Loading...
IP #743COUNCIL REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development 4-28-03 Public Hearino Item No. B Kirk McDonald y: By.: 7 PUBLIC HEARING: RESOLUTION APPROVING PURCHASE AGREEMENT WITH PLYMOUTH HEIGHTS PET HOSPITAL FOR SALE OF 9200 49 AVENUE NORTH PROPERTY (IMPROVEMENT PROJECT NO. 743) REQUESTED ACTION Staff requests that the City Council conduct a public hearing regarding the sale of a portion of the city-owned property at 9200 49 Avenue to Plymouth Heights Pet Hospital. At the conclusion of the public hearing, staff requests that the Council approve the enclosed resolution, which approves the attached purchase agreement with Plymouth Heights Pet Hospital for the sale of the 2900 49 Avenue North property. POLICY/PAST PRACTICE In the past, the City Council has conducted similar public hearings for the sale of city-owned properties for appropriate development purposes, The sale and development of this property is consistent with the priority goals stated in the City Plan and meets several if the city-wide, commercial and industrial goals stated in the Comprehensive Plan, including protect property values and maintain a strong tax base, promote private reinvestment, attract new businesses that are complementary to existing businesses and promote high quality construction. One of the goals of Planning District #3 of the Comprehensive Plan, in which this property is located, specifically states "promote industrial infill development of the remaining vacant parcels on 49th Avenue." BACKGROUND At the April 14 City Council meeting, staff presented a revised purchase agreement for this site in the amount of $81,000 by Quest Real Estate on behalf of Plymouth Heights Pet Hospital. The City Council was in agreement with the offer and passed a resolution calling for this public hearing to approve the sale of a portion of the city property at 9200 49 Avenue North to Plymouth Heights Pet Hospital. A public hearing notice was published in the official newspaper. Quest Real Estate, Inc. has submitted the attached Purchase Agreement and made the minor changes requested by the City Attorney in previous correspondence. Quest has also collected the earnest money check payable to Premier Title in the amount of $1,000 and they will be submitting to the title company to hold, as per the Purchase Agreement. Representatives from Quest Real Estate and Plymouth Heights Pet Hospital will be in attendance at the hearing to answer any questions. MOTION BY &U)T SECOND BY 2 L I-L TO: I:RFA\planning\improvement\Q-9200 49"' ph sale Request for Action Page 2 4 -28 -03 The City Attorney has prepared the enclosed resolution approving the Purchase Agreement. The resolution states that: • The City of New Hope is the fee owner of certain real estate known as 9200 49 Avenue North, New Hope, legally described as Lot 2, Block 1, Brandell Industrial Park Second Addition, Hennepin County, Minnesota. • Pierce Fleming, owner of the Plymouth Heights Pet Hospital, has presented the City with a Purchase Agreement to buy a portion of the property consisting of approximately the south 80,848 square feet for the purpose of developing and constructing a "state of the art" 7,000 square foot veterinarian clinic /pet hospital at the property. • The City Council held a public hearing at its April 28 meeting after duly published notice to sell the property to Plymouth Heights Pet Hospital in compliance with Minn. Stat. §469.029(2) and at said hearing the City Council considered all information presented by the public, Plymouth Heights Pet Hospital and its own opinions and knowledge regarding the property and the proposed sale of the property to Plymouth Heights Pet Hospital. • The City's obligation to sell the property to Plymouth Heights Pet Hospital per the Purchase Agreement is conditional upon Plymouth Heights Pet Hospital's execution of a Development Agreement with the City for a veterinarian clinic /pet hospital subsequent to compliance by Plymouth Heights Pet Hospital with the City's planning process per Chapter 4 of the New Hope City Code. • For real estate tax purposes, the proposed facility has an estimated preliminary market value of $1,000,000. The development will be classified as commercial /industrial for tax purposes and it is believed it will generate approximately $38,669 in taxes based on 2003 rates. It is estimated the City's portion of the new taxes generated by the development will initially be $6,472 annually. Currently, the property is tax exempt. • The City Council hereby determines the City's interests will be best served if the Purchase Agreement for the sale of the property to Plymouth Heights Pet Hospital is hereby approved permitting Plymouth Heights Pet Hospital to prepare and submit to the City a development plan for the property as described above. The resolution further states: That the Purchase Agreement for 9200 49 Avenue Pet Hospital is hereby approved and the Mayor and sign the agreement on behalf of the City. North with Pierce Fleming and the Plymouth Heights City Manager are hereby authorized and directed to That the City Manager and city staff are authorized and directed to take whatever actions are necessary or advisable to fulfill all of the City's obligations required by the Purchase Agreement to sell and convey fee ownership of the property to Pierce Fleming and /or the Plymouth Heights Pet Hospital per the terms of the Purchase Agreement. Additional background information on this property and project from previous Council /EDA meetings is attached for your information, and it is not staff's intent to repeat all of that information in this request. The closing on the property will take place on July 31, 2003, or sooner, should the parties mutually agree. It is anticipated that Plymouth Heights Pet Hospital will be preparing development plans for consideration by the Planning Commission and City Council over the next several months. After taking comments at the public hearing, staff recommends that the City Council close the public hearing and approve the resolution. Request for Action Page 3 4 -28 -03 FUNDING The funds originally used to purchase this site came from the Storm Water Fund and staff is recommending that the proceeds from the sale of the property be returned to that fund and in the future, use the proceeds towards the construction of a regional storm water quality pond on the site. ATTACHMENTS • Resolution • City Attorney Correspondence • Public Hearing Notice • 4/22 Quest Correspondence • Revised Purchase Agreement 0 4/14 RFA and Background Correspondence /Maps RESOLUTION NO. 03- 75 IRL"61 1 BE IT RESOLVED by the City Council of the City of New Hope as follows: WHEREAS, the City of New Hope (the City) is the fee owner of certain real estate known as 9200 49`' Avenue North, New Hope, (hereafter Property) legally described as follows: Lot 2, Block 1, Brandell Industrial Park Second Addition; Hennepin County, Minnesota WHEREAS, Pierce Fleming owner of the Plymouth Heights Pet Hospital (hereafter PHPH) has presented the City with a Purchase Agreement (attached hereto as Exhibit A) to buy a portion of the Property consisting of approximately the south 80,848 sq. ft. for the purpose of developing and constructing a "state of the art" 7,000 sq. foot veterinarian clinic /pet hospital at the Property; and WHEREAS, the City Council held a public hearing at its April 28, 2003 meeting after duly published notice to sell the Property to PHPH in compliance with Minn. Stat. §469.029(2) and at said hearing the City Council considered all information presented by the public, PHPH and its own opinions and knowledge regarding the Property and the proposed sale of the Property to PHP; and WHEREAS, the City's obligation to sell the Property to PHPH per the Purchase Agreement attached as Exhibit A is conditional upon PHPH's execution of a Development Agreement with the City for a veterinarian clinic /pet hospital subsequent to compliance by PHPH with the City's planning process per Chapter 4 of the New Hope City Code; and WHEREAS, for real estate tax purposes the proposed facility has an estimated preliminary market value of $1,000,000.00. The development will be classified as commercial /industrial for tax purposes and it is believed it will generate approximately $38,669.00 in taxes based on 2003 rates. It is estimated the City's portion of the new taxes generated by the development will initially be $6,472.00 annually. Currently, the Property is tax exempt; and WHEREAS, the City Council hereby determines the City's interests will be best served if the Purchase Agreement (Exhibit A attached) for the sale of the Property to PHPH is hereby —1— approved permitting PHPH to prepare and submit to the City a development plan for the Property as described above. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the Purchase Agreement For 9200 49" Avenue North with Pierce Fleming and the Plymouth Heights Pet Hospital is hereby approved and the Mayor and City Manager are hereby authorized and directed to sign the agreement on behalf of the City. 3. That the City Manager and City staff are authorized and directed to take whatever actions are necessary or advisable to fulfill all of the City's obligations required by the Purchase Agreement to sell and convey fee ownership of the Property to Pierce Fleming andl/or the Plymouth Heights Pet Hospital per the terms of the Purchase Agreement . 2003. This resolution is hereby adopted by the New Hope City Council this 2$' day of April, W. Peter Enck, ayor Attest: , t — A 2 Valerie Leone, City Clerk P: \Attorney \Cnh Resolutions \CNH99 - 11217 - 003 -reso approving purchase agreement PHPH.doc —2— This Purchase Agreement is made and entered into this day of 2003, by and between: Parties Seller: City of New Hope Mailing Address: 4401 Xylon Avenue No. New Hope, MN 55428 hereinafter referred to as "Seller" and, Buyer: Pierce Fleming Mailing Address: c/o Plymouth Heights Pet Hospital 3401 North Highway 169 Plymouth, MN 55441 hereinafter referred to as "Buyer ". Copy To: Steven A. Sondrall New Hope City Attorney Jensen & Sondrall, P.A. 8525 Edinborough Crossing, Suite 201 Brooklyn Park, MN 55443 Telephone: 763- 424 -8811 Facsimile: 763 -493 -5193 Joan Young Premier Title 7300 Metro Boulevard, Suite 300 Edina, MN 55439 Telephone: 952 - 897 -1707 Facsimile: 952- 897 -3534 2. Real Property. Seller agrees to sell and Buyer agrees to purchase the following described real property located at 9200 49 Avenue North, in the City of New Hope and County of Hen-iepin, Minnesota as identified in Exhibit A, attached and labeled "Legal Description ", consisting of approximately two- thirds of the property or approximately 80,848 square feet subject to the terms outlined herein. Purchase Agreement New Hope Property Purchase Price. The purchase price of the property, assuming the property contains approximately 1.856 acres or 80,848 square feet, hereinafter referred to as "net square feet ", is eighty -one thousand and no /dollars ($81,000.00). The final purchase price, hereinafter referred to as "purchase price ", shall be determined by multiplying the net square footage of the Property, as determined by the survey to be prepared pursuant to Section 9 hereof, by $1.00188 per net square foot. The term "net square feet" or "net square footage" shall be the net square footage within the Property excluding that portion of the property retained by the Seller for the construction of a drainage pond at the north side of the property but in no case shall the net square footage be less than 80,000 square feet unless mutually agreed to in writing by both parties of this Purchase Agreement. The purchase price shall be paid as follows: (a.) Earnest money of $1,000.00 as set forth in paragraph 4 hereof. (b.) $80,000.00 cash at closing. 4. Earnest Money. Buyer, upon full agreement with Seller, will pay the amount of $1,000.00 by check as earnest money, which amount will be applied toward the purchase price in the event of closing by Buyer, returned to Buyer if required hereunder, or retained by Seller as liquidated damages in the event of (a) default by Buyer, or (b) Buyer's failure to timely close with Seller where such failure is not due to Seller's non - performance under this Agreement. All earnest money paid shall be delivered to Premier Title, by the next business day following acceptance of this agreement by all parties, to be held in trust by Premium Title and deposited in an account bearing money market interest rates. Any and all interest earned on such funds shall be the property of the Buyer regardless of how such earnest money should be applied under the terms of this Agreement. 5. Closing. Closing shall take place on July 31, 2003 or sooner, should the parties mutually agree. 6. Obligations of Parties at Closing. At the closing between Buyer and Seller with respect to the Property: (a.) Seller shall: i.) Execute and deliver a Warranty Deed. 2 Purchase Agreement New Hope Property ii.) Provide a Seller's Affidavit concerning the absence of judgements, mechanics liens and unrecorded interest. iii.) Make any payments as required under this Agreement. iv.) Deliver and record all documents necessary to clear title. v.) Provide any documents required by the IRS including a form 1099B and/or FIRPTA affidavit. vi.) Provide any documents and information to Buyer, at Buyer's request, necessary to obtain a title insurance policy extension. (b.) Buyer shall: i.) Make the necessary payments as required under this Agreement. ii.) Deliver all resolutions or other documents required to show that Buyer has properly approved this conveyance and that all requisite authority has been given. 7. Title. Seller agrees to deliver marketable title to the Property by Warranty Deed subject only to: (a.) Easements of record that do not materially and adversely affect Buyer's contemplated usage of the Property, which determination shall be made by the Buyer in its sole discretion. (b) Reservation of minerals or mineral rights by the State of Minnesota, if any. (c.) Building, zoning and subdivision laws, ordinances and regulations, that allow for completion of Buyer's improvement(s) which shall be a pet hospital/clinic (hereinafter "Permitted Encumbrances) "). 8. Evidence of Title. Within 30 days of the date hereof, Seller shall deliver to Buyer an Abstract of Title or Registered Property Abstract to the Property (hereinafter "Evidence of Title "), which Evidence of Title shall be properly certified to date including property searches covering bankruptcies, State and Federal tax liens, unpaid taxes and special assessments pending, levied or deferred. Seller shall pay the cost of obtaining such Evidence of Title. Buyer shall be allowed thirty (30) days after 3 Purchase Agreement New Hope Property receipt of such Evidence of Title for examination and the making of any objections to the marketability of title, such objections to be made in writing or deemed to be waived. If any objections are so made, Seller shall be allowed sixty (60) days to make title marketable. Seller shall use Seller's best efforts to make title marketable as expeditiously as possible. If such defects are cured within said 60 -day period, Buyer shall be notified in writing of the curing of such defects, in which case the parties shall proceed to perform in accordance with the terms of this Agreement. If the title is not marketable and cannot be made marketable within such time periods, this Agreement shall be null and void at Buyer's election, and the original earnest money shall be refunded to Buyer. If Buyer chooses to waive objections, the parties shall proceed to closing according to the terms of this Agreement. If notification by Seller of the fact that a title defect has been cured or notification by Buyer that it waived an objection occurs at a point in time that is less than thirty (30) days prior to closing, then closing shall be delayed until a day at least thirty (30) days after such notification. 9. Survey. Seller and Buyer shall share proportionately in the cost and expense to cause to be prepared surveys of the Property prepared by a surveyor registered under the laws of the State of Minnesota. Such survey shall be certified to Buyer and Buyer's title company and shall show the net square footage as previously defined to be purchased by Buyer and that portion of the property retained by Seller and all improvements on the Property, including fencing, all easements, encroachments, and utility rights upon the Property, showing the location of adjoining public streets so as to affirmatively show rights of ingress and egress to and from the Property. Buyer shall have twenty (20) days after the later of (1) receipt of Evidence of Title or (2) receipt of said survey to examine said survey and to make objections to title based on said survey and the rights of the parties shall be the same as stated in paragraph 8 above. 10. Obligations of Seller. Seller shall provide Buyer within ten (10) days following execution of this Agreement, the following documents to the extent said documents are in Seller's possession, or readily attainable: (a.) A copy of Seller's most recent survey of the Property. (b.) Existing title reports and title policies related to portions or all of the Property. (c.) A copy of all underlying financing currently existing on the Property. 4 Purchase Agreement New Hope Property (d.) Any and all documents and information available to the Seller relating to any agreements with any unit of government that may affect future development, including, but not limited to, preliminary plats or developer's agreements. (e) Any and all documents and information available to Seller relating to any substances defined as toxic or hazardous under state or federal laws or regulations affecting the Property. This shall include such substances regulated under state and federal law including the following: i.) Underground storage tanks; ii.) Asbestos; iii.) PCB's; iv.) Lead -based paint; v.) Urea formaldehyde; vi.) Radon vii.) Industrial/domestic waste; and viii.) Any other toxic or hazardous substances. (f) Buyer acknowledges and agrees Seller had made no warranties, either expressed or implied, regarding the fitness of this property for Buyer's intended use. Further, Seller has advised Buyer the Property has soil correction problems which may result in significant costs to correct in order for Buyer to develop the Property as intended. Buyer agrees it has not relied on any representations made by Seller concerning Buyer's use of this site and any sale to Buyer of this Property shall be an "AS IS" sale. Buyer shall accept full responsibility for any costs to make the Property suitable for its intended use and will not look to Seller for reimbursement of any such costs. 11. Contingencies. Buyer's obligation to close hereunder is specifically contingent upon the following: (a.) Buyer's environmental assessment of the Property, which approval shall be in Buyer's absolute and sole discretion. The environmental assessment of the Property shall be prepared at Buyer's expense. 5 Purchase Agreement New Hope Property (b) Buyer's investigation and satisfaction that the City of New Hope is favorably disposed toward Buyer's proposed use of the property. (c) Buyer's investigation and approval of the physical condition of the Property. To this end, Buyer may enter upon the Property for purpose of making soil tests and other tests necessarily contemplated by its proposed development of the Property, provided that Buyer shall hold Seller harmless from any an all liens therefrom. Buyer shall not be entitled to make any improvements upon the Property prior to closing, and the property to be improved has been paid in full. Buyer shall pay promptly, when due, all charges incurred by it for labor, materials, services or other items which liens may be filed or assessed against the Property, but, if for any reason whatsoever any mechanic's liens are filed, Buyer shall take immediate steps to have same satisfied of record. However, in the event Buyer in its judgement deems a mechanic's lien to be unlawfully or unjustified, it shall have the right to contest the validity of such lien or liens by court action, if necessary, provided that during the period that such mechanic's lien or liens remain of record, a sum equivalent to one and one -half times the claimed lien or liens be placed in escrow with such bank as Seller may direct, pending the outcome of such contest. Buyer shall hold Seller harmless from any and all claims, including damage to the Property arising out of any entry upon the Property by Buyer or its agents or employees. Buyer shall restore any damage to the Property resulting from such activity at its expense. (d) Buyer's assurance that all off -site sanitary and storm sewers, water mains and treatment facilities necessary to provide service to the Property, including sufficient capacities, volumes, pressure and other pertinent features, have been installed, have been accepted by the appropriate governmental authorities and are in operation, and such service is available at the perimeter of the Property for Buyer to extend into the Property for use in the proposed development without liability or any further cost for such off -site improvements, including, but not limited to, any recapture fee, contribution, assessment or connection fee (other than normal connection fees for service to a commercial development, except as otherwise may be agreed to by Buyer) for construction of proposed improvement. (e.) Approval of Buyer's application for rezoning of the Property, if required by the City and obtaining a Conditional Use Permit, if required, from the City effective upon Buyer's purchase of the Property to accommodate Buyer's proposed development of a pet hospital /clinic. Rezoning and obtainment of a Conditional Use Permit shall deemed to have taken place L V Purchase Agreement New Hope Property when all necessary public hearings have been conducted and all necessary ordinances rezoning the Property effective upon Buyer's purchase of the Property have been adopted, (f.) Buyer's preparation, at its own expense, of a Preliminary Plan of Development for the Property and Engineering thereof, for development and use of the Property for construction of a pet hospital /clinic for the purpose of obtaining approval of such Plan and use of the property by the City. (g.) Buyer shall cause to be prepared the Final Plan of Development together with the associated engineering plans specifying and legally describing the Property. When the Final Plan and Final Plat is so prepared, Buyer shall promptly apply for approval of the Final Plan and Final Plat for the Property by the City. Approval by the City shall be deemed to have been completed (i) with respect to the Preliminary Plan of Development and the Preliminary Engineering for the Property, when the City approves the same by resolution, ordinance or other official action after all requisite hearing and proceedings and commits to approve any Final Plan(s), Subdivision, Final Plat(s) or Development of the Property, subject only to Buyer taking title and depositing the requisite security for installation of public improvements. (h) Approval by the City of Buyer's plans and specification for the pet Hospital/clinic which Buyer proposes to construct on the Property. (i) Written assurances from the City that, upon taking title and recording the Plat(s) or Plan(s) of Subdivision for the Property, Buyer will be permitted to commence the construction and a occupancy permit will be issued upon completion in accordance with the building code of the City. Receipt by Buyer for those permits and approvals from all governmental or quasi - governmental authorities which may be necessary for Buyer to develop the Property and install those public improvements necessary to service the same, including water and sewer lines. (k.) Receipt by Buyer of written assurance from the City that, upon submission of application therefor by Buyer and payment of the connection fee ordinarily assessed by the City for all properties which it services. Buyer will be issued water connection and sanitary sewer connection permit for the pet hospital/clinic to be constructed by it on the Property. (1.) The obtainment of mutual agreement between Buyer and Seller on temporary and permanent Easements for providing access to Seller through Buyer's property to section of property retained by Seller. Purchase Agreement New Hope Property Buyer shall exert timely and diligent efforts to accomplish the objective set forth above, but shall not be required to resort to litigation, or to make contributions or dedications (other than the normal contributions for schools and parks called for under the City's Subdivision Ordinance) or to install off -site improvements' not agreeable to Buyer as a condition to accomplish such objectives. Seller and/or the owner of the Property, shall cooperate with Buyer, including, if appropriate, joining such applications, petitions, agreements, and similar procedures, including, specifically, joiner in a plat for the Property, to be prepared by Buyer and Seller at Buyer's and Seller's expense. Buyer shall have until 5:00 p.m. on July 30, 2003, the day before the Closing Date, to exercise the contingencies above. Buyer shall exercise any of such contingencies by giving Seller notice in writing by 5:00 p.m. on that date. Upon receipt of such notice of exercise, this Agreement shall become null and void and the original earnest money paid to the Seller shall be immediately returned to Buyer. Buyer shall notify Seller of its waiver of those contingencies by giving Seller written notice by 5:00 p.m. on that date, of Buyer's intent to proceed based on it's preliminary investigation. Waiver of any one contingency shall have no effect on Buyer's right to exercise or waive any other contingency. Should Buyer fail to timely exercise any of said contingencies on or before said date, and should Buyer later default under this Agreement, Seller shall be entitled to retain all earnest money paid hereunder as liquidated damages. Nothing contained herein shall in any way restrict Buyer's rights to terminate this Agreement pursuant to Paragraph 8 hereof or by virtue of Seller's default and receive back all earnest money paid hereunder. 12. Extension by Buyer. In the event Buyer has been unable to satisfy the contingencies set forth in Paragraph 11 and Paragraph 12 above by the date set forth therein, Seller shall automatically grant to Buyer an additional sixty (60) days for Buyer to close on the Property, if requested by Buyer. In such event, the Closing Date set forth in Paragraph 5 hereof shall also be extended a like period. In the event of such a request to extend the Closing beyond July 31, 2003, interest at six percent (6 %) shall commence to accrue on the Purchase Price as of August 1, 2003. Said accrued interest from August 1, 2003 to the Date of Closing shall be due at closing in addition to the down payment. 13. Seller's Representations. Seller hereby represents and warrants as follows: (a.) Seller is currently the owner or contract purchaser of the Property, subject only to the Permitted Encumbrance(s). Purchase Agreement New Hope Property (b) Seller has the full and complete authority to sell the Property and the person executing this Agreement on behalf of the Seller has full and complete authority to do so. (c) The Property has not been cited as being in violation of any local ordinances and if any citations are issued prior to closing, Seller will take the necessary curative action in connection with such citations. (d.) From the date hereof through closing, Seller shall not create, suffer or assume any new or additional encumbrances on title to the Property. (e.) There are no actions, suits or proceedings pending or threatened against Seller which would adversely affect the title or interest of Seller to or in the Property. (f) This Agreement, including the Exhibits attached hereto, does not include any untrue statement of a material fact or omit a statement of material fact necessary to make the statement made or to be made not misleading. Seller shall update any such statements as of the closing date if necessary to make them complete or accurate, (g.) There are no special understandings or agreements between Seller and the County in which the Property is located or the City (or any other governmental authority) limiting or defining (i) the use and development of the property, (ii.) the construction of improvements thereon, (iii.) the availability to the Property of public improvements and municipal services, (iv.) any requirement to share in the cost thereof by recapture, contribution, special assessments or otherwise, (v.) any requirement to contribute land or in cash to any school, library, park or other sort of county, municipal or governmental district or body (it is understood that the provisions of the Subdivision Ordinance of the City calling for the normal contributions for schools and parks is not a "special understanding or agreement" covered by this warranty), or (vi.) any other matter in relation to the zoning, subdivision and development of the Property; or if there are, all such obligations thereunder shall have been performed and satisfied in full by Seller prior to the closing of the Property. (h.) There are no parties in possession of the Property, nor are there any parties with possessory rights in the Property other than Seller and/or the owner of the Property. (i) Seller hereby incorporates by reference and remakes any warranties and representations which are made elsewhere in this Agreement. These representations are true as of the date hereof and will be true as of the date of closing and they shall survive the closing. Purchase Agreement 14. Hazardous Substances. (a.) Definitions. New Hope Property i.) "Hazardous Substance" means a hazardous substance or waste, a toxic substance, polychlorinated biphenyls, asbestos or related materials and also includes, but is not limited to substances defined as "hazardous substances" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et M., Hazardous Materials 'Transportation Act, 49 U.S.C. Sec. 6901, et M., or as "hazardous substances ", "hazardous waste" or "pollutant or contaminant" in the Environmental Response and Liability Act, Minn. Stat. Sec. 115B.01 et 5M. ii.) Hazardous Substance Claim ( "Claim ") means discovery of Hazardous Substance on or under the Property or receipt of a notice, claim, demand or complaint, including notice or imposition of a "super fund" line, from any federal, state or local government agency or office or from any third party seeking, pursuant to federal, state or local law, the performance of response action(s) and/or the payment of damages, cost or expenses arising out of the release or threatened release of Hazardous Substance deposited on or under the Property prior to the time the Buyer becomes owner of the Property, including but not limited to, legal, engineering, testing and other fees. iii.) Hazardous Substance Liability ( "Liability ") means occurrence of a claim, and all damages, costs and expenses in connection therewith, including but not limited to legal, investigating, engineering, testing and other fees, and including a final determination or judgement entered or agreed upon. (b.) Pending Actions/EnvironmentalAudit. Seller shall provide to Buyer any previous, current or pending court actions. Environmental audit information, if any, and other such information regarding hazardous waste soil or ground water contamination on or around the property. to av Purchase Agreement New Hope Property (c) Representation and Warranties. Seller represents and warrants that the Property is free from Hazardous Substances and is not subject to any Claim. Seller has not received any notice nor is Seller aware of any notice having been given to prior owners of the Property from federal, state or local governmental agencies or other third parties of any claim or advising of any pending or contemplated search or investigation of the Property or any portion thereof with respect thereto. (e.) Indemnification. If Seller is found to be in breach of the warranty set forth in subsection (c) immediately above, Seller shall at all times indemnify and hold Buyer harmless from and against all liability which Buyer may, at any time, sustain or incur by reason of such breach, including, but not limited to the cost of removing, re- mediating or otherwise responding to a Claim. Seller shall pay, upon demand by Buyer, the amount of any Liability paid or incurred by Buyer to the extent caused by Seller's breach. Seller shall satisfy and discharge any judgement recovered against Buyer or the Property by reason of such Liability to the extent caused by Seller's breach promptly after the entry thereof, unless an appeal is taken and any bond required to stay the collection thereof are procured and filed by the Seller. If a final judgement is entered against Buyer or the Property after appeal, Seller shall satisfy and discharge such judgement, to the extent caused by Seller's breach. Buyer may, in its reasonable discretion, make any payment as required pursuant to the preceding sentence, and Seller shall promptly repay to Buyer the amount of such payment, with interest at 8% per annum. Notwithstanding the foregoing, Buyer agrees it shall provide reasonably prompt notice to Seller upon its receipt of notice of Claim and Seller shall have a reasonable opportunity to respond or contest such Claim and manage any plan of re- mediation, litigation or settlement in connection therewith. 15. Buyer's Representation. Buyer hereby represents and warrants that Buyer has the full and complete authority to enter into this Agreement and the person executing this Agreement on behalf of the Buyer has full and complete authority to do so. 16. Real Estate Taxes and Assessments. Seller agrees to pay any and all real estate taxes plus penalty and interest due and payable in all years prior to the year of closing of the Property. The real estate taxes due and payable in the year of the closing relating to the Property shall be prorated to the actual day of closing. Seller agrees to pay at the closing all special 1i Purchase Agreement New Hope Property assessments or similar governmental charges that are pending, levied or deferred as of the date of this agreement. Seller shall pay any deferred real estate taxes (i.e. Green Acres taxes, open space taxes) due from the Property at the time it is conveyed. Buyer shall be responsible for payment of all area charges such as trunk sewer, trunk water, trunk storm sewer and park land dedication fees and levied and pending special assessments levied after the effective date of this agreement. 17. Condemnation. If the Property is taken or if there is a threat of taking by eminent domain prior to closing, this Agreement shall become null and void at Buyer's option. If Buyer elects to declare the Purchase Agreement null and void, Buyer shall notify Seller in writing and all earnest money paid to Seller shall be promptly refunded to Buyer. If Buyer elects to proceed with Closing, Buyer shall be entitled to, and Seller shall assign to Buyer, all settlements and condemnation awards. 18. Condition of Property Seller shall cap the existing well, if any, and remove from the Property all refuse, debris and personal property prior to the date of closing. At a reasonable, pre - approved by Seller, within three days of closing, Buyer shall have the right to inspect the Propery to determine that there has been no significant change in the condition of the Property, except for changes approved by Buyer. 19. Survival of Terms. To the extent necessary to carry out the terms of this Agreement, this Agreement shall survive the closing of the transaction contemplated herein, 20. Default. If either party defaults, the rights of the parties are as follows: (a.) If Seller defaults, Buyer shall have the right to terminate this Agreement on thirty (30) days notice and receive back all earnest money paid by it. (b.) If Buyer defaults, Seller shall have the right to terminate this Agreement on thirty (30) days notice and retain all earnest money paid as liquidated damages. 21. Agent. Stephen A. Ludovissie /Quest Real Estate, Inc. represent the Buyer as the real estate broker in this transaction. Seller warrants and represents to Buyer that no real estate broker other than Stephen A. Ludovissie /Quest Real Estate, Inc. is I2 Purchase Agreement New Hope Property involved in this transaction. Seller shall indemnify Buyer against any claim of any broker other than Stephen A. Ludovissie /Quest Real Estate, Inc., claiming by, through or under Seller. Buyer shall indemnify Seller against any claim of any broker claiming by, through or under Buyer. 22. Affidavit Regarding Foreign Transferor. At Closing, Seller shall deliver to Buyer either: (a.) An affidavit satisfying the requirements of Section 1445A of the Internal Revenue Code and rules and regulations promulgated thereunder ( "Section 1445A "); or (b) A qualifying statement from the U.S. Treasury Department that the transaction contemplated herein is exempt from the withholding tax requirement imposed by Section 1445A. In the event that Seller fails to deliver either the affidavit or the qualifying statement as aforesaid or in the event Seller delivers such affidavit or qualifying statement and Buyer has reason to believe that suck affidavit or qualifying statement is false or incorrect, Seller agrees that Buyer may, at Closing, deduct and withhold from the proceeds that are due to Seller the amount necessary to comply with the withholding tax requirement imposed by Section 1445A. Buyer shall deposit the amounts so withheld pursuant to terms and conditions acceptable to Seller and Buyer, but in any event complying with Section 1445A. 23. Notices. Any notices required or contemplated hereunder shall be effective upon the placing thereof in the United States mails, certified mail, return receipt requested, postage prepaid and addressed to the other party at the addresses as stated in paragraph 1 above. 24. Agreement as Offer. It is understood that this Agreement constitutes an offer to purchase until executed by Seller. Seller shall have ten (10) days in which to accept this offer at which time, if not accepted, this offer shall become null and void unless ratified in writing by Buyer. In the event this Agreement is executed by Seller after the ten - day period referenced herein, the contingency dates and closing dates set forth in paragraphs 11 and 5, respectively, shall each be extended one day for each day beyond the tenth day provided herein on which Seller's execution shall occur. Said extension shall be in addition to, and not in lieu of, any extension granted pursuant to paragraph 13 hereof. 13 Purchase Agreement 25. Headings. New Hope Property The section and paragraph headings contained herein are for purposes of convenience only and are not intended to define or limit the contents of such section or paragraph. 26. Cooperation. Each party hereto shall cooperate in a timely manner, shall take such further action, and shall execute and deliver such further documents as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement. 27. Governing Law. This Agreement shall be deemed to be a contract under the laws of the State of Minnesota and for all purposes shall be construed and enforced in accordance with the laws of each State. 28. Assignment Buyer shall have the option anytime prior to closing to assign this Purchase Agreement to another party in order to effectuate an IRS -1031; "Like For Exchange ". Buyer shall notify Seller prior to any such assignment. 29. Successors and Assigns. This Agreement shall be binding upon the parties along with their successors, heirs, executors, administrators, assignees, lessees, and transferees of any kind. SELLE / ,,. 7 / By: A f • -�. Its: Date BUYER: Pierce Fleming By: Date L , 3 Its: 14 Purchase Agreement New Hope Property 1 Lot 2, Block I, Brandell Industrial Park Second Addition, Hennepin County, Minnesota, IS JENSEN & SONDRALL, P.A. Attorneys At Law 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443 -1968 TELEPHONE (763) 424 -8811 • TELEFAx (763) 493 -5193 e -mail lawgjensen- sondrall.com DOUGLAS J. DEE CORDON L. JENSEN' VIA FACSIMILE TO (763)536 -5130 GLEN A. NORTON AND BY REGULAR MAIL STEVEN A. SONDRALL WILLIAM C. STRAIT April 18, 2003 STACY A. WOODS Kirk McDonald OF COUNSEL Community Development Director LORENS Q. BRYNESTAD City of New Hope 4401 xylon Avenue North New Hope, MN 55428 Re: Resolution Approving Purchase Agreement With Plymouth Heights Pet Hospital For Sale of 9200 49 Avenue North Our File: 99.11217 Dear Kirk, Enclosed for consideration at the April 28, 2003 Council meeting is a proposed Resolution Approving Purchase Agreement With Plymouth Heights Pet Hospital For Sale of 9200 4Y' Avenue North. As you know, the recommended sales price is $81,000.00. The sale is also contingent upon submission by Pierce Fleming of a development plan acceptable to the City. Also enclosed is a copy the public hearing notice published in the paper to consider the sale. After the close of the public hearing the resolution should be adopted. Contact me if you have any further questions or comments. Very truly yours, Steven A. Sondrall, City Attorney, City of New Hope JENSEN & SONDRALL, P.A. sas@je nse n -so nd ral I . coin After Hours Extension #147 Enclosures 'Real Property Law Specialist Certified By The Minnesota State Bar Association cc: Valerie Leone ''Qualified ADR Neutral Admitted in Iowa P:\Attorney\SAS\Letters\CNH99.11217-004-Kirk ltr approving pp g pa.doc NOTICE OF PUBLIC HEARING PER MINN. STAT FILE COPY §469.029 AUTHORIZING SALE OF PROPERTY AT 9200 49 AVENUE NORTH CITY OF NEW HOPE Notice is hereby given that the City Council of the City of New Hope, Minnesota, will meet on the 28th day of April, 2003, at 7:00 o'clock p.m. at the City Hall, 4401 Xylon Avenue North, in said City for the purpose of holding a public hearing to consider the sale of the following described property to Pierce Fleming and the Plymouth Heights Pet Hospital: 9200 49` Avenue North, New Hope, MN PID No. 07- 118 -21 -23 -0022 Lot 2, Block 1, Brandell Industrial Park Addn. (approx. the south 80,848 sq.ft.) The public may see the terms and conditions of the sale at the City Hall and that at said public hearing, the City Council will decide if the sale is advisable. All persons interested are invited to appear at said hearing for the purpose of being heard with respect to the sale of the described property. Accommodations such as sign language interpreter or large printed materials are available upon request at least 5 working days in advance. Please contact the City Clerk to make arrangements (telephone 531 -5117, TDD number 531 - 5109). Dated the 10' day of April, 2003. s/ Valerie J. Leone Valerie J. Leone City Clerk (Published in the New Hope- Golden Valley Sun -Post on the 16` day of April, 2003.) —1— Suite 150 10700 Old County Road 15 PlYwouth. Dili 55441 ox April 22, 2003 Mr. Kirk McDonald Community Development Director City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE: 9200 49` Avenue No. New Hope, MN PID# 07- 118 -21 -23 -0022 Dear Mr. McDonald: We are pleased with the decision by the Economic Development Agency for the City of New Hope to proceed with the sale of a portion of the above referenced property to Mr. Fleming. Enclosed are two signed copies of the Purchase Agreement on the above referenced property for approval and execution by the City of New Hope. I have revised pages 3 and 8 of the Agreement to incorporate the recommendations of Mr. Steven A. Sondrall as detailed in his letter to the City of New Hope dated April 9, 2003. We have also added a provision under Paragraph 28 titled "Assignment" in order to accommodate the Buyer in a possible deferred exchange; IRS- Section 1.1031, in conjunction with his existing building. If exercised, the assignment has a specific purpose and would not impact the planned development of the site. I have collected the earnest money check payable to Premier Title in the amount of $1,000.00 which I will be submitting to the title company to hold as per the Purchase Agreement. Tel: 763 -595 -9511 Fax: 763 - 595 -9512 Mr. Kirk McDonald April 22, 2003 Page Two We look forward to attending the Public Hearing on the matter scheduled for April 28, 2003. Thank you for your assistance and if you should have any questions, please call me. Sinc , Stephen A. Ludovissie Director of Property Management Cc: Pierce Fleming; Plymouth Heights Pet Hospital PLYMOUTH HEIGHTS PET HOSPITAL, P.A. 3401 N. HIGHWAY 169 PLYMOUTH, MN 55441 (763) 544 -4141 PAY TO THE ORDER OF Pf 6 ✓h' �r 1 U.S. BANK Q-u 12773 C/ DATE + � 3 /O 17 -2/910 i fl �= [Lii o •nu )OLLARS 8 •• • 11 Mr. Stephen Ludovissie Quest Real Estate 10700 Old County Road 15, Suite 150 Plymouth, MN 55441 Subject: 9200 49 Avenue North Dear Messrs. Ludovissie and Fleming: Mr. Pierce Fleming Plymouth Heights Pet Hospital 3401 North Highway 169 Plymouth, MN 55441 At the April 28 New Hope City Council meeting, the City Council conducted the public hearing for the sale of the city -owned property at 9200 49 Avenue North for April 28 in the amount of $81,000. Enclosed is one copy of the purchase agreement, which has been executed by the City. We have retained one copy for our files. If you have any questions, please feel free to contact me at 763- 531 -5119. Since reIy, Kirk McDonald Director of Community Development Cc: Daniel J. Donahue, City Manager Steve Sondrall, City Attorney Roger Axel, Building Official Valerie Leone, City Clerk (Improvement Project No. 743) CITY OF NEW HOPE 4401 Xylon Avenue North e New Hope, Minnesota 55428 -4898 e www. ci.new- hope.mn.us City Hall: 763 -531 -5100 . Police (non - emergency): 763 - 531 -5170 • Public Works: 763 -592 -6777 + TDD: 763 -531 -5109 City Hall Fax: 763- 531 -5136 • Police Fax: 763- 531 -5174 ® Public Works Fax: 763- 592 -6776 Suite 150 10700 Old County Road 15 Plymouth, b1N 55441 April 22, 2003 Mr. Kirk McDonald Community Development Director City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE: 9200 49 Avenue No. New Hope, MN PID# 07- 118 -21 -23 -0022 Dear Mr. McDonald: We are pleased with the decision by the Economic Development Agency for the City of New Hope to proceed with the sale of a portion of the above referenced property to Mr. Fleming. Enclosed are two signed copies of the Purchase Agreement on the above referenced property for approval and execution by the City of New Hope. I have revised pages 3 and 8 of the Agreement to incorporate the recommendations of Mr. Steven A. Sondrall as detailed in his letter to the City of New Hope dated April 9, 2003. We have also added a provision under Paragraph 28 titled "Assignment" in order to accommodate the Buyer in a possible deferred exchange; IRS- Section 1.1031, in conjunction with his existing building. If exercised, the assignment has a specific purpose and would not impact the planned development of the site. I have collected the earnest money check payable to Premier Title in the amount of $1,000.00 which I will be submitting to the title company to hold as per the Purchase Agreement. Tel: 763- 595 -9511 Fax: 763 -595 -9512 Mr. Kirk McDonald April 22, 2003 Page Two We look forward to attending the Public Hearing on the matter scheduled for April 28, 2003. Thank you for your assistance and if you should have any questions, please call me. Sine , Stephen A. Ludovissie Director of Property Management Cc: Pierce Fleming; Plymouth Heights Pet Hospital PURCHASE AGREEMENT NEW HOPE PROPERTY This Purchase Agreement is made and entered into this day of , 2003, by and between: Parties Seller: City of New Hope Mailing Address: 4401 Xylon Avenue No. New Hope, MN 55428 hereinafter referred to as "Seller" and, Buyer: Pierce Fleming Mailing Address: c/o Plymouth Heights Pet Hospital 3401 North Highway 169 Plymouth, MN 55441 hereinafter referred to as "Buyer ". Copy To: 2. Real Property. Steven A. Sondrall New Hope City Attorney Jensen & Sondrall, P.A. 8525 Edinborough Crossing, Suite 201 Brooklyn Park, MN 55443 Telephone: 763-424-8811 Facsimile: 763-493-5193 Joan Young Premier Title 7300 Metro Boulevard, Suite 300 Edina, MN 55439 Telephone: 952 - 897 -1707 Facsimile: 952-897-3534 Seller agrees to sell and Buyer agrees to purchase the following described real property located at 9200 49 Avenue North, in the City of New Hope and County of Hennepin, Minnesota as identified in Exhibit A, attached and labeled "Legal Description ", consisting of approximately two - thirds of the property or approximately 80,848 square feet subject to the terms outlined herein. Purchase Agreement New Hope Property 3. Purchase Price. The purchase price of the property, assuming the property contains approximately 1.856 acres or 80,848 square feet, hereinafter referred to as "net square feet ", is eighty -one thousand and no /dollars ($81,000.00). The final purchase price, hereinafter referred to as "purchase price ", shall be determined by multiplying the net square footage of the Property, as determined by the survey to be prepared pursuant to Section 9 hereof, by $1.00188 per net square foot. The term "net square feet" or "net square footage" shall be the net square footage within the Property excluding that portion of the property retained by the Seller for the construction of a drainage pond at the north side of the property but in no case shall the net square footage be less than 80,000 square feet unless mutually agreed to in writing by both parties of this Purchase Agreement. The purchase price shall be paid as follows: (a.) Earnest money of $1,000.00 as set forth in paragraph 4 hereof: (b) $80,000.00 cash at closing. 4. Earnest Money. Buyer, upon full agreement with Seller, will pay the amount of $1,000.00 by check as earnest money, which amount will be applied toward the purchase price in the event of closing by Buyer, returned to Buyer if required hereunder, or retained by Seller as liquidated damages in the event of (a) default by Buyer, or (b) Buyer's failure to timely close with Seller where such failure is not due to Seller's non - performance under this Agreement. All earnest money paid shall be delivered to Premier Title, by the next business day following acceptance of this agreement by all parties, to be held in trust by Premium Title and deposited in an account bearing money market interest rates. Any and all interest earned on such funds shall be the property of the Buyer regardless of how such earnest money should be applied under the terms of this Agreement. 5. Closing. Closing shall take place on July 31, 2003 or sooner, should the parties mutually agree. 6. Obligations of Parties at Closing. At the closing between Buyer and Seller with respect to the Property: (a.) Seller shall: i.) Execute and deliver a Warranty Deed. 2 Purchase Agreement New Hope Property ii.) Provide a Seller's Affidavit concerning the absence of judgements, mechanics liens and unrecorded interest. iii.) Make any payments as required under this Agreement. iv.) Deliver and record all documents necessary to clear title. v.) Provide any documents required by the IRS including a form 1099B and/or FIRPTA affidavit. vi.) Provide any documents and information to Buyer, at Buyer's request, necessary to obtain a title insurance policy extension. (b.) Buyer shall: i.) Make the necessary payments as required under this Agreement. ii.) Deliver all resolutions or other documents required to show that Buyer has properly approved this conveyance and that all requisite authority has been given. 7. Title. Seller agrees to deliver marketable title to the Property by Warranty Deed subject only to: (a.) Easements of record that do not materially and adversely affect Buyer's contemplated usage of the Property, which determination shall be made by the Buyer in its sole discretion. (b.) Reservation of minerals or mineral rights by the State of Minnesota, if any. (c.) Building, zoning and subdivision laws, ordinances and regulations, that allow for completion of Buyer's improvement(s) which shall be a pet hospital/clinic (hereinafter "Permitted Encumbrance(s) "). 8. Evidence of Title. Within 30 days of the date hereof, Seller shall deliver to Buyer an Abstract of Title or Registered Property Abstract to the Property (hereinafter "Evidence of Title "), which Evidence of Title shall be properly certified to date including property searches covering bankruptcies, State and Federal tax liens, unpaid taxes and special assessments pending, levied or deferred. Seller shall pay the cost of obtaining such Evidence of Title. Buyer shall be allowed thirty (30) days after N Purchase Agreement New Hope Property receipt of such Evidence of Title for examination and the making of any objections to the marketability of title, such objections to be made in writing or deemed to be waived. If any objections are so made, Seller shall be allowed sixty (60) days to make title marketable. Seller shall use Seller's best efforts to make title marketable as expeditiously as possible. If such defects are cured within said 60 -day period, Buyer shall be notified in writing of the curing of such defects, in which case the parties shall proceed to perform in accordance with the terms of this Agreement. If the title is not marketable and cannot be made marketable within such time periods, this Agreement shall be null and void at Buyer's election, and the original earnest money shall be refunded to Buyer. If Buyer chooses to waive objections, the parties shall proceed to closing according to the terms of this Agreement. If notification by Seller of the fact that a title defect has been cured or notification by Buyer that it waived an objection occurs at a point in time that is less than thirty (30) days prior to closing, then closing shall be delayed until a day at least thirty (30) days after such notification. 9. Survey. Seller and Buyer shall share proportionately in the cost and expense to cause to be prepared surveys of the Property prepared by a surveyor registered under the laws of the State of Minnesota. Such survey shall be certified to Buyer and Buyer's title company and shall show the net square footage as previously defined to be purchased by Buyer and that portion of the property retained by Seller and all improvements on the Property, including fencing, all easements, encroachments, and utility rights upon the Property, showing the location of adjoining public streets so as to affirmatively show rights of ingress and egress to and from the Property. Buyer shall have twenty (20) days after the later of (1) receipt of Evidence of Title or (2) receipt of said survey to examine said survey and to make objections to title based on said survey and the rights of the parties shall be the same as stated in paragraph 8 above. 10. Obli!ations of Seller. Seller shall provide Buyer within ten (10) days following execution of this Agreement, the following documents to the extent said documents are in Seller's possession, or readily attainable: (a.) A copy of Seller's most recent survey of the Property. (b.) Existing title reports and title policies related to portions or all of the Property. (c.) A copy of all underlying financing currently existing on the Property. 4 Purchase Agreement New Hope Property (d.) Any and all documents and information available to the Seller relating to any agreements with any unit of government that may affect future development, including, but not limited to, preliminary plats or developer's agreements. (e) Any and all documents and information available to Seller relating to any substances defined as toxic or hazardous under state or federal laws or regulations affecting the Property. This shall include such substances regulated under state and federal law including the following: i.) Underground storage tanks; ii.) Asbestos; iii.) PCB's; iv.) Lead -based paint; v.) Urea formaldehyde; vi.) Radon vii.) Industrial /domestic waste; and viii.) Any other toxic or hazardous substances. (f) Buyer acknowledges and agrees Seller had made no warranties, either expressed or implied, regarding the fitness of this property for Buyer's intended use. Further, Seller has advised Buyer the Property has soil correction problems which may result in significant costs to correct in order for Buyer to develop the Property as intended. Buyer agrees it has not relied on any representations made by Seller concerning Buyer's use of this site and any sale to Buyer of this Property shall be an "AS IS" sale. Buyer shall accept full responsibility for any costs to make the Property suitable for its intended use and will not look to Seller for reimbursement of any such costs. 11. Continj!eneies. Buyer's obligation to close hereunder is specifically contingent upon the following: (a.) Buyer's environmental assessment of the Property, which approval shall be in Buyer's absolute and sole discretion. The environmental assessment of the Property shall be prepared at Buyer's expense. 5 Purchase Agreement New Hope Property (b.) Buyer's investigation and satisfaction that the City of New Hope is favorably disposed toward Buyer's proposed use of the property. (c.) Buyer's investigation and approval of the physical condition of the Property. To this end, Buyer may enter upon the Property for purpose of making soil tests and other tests necessarily contemplated by its proposed development of the Property, provided that Buyer shall hold Seller harmless from any an all liens therefrom. Buyer shall not be entitled to make any improvements upon the Property prior to closing, and the property to be improved has been paid in full. Buyer shall pay promptly, when due, all charges incurred by it for labor, materials, services or other items which liens may be filed or assessed against the Property, but, if for any reason whatsoever any mechanic's liens are filed, Buyer shall take immediate steps to have same satisfied of record. However, in the event Buyer in its judgement deems a mechanic's lien to be unlawfully or unjustified, it shall have the right to contest the validity of such lien or liens by court action, if necessary, provided that during the period that such mechanic's lien or liens remain of record, a sum equivalent to one and one -half times the claimed lien or liens be placed in escrow with such bank as Seller may direct, pending the outcome of such contest. Buyer shall hold Seller harmless from any and all claims, including damage to the Property arising out of any entry upon the Property by Buyer or its agents or employees. Buyer shall restore any damage to the Property resulting from such activity at its expense. (d.) Buyer's assurance that all off -site sanitary and storm sewers, water mains and treatment facilities necessary to provide service to the Property, including sufficient capacities, volumes, pressure and other pertinent features, have been installed, have been accepted by the appropriate governmental authorities and are in operation, and such service is available at the perimeter of the Property for Buyer to extend into the Property for use in the proposed development without liability or any further cost for such off -site improvements, including, but not limited to, any recapture fee, contribution, assessment or connection fee (other than normal connection fees for service to a commercial development, except as otherwise may be agreed to by Buyer) for construction of proposed improvement. (e.) Approval of Buyer's application for rezoning of the Property, if required by the City and obtaining a Conditional Use Permit, if required, from the City effective upon Buyer's purchase of the Property to accommodate Buyer's proposed development of a pet hospital /clinic. Rezoning and obtainment of a Conditional Use Permit shall deemed to have taken place G Purchase Agreement New Hope Property when all necessary public hearings have been conducted and all necessary ordinances rezoning the Property effective upon Buyer's purchase of the Property have been adopted. (f.) Buyer's preparation, at its own expense, of a Preliminary Plan of Development for the Property and Engineering thereof, for development and use of the Property for construction of a pet hospital /clinic for the purpose of obtaining approval of such Plan and use of the property by the City. (g.) Buyer shall cause to be prepared the Final Plan of Development together with the associated engineering plans specifying and legally describing the Property. When the Final Plan and Final Plat is so prepared, Buyer shall promptly apply for approval of the Final Plan and Final Plat for the Property by the City. Approval by the City shall be deemed to have been completed (i.) with respect to the Preliminary Plan of Development and the Preliminary Engineering for the Property, when the City approves the same by resolution, ordinance or other official action after all requisite hearing and proceedings and commits to approve any Final Plan(s), Subdivision, Final Plat(s) or Development of the Property, subject only to Buyer taking title and depositing the requisite security for installation of public improvements. (h) Approval by the City of Buyer's plans and specification for the pet Hospital/clinic which Buyer proposes to construct on the Property. (i.) Written assurances from the City that, upon taking title and recording the Plat(s) or Plan(s) of Subdivision for the Property, Buyer will be permitted to commence the construction and a occupancy permit will be issued upon completion in accordance with the building code of the City. Receipt by Buyer for those permits and approvals from all governmental or quasi - governmental authorities which may be necessary for Buyer to develop the Property and install those public improvements necessary to service the same, including water and sewer lines. (k) Receipt by Buyer of written assurance from the City that, upon submission of application therefor by Buyer and payment of the connection fee ordinarily assessed by the City for all properties which it services. Buyer will be issued water connection and sanitary sewer connection permit for the pet hospital /clinic to be constructed by it on the Property. (1.) The obtainment of mutual agreement between Buyer and Seller on temporary and permanent Easements for providing access to Seller through Buyer's property to section of property retained by Seller. 7 Purchase Agreement New Hope Property Buyer shall exert timely and diligent efforts to accomplish the objective set forth above, but shall not be required to resort to litigation, or to make contributions or dedications (other than the normal contributions for schools and parks called for under the City's Subdivision Ordinance) or to install off -site improvements not agreeable to Buyer as a condition to accomplish such objectives. Seller and /or the owner of the Property, shall cooperate with Buyer, including, if appropriate, joining such applications, petitions, agreements, and similar procedures, including, specifically, joiner in a plat for the Property, to be prepared by Buyer and Seller at Buyer's and Seller's expense. Buyer shall have until 5:00 p.m. on July 30, 2003, the day before the Closing Date, to exercise the contingencies above. Buyer shall exercise any of such contingencies by giving Seller notice in writing by 5:00 p.m. on that date. Upon receipt of such notice of exercise, this Agreement shall become null and void and the original earnest money paid to the Seller shall be immediately returned to Buyer. Buyer shall notify Seller of its waiver of those contingencies by giving Seller written notice by 5:00 p.m. on that date, of Buyer's intent to proceed based on it's preliminary investigation. Waiver of any one contingency shall have no effect on Buyer's right to exercise or waive any other contingency. Should Buyer fail to timely exercise any of said contingencies on or before said date, and should Buyer later default under this Agreement, Seller shall be entitled to retain all earnest money paid hereunder as liquidated damages. Nothing contained herein shall in any way restrict Buyer's rights to terminate this Agreement pursuant to Paragraph 8 hereof or by virtue of Seller's default and receive back all earnest money paid hereunder. 12. Extension by Buyer. In the event Buyer has been unable to satisfy the contingencies set forth in Paragraph 11 and Paragraph 12 above by the date set forth therein, Seller shall automatically grant to Buyer an additional sixty (60) days for Buyer to close on the Property, if requested by Buyer. In such event, the Closing Date set forth in Paragraph 5 hereof shall also be extended a like period. In the event of such a request to extend the Closing beyond July 31, 2003, interest at six percent (6 %) shall commence to accrue on the Purchase Price as of August 1, 2003. Said accrued interest from August 1, 2003 to the Date of Closing shall be due at closing in addition to the down payment. 13. Seller's Representations. Seller hereby represents and warrants as follows: (a.) Seller is currently the owner or contract purchaser of the Property, subject only to the Permitted Encumbrance(s). 8 Purchase Agreement New Hope Property (b) Seller has the full and complete authority to sell the Property and the person executing this Agreement on behalf of the Seller has full and complete authority to do so. (c.) The Property has not been cited as being in violation of any local ordinances and if any citations are issued prior to closing, Seller will take the necessary curative action in connection with such citations. (d.) From the date hereof through closing, Seller shall not create, suffer or assume any new or additional encumbrances on title to the Property. (e.) There are no actions, suits or proceedings pending or threatened against Seller which would adversely affect the title or interest of Seller to or in the Property. (f.) This Agreement, including the Exhibits attached hereto, does not include any untrue statement of a material fact or omit a statement of material fact necessary to make the statement made or to be made not misleading. Seller shall update any such statements as of the closing date if necessary to make them complete or accurate. (g) There are no special understandings or agreements between Seller and the County in which the Property is located or the City (or any other governmental authority) limiting or defining (i.) the use and development of the property, (ii.) the construction of improvements thereon, (iii.) the availability to the Property of public improvements and municipal services, (iv.) any requirement to share in the cost thereof by recapture, contribution, special assessments or otherwise, (v.) any requirement to contribute land or in cash to any school, library, park or other sort of county, municipal or governmental district or body (it is understood that the provisions of the Subdivision Ordinance of the City calling for the normal contributions for schools and parks is not a "special understanding or agreement" covered by this warranty), or (vi.) any other matter in relation to the zoning, subdivision and development of the Property; or if there are, all such obligations thereunder shall have been performed and satisfied in full by Seller prior to the closing of the Property. (h.) There are no parties in possession of the Property, nor are there any parties with possessory rights in the Property other than Seller and /or the owner of the Property. (i.) Seller hereby incorporates by reference and remakes any warranties and representations which are made elsewhere in this Agreement. These representations are true as of the date hereof and will be true as of the date of closing and they shall survive the closing. 9 Purchase Agreement 14. Hazardous Substances. (a.) Definitions. New Hope Property i.) "Hazardous Substance" means a hazardous substance or waste, a toxic substance, polychlorinated biphenyls, asbestos or related materials and also includes, but is not limited to substances defined as "hazardous substances" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et M., Hazardous Materials Transportation Act, 49 U.S.C. Sec. 6901, et M., or as "hazardous substances ", "hazardous waste" or "pollutant or contaminant" in the Environmental Response and Liability Act, Minn. Stat. Sec. 115B.01 et 5M. ii.) Hazardous Substance Claim ( "Claim ") means discovery of Hazardous Substance on or under the Property or receipt of a notice, claim, demand or complaint, including notice or imposition of a "super fund" line, from any federal, state or local government agency or office or from any third party seeking, pursuant to federal, state or local law, the performance of response action(s) and/or the payment of damages, cost or expenses arising out of the release or threatened release of Hazardous Substance deposited on or under the Property prior to the time the Buyer becomes owner of the Property, including but not limited to, legal, engineering, testing and other fees. iii.) Hazardous Substance Liability ( "Liability ") means occurrence of a claim, and all damages, costs and expenses in connection therewith, including but not limited to legal, investigating, engineering, testing and other fees, and including a final determination or judgement entered or agreed upon. (b.) Pending Actions /Environmental Audit. Seller shall provide to Buyer any previous, current or pending court actions. Environmental audit information, if any, and other such information regarding hazardous waste soil or ground water contamination on or around the property. 10 Purchase Agreement New Hope Property (c.) Representation and Warranties. Seller represents and warrants that the Property is free from Hazardous Substances and is not subject to any Claim. Seller has not received any notice nor is Seller aware of any notice having been given to prior owners of the Property from federal, state or local governmental agencies or other third parties of any claim or advising of any pending or contemplated search or investigation of the Property or any portion thereof with respect thereto. (e) Indemnification. If Seller is found to be in breach of the warranty set forth in subsection (c.) immediately above, Seller shall at all times indemnify and hold Buyer harmless from and against all liability which Buyer may, at any time, sustain or incur by reason of such breach, including, but not limited to the cost of removing, re- mediating or otherwise responding to a Claim. Seller shall pay, upon demand by Buyer, the amount of any Liability paid or incurred by Buyer to the extent caused by Seller's breach. Seller shall satisfy and discharge any judgement recovered against Buyer or the Property by reason of such Liability to the extent caused by Seller's breach promptly after the entry thereof, unless an appeal is taken and any bond required to stay the collection thereof are procured and filed by the Seller. If a final judgement is entered against Buyer or the Property after appeal, Seller shall satisfy and discharge such judgement, to the extent caused by Seller's breach. Buyer may, in its reasonable discretion, make any payment as required pursuant to the preceding sentence, and Seller shall promptly repay to Buyer the amount of such payment, with interest at 8% per annum. Notwithstanding the foregoing, Buyer agrees it shall provide reasonably prompt notice to Seller upon its receipt of notice of Claim and Seller shall have a reasonable opportunity to respond or contest such Claim and manage any plan of re- mediation, litigation or settlement in connection therewith. 15. Buyer's Representation. Buyer hereby represents and warrants that Buyer has the full and complete authority to enter into this Agreement and the person executing this Agreement on behalf of the Buyer has full and complete authority to do so. 16. Real Estate Taxes and Assessments. Seller agrees to pay any and all real estate taxes plus penalty and interest due and payable in all years prior to the year of closing of the Property. The real estate taxes due and payable in the year of the closing relating to the Property shall be prorated to the actual day of closing. Seller agrees to pay at the closing all special 11 Purchase Agreement New Hope Property assessments or similar governmental charges that are pending, levied or deferred as of the date of this agreement. Seller shall pay any deferred real estate taxes (i.e. Green Acres taxes, open space taxes) due from the Property at the time it is conveyed. Buyer shall be responsible for payment of all area charges such as trunk sewer, trunk water, trunk storm sewer and park land dedication fees and levied and pending special assessments levied after the effective date of this agreement. 17. Condemnation. If the Property is taken or if there is a threat of taking by eminent domain prior to closing, this Agreement shall become null and void at Buyer's option. If Buyer elects to declare the Purchase Agreement null and void, Buyer shall notify Seller in writing and all earnest money paid to Seller shall be promptly refunded to Buyer. If Buyer elects to proceed with Closing, Buyer shall be entitled to, and Seller shall assign to Buyer, all settlements and condemnation awards. 18. Condition of Property, Seller shall cap the existing well, if any, and remove from the Property all refuse, debris and personal property prior to the date of closing. At a reasonable, pre - approved by Seller, within three days of closing, Buyer shall have the right to inspect the Propery to determine that there has been no significant change in the condition of the Property, except for changes approved by Buyer. 19. Survival of Terms. To the extent necessary to carry out the terms of this Agreement, this Agreement shall survive the closing of the transaction contemplated herein. 20. Default. If either party defaults, the rights of the parties are as follows: (a.) If Seller defaults, Buyer shall have the right to terminate this Agreement on thirty (30) days notice and receive back all earnest money paid by it. (b.) If Buyer defaults, Seller shall have the right to terminate this Agreement on thirty (30) days notice and retain all earnest money paid as liquidated damages. 21. Agent. Stephen A. Ludovissie /Quest Real Estate, Inc. represent the Buyer as the real estate broker in this transaction. Seller warrants and represents to Buyer that no real estate broker other than Stephen A. Ludovissie /Quest Real Estate, Inc. is 12 Purchase Agreement New Hope Property involved in this transaction. Seller shall indemnify Buyer against any claim of any broker other than Stephen A. Ludovissie /Quest Real Estate, Inc., claiming by, through or under Seller. Buyer shall indemnify Seller against any claim of any broker claiming by, through or under Buyer. 22. Affidavit Rmardinj! Foreign Transferor. At Closing, Seller shall deliver to Buyer either: (a.) An affidavit satisfying the requirements of Section 1445A of the Internal Revenue Code and rules and regulations promulgated thereunder ( "Section 1445A "); or (b) A qualifying statement from the U.S. Treasury Department that the transaction contemplated herein is exempt from the withholding tax requirement imposed by Section 1445A. In the event that Seller fails to deliver either the affidavit or the qualifying statement as aforesaid or in the event Seller delivers such affidavit or qualifying statement and Buyer has reason to believe that suck affidavit or qualifying statement is false or incorrect, Seller agrees that Buyer may, at Closing, deduct and withhold from the proceeds that are due to Seller the amount necessary to comply with the withholding tax requirement imposed by Section 1445A. Buyer shall deposit the amounts so withheld pursuant to terms and conditions acceptable to Seller and Buyer, but in any event complying with Section 1445A. 23. Notices. Any notices required or contemplated hereunder shall be effective upon the placing thereof in the United States mails, certified mail, return receipt requested, postage prepaid and addressed to the other party at the addresses as stated in paragraph 1 above. 24. Agreement as Offer. It is understood that this Agreement constitutes an offer to purchase until executed by Seller. Seller shall have ten (10) days in which to accept this offer at which time, if not accepted, this offer shall become null and void unless ratified in writing by Buyer. In the event this Agreement is executed by Seller after the ten - day period referenced herein, the contingency dates and closing dates set forth in paragraphs 11 and 5, respectively, shall each be extended one day for each day beyond the tenth day provided herein on which Seller's execution shall occur. Said extension shall be in addition to, and not in lieu of, any extension granted pursuant to paragraph 13 hereof. 13 Purchase Agreement 25. Headings. New Hope Property The section and paragraph headings contained herein are for purposes of convenience only and are not intended to define or limit the contents of such section or paragraph. 26. Cooperation. Each party hereto shall cooperate in a timely manner, shall take such further action, and shall execute and deliver such further documents as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement. 27. Governing Law. This Agreement shall be deemed to be a contract under the laws of the State of Minnesota and for all purposes shall be construed and enforced in accordance with the laws of each State. 28. Assignment Buyer shall have the option anytime prior to closing to assign this Purchase Agreement to another party in order to effectuate an IRS -1031; "Like For Exchange ". Buyer shall notify Seller prior to any such assignment. 29. Successors and Assigns. This Agreement shall be binding upon the parties along with their successors, heirs, executors, administrators, assignees, lessees, and transferees of any kind. • I fffi j - il j 2 4 Its: Liar Date �/ - 6 3 BUYER: Pierce Fleming By: / /.-' Date � &3 L0 ,2 1 Its: 14 Purchase Agreement New Hope Property EXHIBIT A LEGAL DESCRIPTION Lot 2, Block I, Brandell Industrial Park Second Addition, Hennepin County, Minnesota. 15