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HomeMy WebLinkAbout05-02 - ADMIN Resolution - Economic Development Authority - 2005/01/03ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 05-02 RESOLUTION APPROVING EXECUTION OF "ASSIGNMENT OF PURCHASE AGREEMENT AND CONSENT" AMONG THE ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY, THE ST. LOUIS PARK SCHOOL DISTRICT 283, AND FOUNDATION LAND DEVELOPMENT LLC BE IT RESOLVED By the Board of Commissioners ("Board") of the St. Louis Park Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering Redevelopment Project No. 1 ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. There has been presented before the Authority an Assignment of Purchase Agreement and Consent (the "Assignment") among the Authority, St. Louis Park School District 283 (the "School District"), and Foundation Land Development LLC ("Foundation"), setting forth the terms and conditions under which the Authority will assume the Purchase Agreement between the School District and Foundation. 1.03. The Assignment provides, among other things, for the assignment of Foundation's obligations under the Purchase Agreement to purchase the Brookside School Property owned by the School District, pursuant to the terms of the Purchase Agreement, and the consent of Foundation to such Assignment. Upon acceptance of the Assignment, the Authority will be obligated to purchase the Brookside School from the School District. 1.04. The Assignment is an integral element of the pending transaction between the Authority and 4100 Vernon Developers LLC (the "Redeveloper"). The Authority and Redeveloper intend to execute a Contract for Private Redevelopment (the "Contract"). The Contract will provide, among other things, for the sale by the Authority of the Brookside School ("Redevelopment Property") to the Redeveloper for construction of a residential project, consisting of 27 condominiums, 14 townhouses (or 41 condominiums), and 5 single-family homes. 1.05. The Assignment is contingent on the execution of the Contract and the sale of the Redevelopment Property to the Redeveloper; the Contract is contingent on the execution of the Assignment and the sale of the Redevelopment Property to the Authority. The closing on the Purchase Agreement and the sale of the Redevelopment Property to the Redeveloper as provided in the Contract are to be contemporaneous. 1.06. The Board has reviewed the Assignment and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. EDA Resolution No. 05-02 -2- Section 2. Authority Approval; Further Proceedings. 2.01. The Assignment as presented to the Authority is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The approval of the Assignment as provided in section 2.01, and purchase of the Redevelopment Property by Authority from the School District, is expressly contingent on the Authority and the Redeveloper closing on the sale of the Redevelopment Property to the Redeveloper as provided in the Contract. 2.03. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Assignment and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners of the St. Louis Park Economic Development ty this 3rd day of January, 2005. or Administration Adopted by the Economic Development Authority January 3, 20 g)'z Director President Attest: S retary EDA Resolution No. 05-02 PURCHASE AGREEMENT EXHIBIT A THIS AGREEMENT, is made and entered into this 24"day of January 2004 by and between St. Louis Park School District 283, a Minnesota public school corporation ("Seller"), and Foundation .Land Development, LLC, a Minnesota limited liability company, or its assigns ("Buyer"). In consideration of the Earnest Money, as hereinafter defined, the mutual covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: 1. Sale and Purchase. Subject to the terms, conditions, representations and warranties set forth in this Agreement, Seller agrees to sell and assign to Buyer and Buyer agrees to purchase and accept from Seller, the following (collectively, the "Property"): a. Title in fee simple to a certain tract or parcel of land, and all improvements thereon including the school facility located at 4100 -Vernon Avenue South in the City of St. Louis Park, County of Hennepin, State of Minnesota, and legally described on Exhibit A attached hereto and hereby made a part hereof, together with all hereditaments and appurtenances thereto (the "Real Property"); b. All equipment and fixtures owned by Seller, located at or on the Real Property and used in connection with the ownership, maintenance and operation thereof (collectively, the "Personalty"); C. To the extent they are assignable and approved by Buyer, all Seller's rights, warranties and benefits under any and all contracts or agreements, such as equipment leases, maintenance, service, management or utility contracts, parking or cross -parking agreements, and other contracts relating to the operation of the Real Property (collectively, the "Property Agreements"); d. To the extent they are assignable, all right, title and interest of Seller in and to any drawings, plans, building permits, surveys, building inspection approvals and certificates of occupancy relating to the construction of improvements on the Real Property, and all licenses and permits relating to the ownership and operation of the Real Property (collectively, the "Plans, Licenses and Permits"); e. To the extent they are assignable, all right, title and interest of Seller in all warranties and guaranties regarding acquisition, construction, design, use, operation, management or maintenance of the Real Property and the Personalty (collectively, the "Warranties). f. All records relating to the Real Property and Personalty including all records regarding management and leasing, real estate taxes, assessments, insurance, tenants, maintenance, repairs, capital improvements and services (collectively, the "Records"). 2. Purchase Price. The purchase price for the Property shall be Two Million One Hundred Thousand and No/100 Dollars ($2,100,000.00) (the "Purchase Price") which shall be payable as follows: a. $25,000.00 earnest money (the "Initial Earnest Money") to be deposited with Edina Realty Title ("Escrow Agent") within two (2) business days after execution and delivery of this Agreement by both Buyer and Seller and held by Escrow Agent in accordance with this Agreement in an interest bearing account, with all interest earned to be payable to Buyer upon the closing or, subject to Section 16, termination of this Agreement; b. $25,000.00 additional earnest money (the "First Additional Earnest Money") to be paid to Seller upon expiration of the Inspection Period unless Buyer elects to cancel this Agreement in accordance with its terms. Similarly the Initial Earnest Money shall be released to Seller upon expiration of the Inspection Period without cancellation by Buyer. The Initial Earnest Money and the First Additional Earnest Money (together with any additional earnest money paid hereunder, the "Earnest Money") shall be nonrefundable to Buyer, except in the case of Seller's failure. to close in accordance with the terms of this Agreement; and C. The balance by cash, certified funds or wire transfer on or before the Closing Date l (as hereinafter defined). 3. Title. Immediately upon execution of this Agreement Seller shall order the following for delivery to Buyer: a. Title Insurance Commitment and Abstract. Seller shall, at its expense, furnish to Buyer a current commitment for an ALTA 1992 Owner's Policy of Title Insurance issued by Edina Realty Title or another title insurance company reasonably acceptable to Buyer (the "Title Company"), together with legible copies of all documents, maps or plats referenced therein, in the amount of the Purchase Price (the "Commitment"). The Commitment will commit the Title Company to insure title to the Real Property and any appurtenant easements, subject only to the encumbrances permitted by Buyer in accordance with the provisions set forth in this Section 3. b. Survey. Buyer shall obtain, at Buyer's expense, a current as -built survey of the Real Property (the "Survey") certified to Buyer, Buyer's lender and Title Company, showing the location of all improvements; showing all easements, roads, driveways, and identifying the same by recording information; showing all applicable setback lines; showing any encroachments and otherwise meeting ALTA/ACSM standards. Buyer shall be allowed twenty (20) days after receipt of all of the Commitment and the Survey (collectively, the "Title Evidence") for examination of the same and making of any objections including objections based upon Buyer's intended use of the Property, said objections to be made in writing or deemed to be waived. If any objections are so made, the Seller shall use reasonable 2 efforts to correct any valid title objections within sixty (60) days after receipt of said objections. To the extent an objection can be satisfied by the payment of money, Buyer shall have the right to apply a portion of the cash payable to Seller at the closing to satisfaction of such objection and the amount so applied shall reduce the amount of cash payable to Seller at closing. Provided, however, if the cost of correction of such title objections exceeds $50,000.00, the Seller shall have the option of terminating the Purchase Agreement unless Buyer agreesto assume any costs in excess of said $50,000.00. If such objections are, in Buyer's reasonable judgment, not correctable within sixty (60) days, or if the same are not in fact corrected within sixty (60) days for any reason, then Buyer may, at its option, either (i) terminate this Agreement by notice to Seller, in which case all Earnest Money paid by Buyer to Seller hereunder (including all accrued interest thereon) shall be promptly refunded to Buyer, or (ii) accept title as it is, subject to the right to deduct from the Purchase Price the estimated cost to correct title and cure such objection to a maximum of $50,000.00. 4. Real Estate Taxes and Special Assessments. On or prior to the Closing Date, Seller shall pay in full all assessments, if any, levied or pending against the Real Property as of the date of Closing. Real estate taxes due and payable in the year of closing, if any, shall be prorated between Seller and Buyer on the basis of the number of days in the calendar year of Closing before the Closing Date (as to Seller) and on and after the Closing Date (as to Buyer). Buyer shall pay all real estate taxes and special assessments due and payable in the year following Closing and thereafter. Seller warrants that the Real Property is exempt from all real estate taxes due in all years prior to the year of Closing during which Seller has owned the Real Property or that such real estate taxes and special assessments due in all years prior to the year of Closing have been paid in full. 5. Approval of Documents. Within ten (10) days after the date of this Agreement, Seller shall provide to Buyer the following documents, provided that the Seller's obligation shall be limited to documents currently in the possession of the Seller: a. Copies of any existing Property Agreements or other existing contracts in Seller's possession relating to the Property and written summaries of any verbal agreements for the supplying of equipment and/or services to the Property; b. Copies of Plans, Licenses and Permits, and of all Warranties and Records; C. Copies of any surveys and site plans of the Real Property; d. Copies of any building plans and specifications of the improvements of the Real Property in Seller's possession or control; C. Copies of any existing reports, studies or other information in Seller's possession or control regarding the soils, and/or mechanical, structural or architectural condition of the Real Property, including reports regarding the structural condition of the roof and foundation, heating and cooling systems and any damage due to water infiltration or mold; f. Copies of any existing reports, studies or other information in Seller's possession or control regarding the environmental condition of the Real Property, including reports or studies regarding asbestos, lead-based paint or storage tanks located on the Real Property; 3 g. Copies of all correspondence or notices from the city, state or governmental authorities evidencing any possible uncured violation of any law, ordinance or regulation. h. Copies of any and all documentation relating to litigation, if any, affecting the Property. In the event that this transaction is not closed for any reason, then Buyer shall return the foregoing documents provided by Seller hereunder to Seller. 6. Inspection Period. Buyer shall have the right during a period commencing with the date of this Agreement and ending one hundred twenty (120) days thereafter (the "Inspection Period"), to enter upon the Property from time to time and, at Buyer's sole cost, expense and risk, to examine and inspect the same, and may conduct tests and examinations with regard thereto (including surveys, soil borings, environmental audits, appraisals, etc.), provided that Buyer's activities do not unreasonably interfere with the rights of tenants or the ongoing operation of the Property, and provided that Buyer shall indemnify and hold harmless Seller from any mechanic's liens or claims arising out of such work by Buyer. Prior to the Closing Date, Buyer may obtain a current Phase I environmental report and such other environmental investigations as Buyer deems appropriate which are conducted and prepared by a qualified environmental consultant. Buyer shall be solely responsible for the costs of such investigations and reports. Seller shall allow Buyer or its representatives or agents access to the property to perform any reasonable investigation and inspection. Before Buyer undertakes any Phase 11 environmental investigation, including, but not limited to collecting soil samples or ground water samples for environmental testing, Buyer shall obtain the prior written permission of Seller, which permission Seller may reasonably withhold. Buyer shall be responsible, at Buyer's sole expense, to repair any damage resulting from Buyer's performance of such tests or inspections. In the event Buyer terminates this Purchase Agreement, Buyer shall provide to Seller copies of any and all tests, reports and other documents prepared by or at the request of Buyer relating to the Real Property. Buyer consents to the use by Seller and Seller's assigns of any and all such tests, reports and other documents. The provisions of this paragraph shall survive closing or termination of this Agreement. 7. Conditions to Buyer's Performance. This Agreement and Buyer's obligations hereunder are conditioned, for the sole benefit of Buyer, upon the following: a. Title. Title and the Title Evidence shall have been found marketable, or been made marketable, in accordance with the requirements of Section 3 above. b. Inspection. Buyer shall have been provided the opportunity to inspect the Property and to conduct tests and examinations with regard thereto in accordance with Section 6 above, the results of which shall have been found satisfactory to Buyer in Buyer's sole discretion within the Inspection Period. M C. Underground Storage Tanks. If any underground storage tanks are located on the Property, then within thirty (30) days after the date of this Agreement, Seller shall obtain, at its sole cost and expense, a hydrostatic tank tightness test conducted pursuant to American Petroleum Institute Guidelines (the "Tank Test") and deliver a copy of the results of such Tank Test to Buyer. If said Tank Test indicates that the integrity of the underground storage tank is questionable, Seller agrees to perform, at its sole cost and expense, within twenty- one (21) days after completion of such Tank Test, a Leak Site Investigation pursuant to Minnesota Pollution Control Agency ("MPCA") guidelines and requirements, and provide Buyer with the results of the same within seven (7) days after completion of the Leak Site Investigation. If the Leak Site Investigation reveals a release of any Hazardous Substance as defined .herein, Seller agrees to immediately report said release to the Duty Officer at the MPCA and Seller agrees to obtain a Leak Site Closure Letter from the MPCA. d. Governmental Approvals Buyer shall have obtained all necessary governmental approvals, including any approvals necessary to rehabilitate, convert, clean up, finance, and operate the Real Property for Buyer's intended uses (the "Governmental Approvals"). 8. Waiver of Conditions: Termination, a. Any of the conditions set forth in Section 7 may be waived by the party expressly benefited thereby only in writing. b. Unless the Buyer gives written notice of termination on or before the end of the Inspection Period referred to in Section 6, the conditions precedent referred to in Section 7 will be deemed waived and this Agreement shall be fully enforceable pursuant to its terms; provided, however, the time period to terminate in respect of Section 7.d., Governmental Approvals, shall be sixty (60) days following the end of the Inspection Period. C. In the event Buyer declines to terminate this Agreement under Section 7 and this Section 8 and chooses to close on the property, such closing shall constitute Buyer's acceptance of the property on an "AS IS" basis without any warranties, representations (express or implied) of any sort, type or kind whatsoever as to the physical condition of the Real Property. 9. Representations, Warranties and Covenants of Seller, Seller makes the following representations and warranties to Buyer: a. Authori . Seller is the owner of good and marketable title to the Property, and has all necessary power and authority to enter into this Agreement and convey the Property to Buyer free and clear of all encumbrances. The persons executing this Agreement on behalf of Seller are duly authorized to execute this Agreement and consummate the transaction contemplated hereby on behalf of Seller. b. Non -Foreign Status. Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended. 5 C. Pending Improvements. There are no public improvements which have been commenced or completed and for which assessment may be levied against the Real Property after the date of Closing. d. Violations. Seller has received no written notice of any violations of law, municipal ordinances or federal, state, county, municipal or other governmental agency regulations, orders or requirements relating to the Property. Seller has received no notice of any default or breach of any covenants, conditions, restrictions or easements affecting the Property which have not been cured. Seller agrees that, if any such notice is received by Seller at any time prior to closing, then Seller shall notify Buyer of such notice of violation and, at Buyer's request, provide a copy of such notice of violation, if in writing, to Buyer. e. Other Documents. Neither the execution or the delivery of this Agreement nor the consummation of the transactions contemplated hereby will result in any breach or violation of, or default under, any law, ordinance, regulation, judgment, decree, order, mortgage, lease, agreement, indenture or other instrument or document to which Seller is a party or by which the Property is bound. f. Condemnation. To the best of Seller's knowledge, there are no condemnation proceedings which are pending or threatened against all or any portion of the Real Property. g. Environmental Laws. Seller hereby discloses that there is asbestos on the Real Property, one underground storage tank for fuel oil and, upon information and belief, lead based paint. Other than as disclosed above, Seller has no knowledge (without performing any investigation) that any toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in any state, local or federal law, regulation, rule, policy or order relating to the protection of the environment) (collectively, "Hazardous Substances") have been generated, treated, stored, transferred from, released or disposed of, or otherwise placed, deposited in or located on the Real Property, nor has any activity been undertaken on the Real Property that would cause or contribute to the Real Property becoming a treatment, storage or disposal facility within the meaning of, or otherwise bring the Real Property within the ambit of, any state, local or federal law, regulation, rule, policy or order relating to the protection of the environment. As of the date of this Agreement, the Real Property is not subject to any investigation, administrative order, consent, order or agreement, litigation or settlement with respect to any Hazardous Substances. Other than as disclosed above, Seller has no knowledge of any Hazardous Substances or conditions in or on the Real Property that may support a claim or cause of action under any state, local or federal law, regulation, rule, policy or order relating to the protection of the environment. The -Real Property is not now, and to the best knowledge of Seller never has been, listed on any list of sites contaminated with Hazardous Substances, nor used as landfill, dump, disposal or storage site for Hazardous Substances. no h. Wells, Underground Storage Tanks and Sewage Treatment. Seller has no knowledge of any wells, underground storage tanks, or individual sewage treatment systems located on or serving the Real Property other than the fuel oil tank disclosed above, L Contracts. All Property Agreements of any kind whatsoever affecting the Property may be canceled by Buyer without liability as to Buyer on or before thirty (30) days after the Closing Date. There are no such other Property Agreements other than have been communicated to Buyer on or prior to the date hereof. j. Leases. As of the Closing Date, there will be no leases affecting any part of the Real Property. k. Permits. Licenses, Consents etc There are no permits, licenses or consents required by any governmental authority in connection with the use and occupancy of the Real Property except those previously obtained by Seller and delivered to Buyer. If requested by Buyer and required by law, Seller shall cooperate with Buyer in applying for the transfer and reissuance in the name of Buyer of all certificates of appropriate officials evidencing compliance with all applicable legal requirements. 1. Brokerage Commissions. There are no unpaid leasing or brokerage commissions, finder's fees or similar payments in connection with any leases of the Property which have not been paid in full. in. Construction Contracts. Seller has entered into no outstanding written or oral contracts with regard to construction of improvements on the Real Property (including interior space), which have not been fully paid for or which shall not be fully paid for as of Closing. n. Flood Hazard Area. No part of the Real Property has been designated by the Federal Emergency Management Agency ("FEMA") or any other governmental agency or authority as a flood hazard area. o. Taxes and Special Assessments. The Property is exempt from real estate taxes due and payable in 2004. There are no assessments levied or pending against the Property or which will be deemed to have been levied or pending against the Property upon acquisition of the Property by Buyer at Closing. P. Employees. The Real Property is not affected by any employment contracts, operating agreements, listing agreements, sales agency contracts, union contract, labor contracts, collective bargaining agreements, pension plans, profit sharing plans and/or employee benefit plans. q. Unpaid Labor and Materials. Seller represents and warrants that Seller is not indebted for labor or material that might give rise to the filing of notice of mechanic's lien against the Real Property. 7 Buyer acknowledges that on the Closing Date it is buying the Property in its `AS -IS" condition, relying solely on its inspection of the Property. 10. Pre -Closing Covenants of Seller. From the date of this Agreement until the Closing Date: a. Seller shall operate, maintain and manage the Property in substantially the same manner as it is presently being operated, except the present tenants occupying portions of the Property may vacate the Property, such that at the Closing Date, the Property shall be in substantially the same physical condition as on the date of this Agreement, normal wear and tear and damage or destruction by fire or other casualty excepted; b. Seller shall not remove any material items of the Personalty from the Property unless the same is obsolete or is replaced by tangible personal property of equal or greater utility and value; C. Seller shall not, without Buyer's prior written consent, (i) change the existing zoning (if any) for the Property, (ii) plat or restrict the Property, (iii) place on or remove from the Property any buildings, (iv) excavate the Property (except to the extent required to perform routine maintenance or repairs), or (v) commence any action to protest or appeal real estate taxes payable in the year of closing; d. Seller shall continue in effect all insurance coverage relative to the Property; e. Seller shall not, without Buyer's prior written consent, enter into or renew any Lease; f Seller shall not, without the prior written consent of Buyer, enter into any Property Agreement which could bind Buyer or the Property after the closing except those which can be terminated by Buyer upon thirty (30) days notice without a penalty being paid by Buyer; and g. Seller will cooperate with Buyer, at no expense to Seller, in obtaining the Governmental Approvals deemed reasonably necessary to Buyer to enable Buyer to utilize the Property for Buyer's intended uses. h. Seller's Performance. All representations and warranties of Seller hereunder shall be true as of the Closing Date, with such changes as Buyer may have approved following written notice by Seller prior to the Closing Date, and Seller shall have performed all of its covenants, duties and obligations under this Agreement. 11. Damaee. If, prior to the Closing Date, all or any part of the Property is substantially damaged by fire, casualty, the elements or any other cause, Seller shall immediately give notice to Buyer of such fact and at either party's option (to be exercised within thirty (30) days after Seller's notice), this Agreement shall terminate, in which event neither party will have any further obligations under this Agreement and the Earnest Money, together with any accrued interest, shall be refunded to Buyer. Seller's election to terminate shall only apply if the cost of repairs exceeds the insurance proceeds by more that $50,000 as evidenced by written bids for the costs to repair from third party independent contractors, and Buyer may elect to override Seller's right to terminate in such instance if Buyer elects to proceed forward with the purchase having agreed that Seller shall not be obligated to repair the damage and in such instance the Seller shall assign to Buyer all right to receive the proceeds of insurance related to the damage,and he Purchase e redueed o y any dedu ' der�ny sneh peliey If Buyer fails to elect to terminate despite such damage, or if the Property is damaged but not substantially, Seller shall promptly commence to repair such damage or destruction to return the property to its condition prior to such damage. If such damage shall be completely repaired prior to the Closing Date then there shall be no reduction in the Purchase Price and Seller shall retain the proceeds of all insurance related to such damage. If such damage shall not be completely repaired prior to the Closing Date but Seller is diligently proceeding to repair, then Seller shall complete the repair after the Closing Date and shall be entitled to receive the proceeds of all insurance related to such damage after repair is completed; provided, however, Buyer shall have the right to delay the Closing Date until repair is completed. If Seller shall fail to diligently proceed to repair such damage then Buyer shall have the right to require a closing to occur, and at Buyer's sole option (i) the Purchase Price shall be reduced by the cost of such repair, or (ii) the Seller shall assign to Buyer all right to receive the proceeds of all insurance related to such damage and the Purchase Price shall be reduced only by the amount of any deductible and/or co-insurance under any such policy. If Buyer elects option (i) above and the parties are unable to agree as to the amount of the credit within fifteen (15) days prior to the Closing Date, then the amount of the credit shall be determined as follows: Buyer shall obtain written bids or estimates for repair and restoration of the Property to its condition immediately prior to the damage from three (3) reputable contractors. The amount of the credit shall be the average of said three (3) bids and shall be final and binding on both Buyer and Seller. For purposes of this Section, the words "substantially damaged" mean damage that would cost $50,000.00 or more to repair. Seller agrees to maintain hazard insurance on the Property through closing having a replacement cost feature. 12. 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 Seller's notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement and the Earnest Money, together with any accrued interest, shall be refunded to Buyer. If Buyer shall fail to give such notice 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. Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with respect to the condemnation proceedings without Buyer's prior written consent. 13. Commission. Seller and Buyer represent and warrant to each other that they have not engaged the services of any broker in connection with the sale and purchase contemplated by this Agreement, EXCEPT that Seller has engaged the services of Garfield Clark & Associates ("Seller's Agent"), and Buyer has engaged the services of Charlie Nestor of Master Development Services ("Buyer's Agent"). The parties shall be responsible for their respective obligations to real estate agents and brokers with whom they have contracted and the terms of any written agreement I between the Seller's Agent and Buyer's Agent shall govern payment of the commissions. 14. Adjustments. All utility bills, operating expenses, and all other income and charges shall be prorated to the Closing Date and adjusted between the parties accordingly. Such pro ration shall be made on the basis of the number of days in the calendar year of closing before the Closing Date (as to Seller) and on and after the Closing Date (as to Buyer). In addition to the other costs and expenses specifically provided for in this Agreement, closing costs and expenses shall be borne as follows: a. Seller shall be obligated for and shall pay: (i) Cost of issuance of the Owner's Title Commitment without endorsements; (ii) One-half (1/2) of the escrow and closing fees charged by the Title Company; (iii) Seller's attorneys' fees; (iv) Commission of Seller's Agent; (v) State Deed Tax; (vi) Conservation Fee payable for the Deed; (vii) All fees for recording all documents necessary to place of record fee simple title in Seller's name free and clear of all encumbrances not accepted by Buyer; b. Buyer shall be obligated for and shall pay: (i) The premium for an extended owner's policy of title insurance and for all endorsements; (ii) The Buyer's attorneys' fees; (iii) One-half (1/2) of the escrow and closing fees charged by the Title Company; and (iv) All fees for recording the Deed and related documents other than those specified in Section 14(a)(vii) above. 15. Closine. a. General: Possession. Subject to all the terms and conditions of this Agreement having been complied with, the closing of the transactions contemplated hereby shall occur on or before July 1, 2004 ("Closing Date") in the offices of Buyer's attorneys or at such other date, time and place as the parties shall agree in writing. Notwithstanding the foregoing, at Buyer's sole option, Buyer may extend the Closing Date by an additional sixty (60) days upon payment to Seller of an additional $200,000.00 (the "Second Additional Earnest Money") to be added to, and for purposes of this Agreement to be deemed, additional Earnest Money. In the event Buyer elects to extend the Closing Date, the Second Additional Earnest Money (together with the Initial Earnest Money and the First Additional Earnest Money if not previously delivered by Escrow Agent to Seller) shall be delivered to Seller and all such Earnest Money shall be nonrefundable to Buyer unless Seller defaults by failing to close in accordance with this Agreement. Possession of the Real Property shall be transferred by Seller to Buyer on the Closing Date along with all keys to all locks on the 10 Real Property, all books and Records pertaining to the operation of the Real Property during Seller's ownership thereof, all Plans, Licenses and Permits pertaining to the Real Property, and the originals of all Property Agreements. Seller shall remove all personal property and debris from the Property prior to the Closing Date. b. Deliveries by Seller at Closin . At the closing, Seller shall deliver to Buyer the following: (i) A General Warranty Deed, in recordable form, duly executed by Seller, conveying good and marketable title to the Real Property to Buyer free and clear of all encumbrances and restrictions and stating that Seller does not know of any wells on the Real Property. (ii) A standard form Seller's Affidavit, duly executed by Seller and completed without exceptions for bankruptcy, judgments, tax liens, mechanic's liens, parties in possession (other than tenants in possession under existing leases) and other unrecorded contracts, other than the Property Agreements accepted by Buyer. (iii) A Warranty Bill of Sale duly executed by Seller, conveying title to the Personalty free and clear of all liens, encumbrances and restrictions. (iv) An Assignment and Assumption of Miscellaneous Rights duly executed by Seller, assigning and transferring to Buyer all of Seller's right, title and interest in and to all of the Property Agreements which Buyer elects to assume, all Plans, Licenses and Permits, the Records and all Warranties with respect to the Property, to the extent the same are assignable. (v) Copies of notices canceling or terminating any and all Property Agreements except to the extent Buyer has specifically agreed to assume the same and acknowledged its continuing obligation therefor. (vi) Certified copy of Resolutions authorizing the sale and transfer of the Property and designating the officer(s) authorized to sign on behalf of the Seller. (vii) An affidavit of non -foreign status, duly executed by Seller, containing such information as is required by IRC Section 1445(b)(2) and its regulations. (viii) if Seller knows of any wells, a Well Certificate in the form required by law. (ix) A Certificate dated as of the Closing Date certifying that the representations and warranties are true as of the Closing Date. (x) If the Real Property contains or contained a storage tank, an affidavit with respect thereto, as required by M.S.A. § 116.48. (xi) All Plans, Licenses and Permits pertaining to the Real Property. NO The Records and Warranties pertaining to the Property. (xiii) Keys or combinations to all locks on the Property, (xiv) If the Real Property is abstract property, any Abstract of Title to the Real Property in Seller's possession or control. (XV) All other agreements, documents and instruments necessary or incident to consummation of the transactions contemplated hereby. C. Deliveries by Buyer at Closine. At the Closing, Buyer shall deliver to Seller the following: (i) The funds required by Section 2.b hereof by certified check or wire transfer. (ii) The Assignment and Assumption of Miscellaneous Rights described at Section 1 S.b.(iv) above. (iii) All other agreements, instruments and documents necessary or incident to consummation of the transactions contemplated hereby. The performance by Seller and Buyer at the closing shall be concurrent. 16. Remedies. If Buyer cancels this Agreement by reason of non -satisfaction of one or more conditions to closing, or if Buyer cancels this Agreement by reason of Seller's default, all money paid by Buyer to Seller (including all accrued interest thereon) shall be promptly refunded to Buyer and neither party shall thereafter have any further liability, right or obligation hereunder. Seller's sole and exclusive remedy for Buyer's default shall be cancellation of this Agreement and retention of the Earnest Money and all interest earned thereon as liquidated and final damages. Notwithstanding the foregoing, this provision shall not limit Buyer's or Seller's remedies with respect to any of the indemnification provisions of this Agreement. If this Agreement is not canceled by Buyer, Buyer shall have the right in addition to other remedies and rights available at law or in equity, to apply for and receive from any court of competent jurisdiction, equitable relief by way of specific performance to enforce performance of the terms of this Agreement, plus reimbursement for costs, including reasonable attorney's fees, incurred in securing such relief, provided, however, that an action to enforce such specific performance shall be commenced within six (6) months after such right of action shall arise and shall be in lieu of any claim for damages. 17. Notices. All notices, offers, requests, and other communications from any other parties hereto to the others shall be in writing and shall be considered to have been duly given or served if: delivered personally to of the party served; or if sent by first class certified or registered mail, return receipt requested, postage prepaid; or if transmitted by facsimile, copy followed by mail as above required; or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows or to such other address within the United States of America as such party may hereafter designate by written notice to the other parties: 12 a. If to Buyer, to: Foundation Land Development, LLC 9465 Amesbury Lane Eden Prairie, MN 55437 Fax No. (952) 829-5399 Phone No. (612) 799-5399 Attn: James P. Deanovic with a copy to: Winthrop & Weinstine, P.A. Suite 3500 225 South Sixth Street Minneapolis, MN 55402 Fax No. (612) 604-6800 Phone No. (612) 604-6400 Attn: Joanne L. Matzen, Esq. b. If to Seller, to: St. Louis Park School District 283 6425 33`d Street West St. Louis Park, MN 55416 Fax No. _ Phone No. Attn: with a copy to: Garfield Clark & Associates 250 Second Avenue South Suite 280 Minneapolis, MN 55401 Fax No. (612) 333-1543 Phone No. (612) 333-6688 Attn: Garfield Clark Knutson, Flynn & Deans 1155 Centre Pointe Drive, Suite 10 Mendota Heights, MN 55120 Fax No. (651) 225-0600 Phone No. (651) 222-2811 Attn: Patrick J. Flynn 13 Notices, objections and other communications shall be deemed effective upon delivery, if 3 personally delivered, one (1) business day after being deposited with a nationally recognized overnight air courier, two (2) business days after mailing by certified or registered mail, or on the day of facsimile transmission if the sending party receives transmittal confirmation from the sending facsimile machine and deposits a copy of the notice or other communication in first class, certified or registered mail, return receipt requested, postage prepaid on the date of the transmission addressed to the addressee as set forth above, all without regard to the actual receipt by addressee. Rejection or refusal to accept or the inability to deliver notice hereunder because of changed address of which no notice was given shall be deemed to be receipt of the notice, demand or request. 18. Tax -Deferred Exchane. If either party desires to transfer the Property through an exchange transaction under Internal Revenue Code Section 1031 (the "Exchanging Party"), the other party ("Other Party") agrees to cooperate with the exchange so long as (a) the Other Party bears no expense in connection with such cooperation, (b) the Other Party incurs and assumes no additional risk or liability, (c) the exchange will not result in any impairment or restriction of any remedies or rights of the Other Party, (d) the Closing is not delayed as a result of the exchange, and (e) the Other Party is not required to take or hold title to any exchange property. The Exchanging Party agrees to indemnify, protect, hold harmless and defend the Other Party from and against any claims, damages, costs, liabilities, losses, and expenses (including reasonable attorneys' fees) arising out of the exchange transaction. This indemnity shall survive the closing of this transaction contemplated by this Agreement. 19. Time of Essence. Seller and Buyer agree that time shall be of the essence of this Agreement. 20. Interpretation. This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Seller and Buyer have contributed substantially and materially to the preparation of this Agreement. 21. Construction. The headings of the sections and subsections of this Agreement are for convenience and reference only and do not form a part hereof, and in no way interpret or construe such sections and subsections. Wherever the context requires or permits, the singular shall include the plural, the plural shall include the singular and the masculine, feminine and neuter shall be freely interchangeable. 22. Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties' respective heirs, representatives, successors, and assigns. This Agreement is for the sole benefit of Seller and Buyer (including a permitted assignee), and no third party (including any real estate broker or any subsequent owners of the Property) is intended to be a beneficiary of or have the right to enforce this Agreement. 23. Assignment. Buyer may not assign its rights or obligations under this Agreement without the prior written consent of Seller. Any such assignment will not relieve the assigning party of its obligations under this Agreement. 14 24. Definitions. If any date herein set forth for the performance of any obligations by Seller of Buyer or for the delivery of any instrument or notice as herein provided should be on a Saturday, Sunday or legal holiday, the compliance with such obligations or delivery shall be deemed acceptable on the next business day following such Saturday, Sunday or legal holiday. As used in this Section, the term "legal holiday" means any state or federal holiday for which financial institutions or post offices are generally closed in the State of Minnesota. The term "including" shall mean including, as an example, without limiting the generality of the foregoing. 25. Entire Agreement. This Agreement (including all exhibits hereto) contains the entire agreement of the parties. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 26. Countemarts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same document. A signature page to any counterpart may be detached from such counterpart without impairing the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature pages. 27. Severability. If any provision of this Agreement is held to be unenforceable or void, such provision shall be deemed to be severable and shall in no way affect the validity of the remaining terms of this Agreement. 28. Governing Law. This Agreement shall be construed as to both validity and performance and enforced in accordance with and governed by the laws of the State of Minnesota. 29. Headings. The headings contained herein are for convenience of reference only and do not affect, define, describe or limit the scope or intent of this Agreement or any of its provisions. 15 IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first above written. BUYER: Development, LLC 20 -/0319506 SELLER: St. Louis Park School District 283 By Its By Its TIN: [Signature page to Purchase Agreement between Sl. Louis Park School District 283 and Foundation Land Development, LLCJ 20866720 16 FIRST AMENDMENT TO PURCHASE AGREEMENT SEP 2 3 2004 THIS FIRST AMENDMENT, is made this day of May, 2004, by and1YUutWcdiVW nvur Louis Park School District 283, a Minnesota public school coiporationc,(I i�F Fgt lT�l,;,5:aKi<, MN and Foundation Land Development, LLC, a Minnesota limited liability company (the "Buyer"). WITNESSETH: WHEREAS, the parties hereto entered into a certain Purchase Agreement dated January _, 2004 (the "Purchase Agreement"), whereby Seller agreed to sell to Buyer, and Buyer agreed to purchase from Seller, certain real property located at 4100 Vernon Avenue South in the City of St. Louis Park, Hennepin County, Minnesota (the "Property"); and WHEREAS, the parties hereto desire to amend the Purchase Agreement as herein provided. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree as follows: 1. Purchase Price. The Purchase Price is hereby reduced to $1,800,000, provided however, if Buyer's plans for the development of the Property call for more than fifty- four (54) housing units, and such plans are approved by all necessary governmental authorities, Buyer agrees to pay to Seller $33,000 for each housing unit in excess of fifty- four (54). The Purchase Price shall be payable in the manner set forth in Paragraph 2 of the Purchase Agreement except that the First Additional Earnest Money shall not be payable until after expiration of the contingencies set forth in Section 2 of this First Amendment or the end of the Inspection Period, whichever shall first occur. 2. Additional Contingencies. In addition to the Inspection Period allowed under Section 6 and the conditions set forth in Section 7 of the Purchase Agreement, Buyer shall have three (3) months after application is made by Buyer to the City of St. Louis Park to re -guide the Comprehensive Guide Plan, which application shall be made not later than two weeks after the date both parties have executed this Amendment. Upon obtaining such approvals, Buyer shall have an additional three (3) months to rezone the Property to a higher density residential zoning classification sufficient to accommodate Buyer's plans for the development of the Property, and obtain all other governmental approvals of . Buyer's plans for the Property. Should Buyer fail to obtain the necessary re -guiding, rezoning or the necessary plan approvals within the time frames allotted therefor, Buyer may in either case, within five days after expiration of said time periods, give written notice of termination of this Purchase Agreement, whereupon Seller shall promptly refund the Earnest Money to Buyer, and neither party shall have any further liability under the Purchase Agreement as herein amended. Notwithstanding the foregoing, and recognizing that Buyer does not have complete control of the re -guiding, rezoning and approvals process, if Buyer has been acting diligently and in good faith in pursuing the rezoning and governmental approvals described above, Buyer may, at Buyer's discretion, extend either such deadline up to three (3) times for thirty (30) days each; provided the extensions shall not aggregate more than ninety (90) days. 3. Cooperation. Seller shall cooperate with Buyer in Buyer's efforts to re -guide and rezone the Property and to obtain the necessary governmental approvals for Buyer's plans, provided, however, Seller shall have no obligation to incur out-of-pocket costs in connection therewith. 4. Closing Date. The Closing Date set forth in the first sentence of Section 15 of the Purchase Agreement is hereby extended to a date thirty (30) days after the approvals described in Section 2 of this Amendment are obtained or waived in writing. 5. Reaffirmation of Purchase Agreement. Except as herein amended, the Purchase Agreement shall remain in full force and effect. 6. Counterparts. This First Amendment may be executed in counterparts, each of which will be an original but all of which together will be one document. St. Louis Park School District 283 Foundation Land Development, LLC By: Its: By: James P. Deanovic, Its Chief Manager And by: Its: 2n4o97v2 AMENDMENT; rt:� E'tJl"ttrTi�it:�; !ti"s1�FsT�:PvililWi"1" 2 ak,.: 1 mke ,mbct' 13,:Zot:Y4 "I(- "Ide"i9ruid, St LOMB 1'rA 90hoot DiNaia 223 and fk?aandation I"aaacl i)uv lopinclit I.LC. ("buyer,), arc partim to a ..Nrchas, A.breoll ml Dated Odes ive"af'Jaslu ary 12 2(Hj'.4:, tis Baa ended pala;suant to that miftin. First Anaendai eot, to PU chaso Agivortisiit: (izzterl filly 2A, 2004 (colle:isvcly the "1-'atrehaca Agicernerrt'), pertarasing to tlic fstua harvc an sale of tho )xrclierty� at UK).. wAaa cruc. �m ij �7t,..hs?1L8 . �k a iri.-c�Ilof�>- rnci 11 A0 ,� irzxatuuliy k)gm,e to e'irrkend �;ard Parebasr< A gre.mejYt: ilY fL3Elota°S; atlycr aad ,sellar zagreu time, itof"Withstanding anything, in the k?urehase Agicxaxrrem to the <?tuatrxry (i) the rraisttaig V ,000 "Initiat l'arilest. Ivinttey" t"a; definc l in, Taction 2.a, of the Purehsa„c Adrecine€it) c uexezitly bold zll. cssrosv by Ldirra f!csatty'J'itls- shall tae salt'{fE:i slt and acicwslraatc, aaatl Ilk) aditic.?iaatt on.vaest:.11101wy or Similar dclaosits diall be fequimi, tatttl (ii) the dosing data i:5 laCic (3y arxaendevi Co hae: karh �r befrarc l �dhrnat }> 1.5, ?(.i(t�. t€a addifion fes Chc !'cnc.�;caarg, the �l.11e.€• ho€ci�y consents to an assil itrrzent of the Purchaw Agccer em.. by the Buver te? ttrc. 5f• T. >ce ela ll er onomic Development tkuthodty and abase tha. ,irons Znc1 rttfer ally tach ussitnrncxrt, thcs Buyer shall heave no fur t@z .r liahil.ity=or otxl grtfiUu-under the Txtrrc:hase Agreeatient, This Aiitem4nerit may be executed fir =ally-aunawr Of :ottriYrtpsrEs; cacti of Which sh_ al_i be doomed €ar€ original aatd all of wwbieh. shin) bo Weand fire saute instrume.11t `gall( 'T'itle, Lute: xaao-"r120 ?19522 13up fiya TMet Date;