOTICE AND RIGHT TO CURE. Each Party shall be entitled to written notice of
any default and shall have sixty (60) days from receipt of such notice to cure such default prior
to the exercise of any remedy provided herein. The Parties agree to cooperate with each other in
any and all attempts to cure any default within the default cure period.
9. MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
a. General. Each transferring Party represents, warrants and covenants to the
acquiring Party, as of the date hereof and as of the Closing Date, that with respect to the
transferring Party's Exchange Parcels:
(1)
There are no parties in possession of any portion of the Exchange Parcels
as lessees, tenants at sufferance, or trespassers, and no party has been
granted any license, lease, or other right relating to use or possession of
the Exchange Parcels, other than rights of possession which will terminate
on or before the Closing Date.
(2)
The transferring Party has not received notice of any default (nor is there
any default) under any note, mortgage or contract for deed related to the
Exchange Parcels, and each transferring Party covenants to not default
thereunder nor to grant any liens, leases, easements, options, rights of
refusal or contracts with respect to the Exchange Parcels.
(3)
To the best knowledge and belief of the transferring Party, there is no
pending or threatened condemnation proceeding or similar proceeding or
assessment affecting any part of the Exchange Parcels by any
governmental authority.
(4)
To its best knowledge and belief, the transferring Party has not received
any notice of any violation of (nor is there any violation of) any ordinance,
regulation, law, or statute of any governmental authority or agency
pertaining to the Exchange Parcels.
(5)
The execution and delivery of this Contract, the consummation of the
transaction herein contemplated, and the compliance with terms of the
Contract will not conflict with or, with or without notice or the passage of
time or both, result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, loan agreement,
contract for deed, or instrument to which the transferring Party is a party
2174122vl 6
or by which the transferring Party or the Exchange Parcels are bound, any
applicable regulation or any judgment, order, or decree of any court
having jurisdiction over the transferring Party or the Exchange Parcels.
(6)
Except for the transferring Party, there are no parties with any interest in
the Exchange Parcels (marital, homestead, or otherwise), and no other
signatures are required to make this Contract fully enforceable by the
acquiring Party.
(7) There are no buildings or improvements located on the Exchange Parcels.
(8)
The transfemng Party does not know of any underground or aboveground
storage tanks currently or formerly located on the Exchange Parcels.
(9)
The transferring Party does not know of any individual sewage treatment
systems or wells on or serving the Exchange Parcels.
(10)
To the best of its knowledge and belief, transferring Party has received no
notice with respect to any investigation, administrative order, consent
order or agreement, litigation, or settlement with respect to hazardous
materials or hazardous material contamination that may exist with respect
to the Exchange Parcel. Transferring Party has not manufactured, stored,
generated, treated or disposed of any Hazardous Material on the Exchange
Parcel. As used herein, "Hazardous Material" means any hazardous,
toxic, or dangerous waste, substance, or material, as currently defined for
purposes of the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any other federal, state, or local
law, ordinance, rule, or regulation, applicable to the Property and
establishing liability standards or required action as to reporting,
discharge, spillage, storage, uncontrolled loss, seepage, filtration, disposal,
removal, use or existence of a hazardous, toxic, or dangerous waste,
substance or material.
b. Indemnity. The transferring Party shall indemnify, defend and hold the acquiring
Party, its successors and assigns harmless from and against all fines, penalties, liabilities, claims,
suits, actions, damages, losses, costs and expenses including, without limitation, attorneys' fees,
consequential damages and the cost of any environmental remediation, removal, response,
abatement, clean-up, investigation and monitoring, directly or indirectly, and in whole or in part,
arising out of or attributable to a breach of any of the representations, warranties or covenants of
the transferring Party in this Contract.
c. Remedy. In the event that any of the representations, warranties or covenants set
forth in this Contract are not true and correct as of the Closing Date, the Party to whom such
representations, warranties and covenants are made may, in addition to its other remedies, either:
(1) terminate this Contract pursuant to Section 14; or
2174122vl 7
(2)
elect to Close under this Contract notwithstanding the failure of such
representation or warranty, in which event the Closing shall be deemed a
waiver of the failure of such representation or warranty.
Indemnity.
Update and Survival of Representation, Warranties, Covenants and
(1)
Notwithstanding anything to the contrary contained herein, the
representations, warranties and covenants in this Contract shall be deemed
remade as of Closing.
(2)
If any of the representations, warranties and covenants contained herein
are or become untrue or incorrect before Closing, each transferring Party
shall use its good faith best efforts to take such necessary action to make
such representations, warranties and covenants tlxte and correct as of the
Closing Date.
(3)
The representations, warranties and covenants and the indemnification
provisions in this Contract shall survive Closing for a period of one year
and shall not be merged therein.
10. MEMORANDUM OF CONTRACT. Upon request of either Party, both Parties shall
promptly execute a memorandum of this Contract suitable for filing of record.
11. CHANGE IN PROPERTY.
a. Contingency. This Contract is expressly contingent upon there being no change
after the expiration of the periods described in Section 7 and prior to Closing in the nature or
condition of or circumstances affecting the Exchange Parcels, including, without limitation, any
change in:
(1)
restrictions and requirements affecting the ownership and development of
the Exchange Parcels; or
(2) the environmental condition of the Exchange Parcels.
If any such change occurs prior to Closing, then the acquiring Party may elect to terminate this
Contract pursuant to Section 14.
b. Moratorium. If any state, county, city, or governmental agency declares or
effects any moratorium on the approval of subdivision plats or plans, which moratorium is
applicable to Trott Brook Farms or any portion thereof, and, as a result of such moratorium, the
state, county, city, or any other applicable governmental agency or authority will not approve
subdivision plats or plans, then, in such event, each Party's obligation to close hereunder shall
abate.
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Upon the discontinuation of any such moratorium, the Parties' obligations
to close hereunder shall resume as of that date and continue as per the
provisions of this Contract.
(2)
If, however, such moratorium shall last longer than ninety (90) days, each
Party shall have the right, but not the obligation, to terminate this Contract
pursuant to Section 14.
12. CLOSING.
a. Closing Date and Place. The Closing ("Closing") of this Contract shall be held
on March 13, 2002 ("Closing Date"), provided, however, that if, on such date a transferring
Party has not satisfied the conditions required to induce the Title Company to issue the Title
Policy or if there are objections made by an acquiring Party which have not yet been cured by
the transferring Party, either Party, by written notice to the other, may postpone the date of the
Closing to such date as shall be designated in such notice, but not more than thirty (30) days after
the Closing Date above specified. Closing shall occur at the offices of the Title Company.
Notwithstanding anything herein to the contrary, Horton's obligation to perform hereunder is
expressly contingent upon Horton obtaining fee simple title to the Horton Exchange Parcels and
Horton's Retained Land on or before the Closing Date. In the event Horton has not obtained fee
simple title to the Horton Exchange Parcels and Horton's Retained Land as contemplated herein,
then either party may terminate this Contract pursuant to Section 14.
b. Deliveries by Elk River. At Closing, Elk River shall deliver to Horton:
a limited warranty deed conveying the Elk River Exchange Parcels
according to the legal descriptions prepared by the surveyor as shown on
the Survey, subject only to the Permitted Exceptions;
(2) the Title Policy, subject only to the Permitted Exceptions;
(3) possession of the Elk River Exchange Parcels;
(4) a standard form Seller's affidavit;
a well disclosure certificate or a statement on the deed asserting that Elk
River does not know of any wells on the Elk River Exchange Parcels; and
(6) a Non-Foreign Affidavit in standard form.
c. Deliveries by Horton. At Closing, Horton shall deliver to Elk River:
(~)
a limited warranty deed conveying the Horton Exchange Parcels according
to the legal descriptions prepared by the surveyor as shown on the Survey,
subject only to the Permitted Exceptions;
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(2) the Title Policy, subject only to the Permitted Exceptions;
(3) possession of the Horton Exchange Parcels;
(4) a standard form Seller's affidavit;
(5)
a well disclosure certificate or a statement on the deed asserting that
Horton does not know of any wells on the Horton Exchange Parcels;and
(6) a Non-Foreign Affidavit in standard form.
d. Prorations and Closing Costs. Elk River and Horton agree to the following
prorations and allocation of costs, fees, taxes and special assessments with respect to the
Exchange Parcels, which the Parties will pay at Closing:
(1)
Title, Recording and Closing Fees. Each Party shall pay fees charged by
the Title Company related to issuing the Title Commitment, including all
examination fees and title search fees for the Exchange Parcel which it is
transferring. Horton shall pay the premium for the Title Policy issued for
the Elk River Exchange Parcels. Elk River shall pay the premium for the
Title Policy issued for the Horton Exchange Parcels. Elk River and Horton
shall each pay one-half of any closing fee charged by the Title Company.
With respect to all other costs, each Party shall pay its share of the Closing
costs which are normally assessed by the Title Company against an Elk
River or Horton in a transaction of this character in the County. Each
transferring Party shall pay any deed tax, conservation tax, and the cost of
recording any documents necessary to cure Objections of the acquiring
Party or to otherwise transfer good and marketable title to such Party's
Exchange Parcels. Each acquiring Party shall pay all document recording
fees for the limited warranty deed delivered by the transferring Party.
(2)
Real Estate Taxes. Each transferring Party shall pay all real estate taxes
due and payable in the years prior to the year of Closing with respect to its
Exchange Parcels. Real estate taxes due and payable in the year of
Closing shall be prorated on a calendar year basis at Closing, effective as
of the Closing Date. If Closing shall occur before the tax rate is fixed for
the year of Closing, the apportionment of the taxes shall be upon the basis
of the real estate taxes for the preceding year, but any difference in actual
real estate taxes for the year of Closing shall be adjusted between the
Parties to the actual amount upon receipt of written evidence of the
payment thereof. Each acquiring Party shall pay all real estate taxes
payable in the years after the year of Closing for the Exchange Parcels
which it acquires.
(3) Deferred Taxes. All "Green Acres" recapture taxes or similar taxes
2174122v1 10
attributable to agricultural or special use valuation or any other deferred
taxes with respect to all Exchange Parcels, if any, shall be paid by the
transferring Party.
(4)
Special Assessments. All assessments that are levied, pending or
deferred as of the Closing Date with respect to all Exchange Parcels, if
any, shall be paid by the transferring Party.
13. DEFAULT.
a. Horton's Remedies. If Elk River shall fail to consummate this Contract for any
reason except Horton's default or the termination of this Contract pursuant to a right to terminate
given herein, Horton may, as its sole and exclusive remedies, either enforce specific performance
of this Contract or terminate this Contract.
b. Elk River's Remedies. If Horton shall fail to consummate this Contract for any
reason except Elk River's default or the termination of this Contract pursuant to a right to
terminate given herein, Elk River may, as its sole and exclusive remedies, either enforce specific
performance of this Contract or terminate this Contract.
14. TERMINATION.
a. Termination by Notice. Termination of this Contract by Horton or Elk River
pursuant to Section 7b(2), 9, 11, 12 or 13 shall be effective upon notice to the other Party and
the Title Company.
b. Automatic Termination. Termination of this Contract automatically upon
failure of Horton to give Notice of Suitability pursuant to Section 7.a.(2) shall be effective upon
expiration of the ten (10) day period after written notice from the transferring Party.
c. Effect of Termination. In the event this Contract is terminated pursuant to this
Section 14, then upon such termination neither Elk River nor Horton shall have any further
rights, liabilities or obligations under this Contract, except that the representations, warranties
and covenants and the indemnification provisions in this Contract shall survive termination for a
period of one year.
15. COMMISSION.
a. Brokers. Elk River and Horton each hereby warrant and represent to the other
that no brokers, agents, finders fees, commissions, or other similar fees are due or arising in
connection with the entering into of this Contract, the sale and purchase of the Exchange Parcels,
or the consummation of transactions contemplated herein, and Elk River and Horton each hereby
agree to indemnify and hold the other harmless from and against all liability, loss, cost, damage,
or expense (including, but not limited to, attorneys' fees and costs of litigation) which the other
Party shall suffer or incur because of any claim by a broker, agent, or finder claiming by,
through, or under such indemnifying Party, whether or not such claim is meritorious, for any
compensation with respect to the entering into of this Contract, the sale and purchase of the
2174122vl 1 1
Property, or the consummation of the transactions contemplated herein.
b. Disclosure. Horton hereby discloses that it is a licensed real estate broker buying
for its own account. Elk River hereby discloses that it is a licensed real estate broker buying for
its own account.
16. MISCELLANEOUS PROVISIONS.
a. Date of Contract. The term "date of this Contract" or "date hereof' or "effective
date of this Contract" as used herein shall mean the later of the dates on which this Contract is
signed by: (i) Elk River, (ii) Horton or (iii) Horton's Corporate Approval, which later date shall
be the date of final execution and agreement by the Parties hereto.
b. Notices. Any notice or communication required or permitted hereunder shall be
deemed to be delivered, whether actually received or not, when deposited in the United States
mail, postage fully prepaid, registered or certified mail, addressed to the intended recipient at the
address on the signature page of this Contract or when delivered personally to such address. Any
address for notice may be changed by written notice so given. All notices to Horton shall
include a copy to:
D.R. Horton, Inc.-Minnesota
1901 Ascension Boulevard, Suite 100
Arlington, Texas 76006
Attn: James M. Peebles
c. Forms. In case of a dispute as to the form of any document required hereunder,
the current form adopted by the Minnesota Commissioner of Commerce as a Uniform
Conveyancing Blank or prepared by the Minnesota State Bar Association shall be conclusively
deemed reasonable.
d. Attorneys' Fees. If either Party shall be required to employ an attorney to
enforce or defend the rights of such Party hereunder, the prevailing Party shall be entitled to
recover reasonable attorneys' fees.
e. Integration. This Contract contains the complete agreement between the Parties
and cannot be varied except by the written agreement of the Parties. The Parties agree that there
are no oral agreements, understandings, representations, or warranties which are not expressly
set forth herein.
f. Survival. Except as expressly provided in this Contract, any portion of this
Contract which relates to a period after Closing, and all of the representations, warranties and
indemnities, will survive Closing or termination of this Contract for a period of one year and
shall not merge with delivery of the deed, including without limitation the indemnification
obligations contained in Section 7.d.
g. Binding Effect. This Contract shall inure to the benefit of and bind the Parties
2174122vl 12
hereto and their respective heirs, representatives, successors, and assigns. Either Party shall have
the right to assign its rights hereunder.
h. Impairment of Property. From and after the date of this Contract, neither Party
shall do or permit others to do any of the following on or to the respective Exchange Parcels,
without prior written consent from the acquiring Party:
(1) hunting;
(2) logging;
(3) grubbing or clearing;
(4) grading;
(5) removal of gravel, rock, sand, dirt or minerals; or
(6) waste of the Exchange Parcels.
i. Interpretation. The Parties acknowledge and agree that each has been given the
opportunity to independently review this Contract with legal counsel, and/or has the requisite
experience and sophistication to understand, interpret, and agree to the particular language of the
provisions hereof. The Parties have equal bargaining power, and intend the plain meaning of the
provisions herein. In the event of an ambiguity in or dispute regarding the interpretation of this
Contract, the interpretation of this Contract shall not be resolved by any rule of interpretation
providing for interpretation against the party who causes the uncertainty to exist or against the
draftsman.
j. Dates and Time Periods. Should the date for the giving of any notice, the
performance of any act, or the beginning or end of any period provided for herein fall on a
Saturday, Sunday or other legal holiday, such date shall be extended to the next succeeding
business day which is not a Saturday, Sunday or legal holiday.
17. EXECUTION OF CONTRACT BY OFFICER OF HORTON.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
NEITHER THIS CONTRACT NOR ANY AMENDMENT HERETO SHALL BE A VALID
AND ENFORCEABLE OBLIGATION OF HORTON UNLESS THE CONTRACT OR
AMENDMENT IS EXECUTED BY ANY ONE OF DONALD R. HORTON, DONALD J.
TOMNITZ, OR GEORGE SEAGRAVES, EACH AN OFFICER OF HORTON, WITHIN
THIRTY (30) DAYS OF THE EXECUTION OF THIS CONTRACT OR AMENDMENT BY
ELK RIVER AND HORTON'S REPRESENTATIVES.
EXHIBIT LIST
Exhibit A - Depiction of Elk River Parcels
2174122vl 13
Exhibit B - Description of Elk River Exchange Parcels
Exhibit C - Depiction of Horton Parcels
Exhibit D - Description of Horton Exchange Parcels
2174122vl 14
SIGNATURE PAGE
CONTRACT OF SALE BETWEEN
D.R. HORTON, Inc.-MINNESOTA
AND
THE CITY OF ELK RIVER
IN WITNESS WHEREOF, the Parties hereto have executed this Contract in multiple copies,
each of which shall be deemed to be an original, on the dates set forth below.
CITY OF ELK RIVER,
a Minnesota municipal corporation
Elk River, MN
Telephone: ( ) __
Facsimile: ( )__
By:
Name:
Its:
Date:
TITLE COMPANY:
DR/-I TITLE COMPANY OF MINNESOTA
20860 Kenbridge Court
Suite 110
Lakeville, MN 55044
Telephone: (952) 985-7875
Facsimile: (952) 985-7876
D. R. HORTON, INC.-MINNESOTA
a Delaware corporation
20860 Kenbridge Court
Suite 100
Lakeville, MN 55044
Telephone: (952) 985-7822
Facsimile: (952) 985-7800
By:
Date:
Neil G. Hansen
President
CORPORATE APPROVAL:
D.R. HORTON, Inc.-Minnesota
By:
Name:
Its:
Date:
By:
Name:
Its:
Date:
2174122vl 15
2174122vl 16
EXHIBIT A
Depiction of Elk River Parcels
2174122vl A-1
EXHIBIT B
Description of Elk River Exchanee Parcels
PARCEL 1:
Outlot A, Elk River Crossing, according to the plat thereof.
PARCEL 2:
Outlot B, Elk River Crossing, according to the plat thereof.
PARCEL 3:
That portion of 179th Avenue Northwest that lies between Outlot A and Outlot B, Elk River
Crossing, according to the plat thereof.
PARCEL 4:
Outlot A, Elk River Business Park, according to the plat thereof.
PARCEL 5:
That part of the Southwest Quarter of the Northwest Quarter of Section 35, Township 33, Range
26, Sherbume County, Minnesota lying southerly and easterly of the southerly and easterly right
of way lines of Twin Lakes Road and County State Aid Highway 13.
2174122vl 18
EXHIBIT C
Depiction of Horton Parcels
2174122vl C-1
EXHIBIT D
Description of Horton Exchange Parcels
PARCEL 1:
That part of Lot 78, Block 1, TROTT BROOK FARMS FIFTH ADDITION, according to the
recorded plat thereof, Sherburne County, Minnesota, lying northeasterly of the following
described line:
Commencing at the southeast corner of said Lot 78; thence North 00 degrees 22 minutes 24
seconds West, assumed bearing along the east line of said Lot 78, a distance of311.86 feet to the
actual point of beginning of the line to be described; thence North 79 degrees 05 minutes 37
seconds West, a distance of 78.93 feet; thence North 72 degrees 17 minutes 30 seconds West, a
distance of 64.61 feet; thence North 57 degrees 01 minutes 24 seconds West, a distance of 58.21
feet; thence North 49 degrees 36 minutes 46 seconds West, a distance of 52.70 feet; thence North
42 degrees 50 minutes 51 seconds West, a distance of 189.34 feet; thence North 41 degrees 03
minutes 16 seconds West, a distance of 85.65 feet; thence North 32 degrees 39 minutes 18
seconds West, a distance of 34.51 feet to an angle point in the northeasterly line of said Lot 78
and said line there terminating.
PARCEL 2:
Outlot K, Trott Brook Farms, according to the plat thereof.
2174122vl C-1
BCHENE
OUTLOT
/
OUTLOT ~
\
OUTLOT L
¥
AVENUE NW
C K 3 LOT 1
1
DUSTRIAL CIRCLE
4
5
OUTLOT B
7
OUTLOT E
OUTLOT G
F/,,.'F1¢¢
OU TLOT L
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)T A
OF WAY
B
B
ROAD NO. 12 .,~
HILLSIDE /
CITY PARK
Location Map
Case Number: LAND EXCHANGE WITH D.R. HORTON
N