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HomeMy WebLinkAboutIV B. Authorize Signature: Purchase and Development Agreement with Carlson Capital Mgt5/26/11 PURCHASE AND DEVELOPMENT AGREEMENT By and Between HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY and CARLSON CAPITAL PARTNERS, LLP Dated: _____________, 2011 This document was drafted by: BRADLEY & DEIKE, P. A. th 4018 West 65Street, Suite 100 Edina, MN 55435 Telephone:(952) 926-5337 HEDRA Meeting Packet - June 2, 2011Page 22 of 46 TABLE OF CONTENTS Page PREAMBLE 1 ARTICLE I Definitions Section 1.1. Definitions 1 ARTICLE II Representations Section 2.1. Representations by the Authority 3 Section 2.2. Representations by the Developer 4 ARTICLE III Conveyance of Property Section 3.1. Status of Property 5 Section 3.2. Agreement to Sell 5 Section 3.3. Conditions Precedent to Conveyance 5 Section 3.4. Title 6 Section 3.5. Condition of the Property 6 Section 3.6. Closing 7 Section 3.7. Business Subsidy Provisions 8 Section 3.10. Authority Costs 9 ARTICLE IV Construction of Improvements Section 4.1. Construction of Improvements 9 (i) HEDRA Meeting Packet - June 2, 2011Page 23 of 46 Section 4.2. Construction Plans and Site Plan 9 Section 4.3. Commencement and Completion of Construction 9 ARTICLE V Taxes Section 5.1. Real Property Taxes 10 ARTICLE VI Financing Section 6.1. Mortgage Financing 10 Section 6.2. Limitation on Encumbrance of Property 10 ARTICLE VII Prohibitions Against Assignment and Transfer; Indemnification Section 7.1. Prohibition Against Transfer of Property and Assignment of Agreement 11 Section 7.2. Release and Indemnification Covenants 11 ARTICLE IX Events of Default Section 8.1. Events of Default Defined 11 Section 8.2. Remedies on Default 12 Section 8.3. No Remedy Exclusive 13 (ii) HEDRA Meeting Packet - June 2, 2011Page 24 of 46 Section 8.4. No Additional Waiver Implied by One Waiver 13 Section 8.5. Effect of Termination ofAgreement 13 Section 8.6. Costs of Enforcement 13 ARTICLE IX Additional Provisions Section 9.1. Representatives Not Individually Liable 14 Section 9.2. Provisions Not Merged With Deed 14 Section 9.3. Titles of Articles and Sections 15 Section 9.4. Notices and Demands 15 Section 9.5. Disclaimer of Relationships 15 Section 9.6. Modifications 15 Section 9.7. Counterparts 15 Section 9.8. Judicial Interpretation 15 Section 9.9. Severability 15 SCHEDULE A Description of Property SCHEDULE B Environmental Documents SCHEDULE C Construction Plans and Site Plan (iii) HEDRA Meeting Packet - June 2, 2011Page 25 of 46 PURCHASE AND DEVELOPMENT AGREEMENT THIS AGREEMENT, made on or as of the ____ day of __________, 2011, by and between the Hastings Economic Development and Redevelopment Authority, a public body politic and corporate under the laws of the State of Minnesota (hereinafter referred to as the , "Authority")and having its principal office at 101 4th Street East, Hastings, Minnesota 55033- 1955, and Carlson Capital Partners, LLP,a Minnesota limited liability partnership(hereinafter , referred to as the "Developer")having its principal office at 11 Bridge Square, Northfield, Minnesota 55057. WITNESSETH: WHEREAS, the Authority is a municipal economic development authority created by the City Council of the City of Hastings, Minnesota (the “City”) pursuant to Minnesota Statutes, sections 469.090 to 469.108 (the “Act”) and is the owner of certain real property located in the downtown area of the City and described in Schedule A of this Agreement (which real property is referred to herein as the "Property"); and WHEREAS, the Developer has presented to the Authority a proposal by which it would purchase the Property from the Authority and construct thereon a 3,770 square foot one story office building with related parking; and WHEREAS, the Authority believes that the conveyance of the Property to the Developer for the proposed development is consistent with and furthers the Authority’s goals with respect to the Project and is willing to sell the Property to the Developer but only if the Developer complies with its obligations under this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I Definitions Section 1.1. Definitions.In this Agreement, unless a different meaning clearly appears from the context: Agreement "" means this Agreement, as the same may be from time to time modified, amended, or supplemented. Authority "" means the Hasting Economic Development and Redevelopment Authority, a public body politic and corporate. HEDRA Meeting Packet - June 2, 2011Page 26 of 46 Construction Plans "" means the plans, specifications, drawings and related documents on the construction work to be performed by the Developer on the Property and adjacent property a copy of which is attached to this Agreement as Schedule C. County "" means Dakota County, Minnesota. Developer "" means Carlson Capital Partners, LLP, a Minnesota limited liability partnership, its successors and assigns, and any future owners of any interest in the Property. Event of Default "" means an action listed in Section 8.1 of this Agreement. Hazardous Substances “” means asbestos, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, chemical waste, radioactive materials, explosives, known carcinogens, petroleum products and also all dangerous, toxic or hazardous pollutants, contaminates, chemicals, materials or substances defined as hazardous or as a pollutant or contaminant in, or the release or disposal of which is regulated by, any Laws or Regulations, as hereafter defined. Laws or Regulations mean and include the Comprehensive Environmental Response and Liability Act (“CERCLA” or the Federal Superfund Act) as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”) 42 U.S.C. 9601-9675; The Federal Resource Conservation and Recovery Act of 1986 (“RCRA”); the Clean Water Act, 33 U.S.C. 1321, et seq.; the Clean Air Act 42 U.S.C. 7401, et seq., all as the same may be from time to time amended, and any other federal, state, county, municipal, local or other statute, law ordinance or regulation which may relate to or deal with human health or the environment including, without limitation, all regulations promulgated by a regulatory body pursuant to any such statute, law or ordinance. Holder "" means the owner of a Mortgage. Improvements "" means the construction by the Developer on the Property of a 3,770 square foot one story office building with related parking in accordance with the Construction Plans. Mortgage "" means any mortgage, lien or other encumbrance made or permitted to be made by the Developer which is secured, in whole or in part, by the Property. Permitted Encumbrances “” means the provisions of this Agreement; the right of reversion described in Section 8.2; reservations of minerals or mineral rights to the State of Minnesota; public utility, roadway and other easements which will not adversely affect the development and use of the Property pursuant to the Developer’s Construction Plans; building laws, regulations and ordinances consistent with the Improvements; real estate taxes that Developer agrees to pay or assume pursuant to this Agreement; restrictions, covenants and easements of record that do not materially adversely affect the development and use of the Improvements; and exceptions to title to the Property which are not objected to by Developer upon examination of the title evidence to be delivered to the Developer pursuant to Section 3.4 of this Agreement. HEDRA Meeting Packet - June 2, 2011Page 27 of 46 Property "" means the real property described in Schedule Aof this Agreement. State "" means the State of Minnesota. Unavoidable Delays "" means delays which are the direct result of acts of God, unforeseen adverse weather conditions, strikes, other labor troubles, fire or other casualty to the Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in enforcing its rights under this Agreement) which directly result in delays. ARTICLE II Representations Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a)The Authority is a municipal economic development authority organized and existing under the laws of the State. Under the laws of the State, the Authority has the power to enter into this Agreement and to perform its obligations hereunder. (b)The Property is directly accessible to City sewer located in the adjacent right-of- way or in a utility easement. (c)To the best of the Authority’s knowledge and belief, at the time of execution by the Authority of this Agreement, there are no environmental proceedings, applications, ordinances, petitions, court pleadings, resolutions, investigations by public or private agencies, or other matters pending which could prohibit, impede, delay or adversely affect the contemplated use of the Property. (d)To the best of the Authority’s knowledge and belief, no underground storage tanks or Hazardous Substances have been, or pending the conveyance of the Property shall be, installed, used, incorporated into, discharged, released, stored, generated, disposed of, or allowed to escape in, to, or upon the Property. Attached to this Agreement as Schedule Bis a summary of the investigation and remediation activities under taken by the Authority related to the Property. (e)To the best of the Authority’s knowledge and belief, no investigation, administrative order, consent order or agreement, litigation, or settlement with respect to Hazardous Substances is proposed, threatened, anticipated or in existence with respect to the Property. (f)To the best of the Authority’s knowledge and belief, the Property is not in violation of any federal, state, or local law, ordinance or regulation relating to Hazardous Substances. HEDRA Meeting Packet - June 2, 2011Page 28 of 46 (g)The Authority has received no notice or communication from any local, state or federal official that the activities of the Developer or the Authority on the Property may be or will be in violation of any environmental law or regulation. The Authority, tothe best of its knowledge, is aware of no facts the existence of which would cause the Authority to be in violation of any local, state or federal environmental law, regulation or review procedure. In the event that the Developer is required to take any action to obtain any necessary permits or approvals with respect to the Property under any local, state or federal environmental law or regulation, the Authority will cooperate with the Developer in connection with such action. (h)The Authority does not know of any “Wells” on the described Property within the meaning of Minn. Stat. §103I, or that it does know of one or more “Wells” on the Property and that it has disclosed the same to Purchaser pursuant to a Well Certificate to be delivered and executed at the Closing. Section 2.2. Representations by the Developer.The Developer represents that: (a)The Developer is a Minnesota limited liability partnershipduly organized and authorized to transact business in the State, is not in violation of anyprovisions of its partnership agreementor the laws of the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its partners. (b)The Developer will constructthe Improvements on the Property in compliance with the terms of this Agreement and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations), except for variances necessary to construct the improvements contemplated in the Construction Plans and site plan approved by the City which are attached hereto as Schedule C. (c)The Developer has received no notice or communication from any local, state or federal official that the activities of the Developer or the Authority in the Project Area may be or will be in violation of any environmental law or regulation. The Developer, to the best of the Developer’s knowledge, is aware of no facts the existence of which would cause the Developer to be in violation of any local, state or federal environmental law, regulation or review procedure. In the event that the Authority is required to take any action to obtain any necessary permits or approvals with respect to the Property under any local, state or federal environmental law or regulation, the Developer will cooperate with the Authority in connection with such action. (d)The Developer has or will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Improvements on the Property may be lawfully constructed and operated. All representationsset forth in Section 2.1 and 2.2. of this Agreement shall be true and correct in all material respects as of the date of closing on conveyance of the Property to the Developer. HEDRA Meeting Packet - June 2, 2011Page 29 of 46 ARTICLE III Conveyance of Property Section 3.1. Status of Property. The Authority owns fee title to the Property. Section 3.2 Agreement to Sell. (a) The Authority agrees to sell to the Developer and the Developer agrees to buy from the Authority the Property. The Developer agrees to pay to the Authority, as and for the purchase price for the Property (the "Purchase Price"), the sum of One Dollar ($1.00). (b)The Purchase Price shall be payable by means of cash or certified funds on the date of closing on the sale of the Property to the Developer. Section 3.3. Conditions Precedent to Conveyance. The Authority’s obligation to sell and the Developer’s obligation to purchase the Property shall be subject to satisfaction of all of the following conditions precedent: (a)The Developer having obtained the requisite approval of the Authority hereunder and all applicable governmental agencies and instrumentalities, municipal, county, state and federal, to the development of the Property through the commencement of construction of the Improvements in accordance with the Developer’s Construction Plans and site plan. (b)The Developer having obtained: (i) amendments, revisions, exceptions or changes as may be necessary to applicable zoning codes and ordinances; (ii) special use permits, if applicable, (iii) building permits for the Improvements; (iv) driveway permits; (v) roadway access rights and permits; (vi) environmental consents, if necessary; and (vii) vacations and variances deemed necessary by Developer or as may be otherwise required to permit Developer to commence the construction of the Improvements in accordance with the Developer’s Construction Plans and site plan. (c)The Developer having determined that the soil and environmental conditions on the Property are acceptable for the Developer’s purposes. (d)TheDeveloper having reviewed and approved, or waived any objections to, title to the Property pursuant to Section 3.4 of this Agreement. (e)The Developer having secured construction and/or permanent mortgage loan financing sufficient for the acquisition of the Property and construction of the Improvements. (f)All representations set forth in Section 2.1 and 2.2. of this Agreement shall be true and correct in all material respects as of the date of closing. In the event that the above conditions precedent have not been satisfied, or waived in writing by both the Authority and Developer, by __________, 2011, unless such date shall be extended in a writing signed by the Authority and the Developer, either the Authority or Developer may HEDRA Meeting Packet - June 2, 2011Page 30 of 46 terminate this Agreement by giving written notice of termination to the other party, whereupon this Agreement shall be null and void and the Developer and Authority shall execute an instrument in recordable form canceling this Agreement. Upon termination of this Agreement, the Authority and the Developer shall have no further obligations to the other under this Agreement, except as stated in Section 8.5 of this Agreement. Section 3.4. Title.Within a reasonable time after the date of this Agreement the Authority shall obtain and furnish to the Developer a commitment for the issuance of an owner's policy of title insurance in the amount of the Purchase Price for the Property naming the Developer as the proposed insured party. The Developer shall be allowed the later of (i)twenty s (20) dayafter the date of its receipt of such commitment for examination of said title or (ii) twenty (20) daysafter the date of the last signature on this Agreement for examination of said title and the making of any objections thereto, said objections to be made in writing or deemed to be waived. The Developer may not object to Permitted Encumbrances. The Developer’s objections shall be made in writing or shall be deemed waived. If any objections are so made, the Authority shall be allowedninety (90) daysfrom notice thereof to cure the title defect or exception, either by the removal thereof or by the procurement of title insurance endorsements satisfactory to Developer providing coverage against loss or damage as a result of such defect or exception. If the Authority does not cure such title defect or exception to Developer’s satisfaction within said ninety (90) days, the Developer may, at its option, either (i) terminate the Agreement upon written notice to the Authority upon which this Agreement shall be null and void, the Developer and the Authority shall execute an instrument in recordable form canceling this Agreement, and the earnest money paid by the Developer shall be returned to the Developer; or (ii) waive the title defect or exception and proceed with the closing on the purchase of the Property. If the Developer waives the title defect or exception and proceeds to acquire the Property, the Authority shall have no further obligations with respect to any such defects or exceptions. Except as provided herein, the Authority shall have no obligation to expend any monies to cure any title objection made by the Developer. The cost of obtaining the title insurance commitment shall be paid by the Authority and the cost of the title insurance policy shall be paid by the Developer. Section 3.5 Condition of the Property. The Developer acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Property, including any adverse environmental conditions, or its fitness for construction of the Improvements. The Developer shall have the right to enter upon the Property to undertake such environmental and soil tests as the Developer deems necessary to determine the condition of the Property. The Authority shall furnish the Developer with all test results and environmental assessments that it has in its possession relating to the Property. If the Developer determines that the condition of the soils or other environmental conditions on the Property are unacceptable to the Developer, in its sole discretion, it shall notify the Authority of such determination in writing and if the Authority and the Developer are unable to reach agreement on how the cure the defective condition within twenty (20) daysof such notification either party hereto shall have the right to terminate this Agreement by giving ten (10) days notice of termination to the other party. At the end of such ten (10) day period this Agreement shall terminate and be of no further force, or effect, unless the Developer waives its objection to such conditions within such ten (10) day period, and the parties shall execute a certificate in recordable form evidencing the termination HEDRA Meeting Packet - June 2, 2011Page 31 of 46 of this Agreement. Any notification by the Developer regarding unacceptable soils or environmental conditions on the Property shall be made within ninety (90) days after the date hereof or the Developer shall be deemed to have waived its right to object to any adverse soil or environmental conditions existing on the Property. Section 3.6 Closing.(a) Closing on the conveyance of the Property to the Developer shall occur on or before ten (10) business daysafter satisfaction, or waiver, of all of the conditions precedent set forth in Section 3.3 of this Agreement. (b)At closing on conveyance of the Property, the Authority shall deliver to the Developer: (i) a warranty deed duly executed and acknowledged, in recordable form, conveying to the Developer marketable title to the Property subject only to Permitted Encumbrances; (ii) the Owner’s title insurance policy described in Section 3.4 (the premium for which shall be paid by Developer); (iii) a Seller’s Affidavit, in customary form, relative to judgments, federal tax liens, mechanic’s liens and outstanding interests in the Property; (iv) a Well Certificate in the form required by Minnesota law; and (v) such further documents or instruments as may reasonably be required to vest title to the Property in the Developer and to enable the title company issuing the title commitment pursuant to section 3.4 to insure the title thereto, in accordance with the terms of this Agreement. (c)At closing on the conveyance of the Property the Authority will pay the following costs: (i)State deed tax; (ii)The costs of obtaining the title insurance commitment; (iii)Conservation fee payable in connection with the conveyance; and (iv)One half of the closing costs. (v)Those real estate taxes and special assessments set forth as the Authority’s obligation to pay in Article V. At closing on the conveyance of the Property the Developer will pay the following costs: (i)The purchase price; (ii)The cost of the premium for the policy of title insurance; (iii)Recording fees for the deed, this Agreement and any other documents required to be recorded in connection with the conveyance; and (iv)One half of the closing costs. HEDRA Meeting Packet - June 2, 2011Page 32 of 46 (vi)Those real estate taxes and special assessments set forth as the Developer’s obligation to pay in Article V. Section 3.7. Business Subsidy Provisions. Because the market value of the Property is less than $150,000, the assistance being provided by the Authority to the Developer does not constitute a “business subsidy” for purposes of some parts of the Minnesota Business Subsidy Law, Minnesota Statutes, sections 116J.993-116J.995. However, section 116J.994, subd. 8(b), of the law does require that the Authority submit certain reports to the State regarding the assistance being provided. Therefore, the Authority and Developer agree as follows (a)General Terms. The parties agree and represent to each other as follows: (i)The subsidy provided to the Developer is the difference between the current market value of the Property and the purchase price paid by the Developer to acquire the Property, which subsidy amount is $_________. (ii)The public purposes of the subsidy are to promote the development of an office building in the City, increase net jobs in the City and the State, and increase the tax base of the City and the State. (iii) The goal for the subsidy is to secure development of the Improvements. (b)Continued Operations. The Developer agrees that it will occupy and operate its business in the Improvements for a period of at least five (5) years from the date that the City issues a certificate of occupancy for the completed Improvements. If the Developer fails to occupy and operate its business in the Improvements during said five (5) year period, the Developer will be required to repay the subsidy identified in subsection (a)(i) above,or a portion thereof,as provided in this subsection. Upon the occurrence of a failure to continue operations as required by this subsection the Developer shall repay to the Authority upon written demand from the Authority a “pro rata share” of the subsidy and interest on the subsidy at the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the bureau of economic analysis of the United States Department of Commerce for the 12 month period ending March 31 of the year prior to the year in which the payment from the Redeveloper is due accrued from the Benefit Date. The term “pro rata share” means a percentage calculated by subtracting from sixty (60) the number of months of operation (where any month in which the Improvements are in operation for at least fifteen (15) days constitutes a month of operation), commencing on the date the City issues the certificate of occupancy for the Improvements and ending on the date the Developer ceases operation, as reasonably determined by the Authority, and dividing the resulting number by 60. (c)Reports.The Developermust submit to the Authority upon request by the Authority a report containing information that allows the Authority to submit the reports required by section 116J.004(8)(b) and (c) of the Business Subsidy Act. The Authority will provide information to the Developer regarding the required forms. If the Developerfails to timely file any report required under this section, the Authority will mail the Developera warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, HEDRA Meeting Packet - June 2, 2011Page 33 of 46 the Developer fails to provide a report, the Developermust pay to the Authority a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section $1,000. Section 3.8. Authority Costs. The Developer agrees that it will pay upon demand by the Authority the Authority’s attorneys’ fees incurred in connection with the negotiation and preparation of this Agreement and any related documents. ARTICLE IV Construction of Improvements Section 4.1. Construction of Improvements.The Developer agrees that it will construct the Improvements on the Property in accordance with the approved Construction Plans and site plan and at all times during its ownership of the Property will use its commercially reasonable efforts to operate and maintain, preserve and keep the Improvements or cause the Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2. Construction Plans and Site Plan. (a) The Authority’s willingness to convey the Property to the Developer is predicated upon and subject to the Developer’s agreement that it will construct the Improvements and that the Improvements will be of such quality and nature as will satisfy the Authority’s goals for the development of the Property. The Developer has submitted and the Authority has approved Construction Plans and a site plan for the Improvements. The Construction Plans and site plan provide for the construction of the Improvements and are attached to this Agreement as Schedule C. Nothing in this Section shall be deemed to relieve the Developer’s obligations to comply with the requirements of the City’s normal construction permitting process. (b)If the Developer desires to make any material change in any Construction Plans or site plan after their approval by the Authority, the Developer shall submit the proposed change to the Authority for its approval. If the Construction Plans and site plan, as modified by the proposed change, conform to the requirements of this Agreement and such changes do not materially alter the nature, quality or exterior appearance of the Improvements, the Authority shall approve the proposed change and notify the Developer in writing of its approval. Any requested change in the Construction Plans or site plan shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) daysafter receipt of the notice of such change. Section 4.3. Commencement and Completion of Construction.(a) The Developer agrees for itself, its successors and assigns, and every successor in interest to the Property, or any part thereof, that the Developer, and its successors and assigns, shall promptly begin and diligently prosecute to completion construction of the Improvements within the period specified in this Section 4.3 of this Agreement. HEDRA Meeting Packet - June 2, 2011Page 34 of 46 (b)Subject to Unavoidable Delays, the Developer shall commence construction of the Improvements within _________ (___) days after conveyance of the Property to the Developer and shall complete such construction within ___________ (___) months after commencement. The Developer shall, however, be entitled to request additional time to complete the Improvements, together with any site improvements shown on the site and building plans approved by the Authority; provided, that any such request shall be made prior to the date that completion is required and that the Authority may require security from the Developer to assure that any uncompleted work is completed. ARTICLE V Taxes Section 5.1. Real Property Taxes. Real estate taxes and installments of special assessments due and payable in the year of closing shall be apportioned between the Developer and the Authority as of the date of conveyance of the Property, with the result that the Authority shall pay that portion of such taxes and special assessments attributable to the period of the year prior to the conveyance and the Developer shall pay that portion of the taxes attributable to the period of time commencing with the date of conveyance. The Developer agrees to pay taxes and installments of special assessments when due and prior to the imposition of penalty ARTICLE VI Financing Section 6.1. Financing. On or before __________, 2011, the Developer shall submit to the Authority evidence, satisfactory to the Authority, that the Developer has obtained mortgage or other construction financing in an amount sufficient for acquisition of the Property and construction of the Improvements. Section 6.2. Limitation Upon Encumbrance of Property. Prior to completion of construction of the Improvements, neither the Developer nor any successor in interest to the Property, or any part thereof, shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Property, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Property, except for the purposes of obtaining funds only to the extent necessary for acquiring, constructing, or marketing the Improvements, and any costs related thereto, or purchasing or financing the purchase of any condominium units, without the prior written approval of the Authority. HEDRA Meeting Packet - June 2, 2011Page 35 of 46 ARTICLE VII Prohibitions Against Assignment and Transfer, Indemnification Section 7.1. Prohibition Against Transfer of Property and Assignment of Agreement.(a) Prior to Developer’s satisfaction of its obligation to continue its operations in the Improvements under Section 3.7(c) of this Agreement,except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Property, or any part thereof, to perform its obligations with respect to constructing the Improvements under this Agreement, and any other purpose authorized by this Agreement, the Developer (except as so authorized) has not made or created, and will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Property (except for leases of space in the Improvements to tenants) or any part thereof or any interest herein or therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority. (b)In the absence of specific written agreement by the Authority to the contrary, no transfer of the Property or approval by the Authority thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement, from any of its obligations hereunder. Section 7.2. Release and Indemnification Covenants.(a) The Developer releases from and covenants and agrees that the Authority and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Improvements. (b)Except for any willful misrepresentation or any willful or wanton misconduct of the following named parties, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand,suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Property and Improvements. ARTICLE VIII Events of Default Section 8.1. Events of Default Defined.The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events: HEDRA Meeting Packet - June 2, 2011Page 36 of 46 (a)Failure by the Developer to pay when due the Purchase Price. (b)Failure by the Developer to obtain financing, if required, for construction of the Improvements pursuant to the terms and conditions of Section 6.1 of this Agreement. (c)Failure by the Developer to commence construction of the Improvements and any site improvements as shown on the Developer’s Construction Plans approved by the Authority or specified as conditions of the Authority’s approval (including _______________ resolution) pursuant to the terms, conditions and limitations of Article IV of this Agreement. (d)Failure by Developer to provide any documentation or information required to be provided under the terms of this Agreement. (e)Failure by Developer to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder. (f)The Developer does any of the following: (i) files any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under United States Bankruptcy Laws or any similar Federal or State Laws; or (ii) make an assignment for the benefit of its creditors; or (iii) admits, in writing, its inability to pay his debts generally as they become due; or (iv) be adjudicated, bankrupt or insolvent; or (v) if a petition or answer proposing the adjudication of the Developer, as a bankrupt under any present or future federal bankruptcy act or any similar federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within sixty (60) days after the filing thereof; or (vi) a receiver, trustee or liquidator of the Developer,or of the Property and Improvements, shall be appointed in any proceeding brought against the Developer and shall not be discharged within sixty (60) days of such appointment, or if the Developer shall consent to or acquiesce in such appointment. Section 8.2. Authority’s Remedies on Default. Whenever any Event of Default occurs, the Authority may immediately suspend its performance under this Agreement and may take any one or more of the following actions after providing thirty (30) days prior written noticeto the Developer of the Event of Default, but only if the Event of Default has not been cured within thirty (30) days after the receipt of such written notice: (a)Terminate this Agreement. (b)Subject to the rights of a Holder, reenter and retake title to and possession of the Property pursuant to the terms of the deed from the Authority to the Developer, which deed will contain a provision allowing the Authority, if the Developer fails to commence and complete the construction of the Improvements when required by this Agreement, to reenter the Property and retake title to and possession of the Property and to resell the Property to a third party who will develop it in accordance with the Authority’s goals for development of the Property. The proceeds received by the Authority from the sale of the Property will be used to first reimburse the Authority for its costs incurred in exercising its remedies under this Agreement with any excess proceeds being paid to the Developer to reimburse it for the Purchase Price. HEDRA Meeting Packet - June 2, 2011Page 37 of 46 (c)Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Developer to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 8.4. No Additional Waiver Implied by One Waiver.In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 8.5. Effect of Termination of Agreement. In theevent that this Agreement is terminated pursuant to Sections 3.3, 3.4, 3.5 or 8.2, all provisions hereof shall terminate except that Section 8.6 shall survive such termination and any cause of action arising hereunder prior to such termination shall not be affected. Section 8.6. Costs of Enforcement. If any legal action or other legal proceeding relating to the enforcement of the this Agreement is brought by the Authority, the Authority shall be entitled to recover its reasonable attorney’s fees and disbursements in pursuing such action or proceeding (in addition to any other relief to which the Authority may be entitled). ARTICLE IX Additional Provisions Section 9. 1. Representatives Not Individually Liable.No member, official, or employee of the Authority shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach or for any amount which may become due to Developer or successor or on any obligations under the terms of the Agreement. No member, officer, governor, owner, or employee of Developer shall be personally liable to the Authority, or any successor in interest, in the event of any default or breach or for any amount which may become due to the Authority or successor or on any obligations under the terms of the Agreement. Section 9.2. Provisions Not Merged With Deed.None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Property HEDRA Meeting Packet - June 2, 2011Page 38 of 46 and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 9.3. Titles of Articles and Sections.Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 9.4. Notices and Demands.Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a)in the case of the Developer, is addressed to or delivered personally to the Developer at 11 Bridge Square, Northfield, MN 55057; and (b)in the case of the Authority, is addressed to or delivered personally to the Authority th at City Hall, 101 4 Street East, Hastings, Minnesota 55033-1955, or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 9.5. Disclaimer of Relationships. The Developer acknowledges that nothing contained in this Agreement nor any act by the Authority orthe Developer shall be deemed or construed by the Developer or by any third person to create any relationship of third-party beneficiary, principal and agent, limited or general partner, or joint venture between the Authority, the Developer and/or any third party. Section 9.6. Modifications.This Agreement may be modified solely through written amendments hereto executed by the Developer and the Authority. Section 9.7. Counterparts.This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 9.8. Judicial Interpretation. Should any provision of this Agreement require judicial interpretation, the court interpreting or construing the same shall not apply a presumption that the termshereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent or attorney prepared the same, it being agreed that the agents and attorneys of both parties have participated in the preparation hereof. Section 9.9. Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. HEDRA Meeting Packet - June 2, 2011Page 39 of 46 IN WITNESS WHEREOF , the Authority has caused this Agreement to be duly executed in its name and behalf and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY By_________________________________ ______________, Chairman CARLSON CAPITAL PARTNERS, LLP By__________________________________ Its ____________________________ STATE OF MINNESOTA) ) SS. COUNTY OF __________) The foregoing instrument was acknowledged before me this day of , 2011, by _____________, the Chairman of the Hastings Economic Development and Redevelopment Authority, a public body politic and corporate, on behalf of the authority. ______________________________ Notary Public STATE OF MINNESOTA) ) SS. COUNTY OF ___________) The foregoing instrument was acknowledged before me this day of , 2011, by _______________, the ______________ of Carlson Capital Partners, LLP, a Minnesota limited liability partnership, on behalf of the partnership. ______________________________ Notary Public HEDRA Meeting Packet - June 2, 2011Page 40 of 46 SCHEDULE A Description of Property Lots 1 and 2, Block 29, Town of Hastings, according to the recorded plat thereof, Dakota County, Minnesota. HEDRA Meeting Packet - June 2, 2011Page 41 of 46 SCHEDULE B Environmental Documents HEDRA Meeting Packet - June 2, 2011Page 42 of 46 SCHEDULE C Construction Plans and Site Plan HEDRA Meeting Packet - June 2, 2011Page 43 of 46