Loading...
HomeMy WebLinkAbout03-104 Purchase Agreement CITY COUNCIL AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: AUGUST 4, 2003 10E DONALD RYE, COMMUNITY DEVELOPMENT DIRECTOR AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE MAYOR AND CITY MANAGER TO ENTER INTO A PURCHASE AGREEMENT FOR PROPERTY LOCATED AT 16328 MAIN AVENUE DISCUSSION: History: The City Council has, on past occasions, sought to acquire property in the Downtown area to facilitate redevelopment efforts. The City submitted a purchase agreement to the owner of this property in March of this year but the owner received a higher bid than that offered by the City. At that time, the City offered $87,000 for the property and the other potential buyer offered $93,000. A purchase agreement in that amount was executed. Since then, the closing date has been extended several times and the last extension required a closing by June 25. The owner has indicated he would like to proceed with a sale to the City and has verbally agreed to a purchase price of $93,000. Staff will have a signed purchase agreement in hand for the Council meeting or this item will be removed from the agenda. Current Circumstances Scott County tax records indicate the market value of the property for payable 2004 is $81,900. As noted, the price to be proposed in the purchase agreement is $93,000 for the land and building. Staff has had conversations with an individual who is interested in leasing the building from the City for about a year. During that time, this individual has indicated a desire to work with the City on the redevelvpment of this property concurrently with the Joe's 16200 dn)~p~~~~~~\~!~~~~t~f-~'ke, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER ALTERNATIVES: RECOMMENDED MOTION: REVIEWED BY: Pizza building next door. Any lease agreement for this property would come back to the Council for its approval. Other City costs associated with the purchase of this property would include typical closing costs, real estate taxes payable October, 2003 and subsequent years until the property is disposed of and utility costs. Issues Acquisition of this property would enhance the City's ability to redevelop the site consistent with the 2020 Vision and Strategic Plan and the Downtown zoning ordinance. The property has expressed a willingness to sell. Staff believes the acquisition of this property is prudent from a public policy perspective and is supportive of Community goals and objectives. I.Adopt a resolution authorizing the acquisition of the property and authorizing the Mayor and City Manager to enter into the purchase agreement. 2. Take no action. Alternative 1. (J 21:\community dev\ccreportkline.doc 2 RESOLUTION 03-XX A RESOLUTION AUTHORIZING ACQUISITION OF PROPERTY LOCATED AT 16328 MAIN AVENUE SE, PRIOR LAKE, AND AUTHORIZING THE MAYOR AND CITY MANAGER TO ENTER INTO A PURCHASE AGREEMENT Motion By: Second By: '" tlEREAS, the City desires to facilitate progress and encourage the redevelopment of the Downtown area; and WHEREAS, the property located at 16328 Main Avenue SE, that will ultimately be redeveloped as part of the Downtown revitalization effort, is available for purchase; and WHEREAS, a purchase agreement satisfactory to Buyer and Seller has been voluntarily negotiated and executed by the Seller. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA THAT: 1. The recitals set forth above are incorporated herein. 2. The acquisition of the property is hereby approved. 3. The Mayor and City Manager are authorizes to execute all necessary documents to effectuate the closing of the transaction. 4. Funding for the acquisition will be drawn from the Tax Increment Fund. PASSED AND ADOPTED THIS 4TH DAY OF AUGUST, 2003. YES NO I HAUGEN I BLOMBERG I LEMAIR jPETERSEN I ZIESKA HAUGEN BLOMBERG LEMAIR PETERSEN ZIESKA {Seal} Frank Boyles, City Manager 16200 PagkP~~g~~~?PH6l't1ih!.g~t9Bfmesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER Property Search Results Page 1 of3 ~ -~ ..." Scott County Property Information Search Results General Property Information Property ID: Roll Type: Payable Year: Owner Name: Property Address: City/State/Zip: Taxpayer Name: Attn: Taxpayer Mailing Address: Address: City/State/Zip: 25-002006-0 Real Estate 2004 SPACE,JR,D JAMES & KATHERINE M 16328 MAIN AV SE PRIOR LAKE MN 55372 KLEIN,CHARLES D 5242 FROST POINT CIR SE PRIOR LAKE MN 55372 Legal Description Information Lot/Block/Plat# : Plat Name: Section/Townsh i p/Range: Deeded Acres: Legal Description: 1&2 2 25002 PLAT-25002 CATES ADDN 0.00 P/O LYING S OF LINE COM PT ON W LINE Miscellaneous Information School District: Taxing District Code: 719 2001 http://www.co.scott.mn.us/intradoc-cgi/idc _ cgi_isapi.dll?RowCount=20&currPage= 1 &Co... 7/29/2003 Property Search Results Taxing District Name: Valuation & Tax Information Estimated Market Value of Land: Estimated Market Value of Building: Estimated Market Value Total: Total Net Taxes for Current Year: Total Special Assessments Due for Current Tax Year: Total Net Tax plus Special Assessments: Outstanding Special Assessments: Payments: Green Acres: Ag Preserve: Tax Classifications Property Type: Homestead Status: Exempt Status: Sales Information Last Qualified Sale: Amount: Building Characterstics Type: Year Built: Architectural Style: Foundation Size (Sq Ft): Page 2 of3 PRIOR LAKE CITY $25,500 $56,400 $81,900 $0.00 $0.00 $0.00 $0.00 $0.00 COMM LAND & BLDGS N 08/16/2001 $83,000.00 STORE/COMM 1945 N/A 976 http://www.co.scott.mn.us/intradoc-cgi/idc _ cgi_isapi.dll?RowCount=20&currPage= 1 &Co... 7/29/2003 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT is made this. , 2003 between the City of Prior Lake, a Minnesota municipal corporation, with offices at 16200 Eagle Creek Avenue SE, Prior Lake, Minnesota ("Buyer"), and Charles D. Klein and , husband and wife, whose address is 3632 Willow Beach St. SW, Prior Lake, Minnesota ("Seller"). IN CONSIDERATION of the promises and covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Buyer agree as follows: 1. Sale of Property. Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller the real property located at 16328 Main Avenue SE, Prior Lake, Minnesota, and legally described in the attached Exhibit A, together with all improvements, easements and rights benefiting or appurtenant thereto (collectively referred to as the "Property"). 2. purchase Price and Manner of Payment. The total purchase price (the "Purchase Price") to be paid by Buyer to Seller for the Property shall be Ninety-Three Thousand and 00/100 Dollars ($93,000.00). The Purchase Price shall be payable in full on the date of closing. 3. Acceotance Deadline. The offer to purchase contained in this Agreement (the "Offer") shall be revoked and shall be null and void on August 15, 2003 at 4:00 p.m. (the "Acceptance Deadline"), unless the Buyer and Seller has accepted the Offer by the Acceptance Deadline. In order to constitute acceptance of the Offer, Seller and Buyer must execute this Agreement and provide a copy of the fully executed Agreement to Buyer in the manner provided for giving notices specified in Paragraph 17 of this Agreement. 4. Closina and Possession. The closing of the purchase and sale contemplated by this Agreement (the "Closing") shall be on or before September 15, 2003, or such other date as may be mutually agreed to by the parties (the "Date of Closing" or "Closing Date"). The Closing shall take place at the offices of Scott County Abstract and Title (the "Title Company") or at such other place as may be agreed to by the parties. The parties shall deliver the following documents at Closing: a. Seller's Closino Documents. On the Closing Date, Seller shall execute and deliver to Buyer the following (collectively, "Seller's Closing Documents"): i. Warranty Deed. A Warranty Deed, free and clear of all encumbrances, liens, covenants, conditions, easements, restrictions, reservations, and assessments, except as shown in the attached Exhibit B (the "Permitted Encumbrances") from Charles D. Klein and . husband and wife to the City of Prior Lake. The cost for preparing the Warranty and related documents shall be borne by the Seller. ii. Seller's Affidavit. An Affidavit of Title by Seller indicating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Property; that there has been no skill, labor or material furnished to the Property for which payment has not been made or for which mechanic's liens could be filed; and that there are no other unrecorded interests in the Property. iii. Abstract of Title. The Abstract of Title to the Property, if the Property is Abstract property. v. Well Certificate. If there is a well located on the Property, a Well Disclosure Certificate signed by Seller in the form required by law. vi. Title Documents. Seller will provide all other documents necessary as determined by the Title Company in order to provide clear and marketable title to Buyer, including but not limited to a Warranty Deed to Seller from D. James Space and Katherine M. Space, or such other person or entity that holds the fee title to the Property, free and clear of all encumbrances, liens, covenants, conditions, easements, restrictions, reservations and assessments, except the Permitted Encumbrances. Costs and recording fees for said documents will be borne by the Seller. b. Buver's Closino Documents. On the Closing Date, Buyer will execute and deliver to Seller the following (collectively, "Buyer's Closing Documents"): i. Purchase Price. The sum of Ninety-Three Thousand and 00/100 Dollars ($93,000.00). ii. Title Documents. Such Affidavits of Purchaser, Certificates of Value or other documents as may be reasonably required in order to record the Seller's Closing Documents. 5. Possession of Property. Seller shall vacate the Property as of the Closing Date. Utilities, including but not limited to electric, sewer and water, and telephone, shall be paid by Seller up to and including the Closing Date. 6. Prorations. Seller and Buyer agree to the following allocations of costs regarding this Agreement. a. Seller's Closino Costs. Seller shall pay (i) the cost of obtaining and recording any documents necessary to make title to the Property marketable as provided in this Agreement, (ii) the cost of the title insurance commitment as provided in this Agreement, (Hi) the cost of preparing the Seller's Closing Documents, (iv) one- half (~) of the closing fee charged by the Title Company, and (v) any other cost or expenses allocated to Seller under this Agreement. b. Buyer's ClosinQ Costs. Buyer shall pay (i) the cost of preparing the Buyer's Closing Documents, (ii) one-half (~) of the closing fee charged by the Title Company, (iii) the premium for any title insurance policy purchased by Buyer, and (iv) any other cost or expense allocated to Buyer under this Agreement. -2- c. Real Estate Taxes and Special Assessments. i. General real estate taxes payable in 2002 and all prior years shall be paid by Seller. ii. Real estate taxes payable for the first half of 2003 (due May 15, 2003) shall be paid in full by the Seller. Real estate taxes due and payable for the second half of 2003 (due October 15, 2003) shall be prorated between the Buyer and Seller as of the date of closing. iii. Seller shall pay all special assessments levied, pending, or constituting a lien against the Property as of the Closing Date, including without limitation any installments of special assessments (including interest) payable with general real estate taxes in 2003 (the "Special Assessments"). In the event that the amount of the Special Assessments is unknown as of the Date of Closing, Seller shall escrow with the Title Company on the Date of Closing one and one-half (1.5) times the estimated amount of the Special Assessments. Upon receipt of notification of the actual amount of the Special Assessments, the Title Company shall pay such amount from the escrowed funds. Any escrowed funds remaining after payment of the actual amount of the Special Assessments shall be disbursed to Seller. In the event that the escrowed funds are not sufficient to pay the actual amount of the Special Assessments, Seller shall deposit with the Title Company such additional amounts as may be necessary to fully pay the actual amount of the Special Assessments. Seller shall pay such additional amount to the Title Company within fourteen (14) days of the date of notice from Buyer or the Title Company that the escrowed funds are not sufficient to pay the actual amount of the Special Assessments. d. Miscellaneous. i. Seller understands and acknowledges that Seller will be responsible for city water, city sewer, natural gas, fuel oil, liquid petroleum gas, electricity, garbage removal, and other operating costs incurred during the time that Seller retains possession of the Property after the Closing Date. ii. In addition to those costs and expenses allocated to and/or to be paid or assumed by Seller pursuant to this Agreement, Seller agrees to pay any other closing costs and expenses customarily paid by sellers and Buyer agrees to pay any other closing costs and expenses customarily paid by buyers. 7. Title Evidence. As soon as reasonably possible but no later than fifteen (15) days after the date of this Agreement, Seller shall, at Seller's sole cost and expense, deliver the following to Buyer (collectively, the "Title Evidence"): a. A commitment by the Title Company to issue an AL TA Form B 1990 Owner's Policy of Title Insurance, in an amount equal to the Purchase Price, to insure Buyer's title to the Property (the "Title Commitment"). The Title Commitment -3- shall have an effective date of no earlier than the date of this Agreement. The Title Commitment shall include affirmative coverages for appurtenant easements, if any. The Title Commitment shall obligate the Title Company to delete standard exceptions from the Title Commitment and the policy upon the Title Company's receipt of a satisfactory survey of the Property, a seller's affidavit in the form described in Paragraph 4a(ii) and a buyer's affidavit in the form described in Paragraph 4b(ii). b. Within five (5) days of the date of this Agreement, Seller shall deliver to Buyer a copy of any survey of the Property in Seller's Possession. Buyer may, at Buyer's sole cost and expense, have a current survey of the Property prepared by a surveyor registered under the laws of State of Minnesota. Such survey shall be certified to Buyer and the Title Company, and the certification language shall be reasonably acceptable to Buyer (the "Survey"). The Survey shall meet the 1999 Minimum Standard Detail Requirements for AL TAlACSM Title Surveys. 8. Title Examination. Title Corrections and Remedies. Within ten (10)business days of Buyer's receipt of the last item of Title Evidence and within ten (10) business days of Buyer's discovery of a defect in the marketability of Seller's title to the Property which defect was not reasonably ascertainable from the Title Evidence, Buyer shall deliver written objections thereto to Seller (the "Objections"). Seller shall have sixty (50) days from receipt of the Objections to make title marketable. Upon receipt of the Objections, Seller shall, within ten (10) business days, notify Buyer of Seller's intention to make title marketable within the 50-day period. Liens or encumbrances for liquidated amounts that can be released by payment or escrow from proceeds of closing shall not delay the closing. Cure of the defects by Seller shall be diligent and prompt. Pending correction of title, the payments required hereunder shall be postponed, but upon correction of title, and within ten (10) days after written notice to the Buyer, the parties shall perform this Agreement according to its terms. a. If notice is given and Seller makes title marketable, then upon presentation to Buyer and proposed lender of documentation establishing that title has been made marketable, and if not objected to in the same time and manner as the original title objections, the Closing shall take place within ten (10) business days or on the scheduled Closing Date, whichever is later. b. If notice is given and Seller attempts in good faith to make title marketable but the 50-day period expires without title being made marketable, Buyer may declare this Agreement null and void by notice to Seller, and neither party shall be liable for damages hereunder to the other. c. If Seller does not give notice of intention to make title marketable, or if notice is given but the 50-day period expires without title being made marketable due to Seller's failure to make good faith attempts to make title marketable, Buyer may seek, as permitted by law, anyone or more of the following: i. Proceed to closing without waiver or merger in the deed of the Objections and without waiver of any remedies, and may: -4- (1) Seek damages, costs, and reasonable attorney's fees from Seller as permitted by law; or (2) Undertake proceedings to correct the objections to title; ii. Rescission of this Purchase Agreement by notice as provided herein, in which case the Purchase Agreement shall be null and void; iii. Damages from Seller, including costs and reasonable attorney's fees, as permitted by law; iv. Specific performance, including costs and reasonable attorney's fees, within six (6) months after such right of action arises. d. If title is marketable, or is made marketable as provided herein, and Buyer defaults in any of the agreements herein, Seller may cancel this Agreement as provided by statute and retain all payments made hereunder as liquidated damages. e. If title is marketable, or is made marketable as provided herein, and Seller defaults in any of the agreements herein, Buyer may, as permitted by law: i. Seek damages from Seller, including costs and reasonable attorney's fees; or ii. Seek specific performance, including costs and reasonable attorney's fees, within six (6) months after such right of action arises. 9. Soil and Environmental Tests. Buyer acknowledges receipt of a copy of reports from Agassiz Environmental Systems and Midwest Analytical Services. Buyer and Buyer's agents shall have the right to go upon the Property and perform such additional soil and environmental tests as Buyer deems necessary or desirable, in Buyer's sole discretion. Such soil tests and environmental tests, whether performed by Seller or Buyer, shall hereafter be referred to as the "Environmental Tests." Buyer shall repair any damage to the Property resulting from any additional soil and environmental tests that Buyer has performed. 10. Inspections. Buyer may perform such inspections of the Property as Buyer, in Buyer's sole discretion, deems appropriate (the "Inspections"). The Inspections shall be done at Buyer's sole cost and expense. Buyer and Buyer's agents shall have the right, upon reasonable advance notice to Seller, to go upon the Property to perform the Inspections. 11. Representations and Warranties bv Seller. Seller makes the following representations to Buyer as of the date of this Agreement and as of the Date of Closing: a. Authority. Seller represents and warrants to Buyer that Seller has the requisite of power and authority to enter into this Agreement and the Seller's Closing Documents to be signed by Seller; that the execution, delivery and performance by Seller of such documents do not conflict with or result in violation of any judgment, order, or decree of any court or arbiter to which Seller is a party; and -5- such documents are valid and binding obligations of Seller, and are enforceable in accordance with their terms. b. Title to Propertv. Seller owns or will own on the Closing Date, the Property free and clear of all encumbrances, liens, covenants, conditions, easements, restrictions, reservations, and assessments, except the Permitted Encumbrances. c. Utilities. The Property is served by the following public and private utility services: electric, gas, storm sewer, water, sanitary sewer and telephone, all of which services are available in adequate capacities to properly service the Property. Seller has received no notice of actual or threatened reduction or curtailment of any utility service now supplied to the Property. All utility lines reach the boundaries of the Property through public rights-of-way or valid private easements, the interest of Seller in which shall be assigned by Seller to Buyer on the Closing Date. d. Assessments. Seller has received no notice of actual or threatened special assessments or reassessments of the Property. e. Environmental Laws. To the best of Seller's knowledge, no toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA", 42 U.S.C. 99601-9657, as amended) have been generated, treated, stored, released or disposed of, or otherwise placed, deposited in or located on the Property, nor has any activity been undertaken on the Property that would cause or contribute to (i) the Property becoming a treatment, storage or disposal facility within the meaning of, or otherwise bring the Property within the ambit of, the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S. C. 96901 et. sea., or any similar state law or local ordinance, (ii) a release or threatened release of toxic or hazardous wastes or substances, pollutants or contaminants, from the Property within the meaning of, or otherwise bring the Property within the ambit of, CERCLA, or any similar state law or local ordinance, or (iii) the discharge or pollutants or effluents into any water source or system, the dredging or filling of any waters or the discharge into the air of any emissions, that would require a permit under the Federal Water Pollution Control Act, 33 U.S.C. 91251 et. seq., or the Clean Air Act, 42 U.S.C. 97401 et. sea., or any similar state law or local ordinance, except as disclosed in the reports of Agassiz Environmental Systems and Midwest Analytical Services. To the best of Seller's knowledge, there are no substances or conditions in or on the Property that may support a claim or cause of action under RCRA, CERCLA or any other federal, state or local environmental statutes, regulations, ordinances or other environmental regulatory requirements, including without limitation, the Minnesota Environmental Response and Liability Act, Minn. Stat. 9115B ("MERLA") and the Minnesota Petroleum Tank Release Cleanup Act, -6- Minn. Stat. 9115C, except as disclosed in the reports of Agassiz Environmental Systems and Midwest Analytical Services. f. Riqhts of Others to Purchase Propertv. There are no unrecorded mortgages, contracts, purchase agreements, options, rights of first refusal, leases, easements or other agreements or interests relating to the Property and there are no persons in possession of any portion of the Property, except as may be disclosed by the Title Evidence; g. Seller's Defaults. Seller is not in default in the performance of any of Seller's obligations or liabilities under any easement agreement, covenant, condition, restriction or other instrument relating to the Property. h. FIRPTA. Seller is not a "foreign person," "foreign partnership," "foreign trust," or "foreign estate" as those terms are defined in Section 1445 of the Internal Revenue Code. i. Proceedinos. There is no action, litigation, investigation, condemnation or proceeding of any kind pending or, to the best knowledge of Seller, threatened against Seller or the Property. j. Wells. Seller certifies that Seller does not know of any "Wells" on the described Property within the meaning of Minn. Stat. 91031. This representation is intended to satisfy the requirements of that statute. k. Private Sewer Svstems. Seller certifies that Seller does not know of any private sewer system on or serving the Property, nor have any been installed or removed during Seller's ownership of the Property. I. Storaoe Tanks. To the best of Seller's knowledge, no storage tanks are located under, in, or about the Property, and no storage tanks have been located under, in, or about the Property and subsequently been removed or filled, except as disclosed in the reports of Agassiz Environmental Systems and Midwest Analytical Services. m. Compliance. To the best of Seller's knowledge, the Property fully conforms with all applicable statutes, laws, codes, ordinances and restrictions including all zoning, platting, subdivision and use laws and all building, energy and environmental codes and regulations. To the best of Seller's knowledge, all improvements are located entirely within the boundary lines of the Property and do not encroach upon any adjacent property and no improvements on any adjacent property encroach upon the Property. n. Access. To the best of Seller's knowledge, the Property abuts on and has direct vehicular access to a public road or has driveway access to public roads by permanent, irrevocable easements which will be conveyed to Buyer on the date of closing, and Seller has no knowledge of any fact or condition which would result in the termination of such access. -7- Seller will indemnify Buyer, and Buyer's successors and assigns, against, and will hold Buyer, and Buyer's successors and assigns, harmless from, any expenses or damages, including reasonable attorney's fees, that Buyer incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller will not constitute a waiver or release by Buyer of any claims due to such breach. Each of the representations and warranties set forth above shall survive the Closing. Buyer agrees to accept the Property in lias is" condition, except as may be provided elsewhere in this Agreement. 12. ReDresentations and Warranties of Buver. Buyer represents and warrants to Seller that Buyer is a duly organized municipal corporation under the laws of the State of Minnesota; that Buyer is duly qualified to transact business in the State of Minnesota; that Buyer has the requisite of power and authority to enter into this Agreement and the Buyer's Closing Documents to be signed by Buyer; such documents have been, or will have been by the Date of Closing, duly authorized by all necessary action on the part of Buyer and have been duly executed and delivered; that the execution, delivery and performance by Buyer of such documents do not conflict with or result in violation of Buyer's governing documents or any judgment, order, or decree of any court or arbiter to which Buyer is a party; and such documents are the valid and binding obligations of Buyer and enforceable in accordance with their terms. Buyer will indemnify Seller, and Seller's successors and assigns, against, and will hold Seller, and Seller's successors and assigns, harmless from, any expenses or damages, including reasonable attorney's fees, that Seller incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Consummation of this Agreement by Seller with knowledge of any such breach by Buyer will not constitute a waiver or release by Seller of any claims due to such breach. Each of the representations and warranties set forth above shall survive the Closing. 13. _Buver's Continaencies. The obligations of Buyer under this Agreement are contingent upon each of the following: a. Representations and Warranties. The representations and warranties of Seller contained in this Agreement shall be true at the time this Agreement is executed and on the Closing Date as if made on the Closing Date. b. Title. Title shall have been found acceptable, or been made acceptable, in accordance with the requirements and terms of this Agreement. c. Performance of Seller's Oblioations. Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement. d. Soil and Environmental Tests. Buyer shall have received from Seller the environmental reports referenced in this Agreement, and the results of the Environmental Tests are satisfactory to Buyer, in Buyer's sole discretion. -8- e. Survey. Buyer shall be satisfied, in Buyer's sole discretion, with the Survey. f. Inspections. The results of the Inspections shall be satisfactory to Buyer, in Buyer's sole discretion. Unless each of the above contingencies is satisfied, removed, or waived by Buyer one day before the Date of Closing, Buyer shall have the right to cancel this Purchase Agreement by giving Seller written notification of Buyer's election to so cancel. Upon delivery of such written notification, this Purchase Agreement shall be null and void, and Seller and Buyer agree to execute a cancellation of this Purchase Agreement. 14. ODeration Prior to Closing. During the time period between the date of this Agreement and the Closing Date (the "Executory Period"), Seller shall operate and maintain the Property in the ordinary course of business in accordance with prudent and reasonable business standards. Seller shall execute no contracts, leases, or other agreements regarding the Property during the Executory Period which extend beyond the Closing Date without the prior written consent of Buyer, which consent may be withheld by Buyer, in Buyer's sole discretion. 15. Brokers. The parties have retained no brokers or agents in connection with this transaction and shall indemnify each other from any claims, demands, causes of action and costs, including reasonable attorneys' fees, arising from any broker or agent claiming a commission or fee with respect to this transaction. 16. ~urvival. All of the terms, conditions, representations, warranties, and indemnifications contained in this Agreement shall survive and be enforceable after the Closing. 17. Notices. Any notice required or permitted to be given by either party upon the other is given in accordance with this Agreement if notice is directed to Seller by delivering notice personally to anyone of the undersigned of sellers; or if notice is directed to Buyer, by delivering notice personally to anyone of the undersigned buyers; or if mailed in a sealed wrapper, properly addressed, by United States registered or certified mail, return receipt re- quested, postage prepaid; or if transmitted by facsimile, copy followed by mailed notice as above required; or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows: If to Seller: Charles D. Klein 3632 Willow Beach St. SW Prior Lake, MN 55372 If to Buyer: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, MN 55372 with a copy to: . Suesan L. Pace, Esq., City Attorney for City of Prior Lake HALLELAND, LEWIS, NILAN SIPKINS & JOHNSON 600 Pillsbury Center South 220 South Sixth Street, Suite 600 Minneapolis, MN 55402-4501 -9- Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit as aforesaid; provided, however, that if notice is given by deposit, that the time for response to any notice by the other party shall commence to run one (1) business day after any such deposit. Any party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, ten (10) days prior to the effective date of such change. 18. Miscellaneous Governina Provisions. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, representatives, successors, and assigns. This Agreement shall be construed and interpreted in accordance with the laws of the State of Minnesota. No failure on the part of a party to this Agreement to exercise, and no delay in exercising, any rights contained in the Agreement shall operate as a waiver of such rights, nor shall any single or partial exercise of any rights hereunder preclude any other or further exercise of such rights or the exercise of any other right. The remedies provided in this Agreement are cumulative and not exclusive of any other remedy provided by law or equity. All terms and words used in this Agreement shall be construed to include any other number and any other gender as the context or sense of this Agreement or of any paragraph of this Agreement may require as if such terms or words had been fully and properly written in the appropriate number and gender. Any exhibits to this Agreement are a part of this Agreement. Captions are provided for convenience and ease of reference only and do not affect or modify the terms of any of the provisions of this Agreement. All of the provisions of this Agreement are separable, so if any provision of this Agreement is held to be ineffective by a court of competent jurisdiction, the remaining provisions of this Agreement shall remain in full force and effect unless the invalidated provision is so fundamental to this Agreement that the remaining provisions do not reflect the parties' intent. This Agreement contains the entire agreement of the parties with respect to the subject matter of this Agreement and supersedes any and all prior Agreements and understanding between the parties with respect to the same. The terms of this Agreement have been cooperatively negotiated by and among the parties hereto, and this Agreement shall not be construed against any party hereto as its author. This Agreement may be modified only by a written instrument executed by both parties. There are no third party beneficiaries of this Agreement, intended or otherwise. Time is of the essence for each and every term of this Agreement. This Agreement may be executed in counterparts and, upon execution, each counterpart shall be considered an original. IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the date first written above. SELLER: BUYER: CITY OF PRIOR LAKE By: Charles D. Klein Jack G. Haugen, Mayor By: Frank Boyles, City Manager -10- EXHIBIT A (Legal Description) All that part of the South 102 feet of Lots 1 and 2, Block 2, Cates Addition to Prior Lake, lying South of a line drawn from a point on the West line of said Lot 2, distant 51.75 feet North of the Southwest corner of said Lot 2, Easterly to a point on the East line of said Lot 1, distant 52.79 feet Northerly of the Southeast corner of said Lot 1; except all that part thereof lying Easterly of the following described line: Commencing at a point 14 feet West of the Southeast corner of Lot 1; thence running Northeasterly to the Northeast corner of said Lot 1, Block 2, Cates Addition to Prior Lake, according to the United State Government Survey thereof and situate in Scott County, Minnesota. EXHIBIT B PERMITTED ENCUMBRANCES 1. Covenants, conditions, easements, restrictions, and reservations of record approved in writing by Buyer. 2. Real estate taxes not due and payable.