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062705 EDA Official File Copy - ~ CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North June 27, 2005 EDA Meeting will commence upon adjournment of the City Council Meeting President Martin Opem Sr. Commissioner Mary Gwin-Lenth Commissioner Andy Hoffe Commissioner Karen Nolte Commissioner Steve Sommer 1. Call to order 2. Roll call 3. Approval of regular meeting minutes of June 13, 2005 4. Resolution approving a purchase agreement to sell the city-owned property at 7500, 7516, 7528 42n. Avenue North to Frey Development and Manley Land Development, LLC (improvement project no. 740) 5. Adjournment EDA Minutes Regular Meeting CALL TO ORDER ROLL CALL APPROVE MINUTES PUBLIC HEARING IMP. PROJECT 740 Item 4 CLOSE HEARING Item 4 MOTION Item 4 EDA Meeting Page 1 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 June 13, 2005 City Hall President Opem called the meeting of the Economic Development Authority to order at 7:56 p.m. Present: Martin Opem Sr., President Mary Gwin-Lenth} Commissioner Andy Hoffe, Commissioner Karen Nolte, Commissioner Steve Sommer, Commissioner Staff Present: Dan Donahue, City Manager Clarissa Klug, Assistant City Attorney Valerie Leone, City Clerk Shawn Siders, Community Development Specialist Steve Sondrall, City Attorney Vince VanderTop, Assistant City Engineer Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner Sommer, to approve the Regular Meeting Minutes of May 23, 2005. All present voted in favor. Motion carried. President Opem introduced for discussion Item 4, Public hearing regarding a proposed transfer of real property, 7500, 7516 and 7528 42nd Avenue North to Frey Development and Manley Land Development, LLC (improvement project no. 740). Mr. Shawn Siders, community development specialist, provided a brief history of the property. He stated staff recommends receiving public comment during the public hearing and a motion by the EDA to direct staff to prepare a purchase agreement for consideration at the EDA meeting of June 27,2005. President Opem opened the floor to anyone wishing to comment during the public hearing. There was no one present desiring to address the EDA. Motion was made by President Opem, seconded by Commissioner Nolte, to close the public hearing. All present voted in favor. Motion carried. Motion was made by Commissioner Sommer, seconded by Commissioner Gwin-Lenth, directing staff to prepare the purchase order to transfer city- owned property to Frey Development and Manley Land Development, LLC (improvement project no. 740). All present voted in favor. Motion carried. June 13, 2005 PUBLIC HEARING IMP. PROJECT 775 Item 5 CLOSE HEARING Item 5 EDA RESOLUTION 05-04 Item 5 ADJOURNMENT EDA Meeting Page 2 President Opem introduced for discussion Item 5, Public hearing and purchase agreement approval regarding a proposed transfer of real property, 5207 Pennsylvania A venue North to A very Homes, Inc. (improvement project no. 775). Mr. Shawn Siders, community development specialist, stated the EDA acquired the property in November of 2004; the demolition was authorized in February of 2005; the EDA selected Avery Homes as the preferred developer in May of 2005. He illustrated a home recently constructed by A very Homes and reviewed the proposed construction of a two-story single-family home. He stated if the EDA approves the purchase agreement, the property closing will occur during the week of June 27 and the new house is expected to be substantially complete by December 15, 2005. President Opem opened the floor to anyone wishing to comment during the public hearing. There was no one present desiring to address the EDA. Motion was made by Commissioner Hoffe, seconded by Commissioner Nolte, to close the public hearing. All present voted in favor. Motion carried. Commissioner Gwin-Lenth introduced the following resolution and moved its adoption: "RESOLUTION AUTHORIZING EXECUTION OF PURCHASE AGREEMENT FOR SALE OF PROPERTY LOCATED AT 5207 PENNSYLVANIA AVENUE NORTH." The motion for the adoption of the foregoing resolution was seconded by Commissioner Sommer, and upon vote being taken thereon, the following voted in favor thereof: Opem, Gwin-Lenth, Hoffe, Nolte, Sommer; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted. signed by the president which was attested to by the executive director. Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner Sommer, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:05 p.m. Respectfully submitted, ~~ Valerie Leone City Clerk June 13, 2005 EDA REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development By: Kirk McDonald, Director of CD Shawn Siders, CD S ecialist RESOLUTION APPROVING A PURCHASE AGREEMENT TO SELL THE CITY OWNED PROPERTY AT 7500, 7516 AND 7528 42ND A VENUE NORTH TO FREY DEVELOPMENT AND MANLEY LAND DEVELOPMENT, LLC (IMPROVEMENT PROJECT NO. 740) By: 6-27-05 EDA Item No. 4 REOUESTED ACTION City staff requests that the EDA approve the enclosed resolution approving the sale of the city owned property at 7500, 7516 and 7528 42nd A venue North to Frey Development and ManIey Land Development. Staff will give a short summary of the proposed terms and request that the EDA approve the enclosed purchase agreement which authorizes the Mayor and City Manager to execute the purchase agreement. POLICY/PAST PRACTICE City goal #2 is to emphasize the maintenance and redevelopment of commercial and residential properties within the city. BACKGROUND At its meeting of June 13, 2005, the Economic Development Authority conducted a public hearing regarding the proposed transfer of the city owned property at 7500-7528 42nd Avenue North to Frey Development and ManIey Land Development. The proposed terms of the sale are as follows: o Land Acquisition Price - $510,000; o Brokerage Fees - To be paid by Frey Development and ManIey Land Development, Inc. Developers to provide city with indemnification agreement against brokerage fees; o Property is being transferred in an "as is" condition; o Buyer must receive all planning approvals prior to closing; o Buyer will obtain necessary approvals from the Minnesota Pollution Control Agency (MPCA) prior to closing; o Buyer will provide cross easements for shared access and parking for all tenants on the entire site; o Buyer agrees to pay all fees associated with the redevelopment of this site. MOTION BY ~ KM 1)5- SECOND BY TO: I: \ RF A \PLANNING\ Electronic Industries \ Public Hearin Fre & ManIe .doc Request for Action Page 2 June 27, 2005 On June 10, 2005, Frey Development and Manley Land Development submitted redevelopment plans which propose the redevelopment of the site. The proposal includes the construction of 8 office condominiums on the eastern one-half of the property and a 9,500 square foot restaurant/retail use on the western one-half of the property. Viva Italia, a full service Italian restaurant will anchor the retail building. The Planning Commission will review the plans and make a recommendation to the City Council at its meeting of July 12, 2005. The plans will be presented to the City Council for its consideration on July 25, 2005. RECOMMENDATION Staff recommends that the EDA approve the enclosed resolution authorizing the Mayor and City Manager to execute the purchase agreement. ATTACHMENT o Resolution o Purchase and Redevelopment Agreement RESOLUTION NO. 05- RESOLUTION AUTHORIZING NEGOTIATION, EXECUTION AND DELIVERY OF A PURCHASE AGREEMENT BETWEEN THE ECONOMUC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, FREY DEVELOPMENT, INC. AND MANLEY LAND DEVELOMENT, INC. FOR PROPETY LOCATED AT 7500, 7516 AND 7528 42nd AVENUE NORTH BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (the "Authority") as follows: WHEREAS, the Authority is the owner of certain real estate within Auditor's Subdivision Number 324, Hennepin County, Miunesota, which real estate is more commonly known as 7500 42nd Avenue, 7516 42nd Avenue and 7528 42nd Avenue (collectively, the "Property"); and WHEREAS, it has been proposed that it is in the best interests of the City of New Hope and . its people if the Property is sold to Frey Development, Inc. and Manley Land Development, Inc. (collectively, the "Redeveloper") to facilitate construction of (i) an 8-unit office-condo building and (ii) a multi-tenant retail building approximately 8,500 to 9,000 square feet in size, with 5,000 to 6,000 square feet of that building to be occupied by a "Viva Italia" restaurant and with the remaining tenants chosen after consideration of input by the Authority. WHEREAS, it has further been proposed that the above-outlined sale would further the Authority's general plan of economic development; and WHEREAS, the Authority has pursuant to Minnesota Statutes Section 469.105 and other applicable laws and regulations called for and held a public hearing regarding such sale of the Property and has accepted public comments, if any, made at the hearing session(s); and WHEREAS, the Authority has determined that it is in the best interests ofthe City of New Hope and its people if the Property is sold to the Redeveloper, and that such sale would further the Authority's general plan of economic development. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That sale of the Property is hereby approved and authorized. 2. That the President and the Executive Director (the "Officers") are hereby authorized to execute and deliver a purchase agreement for sale of the Property when the following condition is met: 1 Substantial conformance of the purchase agreementto the form of agreement presented to the Authority as of this date, with such additions and/or modifications as the Officers may deem necessary or desirable as evidenced by their execution thereof. Dated the 27th day of June, 2005. Martin E. Opem Sr., President Attest: Daniel J. Donahue, Executive Director P,\AITORNEYICMK\CLIENTSICNHI99-11293Ws;..II293.(108 vrv A ITAUA RESOWTION AUTHORIZING PURCHASE AGREEMENT.DOC 2 PURCHASE AND DEVELOPMENT AGREEMENT This Purchase and Development Agreement ("Agreement") is made by and between FREY DEVELOPMENT, INC. a Minnesota Corporation and MANLEY LAND DEVELOPMENT, INC. a Minnesota corporation (collectively, "Buyer") and the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, MINNESOTA, ("Seller"). In consideration of the covenants and agreements of the respective parties as hereinafter set forth, Seller shall sell and Buyer shall purchase those certain parcels of real estate located in the City of New Hope and more commonly known as 7500 - 42nd Avenue North, 7516 - 42nd Avenue North and 7528 - 42nd Avenue North, which parcels are legally described on Exhibit A attached hereto and made a part hereof (the "Property"). 1. Purchase Price. The purchase price for the Property shall be Five Hundred Ten Thousand and No/lOO Dollars ($510,000.00) (the "Purchase Price"), which the Buyer shall pay as follows: an initial payment of Two Thousand Dollars ($2,000.00) (the "Earnest Money"), . which sum shall be deposited with Old Republic Title Insurance Company (the "Escrow Agent", also referred to hereafter as the "Title Company"), and Five Hundred Eight Thousand Dollars ($508,000.00) payable by wire, cashier's check or cash on the on the "Date of Closing", as that term is defined below. 2. Title Conveyed. On the Date of Closing, the Seller shall deliver a Quit Claim Deed (the "Deed") to the Buyer conveying marketable title of record, free and clear of liens, encumbrances, assessments restrictions, except for the "Permitted Exceptions", as that term is defmed below. 3. Representations and Warranties by Seller. The Seller represents to the Buyer that: a) The Seller owns the Property and has the right to sell the same, and that there are no unrecorded contracts, leases, easements or other agreements or claims of any third party affecting the use, title, occupancy or development of the Property, and no person, firm or entity has any right of refusal, option or other right to acquire all or any part of the Property except as follows: A Purchase and Sale Agreement executed by Frey Development, Inc. on November 5, 2003, and by the Seller on November 24, 2003, which Agreement relates only to the portion of the Property legally described as "All of the following described parcel except for the West 163 feet thereof: That part of Lot 5, Auditor's Subdivision Number 324, Hennepin County, Minnesota described as follows: Commencing at the point of intersection of the North line of Rockford Road and the East line of said Lot 5; thence North along said East line a distance of 350 feet; thence West parallel with the North line of Rockford Road a distance of 320.4 feet more or less, to a point 48.95 feet East of the West line of said Lot 5, as measured at right angles thereto thence South parallel with the West line of said Lot 5 a distance of 350.0 feet to the North line of Rockford 1 Road; thence Easterly along the North line of Rockford Road a distance of 320.4 feet, more or less to the point of beginning." b) The Seller shall cooperate with the Buyer in the Buyer's efforts to obtain the approval of all public or governmental authorities as to all matters relating to zoning, subdivision, lot splits, special use permits, access, or similar requirements for an eight unit town-office project on the eastern portion of the site and a multi- tenant retail building (approximately 8,500 to 9,000 square feet in size) on the western portion of the site, which retail building will include a Viva Italia restaurant (collectively, the "Buyer's Intended Use"). For the purposes of this Agreement "town-office" shall mean a common ownership interest community with commercial office units constructed on individually-owned lots and common areas owned and maintained by a non-profit owners' association. Seller shall join in such applications and other documents, including access and parking easements, as may be necessary or required by governmental or regulatory bodies to develop the Property for the Buyer's Intended Use. c) The Seller's warranties and representations contained In this Section 3 shall survive the delivery of the Deed. d) The Property is subject to a Declaration of Environmental Restrictive Covenants dated November 24, 2003, which Declaration is recorded with the Office of the Hennepin County Recorder as Document Number 8298194 and is attached hereto as Exhibit B (the "Environmental Restrictive Covenants"). The Seller has not received any notice from any person or entity as to a breach of the terms contained in the Environmental Restrictive Covenants. e) The Seller has not received any notice from any governmental authority concerning any eminent domain, condemnation, special taxing district, or rezoning proceedings. f) The Property is not subject to any assessment or valuation agreement that is not listed as one of the Permitted Exceptions, and the Seller has not received any notice of actual or threatened special assessments or reassessments of the Property. g) To the best of the Seller's knowledge there are no wells or septic systems on the Property. The Seller agrees that any breach of the forgoing representations shall be grounds for Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned. NOTWITHSTANDING THE FOREGOING REPRESENTATIONS BY THE SELLER, THE BUYER HEREBY ACKNOWLEDGES THAT THE BUYER IS PURCHASING THE PROPERTY IN "AS IS" CONDITION. 2 4. Conditions of Offer. The Buyer's obligation to close the transaction contemplated by this Agreement is subject to the satisfaction of the following conditions on or before July 15, 2005: a) The Buyer shall, pursuant to the terms of Section 7 below, have reasonably determined that the Property is marketable. In making such determination the Buyer specifically agrees and acknowledges that title to the Property is currently, and if the Buyer proceeds with closing will be, subject to the following title matters the "Permitted Exceptions": (i) any lien of real estate taxes not yet due and payable in 2005; (ii) rights-of-way for drainage ditches, drain tiles, feeders, laterals and underground pipes, if any; (Hi) all dedicated rights-of way; (iv) the Environmental Restrictive Covenants; and (v) all other easements, restrictions, covenants and agreements which are depicted by the public records, so long as the Buyer's Intended Use is not materially impaired by such matters of record. The Buyer agrees and acknowledges that for the purposes of this Agreement the Environmental Restrictive Covenants shall not be considered to "materially impair" the Buyer's Intended Use. b) Obtaining approval for ingress and egress to the Property and all zoning changes, including rezoning, variances, special use permits, subdivisions and any other governmental permits, consents and authorizations, which are necessary or desirable for Buyer's Intended Use, including, without limitation, final building permits. c) Obtaining financing under terms and conditions reasonably acceptable to the Buyer. d) The Buyer and the Seller agreeing to reasonable terms and provisions for cross easements in favor of the Buyer for construction and maintenance of access and parking. e) Reasonably acceptable direct access to and from the Property VIa publicly dedicated streets. If any condition of this Section 4 remains unsatisfied or has not been waived by the Buyer on or before July 15, 2005, this Agreement shall become null and void, neither party shall have any further obligation to the other under this Agreement (other than rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement), and the Earnest Money shall be refunded. With respect to the above-described conditions in favor of the Buyer, the Buyer shall give notice of its desire to terminate this Agreement for failure to satisfY or fulfill any of said conditions on or before July 15, 2005, but ifno notice of 3 termination is given within the specified time period with respect to any of the conditions listed above, such condition shall be deemed to be waived by the Buyer and the Buyer shall proceed to close this transaction in accordance with the other terms and conditions of this Agreement. The Buyer hereby acknowledges that the Buyer has been fully informed of the ground water and soil contamination existing on the Property and has had ample opportunity to investigate and inform itself regarding these circumstances. The Buyer further acknowledges that this contamination does not render the Property unsuitable for development in connection with the Buyer's Intended Use. 5. Survey. The Seller has previously delivered to the Buyer a survey of the Property (the "Survey"). The Buyer acknowledges receipt of the survey and agrees and acknowledges that the same was prepared by a duly licensed surveyor in accordance with the current minimum standard detail requirements for ALTNASCM land title surveys. 6. Access Prior to Closing. The Buyer and its employees, agents, and contractors shall have the right to enter upon the Property for the purpose of conducting examinations, making. measurements, and performing such tests or surveys thereon (including soil borings) as the Buyer desires. The Buyer's access to the Property and actions thereon shall be subj ectto Seller's approval, the approval of the Minnesota Pollution Control Agency and, if requested by the Seller, a written access agreement. The Buyer agrees to promptly repair or restore any damages caused by the Buyer or its employees, agents, or contractors during the course of making such examination, measurements or tests, with repairs to be performed in any reasonable manner specified by the Seller or the Minnesota Pollution Control Agency and the Buyer further agrees to indemnifY and hold the Seller (and the Seller's employees, agents, consultants and officers) harmless from and against any lien, claim, loss, liability, cost, damage or injury asserted against or suffered by the Seller or the Property, including but not limited to attorneys' fees, related to any entry by the Buyer, its assigns or any of its agents, representatives, contractors or employees, as related to this Agreement. The repair and indenmification obligations recited in this Section 6 shall survive closing or the cancellation or other termination of this Agreement. 7. Title Commitment and Policy. a) The Seller shall deliver to the Buyer a Commitment for an ALTA Form B owner's policy of title insurance (the "Commitment") issued by the Title Company and covering title to the Property, in th.e amount of the Purchase Price. The Seller agrees to pay the costs associated with the preparation and issuance of the Commitment; the Buyer shall pay the premium for the owner's policy, if any, and the lender's policy, if any, along with the price for any endorsements requested by the Buyer or the Buyer's lender. b) The Buyer shall have ten (10) days after receipt of the Commitment to review and approve the title to the Property and to object to any exception to title that is disclosed in the Commitment and Surveyor which is otherwise discovered by the Buyer. In the event that the Buyer does not within such ten (10) day period give notice to the Seller objecting to any such exceptions, then all such exceptions shall be deemed approved and shall be considered a part of the Permitted Exceptions. 4 If the Buyer timely objects to an exception to title, then on or before the tenth (10) day following the Buyer's notice of exception, the Seller shall remove the exception or notify the Buyer that the Seller is unwilling or unable to remove the exception. Within five (5) days of any notice by the Seller that the Seller it is unwilling or unable to remove an exception to title, the Buyer may elect by notice to the Seller to either: (i) terminate this Agreement, whereupon the Earnest Money shall be returned to the Buyer and the parties shall be released from all further obligations hereunder except obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement; or (ii) elect to have this Agreement remain in effect, in which event the Buyer will be deemed to have approved the previously-cited exception and the same shall be considered part of the Permitted Exceptions. 8. Buyer Obligations Joint and Several. Frey Development, Inc. and Manley Development, Inc. each acknowledge joint and several liability for the Buyer representations and obligations under this Agreement, and each further acknowledges that the Seller may pursue one or both of them as the "Buyer" in connection with enforcement of any Seller rights pursuant to this Agreement. 9. Closing. a) Closing shall occur within ten (10) business days after all the conditions of the Agreement have been satisfied, and in no event later than August 1, 2005 (the "Date of Closing"), unless both parties agree, in writing, to an earlier or later time. b) Closing shall, at the Seller's sole option, occur at the Escrow Agent's office, the Seller's office, or the office of the Seller's attorney. c) The Seller shall deliver at closing the following executed and acknowledged documents: (i) the Deed; (ii) affidavit(s) in industry-standard form(s) stating that possession of the Property is being delivered free of any mechanic's or statutory liens in connection with work performed prior to closing; the Seller is not a foreign person or entity; and addressing such other matters as the Buyer may reasonably require; and (Hi) a Cancellation of Purchase Agreement, in form reasonably acceptable to the Buyer, terminating the agreement between the Seller and Frey Development, Inc. cited in Subsection 3(a) above with respect to a portion of the Property; 5 (Iv) easement or easement agreements as outlined in Section 4( d) above; (v) an Assignment of the Environmental Restrictive Covenants. d) The Buyer shall deliver at closing the following executed and aclmowledged documents: (I) a Cancellation of Purchase Agreement, in form reasonably acceptable to the Buyer, terminating the agreement between the Seller and Frey Development, Inc. cited in Subsection 3(a) above with respect to a portion of the Property; (Ii) easement or easement agreements as outlined in Section 4( d) above; and (iii) an Assignment of the Environmental Restrictive Covenants. 10. Payments/Proratlons. The Seller shall, on or before the Date of Closing, pay for the' costs relating to the Commitment. At closing, the Seller shall pay the cost of recording any instrument (other than the Deed) necessary to place title in the condition required under this Agreement, State deed tax, and all special assessments levied, pending or constituting a lien against the Property as of the Date of Closing, including without limitation any installments of special assessments and interest payable with general real estate taxes in the year of closing. The Seller will pay general real estate taxes payable in the year prior to the year of closing and all prior years. The Buyer shall pay at closing the cost of any owner policy or lender policy of title insurance, sales tax, if any, and fees required for recording the Deed. The Seller and the Buyer each will pay one-half of customary closing fees. General real estate taxes payable in the year of closing shall be prorated by the Seller and the Buyer as of the closing date based upon a calendar year. 11. Condemnation. If, prior to the Date of Closing, all or any part of the Property shall be condemned by governmental or other lawful authority, the Buyer shall have the option of (a) completing the purchase contemplated by this Agreement, in which event all condemnation proceeds or claims thereof shall be assigned to the Buyer, or (b) canceling this Agreement, in which event the Earnest Money shall be refunded and this Agreement shall be terminated with neither party having any rights against or obligations to the other except rights or obligations under this Agreement which provide for continued exercise following closing or cancellation or other termination of this Agreement, and the Seller shall be entitled to any and all condemnation proceeds. 12. Notices. All notices required hereunder shall be in writing and shall be deemed to have been duly given and received (a) two (2) business days after depositing of the same in the mail if sent by regular, registered or certified mail, postage prepaid, to the party to whom directed, at such party's address herein set forth; (b) upon delivery, or attempted delivery if delivered by overnight courier service or hand delivery; (c) or upon transmission if successfully transmitted by facsimile. Any party shall have the right to designate any other address or facsimile number for 6 notice purposes by written notice to the other party in the manner aforesaid. The addresses of the parties are as follows: SELLER: City of New Hope Dan Donahue, City Manager 4401 Xylon Avenue North New Hope, MN 55428-4898 Facsimile No.: 309-688-9099 with copy to: Clarissa M. Klug Jensen & Sondrall, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 Facsimile No.: 763-493-5193 BUYER: Bernie R. Frey Frey Development, Inc. 4801 Y2 Nicollet Avenue South Minneapolis, MN 55409 Facsimile No.: 612-827-4331 and Manley Land Development, Inc. 243 Cliff Drive Eagan, MN 55122 Facsimile No.: 13. Broker. The Buyer represents and warrants that it will pay all brokerage charges incurred in connection with this transaction in connection with activities authorized by the Buyer, along with any brokerage charges incurred in connection with prior marketing of the Property or a portion thereof. The Buyer obligations recited in this Section 13 shall survive the closing or the cancellation or other termination of this Agreement. 14. Remedies. If the Buyer defaults under this Agreement, the Seller shall have the right to terminate this Agreement by giving written notice to the Buyer as provided by law. If the Buyer fails to cure such default as provided by law, this Agreement will terminate, and upon such termination the Seller will retain the Eamest Money and neither party shall have any rights or obligations against the other except rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. If the Seller defaults under this Agreement, the Buyer shall have the right to seek specific performance and recover as damages from the Seller all of the Buyer's reasonable out-of-pocket costs and fees. 7 15. MPCA VIC Application and Letter. The Seller shall apply for and obtain written assurance from the MPCA that the Buyer is not responsible for cleanup of the hazardous materials that remain in the undisturbed soil and water of the Property (a "No Association" assurance letter). This letter is to be obtained through application to the Minnesota Pollution Control Agency ("MPCA") Voluntary Investigation and Cleanup ("VlC") program. Notwithstanding the foregoing language, the Seller shall have no responsibility for applying for a "No Association" assurance letter in the event that the Buyer fails to provide the Seller, a sufficient period before the Date of Closing, with the "Required Information" (as that term is defmed below). The Seller's failure to provide a ''No Association" assurance letter in accordance with the provisions of this Section 15 shall be grounds for the Buyer to terminate this Agreement. In the event of such termination, the Earnest Money shall be returned and neither party shall have any rights against or obligations to the other except those rights or obligations under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. 16. Required Information. The Buyer is required to provide the Seller, consistent with. Section 15 above, with the following information at the Buyer's sole expense so that the Seller can complete the VIC application (the "Required Information"): a) Site plan and associated text describing the nature of business activities anticipated after redevelopment; b) Grading plan; c) Geotechnical drilling and/or soil testing plan; d) Subsurface utilities plan; e) Vapor collection system desigu drawings; 1) Construction time line; and g) Any other information required for the completion of the VIC application that the Buyer otherwise needs to prepare in connection with its development of the Property. The Buyer's failure to provide the Required Information in accordance with the provisions of this Agreement shall be grounds for the Sdler to terminate this Agreement. In the event of such termination the Seller shall be allowed to retain the Earnest Money and neither party shall have any rights against or obligations to the other except those rights under this Agreement which provide for continued exercise following the cancellation or other termination of this Agreement. 17. Monitoring During Construction. The parties acknowledge that on-site monitoring of certain construction activities by an enviromnental professional will be required after closing. The Seller agrees, consistent with the requirements of this Agreement, to be responsible for providing a field teclmician to be on-site during: 8 a) Grading activities near the Restricted Area (as defmed m the Environmental Restrictive Covenants); .b) Subsurface excavation of utilities; c) Installation and startup of vapor collection system; and d) Geotechnical drilling and/or soil testing activities. The field technician will monitor excavated soils for the presence of contaminants. If contaminated soils are detected, they will be stockpiled by the Buyer separately from clean soils for later disposal. At the conclusion of on-site monitoring activities, the field technician will provide a letter report to both the Seller and the Buyer summarizing the field technician's activities and observations. The Buyer and Seller obligations under this Section 17 shall survive delivery ofthe Deed. 18. Monitoring Costs and Responsibilities. The Buyer shall be responsible for providing the Seller with reasonable notice of the activities outlined in Section 17 so that the Seller will be able to provide an appropriate field technician. If the Buyer fails to provide the Seller with such reasonable notice than the Buyer shall be responsible for providing the required field technician (approved in writing by the Seller prior to technician work beginning, with approval not to be unreasonably withheld or delayed) and shall bear all costs and liabilities associated with provision of an appropriate field technician. Regardless of which party bears the cost the field technician, the Buyer shall be solely responsible for the proper disposal of any contaminated materials. The Buyer and Seller obligations under this Section 18 shall survive delivery of the Deed. 19. Future Access and Utility Easements. The Buyer hereby represents and warrants that the Buyer will, if requested by the City of New Hope, provide the City with access and utility easements in connection with the Buyer's future development of the Property and as provided for by New Hope's City Code, regulations and past practices. The Buyer further represents and warrants that any such easements shall be provided at no cost to the City. The Buyer representations and warranties contained in this Section 19 shall survive delivery ofthe Deed. 20. Assignment. The Buyer may assign its rights and obligations hereunder only with the prior written consent of the Seller, which consent may be granted or withheld by the Seller in its sole discretion. 21. Post-Closing Construction/Revesting of Title. The Buyer agrees and covenants that the Buyer will construct, or cause to be constructed, on the Property all structures necessary for the Buyer's Intended Use, with materials and plans to coincide with those approved by the City of New Hope as part of the governmental approval process cited in Subsection 4(b) above (collectively, the Minimum Improvements"). This covenant shall survive the delivery of the Deed. Construction of the Minimum Improvements must be substantially completed by January 31, 2006. Construction will be considered substantially complete when a final certificate of occupancy has been issued for each building of the Minimum Improvements. Promptly after 9 substantial completion of the Minimum Improvements the Seller will at the request of the Buyer provide the Buyer with a certificate of completion in form and substance reasonably acceptable to the Buyer. Said certificate shall be (and it shall be so provided in the Deed and in the certificate itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Buyer (and its successors and assigns) to construct the Minimum Improvements and satisfaction of the date(s) for completion thereof. If the Seller shall refuse or fail to provide a certificate as required by this Section 21 then the Seller must, within thirty (30) days after written request by the Buyer, provide the Buyer with a written statement outlining in reasonably adequate detail the reasons that the Seller is of the opinion that the Buyer has failed to complete the Minimum Improvements in accordance with the provisions in this Agreement, or the reasons the Seller is of the opinion that the Buyer is otherwise in default. A writing required of the Seller under this Section 21 must additionally outline the measures or acts that will be necessary, in the opinion of the Seller, for the Buyer to take or perform in order to obtain a certificate of completion. The Buyer agrees and acknowledges that in the event of an uncured default with respect to the Buyer's obligations to construct the Minimum Improvements the Seller may, pursuant to the terms outlined in Exhibit C attached hereto and made a part hereof), . declare that all rights and interests in and to the Property (including an improvements or rights subsequently added to the Property after closing of the transaction contemplated by this Agreement) shall revert to the Seller. 22. Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. No amendment of this Agreement shall be valid or binding unless executed by authorized representatives of both the Seller and the Buyer. The headings and captions of this Agreement are for the convenience of the parties only and shall not be looked to in the interpretation or enforcement of this Agreement. The Seller and the Buyer acknowledge and agree that each has had opportunity to participate in the drafting of this Agreement and accordingly acknowledge and agree that this Agreement as a whole and each of is clauses are not to be interpreted in favor of or against either party. This Agreement may be signed in counterpart, with each copy of the Agreement binding upon the signing party at the time of signing and together which shall constitute a single document. [The Remainder of this Page is intentionally Left Blank; Signature Page(s) Follow] 10 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the latest date indicated below ("Effective Date"). SELLER: BUYER: ECONOMIC DEVELOPMENT AUTHORITY FREY DEVELOPMENT, INC. IN AND FOR THE CITY OF NEW HOPE By: By: Its: Martin E. Opem Sr. Its: President Dated: ,2005. Dated: ,2005. MANTEY LAND DEVELOPMENT, INC. By: By: Daniel J. Donahue Its: Executive Director Its: Dated: ,2005. Dated: ,2005. P:\Attomey\Cmk\Clients\CNH\99-11293\99-11293-006-Purchase Agreement D1 ,doc 11 EXHIBIT A Leeal Descriution That part of Lot 5, Auditor's Subdivision Number 324, Hennepin County, Minnesota described as follows: Commencing at the point of intersection of the North line of Rockford Road and the East line of said Lot 5; thence North along said East line a distance of350 feet; thence West parallel with the North line of Rockford Road a distance of 320.4 feet more or less, to a point 48.95 feet East of the West line of said Lot 5, as measured at right angles thereto thence South parallel with the West line of said Lot 5 a distance of 350.0 feet to the North line of Rockford Road; thence Easterly along the North line of Rockford Road a distance of 320.4 feet, more or less to the point of beginning. 12 EXHIBIT B November 24, 2003 Declaration of Environmental Restrictive Covenants (Attached) . 13 06/23/2005 09:54 FlL~ 763 493 5193 JENSEN & SO.\1JRALL. P_A_ 141002 -mANGnRe:NTERED f:f~JIJ~ePlN e.oLJNTV TAXP,\'(ER SERVICES Illn ll~ 1llllfI1Idmml! ,-. .:. llJ '. l ,. FES 23 2004 ~-EPI~TV . BY. _~_ DEPUTY t/ '- . \)U?\iC~\e f'iliog cerli1ice.\e Doc No 8298194 02123/200402:41 PM Certified filed and or recorded on above date: Office of the County Recorder Hennepin County, Minnesota Michael H_ Cunniff, County Recorder Deputy 5 TranslD 6572 Fees $17.00 DOC $5.00 SUR $1.00 COPY $23.00 Total DECLARATION t OF ENVIRONMENTAL RESTRICTIVE COVENANTS THIS DECLARATION is made this M day of .NOl/. ,2003, by the Economic Development Authority of the City of New Hope, a Minnesota municipal corporation. DEFINITIONS For the purpose of this Declaration, the following terms shall have the following meanings: 1. Buildinlr. "Building" means that building that was formerly present on the Property and was formerly used by Electronic Industries, Inc. as its place of business. The Building has since been demolished. 2. Commissioner. "Commissioner" means the Commissioner of the MPCA or the head of any successor entity. Nothing herein shall be construed to prohibit the Commissioner from delegating the Commissioner's obligations or duties under this Declaration to the employees, agents, contractors or subcontractors of the MPCA. 3. . Covenants. "Covenants" mean all of the agreements, covenants, restrictions and easements contained in this instrument. 4. Declaration. "Declaration" means this instrument, including the definitions and recitals contained herein and the Exhibits attached hereto. 5. El "Ef' means Electronic Industries; Inc. 6. Exhibits. "Exhibits" mean the exhibits to this Declaration and are as follows: a. Exhibit 1: 1/8 Section Map of Project Site c. Exhibit 2: 1/8 Section Map of Project Site showing Restricted Area d. Exhibit 3: Table of Contominonts Page 1 of1? .06/23/2005 09:54 FAX 763 493 5193 JEXSEN & SONDRALL, P.A. 141003 , ' , ii. Address. 7500 42Dd Avenue North, New Hope, MN. iii. Property Identification Number. 17-1'18-21-22-0006. b. Parcel 7. i. Lel!al Description. The West 95 fe,et of the East 195 feet of the South 350 feet of Lot 5, Auditor's Subdivision No. 324, Hennepin County, Minnesota. ii. Address. 7516 42nd Avenue North, New Hope, MN. iii. Property Identification Number. 17-118-21-22-0007. c. Parcel 8. i. Lel!al Descrintion. That part of Lot 5, "Auditor's Subdivision Number 324, Hennepin County, Minnesota" described as follows: Commencing at a point 01;1 the North line of Rockford Road distant 195.0 feet Westerly of the East line of said Lot 5; thence North parallel with the East line of said Lot 5 a distance of 350.0 feet; thence West parallel with the North line of Rockford Road a distance of 125.4 feet, more or less, to a point 48.95 feet East of the West line of said Lot 5, as measured at right angles thereto; thence South parallel with the West line of said Lot 5 a distance of 350.0 feet to the North line of Rockford Road; thence Easterly along the North line of Rockford Road a distance of 125.4 feet, more or. less to the point of beginning. ii. Address. 7528 42nd Avenue North, New Hope, MN. iIi. Pronertv Identification Number. 17-118-21-22-0008. It is specifically noted that the entire Restricted Area is contained within the Property. Therefore, all references to the Property include the Restricted Area. 11. Restricted Area. "Restricted Area" means that part of the Property legally described as follows: That part of Lot 5, "Auditor's Subdivision Number 324, Hennepin County, Minnesota" described as follows: Commencing at the point of intersection of the North line of Rockford Road and the East line of said Lot 5; thence North along said East line a distance of 250 feet; thence Page 3 of 17 12l1:znoQ3&l11:16AM 06/23/2005 09:54 FAX 763 493 5193 JENSEN & SONDRALL. P.A. I4J 004 , . '. < .' " installation of monitoring wells, a soil vapor extraction system, an air sparge system, and a groundwater extraction and treatment system, including the following: 1. The groundwater extraction system was instaUed in 1987. Z. The soil vapor extraction system was installed in 1992. 3. The air sparge system was installed in 1994. These efforts produced the following information: 4. Observed TeE levels have ranged from 5 ppm to 290.000 ppm. 5. Monitoring wells downgradient show ranges of near zero to 41 ppm. 6. An estimated total of 7,000 pounds of TCE has been removed to date through the combination of these remediation systems. H. Lower Aauifer Investil!ation. In 1998, the MPCA required that the aquifer beneath the clay layer be investigated. Subsurface drilling and sampling of this aquifer was performed in 1998. Lower aquifer monitoring wells were also installed in 1998. Initial results from this sampling showed TCE concentrations up to 124,000 ugll. This data suggested that the TCE accumulating on the top of the clay layer had migrated through the clay layer into the lower aquifer. I. Amounts of Contaminates Present. TCE, tetrachloroethylene (PCE), dichloroethylene (DCE), trans-DCE, cis-DCE, vinyl chloride, toluene, and methylene chloride are all historically documented to be present on the Property, in the amounts shown on the Exhibit 3 tables. J. Location of Contaminates Present. Residual contamination, primarily TCE exist in subsurface soil as well as groundwater in both the ''perched'' water table aquifer and the lower aquifer. K. Reports. Many investigative reports have been completed since 1983, the reSults of which are summarized in the Resource Conservation and Recovery Act Facility Investigation and Corrective Measures Study (February 2001 and revised January, 2002), Results from May 2001 Push Probe Investigation of the Clay (June 2001), Remediation Alternatives Report (August 2001), and the Corrective Measures Implementation Work Plan (October, 2001) prepared by Frontline Environmental, LLC, an environmental consulting firm currently located at 17450 Juneberry Court, Lakeville, Minnesota, 55044. The location of near surface contaminants at the Property is shown in Figure 1 of the Corrective Measures Implementation Work Plan. L. City's Al!reement with the MPCA. The Economic Development Authority of the City of New Hope has agreed with the MPCA to place the following restrictive Covenants on the Property. Page 5 of 17 "06/23/2005 09: 54 FAX 763 493 5193 JENSEN & SONDRALL, P"A" I4J 005 '. .' e. Permanent facilities (e.g. buildings, parking surfaces, etc.) shall be designed to minimize infiltration of precipitation runoff (rainwater, snow melt) by routing all such precipitation runoff to storm sewers that carry the runoff off. site. This shall be done to minimize recharge of subsurface ground water so as to prevent mobilization of existing subsurface contaminants. f. New monitoring wells installed in areas of vehicle or pedestrian traffic shall be constructed as flush-mount monitoring wells. 2. Use Restrictions for the Restricted Area. In addition to the Covenants restricting the use of the entire Property, the Economic Development Authority of the City of New Hope hereby imposes the following Covenant on the Restricted Area: a. Prior to the commencement of any subgrade. construction activities or other disturbances to subsurface soil in the Restricted Area (e.g. utility installation, excavation, grading cuts, soil corrections, borings, drilling, etc.), a soil contamination monitoring plan must be prepared and submitted to and approved by MPCA and the City of New Hope. The soil contamination monitoring plan must desc<ribe: i. The methods to be used and actions to taken to monitor the disturbance and/or removal of contaminated soil. ii. Plans for proper containment and disposal of any contaminated soil removed as part of the construction activities. ill. Schedule for submitting a final report to the MPCA describing volume of soil removed, how it was disposed, and associated analytical data. 3. Commissioner ADDroval. Any action prohibited by the Covenants shall not occur without the prior approval of the Commissioner. a. Requests for the Commissioner's approval must be made in writing to the Commissioner. b. The Commissioner shall have 60 days after the receipt of a request to mail a response thereto. c. The Commissioner's response shall be in writing and shall approve or disapprove the request or require additional information be provided. d. A lack of response from the Commissioner shall not constitute approval by default or authorization to proceed with the requested activity. Page 7 Qf17 06/23/2005 09:55 FAX 763 493 5193 JENSEN & SONDRALL, P.A. 141006 . 6. Reservation. Nothing contained in this Declaration shall in any way prohibit, restrict, or limit the Economic Development Authority of the City of New Hope. its successors or assigns, from fully conveying, transferring,. occupying, or using the Property for all purposes not inconsistent with the Covenants. 7. Duration of Declaration, This Declaration and the Covenants herein shall continue in perpetuity until terminated, modified, released and/or amended with the written consent of the Commissioner, such consent not to be unreasonably withheld. 8. Amendment of Declaration bv Owners. This Declaration and the Covenants herein shall only be modified, altered, supplemented or amended with the written consent of the Commissioner, such consent not to be unreasonably withheld. 9. Amendment of Declaration bv MPCA. This Declaration and the Covenants herein may be modified, altered, supplemented or amended by the MPCA upon the occurrence of the following: a. The MPCA frods that this Declaration is inadequate to protect the public health or welfare, or the environment; b. The MPCA gives notice (written or oral) of such fmding to the then current Owner; and c. The MPCA and the Owner enter into a document so modifying, altering, supplementing or amending this Declaration. 10. Termination of Declaration. This Declaration and the Covenants herein may be terminated upon the occurrence and satisfaction of all of the following conditions: a. Soil and ground water sampling is conducted on the Property with prior written notice to and in accordance with a plan approved by -the MPCA, such approval not to be unreasonably withheld; and b. Based on such samples, the MPCA certifies that the soil and ground water located within the Restricted Area no longer poses an unacceptable risk to public health and the environment. 11. Recordin2 of Owner Terminations and Amendments. In the event this Declaration is terminated, modified, altered, supplemented or amended by the Owner, the Owner shall submit an original document already signed by Owner to the MPCA with a self addressed return envelope. a. The MPCA shall have 60 days after the receipt of such document and envelope to execute and mail the original document back to the Owner. Page 9 of17 IZlU/2.003at Ill:Sl AM . 06/23/2005 09: 55 FAX 763 493 5193 JENSEN & SONDRALL. P.A. I4J 007 .' 14. Disclosures. The Covenants shall be incorporated in full or by reference into all instruments conveying an interest in and/or right to use the Property (e.g. easements, mortgages, leases). GENERAL PROVISIONS 1. Duration. This Declaration shall run with the land in perpetuity and shall inure to the benefit of and be enforceable by each Owner and the MPCA. 2. Amendments. This Declaration may be amended by the unanimous agreement of all Owners and the MPCA. Amendments shall not be effective until recorded. 3. Enforcement. Enforcement of these Covenants shall be by any proceeding at law or in equity against any person(s) or entity(ies) violating or attempting to violate any of the Covenants. Such proceedings may seek to enforce compliance, to restrain violations or to recover damages. The Covenants may be enforced by the MPCA, the City of New Hope or any other Interested Parties. 4. Waiver. Failure to enforce any Covenant shaIJ not be deemed a waiver of the right to do so thereafter. 5. Severability. Invalidation of anyone Covenant by judgment or court order shall in no way affect any other provisions, which shall remain in full force and effect. Whenever possible, each provision of this Declaration will be interpreted in such a mauner as to be effective and valid under applicable law, but if any provision of this Declaration is held to be invalid, illegal or unenforceable under any applicable law or rule in any jurisdiction, such provision will be ineffective only to the extent of such invalidity, illegality, unenforceability in such jurisdiction, without invalidating the remainder of this Declaration in such jurisdiction, and without effecting the enforceability of any such provision hereof in any other jurisdiction. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Declaration a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid and enforceable. . 6. Mechanic's Lien. Each Owner agrees to indemnify and hold harmless all other Owners from all Mechanic's Liens arising from work for which the Owner is responsible. 7. Assimment. The Economic Development Authority of the City of New Hope may assign any and all of its rights, powers, obligations and privileges hereunder to any other corporation, association, person or entity. Such assignment or assignments are effective upon the recording of the instrument making the assignment. Page 11 of17 06/23/2005 09:55 FAX 763 493 5193 JENSEN & SONDRALL. P.A. ~008 , . '. CITY OF NEW HOPE By: ;/~--k~ W. Peter Enck Its: Mayor By: 1J1:FiI~ Its: City Manager STATEOFMINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ~ day of /LbU. ,2003, by W. Peter Enck and Daniel J. Donahue, the Mayor and City Manager, respectively, of the City of New Hope, a Minnesota municipal corporation, on behalf of said municipal corporation. (Notal)' Public Seal) VALERIE J. LEONE NOTARY PUBUC.MINNESOTA My Commission Expires Jan. 31. 2005 ~of~o Notary Public Page 13 of14 "06/23/2005 09:55 FAX 763 493 5193 JENSEN & SONDRALL, P.A. 141009 EXHIBIT 1 I I I I I I I I I I I I I I I I I , I , , I I I -~"'.~~....._....._......._.... .... ~ IFP NO 1606 I'" , : , "' , ' , 7528 7516: 7500 I , I : I , ',... ,., I :S ~ : I~ :e : I 0 0 PART OF LOT 5 I 'Z Nr;; ;. Iu ' ,e I N S (8) (7)! I : I I I . I i I . N 1 : rri : : :t;.. I I !!l I I I : I I I : ,30 30 n__u"125..\IIn_nR~.~ aT 7-D-S8 :'BIB:Ii DOC NO "'''9268J I I : '6.01";' L.. ___ __"__1_________ - ~'ir2i.29li:-2S2:_4f - - - - - - - - "t. T i -- - - i.::r --- - - - - - - -3D'US N88.2e~29"E 2~151 III 2LI 9BLJi9 NBB- 29"46"E _ 1lI N44"'5'SO'FI::l- S(6"3'03'[42N"-:a A' 'E - S-46-08'56"[ 1:::- U V .. t4~05. 1/\ - - -. - -- -\""~ . -- - n - --.:::-:;.a~--:_~-- _ _ _ _ _ _ . _ . _ _ _ _ _ _ _ - - -'.... 83 i. _ _ _ _ - - - - - - - - - 296,1 NB8 " 01 .7-U-88 ..,- -Niil 38'01'[ 0::: . . . , '" , . , w Z ...J . . i i j ALLEY oW 2532 PO 333 iii o o Vl , , I 30 , . " , (5) , . . . . ',.r . (6) r 7"1-88 o " u o o ...~~;Ji1' lY '" ~ _ 8 .....::- 10l.66 _ _ _ 10:; _ _ _ _ _'" '" '" _ · 208.79-N88 31'16' . . ''I -{HCSAH . N€l U1i:t-- '" I i~' 209.41 ~BB. 3T'J6"E _-"'1,._____:41_. ISO &3.45 ! .. --- -- '" ~ I (~Ol ON ":: uS: 0.- 0" oe.~ .. , ~= &. 120 PART OF L9T 9 EXHIBIT 1 I" = 100' Page 15 of17 06/23/2005 09:55 FAX 763 493 5193 JENSEN & SONDRALL. P.A. I4J 010 . . , ., EXHIBIT 3 Table of Contaminants . General Total volume of Total volume of Remedy RAP Cleannp Goal contaminant type identified identified (i.e., residential (i.e., DRO, VOCs, contaminated soil contaminated soil SRVs, industrial metals, etc.) (cyds) to be remediated SRVs, etc.) (cvds) VOCS 13,000 0 N/A N/A General contaminant Affected aquifer Appronmate dimensions Remedy type (i.e., DRO, (i.e., water table, of contaminant plume VOCs, metals, etc. deeper aquifers) on-site. Specify if the plume extends off-site. voes Water table aquifer 3,200 sq. ft. Potassium permanganate Plume extends off-site injection and ex-situ soil vapor and groundwater treatment VOCs Lower aquifer 48,000 sq. ft. Potassium permanganate Plume extends off-site injection and ex-situ soil vapor and groundwater treatment Compound Tier I Average Concentration Maximum Concentration SRV {residential} TCE 29 mglkg 100 mgikg 1,900 mgikg DCE 0.6 mglkg <0.5 mgikg 5 mglkg peE 72 mglkg 5 mglkg 80 mgIkg Toluene 107 mg/kg <0.3 mg/kg 0.5 mglkg Compound BRL Average Maximum Concentration Concentration TCE 30 ug/L 5,000 ug/L 350,000 ug/L DCE 6 ug/L 1 ug/L 33 ug/L PCE 7ug/L <lug/L 5ug/L Trans-DCE 100 ug/L <1 ug/L 18 ug/L Cis-DCE 70 ug/L <lug/L 640 ug/L Vinyl chloride 0.2 ug/L <lug/L 10 ug/L Methylene Chloride 50 ug/L <2 ug/L 900 ug/L Toluene 1000 ug/L <lug/L 18 ug/L Page 17 of17 EXHffiIT C Buyer and Seller Agreement Regarding Post-closing Default as to Construction of Minimum Improvements. Note: Capitalized terms appearing below are to be interpreted as defined in the Agreement to which this Exhibit is attached. Post-Closinl! Default as to Construction of Minimum Improvements. In the event that after conveyance of the Property (or any part thereof) to the Buyer and before receipt by the Buyer of a certificate of completion from the Seller there is a failure on the part of the Buyer, subject to "Unavoidable Delays" (as that term is defined below), to carry out any obligation with respect to construction of the Minimum Improvements (including but not limited to the nature.ofthe improvements and the date for the completion thereof), or if the Buyer abandons or substantially suspends construction work then the Seller shall have the right to re-enter and take possession of the Property unless such failure, abandonment, or suspension is cured, ended, or remedied within thirty (30) days after written demand from the Seller with respect to the failure, abandonment or suspension. Upon such re-entry and re-taking of possession the Seller may terminate (and revest in the Seller) the estate previously conveyed by the Deed, it being the intent of this provision together with other provisions of the Agreement to which this Exhibit C is attached that the conveyance of the Property to the Buyer shall be made upon (and that the Deed shall contain a condition subsequent to the effect that) the understanding that in the event of any default on the part of the Buyer with respect to the Minimum Improvements and failure on the part of the Buyer to remedy, end, or abrogate such default within the period and in the manner stated herein then the Seller at its sole option may declare a termination in favor of the Seller ofthe title and additionally of all rights and interests of the Buyer (and the Buyer's successors or assigns), and that the Seller may further declare that all ofthe rights and interests in and to the Property (including ai1y improvements or rights subsequently added to the Property) shall revert to the Seller, but only if the events stated in this paragraph have not been cured within the time periods provided above. Notwithstanding anything to the contrary contained in this paragraph, the Seller shall have no right to reenter or retake title to and possession of a portion of the Property for which a certificate of completion has been issued. For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond the reasonable control of the Buyer and which are the direct result of strikes or other labor troubles; damage to the Minimum Improvements due to prolonged adverse weather, acts of God, fire or other casualty; litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays; or acts of any federal, state or local governmental unit (other than the Seller in exercising its rights under this Agreement) which directly result in delays. The term "Unavoidable Delays" shall not inGlude delays in the Buyer's efforts to obtain permits or governmental approvals necessary to enable construction of the Minimum hnprovements by the dates such construction is required under this Agreement. Resale of Reacquired Property: Disposition of Proceeds. Upon the revesting in the Seller of title to and/or possession of the Property (or any part thereof) as provided above, the Seller shall apply the Purchase Price as follows: A. First, to reimburse the Seller for all costs and expenses (including but not limited to proportionate salaries of personnel) incurred by the Seller in connection with the recapture, management, and resale of the Property or any part thereof (but less any income derived by the Seller from the Property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charge during the period of ownership thereof by the Seller, an amount, equal to such taxes, assessments, or charges [as determined by the Seller's assessing official] as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or any part thereof at the time ofrevesting of title thereto in the Seller or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Buyer, its successors or assigns; any expenditures made or obligations incurred with respect to the making or completion of the Minimum hnprovements or any part thereof on the Property or any part thereof; and any amounts otherwise owing the Seller by the Buyer or its successors or assigns; and B. Second, to reimburse the Buyer for the balance of the Purchase Price remaining after the reimbursements to the Seller specified above. Such reimbursement shall be paid to the Buyer upon delivery of an executed, recordable warranty deed to the Property (or, if applicable, part thereof) by the Buyer to the Seller.