HomeMy WebLinkAboutIV.A.3. Development Agreement - Dream1 LLC - 10-7-21_clean v2
CONTRACT
FOR PRIVATE DEVELOPMENT By and Between
HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY And
DREAM1 LLC
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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into as
of the day of , 2021 (the “Effective Date”), by and between the Hastings Economic Development and Redevelopment Authority, a public body corporate and politic organized under the laws of Minnesota (“HEDRA”), and DREAM1 LLC, a Minnesota limited liability company (“Developer”).
RECITALS Recital No. 1. HEDRA was created pursuant to Minn. Stat. §§469.090 to 469.1082, and was authorized to transact business and exercise its powers by a resolution of the City Council
of the City of Hastings (“City”).
Recital No. 2. HEDRA is the owner of certain vacant real property located in Hastings, Dakota County, Minnesota, legally described on Exhibit A (the “Property”).
Recital No. 3. HEDRA will sell the Property to Developer on the terms and conditions
of this Agreement. Recital No. 4. Developer desires to purchase the Property from HEDRA.
Recital No. 5. Developer desires to develop the Property under the terms and
conditions of this Agreement. Recital No. 6. HEDRA believes that the sale and development of the Property pursuant to this Agreement and the fulfillment generally of this Agreement are in the vital and best interests
of the City and the health, safety, and welfare of its residents, and will be in accord with the public
purposes and provisions of the applicable State and local laws and requirements. NOW, THEREFORE, in consideration of the covenants and the mutual obligations contain herein, HEDRA and Developer hereby covenant and agree with each other as follows:
1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: A. “Agreement” means this Agreement, as the same may be modified,
amended, or supplemented, in writing, by mutual agreement of both parties.
B. “Certificate of Completion” means the certificate, in the form contained in Exhibit B attached hereto, which will be provided to Developer pursuant to Section 10.7 of this Agreement.
C. “City” means the City of Hastings, Minnesota.
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D. “Closing” means the closing of the purchase and sale contemplated by this Agreement.
E. “Closing Date” means on or before February 1, 2022, unless otherwise agreed to by the parties. F. “Commence Construction” means on or before April 1, 2022 which is the
start of site grading for the Minimum Improvements.
G. “Completion Date” means October 31, 2022, unless otherwise agreed to by the parties.
H. “Construction Plans” means the final plans for construction of the Minimum
Improvements submitted by Developer to the City. I. “Contingency Date” shall mean sixty (60) days from the Effective Date.
J. “County” means Dakota County.
K. “Deed” means the general warranty deed in the form attached hereto as Exhibit C, by which HEDRA will convey the Property to Developer.
L. “Developer” means DREAM1 LLC, a Minnesota limited liability company.
M. “Effective Date” means the date this Agreement was executed by HEDRA. N. “Event of Default” means an action by Developer or HEDRA listed in
Section 11 of this Agreement.
O. “HEDRA” means the Hastings Economic Development and Redevelopment Authority, a public body corporate and politic organized under the laws of Minnesota.
P. “Minimum Improvements” means the construction of an approximately
20,000 square foot retail showroom and manufacturing warehouse and related improvements to be constructed on the Property. The Construction Plans, as may be amended and approved by the City, are on file with the City.
Q. “Permitted Encumbrance” means any matters reflected on the Title
Evidence which are not objected to by Developer within such time period or waived by Developer in accordance with Section 6.1 (other than such consensual liens). R. “Property” means the real property legally described on Exhibit A attached
hereto.
S. “Purchase Price” means One Dollar and 00/100s ($1.00).
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T. “Sale” means any sale, conveyance, lease, exchange, forfeiture other transfer of the Developer’s interest in the Minimum Improvements or the Property, whether
voluntary or involuntary.
U. “Title Company” means DCA Title, 7373 - 147th Street West, Suite 161, Apple Valley, MN 55124.
V. “Unavoidable Delays” means delays beyond the reasonable control of the
party seeking to be excused, which are the direct result of strikes, other labor troubles, weather, fire, or other casualty to the Minimum Improvements; litigation commenced by third parties which, by injunction or other similar judicial action, results in delays, or acts of any federal, state or local governmental unit (other than HEDRA in exercising its rights
under this Agreement) that result in delays. 2. Sale. Subject to the compliance with the terms and provisions of this Agreement, HEDRA shall sell the Property to Developer for the Purchase Price, and Developer shall purchase the same from HEDRA.
3. Available Surveys, Tests, and Reports. Within ten (10) days of the Effective Date, HEDRA shall cause to be delivered to Developer, (a) copies of any surveys, easement documents, property tax information (including any appeals), soil tests, environmental or engineering reports, wetland delineations, and any other studies and/or site analyses previously
conducted on the Property and in the possession of HEDRA and (b) copies of existing title work
for the Property and in the possession of HEDRA (the “Due Diligence Materials”). HEDRA makes no representations or warranties regarding the accuracy of the Due Diligence Materials. If Developer so requests, HEDRA shall request the preparers of any such surveys, soil tests, environmental reports, and any other studies and/or site analyses to re-issue or re-certify the same
for the direct benefit of Developer, at Developer’s expense, so that Developer may rely on such
site analyses or surveys as if prepared for Developer in the first instance, but HEDRA makes no representation as to whether any such reissuance or recertification will be available. 4. Developer’s Investigations. For a period of up to sixty (60) calendar days
following the Effective Date, HEDRA shall allow Developer and Developer’s agents access to the
Property without charge and at all times for the purpose of Developer’s investigation and testing of the Property, including surveying and testing of soil and groundwater (“Developer’s Investigations”); provided, however, Developer shall not perform any invasive testing unless (a) HEDRA gives its prior written approval of Developer’s consultant that will perform the testing,
which approval shall not be unreasonably withheld, conditioned or delayed, and (b) Developer
gives HEDRA reasonable prior notice of such testing. HEDRA shall have the right to accompany Developer during any of Developer’s Investigations of the Property. Developer shall provide to HEDRA copies of all third-party, non-confidential written test results and reports conducted as part of Developer’s Investigations. Developer agrees to pay all of the costs and expenses associated
with Developer’s Investigations, to cause to be released any lien on the Property arising as a result
of Developer’s Investigations and to repair and restore, at Developer’s expense, any damage to the Property caused by Developer’s Investigations which, however, shall not include any duty by Developer to remediate any pre-existing environmental conditions discovered or disturbed at the
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Property. Developer shall indemnify and hold HEDRA and the Property harmless from all costs and liabilities, including, but not limited to, reasonable attorneys’ fees, arising from Developer’s
Investigations. The indemnification obligations provided herein shall survive the termination or
cancellation of this Agreement. 5. Insurance; Risk of Loss. HEDRA assumes all risk of destruction, loss or damage to the Property prior to the Closing Date. If, prior to the Closing Date, all or any portion of the
Property or access thereto is condemned, taken by eminent domain, or damaged by cause of any
nature, HEDRA shall immediately give Developer notice of such condemnation, taking or damage. After receipt of notice of such condemnation, taking or damage (from HEDRA or otherwise), Developer shall have the option (to be exercised in writing within thirty (30) days) either (a) to require HEDRA to (i) convey the Property at Closing to Developer in its damaged condition, upon
and subject to all of the other terms and conditions of this Agreement without reduction of the
Purchase Price, (ii) assign to Developer at Closing all of HEDRA’s right, title and interest in and to any claims HEDRA may have to insurance proceeds, condemnation awards and/or any causes of action with respect to such condemnation or taking of or damage to the Property or access thereto, and (iii) pay to Developer at Closing by certified or official bank check all payments made
prior to the Closing Date under such insurance policies or by such condemning authorities, or (b)
to terminate this Agreement by giving notice of such termination to HEDRA, whereupon this Agreement shall be terminated, and thereafter neither party shall have any further obligations or liabilities to the other, except for such obligations as survive termination of this Agreement. If the right to terminate this Agreement is not exercised in writing within such thirty (30) day period,
such right shall be deemed to have been waived. HEDRA shall not designate counsel, appear in,
or otherwise act with respect to the condemnation proceedings without Developer’s prior written consent, which consent shall not be unreasonably withheld. 6. Contingencies.
6.1. Developer’s Contingencies. A. Unless waived by Developer in writing, Developer’s obligation to proceed to Closing shall be subject to (a) performance by HEDRA of its obligations
hereunder, (b) the continued accuracy of HEDRA’s representations and warranties
provided in Section 14.1, and (c) Developer’s satisfaction, in Developer’s sole discretion, as to the contingencies described in this Section 6.1 within the time periods set forth below:
(1) On or before the Contingency Date, Developer shall have
determined, in its sole discretion, that it is satisfied with (a) the results of and matters disclosed by Developer’s Investigations, surveys, soil tests, engineering inspections, hazardous substance and environmental reviews of the Property and all other inspections and due diligence regarding the
Property, including any Due Diligence Materials.
(2) On or before the Contingency Date, Developer shall have determined the acceptability of the Property for its intended use and
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incidental uses thereto (collectively, the “Proposed Use”). All costs and expenses related to applying for and obtaining any governmental permits
and approvals for the Property for the Proposed Use shall be the
responsibility of the Developer. (3) On or before the Closing Date, Developer shall have obtained all appropriate approvals and permits necessary for the Proposed
Use on the Property, which approvals may include, without limitation,
platting or replatting, zoning approvals and/or rezoning of the Property, conditional use permits, access permits, signage permits, building permits, required licenses, site plan approvals and architectural approvals (the “Approvals”). All costs and expenses related to the preparation of any
documentation necessary to create any plans, specifications or the like shall
be the responsibility of the Developer.
(4) On or before the Contingency Date, and without limitation of the terms of Section 6.1(A)(3), Developer shall be satisfied that they may
develop the Property in accordance with a site plan, architectural plan,
building plan, grading and drainage plan and other plans and specifications satisfactory to Developer in their sole discretion. (5) On or before the Contingency Date, Developer shall have
satisfied themselves, in Developer’s sole discretion, that access to and from
roads and the Property is adequate for the Proposed Use, including without limitation, access to the Property from the adjacent road, median cuts and curb cuts.
(6) On or before the Contingency Date, Developer shall have
satisfied themselves, in Developer’s sole discretion, that water and gas mains, electric power lines, sanitary and storm sewers and other utilities are available to the Property and are adequate for the Proposed Use, such that only service lines must be extended to service the Property for water, gas,
electric, sanitary and storm sewer and other utilities.
(7) On or before the Closing Date Developer shall have received from Title an irrevocable commitment to issue a title insurance policy for the Property in a form and substance satisfactory to Developer in
Developer’s sole discretion, not disclosing any encumbrance not acceptable
to Developer in Developer’s sole discretion.
(8) On or before the Closing Date, HEDRA shall have obtained releases of the Property from any and all mortgages or other monetary liens
affecting any of the Property.
(9) On or before the Contingency Date, Developer shall review and approve the books and records in HEDRA’s possession, if any,
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including site plans, surveys, engineering or environmental reports associated with the Property.
(10) On or before the Contingency Date, Developer shall secure financing that is satisfactory to Developer in Developer’s sole discretion for the purpose of acquiring and constructing the Minimum Improvements for Developer’s intended use.
(11) On or before the Closing Date, Developer shall approve the forms of all closing documents. The foregoing contingencies are for Developer’s sole and exclusive benefit and
one (1) or more may be waived in writing by Developer in their sole discretion. HEDRA
shall reasonably cooperate with Developer’s efforts to satisfy such contingencies, at no out of pocket cost to HEDRA or assumption of any obligation or liability by Developer. Developer shall bear all cost and expense of satisfying Developer’s contingencies. If any of the foregoing contingencies have not been satisfied on or before the applicable date, then
this Agreement may be terminated, at Developer’s option, by written notice from
Developer to HEDRA. Such written notice must be given on or before the applicable date, or Developer’s right to terminate this Agreement pursuant to this Section shall be waived. Upon termination, neither party shall have any further rights or obligations against the other regarding this Agreement or the Property, except for such obligations as survive
termination of this Agreement.
B. If Developer elects not to exercise any of the contingencies set out herein, such election may not be construed as limiting any representations or obligations of HEDRA set out in this Agreement, including without limitation any
indemnity or representations with respect to environmental matters.
6.2. HEDRA’s Contingencies. HEDRA’s obligation to proceed to Closing shall be subject to the satisfaction, on or before to the Closing Date, of each of the following conditions:
A. Approval of Sale. HEDRA approving the sale of the Property for the Purchase Price at a public hearing. B. Developer Performance. Developer shall have performed and
satisfied all agreements, covenants and conditions required pursuant to this
Agreement to be performed and satisfied by or prior to the Closing Date. C. Developer’s Representations. All representations and warranties of Developer contained in this Agreement shall be accurate as of the Closing Date.
D. No Default. There shall be no uncured default by Developer of any of Developer’s obligations under this Agreement as of the Closing Date.
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E. Developer’s execution of a Deferred Assessment Waiver Agreement with the City.
If any contingency contained in this Section has not been satisfied on or before the date described therein, and if no date is specified, then the Closing Date, then this Agreement may be terminated by written notice from HEDRA to Developer and no party shall have any further rights or obligations with respect to this Agreement or the Property,
except for such obligations as survive termination of this Agreement. All contingencies in
this Section are for the benefit of HEDRA, and HEDRA may in its sole discretion waive any of the conditions precedent set out in this Section by written notice to Developer. 7. Closing. The Closing shall occur on the Closing Date, unless otherwise agreed to
by the parties. All documents and instruments required for the Closing shall be delivered to the
Title Company prior to or on the Closing Date. 7.1. HEDRA’s Closing Documents and Deliveries. HEDRA shall execute and/or deliver, as applicable, to Developer the following:
A. Deed. A general warranty deed conveying title to the Property to Developer, free and clear of all encumbrances, except the Permitted Encumbrances. The Deed shall include as a covenant running with the land the condition of Minn. Stat., Sections 469.090 to 469.1082 relating to the use of the Property. If the
covenant is violated the authority may declare a breach of the covenant and seek a
judicial decree from the district court declaring a forfeiture and a cancellation of the Deed. B. Bring Down Certificate. HEDRA shall provide Developer with a
certificate certifying that the representations and warranties of HEDRA contained
in this Agreement are true as of the Closing Date. C. FIRPTA Affidavit. An affidavit of HEDRA certifying that HEDRA is not a “foreign person”, “foreign partnership”, foreign trust”, “foreign estate” or
“disregarded entity” as those terms are defined in Section 1445 of the Internal
Revenue Code of 1986, as amended. D. HEDRA’s Affidavit. A standard owner’s affidavit (ALTA form) from HEDRA which may be reasonably required by Title Company to issue an
owner’s policy of title insurance with respect to the Property with the so-called
“standard exceptions” deleted. E. Settlement Statement. A settlement statement with respect to this transaction.
F. Copies of Resolutions. HEDRA shall provide Developer with copies of the resolutions for the various HEDRA and/or City public meetings
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showing HEDRA and/or various City commissions and/or councils have approved this transaction, the Approvals, if required by Title Company.
G. General Deliveries. All other documents reasonably determined by Title Company to be necessary to transfer the Property to Developer and to evidence that HEDRA (a) has satisfied all monetary indebtedness with respect thereto, (b) has obtained such termination statements or releases from such secured
creditors as may be necessary to ensure that the Property is subject to no monetary
liens, (c) has obtained all consents from third parties necessary to effect HEDRA’s performance of the terms of this Agreement, including, without limitation, the consents of all parties holding an interest in the Property, (d) has provided such other documents as are reasonably determined by Title Company to be necessary
to issue policies of title insurance to Developer with respect to the Property with
the so-called “standard exceptions” deleted, and (e) has duly authorized the transactions contemplated hereby. 7.2. Developer Closing Documents and Deliveries. Developer shall execute
and/or deliver, as applicable, to HEDRA the following:
A. Payment of Purchase Price. Developer shall pay cash in the amount of $1.00 on the Closing Date, subject to those adjustments, pro-rations and credits described in this Agreement, in cash, certified funds or by wire transfer pursuant to
instructions from HEDRA.
B. Deferred Assessment Waiver Agreement. Developer shall execute a Deferred Assessment Waiver Agreement with the City.
C. Bring Down Certificate. Developer shall provide HEDRA with a certificate, signed by an authorized officer of Developer, certifying that the representations and warranties of the Developer contained in this Agreement are true as of the Closing Date.
D. Settlement Statement. A settlement statement with respect to this transaction. E. FIRPTA Affidavit. An affidavit of Developer certifying that
Developer is not a “foreign person,” “foreign partnership,” “foreign trust,” “foreign
estate” or “disregarded entity” as those terms are defined in Section 1445 of the Internal Revenue Code of 1986, as amended. F. Developer’s Affidavit. A standard owner’s affidavit (ALTA form)
from Developer which may be reasonable required by Title to issue an owner’s
policy of title insurance with respect to the Property with the so-called “standard exceptions” deleted.
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G. Evidence of Authority. Developer shall provide HEDRA with copies of the resolutions showing Developer has met with necessary requirements
to acquire the Property in accordance with this Agreement together with such
proceedings, instruments and documents as may be reasonably required Title Company as a condition precedent to issuing the Title Policy in Developer’s name. H. General Deliveries. All other documents reasonably determined by
Title Company to be necessary to evidence that Developer has duly authorized the
transactions contemplated hereby and evidence the authority of Developer to enter into and perform this Agreement and the documents and instruments required to be executed and delivered by Developer pursuant to this Agreement, or may be required of Developer under applicable law, including any purchaser’s affidavits or
revenue or tax certificates or statements. 8. Prorations. HEDRA and Developer agree to the following prorations and allocation of costs regarding this Agreement:
8.1. General real estate taxes applicable to any of the Property due and payable
in the year of Closing shall be prorated between Developer and HEDRA on a daily basis as of 12:00 a.m. CT on the Closing Date based upon a calendar fiscal year, with HEDRA paying those allocable to the period prior to the Closing Date and Developer being responsible for those allocable to the Closing Date and subsequent thereto. HEDRA shall
pay in full all special assessments (and charges in the nature of or in lieu of such
assessments) levied, pending, postponed or deferred with respect to any of the Property as of the Closing Date. Developer shall be responsible for any special assessments that are levied or become pending against the Property after the Closing Date, including, without limitation, those related to Developer’s development of the Property.
8.2. The Developer may obtain and pay for an ALTA Survey (“ALTA Survey”). 8.3. HEDRA shall pay all title charges for the issuance of the Title Commitment. 8.4. Developer shall pay all premiums for any title insurance policy it desires
with respect to the Property. 8.5. Developer shall pay all costs of recording the Deed, this Agreement and the Deferred Assessment Waiver Agreement.
8.6. HEDRA shall pay for the cost of recording any other documents necessary to convey the Property as required by this Agreement. 8.7. HEDRA shall pay all state deed tax regarding the Deed.
8.8. Developer shall pay any reasonable closing fee or charge imposed by Title Company.
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8.9. There are no brokerage or real estate fees or commissions due and payable by HEDRA as part of this transaction.
8.10. HEDRA and Developer shall each pay their own attorneys’ fees incurred in connection with this transaction. 8.11. The obligations set forth in this Section 8 survive the Closing.
9. Title Examination. HEDRA shall, at HEDRA’s expense, provide to Developer a commitment for an owner’s title insurance policy (ALTA Form 2006) issued by Title Company for the Property, and copies of all encumbrances described in the commitment (the “Commitment”); and if desired, (ii) Developer shall obtain, at Developer’s expense, an ALTA-
certified survey bearing the legal description of the Property, and showing the area, dimensions
and location of the Property and the matters shown in the Commitment (the “Survey,” together with the Commitment, shall mean the “Title Evidence”). 9.1. Developer’s Objections. Within ten (10) days after Developer’s receipt of
the last of the Title Evidence, or ten (10) days after the date of execution of this Agreement,
whichever occurs later, Developer may make written objections (“Objections”) to the form or content of the Title Evidence. The Objections may include without limitation, any easements, restrictions or other matters which may interfere with the Proposed Use of the Property or matters which may be revealed by the Survey. Any matters reflected on the
Title Evidence which are not objected to by Developer within such time period or waived
by Developer in accordance with Section 9.2(B) shall be deemed to be Permitted Encumbrances. Notwithstanding the foregoing, the following items shall be deemed Permitted Encumbrances: (a) Covenants, conditions, restrictions (without effective forfeiture provisions) and declarations of record which do not interfere with the Proposed
Use, if any; (b) Reservation of minerals or mineral rights by the State of Minnesota, if any;
(c) Utility and drainage easements which do not interfere with the Proposed Use; and (d) Applicable laws, ordinances, and regulations. Developer shall have the renewed right to object to the Title Evidence as the same may be revised or endorsed from time to time.
9.2. HEDRA’s Cure. HEDRA shall be allowed twenty (20) days after the
receipt of Developer’s Objections to cure the same but shall have no obligation to do so. If such cure is not completed within said period, or if HEDRA elects not to cure such Objections, Developer shall have the option to do any of the following:
A. Terminate this Agreement with respect to all of the Property.
B. Waive one or more of its objections and proceed to Closing. If Developer so terminates this Agreement, neither HEDRA nor Developer shall be
liable to the other for any further obligations under this Agreement (except for such
obligations as survive termination of this Agreement). If Developer raises Objections, then the Closing Date shall be extended to a date agreed to by the parties in writing.
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10. Construction of Minimum Improvements.
10.1. Construction of Minimum Improvements. No later than 30 days after
Closing, Developer shall submit Construction Plans to the City. The Construction Plans shall provide for the construction of Minimum Improvements. All Minimum Improvements constructed on the Property shall be constructed, operated and maintained in accordance with the terms of the Construction Plans, this Agreement, the
Comprehensive Plan, and all local, Minnesota and federal laws and regulations (including,
but not limited to, Environmental Controls and Land Use Regulations). Developer will use commercially reasonable efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, and will use commercially reasonable efforts to meet, in a timely manner, the requirements of applicable Environmental Controls and Land
Use Regulations which must be met before Developer’s Minimum Improvements may be
lawfully constructed. 10.2. Grading/Drainage Plan and Easements. Developer shall construct drainage facilities adequate to serve the Minimum Improvements in accordance with the
Construction Plans. Developer agrees to grant to the City all easements reasonably
necessary for the preservation of the drainage system, for drainage basins, and for utility service as required by the City. The grading and drainage plan shall include any measures reasonably necessary to conform to the overall City storm sewer plan, including but not limited to such considerations as lot and building elevations, drainage swales, storm sewer,
catch basins, erosion control structures and ponding areas. The grading of the site shall be
completed in conformance with the Construction Plans. All storm sewer facilities, sanitary sewer and water lines shall be private unless located within the City’s right of way, in which case, that portion of the facilities shall be public.
10.3. Street Maintenance, Access, and Repair. Developer shall clear, on a daily
basis, any soil, earth or debris from the existing streets within or adjacent to this Minimum Improvements resulting from the grading or building on the land within the Minimum Improvements by Developer or its agents, and shall restore to the City’s specifications any gravel base contaminated by mixing construction or excavation debris or earth in it, and
repair to the City’s specifications any damage to bituminous surfacing resulting from the
use of construction equipment. 10.4. Erosion Control. Developer shall provide and follow a plan for erosion control in accord with the Best Management Practices (BMP) as delineated by the
Minnesota Pollution Control Agency. Such plan shall be detailed on the Construction Plans
and shall be subject to approval of the City. Developer shall install and maintain such erosion control structures as appear necessary under the Construction Plans or become necessary subsequent thereto. Developer shall be responsible for all damage caused as the result of grading and excavation within the Minimum Improvements including, but not
limited to, restoration of existing control structures and clean-up of public right-of-way.
As a portion of the erosion control plan, Developer shall re-seed or sod any disturbed areas in accordance with the Construction Plans.
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10.5. Zoning; Other Approvals. The parties agree that the development of the Minimum Improvements is in the public interest, will provide significant and important
benefits to the City and its residents, and is a desirable and appropriate use of the Property.
Developer may elect to seek certain Approvals as defined in Section 6.1(A)(3) in order for Developer to develop the Property for the Proposed Use. HEDRA, at no out-of-pocket cost to HEDRA, or the assumption of any obligations or liabilities by HEDRA, will reasonably cooperate with Developer’s efforts to obtain the Approvals at or prior to
Closing. HEDRA hereby grants Developer the right to file and prosecute applications and
petitions for the Approvals and any special use permits and variances desired by Developer; provided, however, any land use applications shall (a) be contingent on the occurrence of the Closing and shall not be binding upon HEDRA or the Property unless and until the Closing occurs, or (b) be approved in writing in advance by HEDRA. HEDRA, at no out-
of-pocket cost to HEDRA, or the assumption of any obligations or liabilities by HEDRA,
agrees to cooperate with Developer in the filing and prosecution of such applications and petitions, including the filing of the same in HEDRA’s name, if required. 10.6. Commencement and Completion of Construction. Subject to Unavoidable
Delays, Developer shall commence construction of the Minimum Improvements no later
than the Commencement Date. Subject to Unavoidable Delays, Developer shall have substantially completed the construction of the Minimum Improvements no later than the Completion Date. All work with respect to the Minimum Improvements to be constructed or provided by Developer on the Property shall be in substantial conformity with the
Construction Plans and Developer will not modify the size or exterior appearance of the
Minimum Improvements without the consent of HEDRA and the City, which consent shall not be unreasonably withheld. 10.7. Certificate of Completion.
A. After substantial completion of the Minimum Improvements in accordance with the Construction Plans and all terms of this Agreement, HEDRA will furnish Developer with a Certificate of Completion in the form of Exhibit B hereto. Such certification by HEDRA shall be a conclusive determination of
satisfaction and termination of the agreements and covenants in this Agreement and
in the Deed with respect to the obligations of Developer to construct the Minimum Improvements and the dates for the beginning and completion thereof. The Certificate of Completion shall only be issued after issuance of a certificate of occupancy by the City.
B. The Certificate of Completion provided for in this Section 10.7 shall be in such form as will enable it to be recorded in the proper county office in Dakota County, Minnesota for the recordation of deeds and other instruments pertaining to the Property. If HEDRA shall refuse or fail to provide such certification in
accordance with the provisions of this Section 10.7, HEDRA shall, within thirty
(30) days after written request by Developer, provide Developer with a written statement, indicating in adequate detail in what respects Developer have failed to complete the Minimum Improvements in accordance with the provisions of the
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Agreement, or is otherwise in default of a material term of this Agreement, and what measures or acts will be necessary, in the reasonable opinion of HEDRA, for
Developer to take or perform in order to obtain such certification.
C. Reconstruction of Minimum Improvements. If the Minimum Improvements are damaged or destroyed before completion thereof and issuance of a Certificate of Completion, to the extent payment is actually made to Developer
under a valid and collectible insurance policy in connection with such specific
claim, issue or matter, Developer agrees, for itself and its successors and assigns, to reconstruct the Minimum Improvements within one (1) year of the date of the damage or destruction. The Minimum Improvements shall be reconstructed in accordance with the approved Construction Plans, or such modifications thereto as
may be requested by Developer and approved by HEDRA in accordance with
Section 10 of this Agreement, which approval will not be unreasonably withheld. Developer’s obligation to reconstruct the Minimum Improvements pursuant to this Section 10.7(C) shall end when the Certificate of Completion is issued.
11. Insurance and Condemnation.
11.1. Required Insurance. Developer agrees to provide and maintain or cause its general contractor to provide and maintain at all times during the process of constructing the Minimum Improvements and, from time to time at the request of HEDRA, furnish
HEDRA with proof of payment of premiums on:
A. Builder’s risk insurance, written on the so-called “Builder’s Risk -- Completed Value Basis,” in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with
coverage available in nonreporting form on the so-called “all risk” form of policy;
and B. Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and
contractual liability insurance) together with an owner’s contractor’s policy with
limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above required limits, an umbrella excess liability policy may be used); and
C. Workers’ compensation insurance, with statutory coverage. The
policies of insurance required pursuant to clauses (A) and (B) above shall be in form and content reasonably satisfactory to HEDRA and shall be placed with financially sound and reputable insurers licensed to transact business in Minnesota. The policy of insurance delivered pursuant to clause (A) above shall contain an
agreement of the insurer to give not less than thirty (30) days’ advance written
notice to HEDRA in the event of cancellation of such policy or change affecting the coverage thereunder.
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11.2. Evidence of Insurance. All insurance required in this Section 11.2 shall be taken out and maintained in responsible insurance companies selected by Developer which
are authorized under the laws of Minnesota to assume the risks covered thereby. Until the
Certificate of Completion is issued, Developer agrees to deposit annually with HEDRA copies of policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Section 11.2, each policy shall contain a provision that the insurer shall
not cancel nor materially modify it without giving written notice to Developer and HEDRA
at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, Developer shall furnish HEDRA evidence satisfactory to HEDRA that the policy has been renewed or replaced by another policy conforming to the provisions of this Section 11.2, or that there is no necessity
therefor under the terms of this Agreement. In lieu of separate policies, Developer may
maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event Developer shall deposit with HEDRA a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements.
11.3. Condemnation. In the event that title to and possession of the Minimum Improvements or any material part thereof shall be taken in condemnation or by the exercise of eminent domain authority by any governmental body or other person (except HEDRA) after Closing but prior to the Commencement of Construction, as defined in
Section 10.6, Developer shall, with reasonable promptness after such taking, notify
HEDRA as to the nature and extent of such taking. Upon receipt of any condemnation award and subject to the rights of the first mortgagee, Developer shall use the entire condemnation award to reconstruct the Minimum Improvements (or, in the event only a part of the Minimum Improvements have been taken, then to reconstruct such part) within
the Property. 12. Prohibition Against Sale; Encumbrances. 12.1. Prohibition Against Sale of Minimum Improvements. Developer represent
and agree that their use of the Property and other undertakings pursuant to the Agreement,
are, and will be, for the purpose of development of the Property and not for speculation in land holding. Developer further recognizes that in view of the importance of the construction of the Minimum Improvements on the Property to the general welfare of the City and the substantial assistance that has been made available by HEDRA for the purpose
of making such development possible, the fact that any act or transaction involving or
resulting in a significant change in the identity of Developer are of particular concern to HEDRA. Developer further recognize that it is because of such qualifications and identity that HEDRA is entering into the Agreement with Developer, and, in so doing, is further willing to accept and rely on the obligations of Developer for the faithful performance of
all undertakings and covenants hereby by it to be performed. For the foregoing reasons,
Developer represent and agree that, prior to the issuance of the Certificate of Completion, there shall be no sale of the Property or the Minimum Improvements by Developer nor shall Developer suffer any such sale to be made, without the prior written approval of
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HEDRA.
A. As security for the obligations of Developer under this Agreement,
Developer represents and agrees that prior to the issuance of the Certificate of Completion, Developer will maintain its existence as a Minnesota limited liability company and shall not consolidate with or merge into another entity and shall not dissolve or otherwise dispose of all or substantially all of its assets except as
permitted by this Agreement. Nothing herein shall prevent Developer from selling
or issuing additional membership interests in Developer. Developer and any entity succeeding to all or part of Developer’s rights in the Minimum Improvements or any part under this Section (“Successor Developer”) may consolidate with or merge into another entity or sell or otherwise transfer to a company or limited liability
company, or other legal entity, or an individual, all or any part of its interest in this
Agreement and the Minimum Improvements and thereafter be discharged from liability hereunder to the extent of the interest so transferred, if Developer or such Successor Developer, as applicable, is not in default of any of its material obligations under this Agreement, if the transferee company, limited liability
company, entity or individual enters into a written agreement assuming all of the
obligations of Developer under this Agreement not retained by Developer, if any, with respect and to the extent of the interest so transferred, in form and substance reasonably acceptable to HEDRA, and the transferee company, limited liability company, entity or individual is financially capable of and has experience in
performing the obligations of Developer under this Agreement and is approved by
HEDRA. In the event of a consolidation, merger or sale in accordance with this subsection, Developer or other transferor shall not be liable for any actions of the Successor Developer or purchaser or have any liability under this Agreement with respect to matters arising subsequent to such consolidation, merger or sale which
relate to the interest so transferred.
B. Developer or any Successor Developer may not sell, transfer, lease or convey the Property and its rights and obligations under this Agreement with respect to such parcel to another entity, whether or not such Successor Developer
is under common management and control with Developer, or is related to
Developer, except in accordance with the terms of this Agreement. Except as provided in Section 12.1 no such sale, transfer, conveyance or lease shall be effective or recognized for any purpose hereunder, unless:
(1) The Successor Developer will assume all of Developer’s
obligation under any agreement relative to a credit provider and the Successor Developer is approved by the credit provider and enters into a written assumption agreement reasonably acceptable to the credit provider; and
(2) The Successor Developer will assume all of Developer’s financial obligations to HEDRA and the Successor Developer is approved by HEDRA and enters into a written assumption agreement in form and
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substance reasonably acceptable to HEDRA.
12.2. Limitation Upon Encumbrance of Property. Prior to the issuance of the
Certificate of Completion, except for financing approved by HEDRA pursuant to Section 6.1(A)(10), Developer agrees not to engage in any financing creating any mortgage or other encumbrance or lien upon the Property or the Minimum Improvements, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attached
to the Property or the Minimum Improvements, other than the liens or encumbrances
directly and solely related to construction of the Minimum Improvements and approved by HEDRA, which approval shall not be withheld or delayed unreasonably if HEDRA determines that such lien or encumbrance will not threaten its security in the Property or the Minimum Improvements.
13. Events of Default. 13.1. Events of Default Defined. Each and every one of the following shall be an Event of Default under this Agreement:
A. Failure by HEDRA or Developer to proceed to Closing on the Property after compliance with or the occurrence of all conditions precedent to Closing;
B. Failure by Developer to commence and complete construction of the
Minimum Improvements pursuant to the terms, conditions and limitations of Section 10 of this Agreement, including the timing thereof, unless such failure is caused by an Unavoidable Delay;
C. Failure by Developer to pay real estate taxes or special assessments
on the Property and Minimum Improvements as they become due; D. Use by Developer or others of the Minimum Improvements for purposes other than those contemplated and permitted by this Agreement;
E. Transfer or Sale of the Property or the Minimum Improvements or any part thereof by Developer in violation of Section 12.1 of this Agreement and without the prior written permission by HEDRA;
F. If Developer shall file a petition in bankruptcy, or shall make an
assignment for the benefit of its creditors or shall consent to the appointment of a receiver; or G. Failure by any party to observe or perform any material covenant,
condition, obligation or agreement on its part to be observed or performed under
this Agreement. 13.2. Remedies on Default. Whenever any Event of Default referred to in Section
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13.1 of this Agreement occurs, the non-defaulting party may take any one or more of the following actions after providing thirty (30) days’ written notice to the defaulting party of
the Event of Default, but only if the Event of Default has not been cured within said thirty
(30) days or, if the Event of Default is by its nature incurable within thirty (30) days, the defaulting party does not provide assurances to the non-defaulting party reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible:
A. Suspend its performance under this Agreement, including refusing to close on the Property, until it receives assurances from the defaulting party, deemed adequate by the non-defaulting party, that the defaulting party will cure its default and continue its performance under this Agreement;
B. Terminate or rescind this Agreement; C. If the default occurs prior to completion of the Minimum Improvements and remains uncured following the cure period, HEDRA may
withhold the Certificate of Completion; or
D. Take whatever action, including legal or administrative action, which may appear necessary or desirable to the non-defaulting party to collect any payments due under this Agreement, or to enforce performance and observance of
any obligation, agreement, or covenant of the defaulting party under this
Agreement.
13.3. Revesting Title in HEDRA on Failure to Commence Construction Subsequent to Conveyance to Developer. Pursuant to Minn. Stat. §469.105 subd. 5, if
Developer fails to commence construction pursuant to this Agreement within one (1) year
from the Closing Date, HEDRA shall have the right to re-enter and take possession of the Property and to terminate the estate conveyed in the Deed to Developer, it being the intent of this provision that the conveyance of the Property to Developer shall be made upon and a deed containing a condition subsequent to the effect that in the event that Developer fails
to commence construction pursuant to this Agreement and fails to request and receive
additional time for commencement, HEDRA at is option, may declare a termination in favor of HEDRA of the title and of all the rights and interests in and to the Property conveyed to Developer. In such circumstances, all title, rights and interests of Developer and any assigns or successors in interest to and in the Property, shall revert to HEDRA. If
Developer does commence construction pursuant to this Agreement within one year from
the Closing Date, a Release of Right to Re-enter and Revest shall be filed with Office of the County Recorder in and for the County of Dakota and State of Minnesota memorializing the commencement of Minimum Improvements and releasing Developer from HEDRA’s right to re-enter and take possession of the parcel and to terminate the
estate conveyed in the Deed to Developer pursuant to Minn. Stat. §469.105, subd. 5,
although all additional covenants and provisions of this Agreement and the Deed shall remain in effect.
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13.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in HEDRA of title to and/or possession of the Property or any part thereof as
provided above, HEDRA shall, pursuant to its responsibilities under law, use its best efforts
to sell the Property or part thereof as soon and in such manner as HEDRA shall find feasible to a qualified and responsible party, who will assume the obligation of making or completing Minimum Improvements or such other improvements in their stead as shall be satisfactory to HEDRA in accordance with the uses specified for such parcel or part thereof.
During any time while HEDRA has title to and/or possession of a parcel obtained by
reverter, HEDRA will not disturb the rights of any tenants under any leases encumbering such parcel. Upon resale of the Property or any part thereof, the proceeds thereof shall be applied: A. First, to reimburse HEDRA for all reasonable costs and expenses
incurred by HEDRA, including but not limited to brokerage fees, all taxes, assessments and water and sewer charges accrued with respect to the Property or part thereof prior to revesting of title; any payments made or necessary to be made to discharge any encumbrances or liens existing on the Property or part thereof at
the time of revesting of title thereto in HEDRA or to discharge or prevent from
attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Developer, or Successor Developer; any expenditures made or obligations incurred by HEDRA with respect to the making or completion of the Minimum Improvements; and any amounts otherwise owing HEDRA by
Developer or its Successor Developer; and
B. Second, to reimburse Developer or Successor Developer, up to the amount equal to (i) the Purchase Price paid by Developer; plus (ii) the amount actually invested by it in making any of the subject improvements on the Property
or part thereof, less (iii) any gains or income withdrawn or made by it from the
Agreement or the Property. C. Any balance remaining after such reimbursements shall be retained by HEDRA as its property.
Nothing in this Section 13 shall in any way affect or diminish Developer’s right to terminate this Agreement in accordance with Section 6.1. 13.5. No Remedy Exclusive. No right or remedy herein conferred upon or
reserved to the parties is intended to be exclusive of any other available right or remedy
herein or provided by law, but each and every such remedy shall be cumulative and shall be in addition to every other right or 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 HEDRA or 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 Section 13.2 of this Agreement.
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13.6. No Additional Waiver Implied by One Waiver. In the event any covenant
or 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. 14. Warranties and Representations.
14.1. By HEDRA. HEDRA warrants and represents the following to Developer, and acknowledges that Developer has relied on such representations and warranties in agreeing to enter into this Agreement:
A. This Agreement has been duly executed and delivered and constitutes the legal, valid and binding obligation of HEDRA enforceable in accordance with its terms. HEDRA has been duly formed under the laws of the State of Minnesota and is in good standing under the laws of the jurisdiction in
which the Property is located, is duly qualified to transact business in the
jurisdiction in which the Property is located, and has the requisite power and authority to enter into and perform this Agreement and the documents and instruments required to be executed and delivered by HEDRA pursuant hereto. This Agreement and the documents and instruments required to be executed and
delivered by HEDRA pursuant hereto have each been duly authorized by all
necessary action on the part of HEDRA and such execution, delivery and performance does and will not conflict with or result in a violation of HEDRA’s organizational agreement or any judgment or order.
B. The execution, delivery and performance by HEDRA of this
Agreement will not (a) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to HEDRA, or (b) result in a breach of or constitute a default under any indenture,
loan or credit agreement or any other agreement, lease or instrument to which
HEDRA is a party or by which it or any of its properties may be bound. C. To HEDRA’s knowledge, except as contemplated herein, no order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or authority,
or any other entity, is required on the part of HEDRA to authorize, or is required in connection with, the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, this Agreement, except for Developer obtaining all the Approvals.
D. To HEDRA’s knowledge, there are no actions, suits or proceedings pending or threatened against or affecting HEDRA or any of its properties, before any court or arbitrator, or any governmental department, board, agency or other
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instrumentality which in any of the foregoing (a) challenges the legality, validity or enforceability of this Agreement, or (b) if determined adversely to HEDRA, would
have a material adverse effect on the ability of HEDRA to perform its obligations
under this Agreement. E. HEDRA has not received written notice, and has no knowledge, of (a) any pending or contemplated annexation or condemnation proceedings, or
purchase in lieu of the same, affecting or which may affect all or any part of the
Property, (b) any proposed or pending proceeding to change or redefine the zoning classification of all or any part of the Property, (c) any proposed changes in any road patterns or grades which would adversely and materially affect access to the roads providing a means of ingress or egress to or from all or any part of the
Property, or (d) any uncured violation of any legal requirement, restriction,
condition, covenant or agreement affecting all or any part of the Property or the use, operation, maintenance or management of all or any part of the Property. F. To HEDRA’s knowledge, there are no wells or sewage treatment
systems located on any portion of the Property. To HEDRA’s knowledge, there
has been no methamphetamine production on or about any portion of the Property. To HEDRA’s knowledge, the sewage generated by the Property, if any, goes to a facility permitted by the Minnesota Pollution Control Agency and there is no “individual sewage treatment system” (as defined in Minn. Stat. § 115.55,
Subd. 1(g)) located on the Property.
G. HEDRA is not a “foreign person,” “foreign corporation,” “foreign trust,” “foreign estate” or “disregarded entity” as those terms are defined in Section 1445 of the Internal Revenue Code.
H. To HEDRA’s knowledge, except as may be disclosed as part of the Due Diligence Materials, (i) no condition exists on the Property that may support a claim or cause of action under any Environmental Law (as defined below) and there are no Hazardous Substances (as defined below) on the Property, (ii) there has been
no release, spill, leak or other contamination or otherwise onto the Property, and
(iii) there are no restrictions, clean ups or remediation plans regarding the Property. To HEDRA’s knowledge, except as may be disclosed as part of the Due Diligence Materials, there is no buried waste or debris on any portion of the Property. “Environmental Law” shall mean (a) the Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. § 9601-9657, as amended, or
any similar state law or local ordinance, (b) the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., (c) the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., (d) the Clean Air Act, 42 U.S.C. § 7401, et seq., (e) the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., (f) the Safe
Drinking Water Act, 42 U.S.C. § 300(f) et seq., (g) any law or regulation governing
aboveground or underground storage tanks, (h) any other federal, state, county, municipal, local or other statute, law, ordinance or regulation, including, without limitation, the Minnesota Environmental Response and Liability Act, Minn. Stat. §
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115B.01, et seq., (i) all rules or regulations promulgated under any of the foregoing, and (j) any amendments of the foregoing. “Hazardous Substances” shall mean
polychlorinated biphenyls, petroleum, including crude oil or any fraction thereof,
petroleum products, heating oil, natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, and shall include, without limitation, substances defined as “hazardous substances,” “toxic substances,” “hazardous waste,” “pollutants or contaminants” or similar substances under any Environmental Law.
I. To HEDRA’s knowledge, there are no leases, tenancies unrecorded agreements or other contracts of any nature or type relating to, affecting or serving the Property that will not be terminated as of the Closing Date.
J. There will be no indebtedness or sums due attributable to the
Property which will remain unpaid after the Closing Date.
K. Whenever any Event of Default occurs and Developer employs attorneys or incurs other expenses for the collection of payments due or to become
due or for the enforcement or performance or observance of any obligation or
agreement on the part of HEDRA under this Agreement, HEDRA agree that HEDRA shall, within ten (10) days of written demand by Developer, pay to Developer the reasonable fees for attorneys and consultants and other expenses so incurred by Developer, including those costs incurred in the negotiation,
preparation and implementation of this Agreement. The requirements of this
provision shall survive any termination of this Agreement. As used in this Agreement, the term “to HEDRA’s knowledge” shall mean and refer to only the current actual knowledge of the designated representative of HEDRA and shall not be
construed to refer to the knowledge of any other partner, officer, manager, member, director, agent,
authorized person, employee or representative of HEDRA, or any affiliate of HEDRA, or to impose upon such designated representative any duty to investigate the matter to which such actual knowledge or the absence thereof pertains, or to impose upon such designated representative any individual personal liability. As used herein, the term “designated representative” shall refer to
HEDRA’s Director.
The representations, warranties and other provisions of this Section 14.1 shall survive Closing; provided, however, HEDRA shall have no liability with respect to any breach of a particular representation or warranty if Developer shall fail to notify HEDRA in writing of such
breach within two (2) years after the Closing Date, and provided further that HEDRA shall have
no liability with respect to a breach of the representations and warranties set forth in this Agreement if Developer has actual knowledge of HEDRA’s breach thereof prior to Closing and Developer consummates the acquisition of the Property as provided herein.
Developer acknowledges and agrees that, except as expressly specified in this Agreement
and/or in any documents executed and delivered by HEDRA at Closing, HEDRA has not made, and HEDRA hereby specifically disclaims, any representation, warranty or covenant of any kind, oral or written, expressed or implied, or rising by operation of law, with respect to the Property,
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including but not limited to, any warranties or representations as to the habitability, merchantability, fitness for a particular purpose, title, zoning, tax consequences, physical or
environmental condition, utilities, valuation, governmental approvals, the compliance of the
Property with governmental laws, the truth, accuracy or completeness of any information provided by or on behalf of HEDRA to Developer, or any other matter or item regarding the Property. Developer agrees that except as expressly specified in this Agreement and/or in any documents executed and delivered by HEDRA at Closing, Developer shall accept the Property and
acknowledges that the sale of the Property as provided for herein is made by HEDRA on an “AS
IS,” “WHERE IS,” and “WITH ALL FAULTS” basis. Developer is an experienced purchaser of property such as the Property and Developer have made or will make its own independent investigation of the Property. The limitations set forth in this paragraph shall survive the Closing and shall not merge in the Deed.
14.2. By Developer. Developer warrants and represents the following to HEDRA, and acknowledges that HEDRA has relied on such representations and warranties in agreeing to enter into this Agreement:
A. Developer is a limited liability company, duly organized and in good
standing under the laws of the state of Minnesota and is not in violation of any provisions of its company documents or its operating agreement. Developer has all requisite authority to enter into this Agreement and to perform all of its obligations under this Agreement.
B. The execution, delivery and performance by Developer of this Agreement will not (a) violate any provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of any court, governmental agency or arbitrator presently in effect having applicability to
Developer, (b) violate or contravene any provision of the articles of organization or
bylaws of Developer, or (c) result in a breach of or constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which Developer is a party or by which it or any of its properties may be bound.
C. Developer have received no notice or communication from any
local, state or federal official that the activities of the Developer or HEDRA on the Property may be or will be in violation of any environmental law or regulation. Developer is aware of no facts, the existence of which would cause it to be in violation of any local, state, or federal environmental law, regulation or review
procedure or which give any person a valid claim under any of the foregoing.
D. Developer will complete the Minimum Improvements in accordance with all local, state, federal laws or regulations.
E. Developer will obtain, in a timely manner, all required permits,
licenses, insurance, and approvals, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which
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must be obtained or met before the Minimum Improvements may be lawfully constructed or acquired.
F. Developer shall have satisfied the terms and conditions contained in this Agreement prior to the Closing Date or posted surety bonds for future fulfillment of all requirements contained in this Agreement.
G. Developer shall cooperate with HEDRA with respect to any
litigation, other than litigation in which HEDRA and Developer are adverse parties, commenced with respect to the Minimum Improvements. H. Whenever any Event of Default occurs and HEDRA employs
attorneys or incurs other expenses for the collection of payments due or to become
due or for the enforcement or performance or observance of any obligation or agreement on the part of Developer under this Agreement, Developer agree that Developer shall, within ten (10) days of written demand by HEDRA, pay to HEDRA the reasonable fees for attorneys and consultants and other expenses so
incurred by HEDRA, including those costs incurred in the negotiation, preparation
and implementation of this Agreement. The requirements of this provision shall survive any termination of this Agreement. The representations, warranties and other provisions of this Section 14.2 shall survive
Closing.
15. Other Obligations of Developer. 15.1. Building Permit Fees. Developer acknowledges that building permit fees
will be payable by Developer or Successor Developer for Minimum Improvements.
15.2. Administrative Costs. HEDRA has incurred and will continue to incur administrative costs in reviewing, analyzing, negotiating and studying the Minimum Improvements and this Agreement. In consideration of the time, effort and expenses to be
incurred in pursuing the undertakings set forth herein, on or before execution of this
Agreement, Developer agrees to pay a $1,000 deposit for the costs of certain consulting fees, including planning, financial, attorneys, engineering, testing and any special meetings. If the obligations of Developer under this Agreement result in a complete depletion of the $1,000 cash deposit, then the balance owed shall be due and payable at
Closing. If, after completion of the tasks contemplated by this Agreement and if, after
appropriate payment to HEDRA, there remains on deposit any sum, then such sum shall be paid over to Developer by HEDRA within 30 days after such completion and payment. If Developer terminates this Agreement because of HEDRA’s default, Developer shall be entitled to payment of any remaining balance. If HEDRA terminates this Agreement
because of Developer’s default, the deposit shall be retained by HEDRA.
15.3. Miscellaneous Requirements. Any additional requirements as specified by HEDRA are incorporated herein.
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15.4. Business Subsidy and Deferred Assessment Waiver. While the Deferred
Assessment Amount, as defined in a Deferred Assessment Waiver Agreement, does not
constitute a “business subsidy” as defined by Minn. Stat. §116J.993, subd. 3(1), of the Business Subsidy Act, Minn. Stat. §§116J.993 to 116J.995 because it is in an amount less than $150,000, any reduction in the Deferred Assessment Amount that is greater than $25,000 is subject to reporting requirements contained in Minn. Stat. §116J.994(8)(b). The
public purposes of the reduction in the Deferred Assessment Amount are to promote the
economic and commercial development of the City, promote the health, safety and welfare of the residents of the City, improve the general economy and vitality of the City, attract, retain, rehabilitate and preserve commercial and industrial facilities and increase of the tax base of the City and the State. Although wage and job goals are not among the public
purposes included, the Minimum Improvements are anticipated to generate an additional
10 full time jobs. A. The Business Subsidy comprises of a forgivable loan in an amount of $134,295.70.
B. Developer will construct the Minimum Improvements pursuant to all approvals or licenses required by the City. C. Upon completion of the Minimum Improvements, Developer, its
tenants, permitted successors or assigns, will continuously occupy the Property for
at least five (5) years, except in the event of unforeseeable casualty, in which event, Developer shall rebuild and reopen as soon as commercially reasonable. D. Developer must submit to HEDRA a written report regarding
Business Subsidy goals and results by no later than March 1st of each year,
commencing March 1st of the year following completion of the improvements and continuing until the later of the date that the goals are met; or thirty (30) days after expiration of the five-year period; or if the goals are not met, then the date the Business Subsidy is repaid. The report must comply with Section 116J.994 subd. 7
of the Business Subsidy Act. HEDRA will provide information to Developer
regarding the required forms. If Developer fails to timely file any report required under this section, HEDRA will send Developer a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, Developer fails to provide a report, Developer must pay HEDRA a penalty of $100
for each subsequent day until the report is filed. The maximum aggregate penalty
payable under this section is $1,000. E. Deferred Assessment Waiver. Developer shall execute a Deferred Assessment Waiver Agreement on or before Closing.
15.5. Developer Fees. On or before issuance by the City of a building permit to Developer, Developer shall pay all development fees, administrative costs and provide a landscaping letter of credit in the amount of 150% of the value of the landscaping
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improvements. Upon completion of the landscaping improvements and approval by the City, the letter of credit shall be reduced to 50% of the initial value and retained for a one-
year warranty period. Upon completion of the one-year warranty period the City will
reinspect the landscaping improvements, at which time the letter of credit shall be released upon final approval by the City. 16. Additional Provisions.
16.1. Commissions. Each party represents that all negotiations on its behalf relative to this Agreement and the transactions contemplated by this Agreement have been carried on directly between the parties, without the intervention of any party as broker, finder or otherwise, and that there are no claims for brokerage commissions or finders’ fees
in connection with the execution of this Agreement.
16.2. Notice. Except as otherwise provided in this Agreement, any notice to be given by one party hereto shall be personally delivered (including messenger delivery) or be sent by registered or certified mail, or by a nationally recognized overnight courier
which issues a receipt, in each case postage prepaid, to the other party at the addresses in
this Section (or to such other address as may be designated by notice given pursuant to this Section), and shall be deemed given upon personal delivery, three (3) days after the date postmarked or one (1) business day after delivery to such overnight courier.
If to HEDRA: Hastings Economic Development and
Redevelopment Authority Attn: John Hinzman 101 4th Street East Hastings, MN 55033
with a copy to: Korine L. Land LeVander, Gillen & Miller, P.A. 633 South Concord Street, Suite 400 South St. Paul, MN 55075
If to Developer: DREAM1 LLC Attn: Joel Wiens 1325 Eagandale Court, Suite 190 Eagan, MN 55121
16.3. HEDRA Representatives Not Individually Liable. No member, official, or employee of HEDRA shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by HEDRA or for any amount which may become due to Developer or successor or on any obligations under the terms of the Agreement.
16.4. Equal Employment Opportunity. Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement, it will comply with all applicable equal employment and
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nondiscrimination laws and regulations.
16.5. Restrictions on Use. Developer, for itself and its successors and assigns,
agrees to devote the Property and Minimum Improvements only to such land use or uses as may be permissible under the City’s land use regulations. 16.6. Entire Agreement; Modification. This written Agreement constitutes the
complete agreement between the parties with respect to this transaction and supersedes any
prior oral or written agreements between the parties regarding this transaction. There are no verbal agreements that change this Agreement and no waiver of any of its terms will be effective unless in writing executed by the parties.
16.7. Binding Effect; Survival. The provisions of this Agreement and the
representations, warranties and indemnities contained herein shall survive the execution and delivery of the Deed and the conveyance thereunder, shall not be merged therein, and shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.
16.8. Disclaimer of Relationships. Developer acknowledge that nothing contained in this Agreement nor any act by HEDRA or Developer shall be deemed or construed by 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
HEDRA and Developer.
16.9. Developer’s Assignment. Developer may assign this Agreement with the prior written consent of HEDRA. No assignment shall relieve Developer from its obligations under this Agreement.
16.10. Governing Law. The provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 16.11. Rules of Interpretation. The words “herein” and “hereof” and words of
similar import, without reference to any particular section or subdivision, refer to this
Agreement as a whole rather than any particular section or subdivision hereof. References herein to any particular section or subdivision hereof are to the section or subdivision of this Agreement as originally executed.
16.12. Counterparts; Facsimiles. This Agreement may be executed in any number
of counterparts, and all of the signatures to this Agreement taken together shall constitute one and the same agreement, and any of the parties hereto may execute such agreement by signing any such counterpart. Facsimile or “PDF” signatures on this Agreement shall be treated as originals until the actual original signatures are obtained.
16.13. Represented by Counsel. Each party confirms that it has had the opportunity to be represented and advised by counsel in this transaction.
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16.14. Titles of Sections. Any titles of the sections, or any subsections, of the Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
16.15. Recording. The parties agree that this document shall be recorded against the Property at the Dakota County Recorder’s Office.
16.16. Time of the Essence. Time is of the essence of this Agreement.
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IN AGREEMENT, the parties hereto have hereunto set their hands as of the Effective
Date.
HEDRA: HASTINGS ECONOMIC DEVELOPMENT AND
REDEVELOPMENT AUTHORITY By ________________________________
Dennis Peine
Its President By ________________________________
Eric Maass
Its Secretary STATE OF MINNESOTA ) ) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this ____ day of ____________, 2021 by Dennis Peine and Eric Maass, the President and Secretary respectively, of the Hastings Economic Development and Redevelopment Authority, a public body corporate and politic
organized and existing under the Constitution and laws of Minnesota, on behalf of HEDRA.
Notary Public
30
DEVELOPER: DREAM1 LLC
By Joel Wiens
Its:
STATE OF MINNESOTA ) ) ss. COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of __________________, 2021 by Joel Wiens, the of DREAM1 LLC, a Minnesota limited liability company, on behalf of said limited liability company.
Notary Public
This instrument was drafted by and after recording return to: Korine L. Land, #262432 LeVander, Gillen & Miller, P.A.
633 South Concord Street, Suite 400
South St. Paul, MN 55075 651-451-1831
A-1
EXHIBIT A LEGAL DESCRIPTION OF PROPERTY
Real property in Dakota County, Minnesota legally described as follows: Lot 1, Block 2, HASTINGS INDUSTRIAL PARK NO. 7, according to the recorded plat thereof.
Abstract Property PID: 19-32006-02-010
B-1
EXHIBIT B FORM OF CERTIFICATE OF COMPLETION
WHEREAS, the Hastings Economic Development and Redevelopment Authority (the “Grantor”), by a deed dated _____________, _________, and recorded in the office of the County Recorder in Dakota County, Minnesota, as Document No. ________________, has conveyed to DREAM1 LLC, a Minnesota limited liability company (the “Grantee”), the following described
land in County of Dakota and State of Minnesota, to-wit:
Lot 1, Block 2, HASTINGS INDUSTRIAL PARK NO. 7, according to the recorded plat thereof.
Abstract Property
PID: 19-32006-02-010 (the “Deed”); and
WHEREAS, said Deed was executed pursuant to that certain Development Agreement by
and between the Grantor and Grantee, dated _________________, ___________and recorded in the office of the County Recorder in Dakota County, Minnesota, as Document No. ________________, which Development Agreement contained certain covenants and restrictions regarding completion of the Minimum Improvements; and
WHEREAS, said Grantee has performed said covenants and conditions in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification. NOW, THEREFORE, this is to certify that all construction of the Minimum Improvements
specified to be done and made by the Grantee has been completed and the covenants and conditions
in the Development Agreement have been performed by the Grantee therein, and the County Recorder in Dakota County, Minnesota, are hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions relating to completion of the Minimum Improvements and the removal
of the conditions, restrictions and limitations found in Sections 1 and 2 of the Deed.
B-2
Dated: ______________, ____. HEDRA: HASTINGS ECONOMIC
DEVELOPMENT AND REDEVELOPMENT AUTHORITY By ________________________________
Dennis Peine
Its President By ________________________________
Eric Maass
Its Secretary STATE OF MINNESOTA ) ) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this ____ day of ____________, 2021 by Dennis Peine and Eric Maass, the President and Secretary respectively, of the Hastings Economic Development and Redevelopment Authority, a public body corporate and politic
organized and existing under the Constitution and laws of Minnesota, on behalf of HEDRA.
Notary Public
This instrument was drafted by and after recording return to: Korine L. Land, #262432
LeVander, Gillen & Miller, P.A.
633 South Concord Street, Suite 400 South St. Paul, MN 55075 651-451-1831
C-1
EXHIBIT C FORM OF DEED
WARRANTY DEED
DEED TAX DUE: $1.65 DATE: _______________, 202__
FOR VALUABLE CONSIDERATION, the Hastings Economic Development and
Redevelopment Authority, a public body corporate and politic organized and existing under the
constitution and laws of Minnesota (the “Grantor”), hereby conveys and warrants to DREAM1 LLC, a Minnesota limited liability company (“Grantee”), the real property in Dakota County, Minnesota, described as follows:
Lot 1, Block 2, HASTINGS INDUSTRIAL PARK NO. 7, according to the recorded plat
thereof.
Abstract Property PID: 19-32006-02-010
Check here if all or part of the described real property is Registered (Torrens)
together with all hereditaments and appurtenances belonging thereto, subject to the following exceptions: None.
TOTAL CONSIDERATION IS LESS THAN $3,000.00.
This Deed is subject to the following:
1. Right of Reverter. Minnesota Statute §469.105, Subdivision 5, which Grantor agrees to promptly release upon request of Grantee after commencement of construction pursuant to a Release of Right of Reverter in substantially the form attached as Exhibit B on the Development Agreement (defined below).
2. Development Agreement. The terms of that certain Development Agreement
entered into between Grantor and Grantee dated ________________, 2021 (the “Development Agreement”), recorded in the Office of the County Recorder for Dakota County, Minnesota, as Document No. ______________, which
C-2
Development Agreement contains certain covenants and restrictions regarding completion of the Minimum Improvements, and which shall be terminated upon
the recording by the Grantor of a Certificate of Completion in substantially the form
attached as Exhibit B on the Development Agreement.
The Grantor certifies that the Grantor does not know of any wells on the described real property.
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C-3
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its President and Secretary and has caused its corporate seal to be hereunto affixed this
_______ day of ___________________, 2021.
HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY
By: ____________________________________ Dennis Peine Its: President
By: ____________________________________ Eric Maass
Its: Secretary
STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this ____ day of ____________, 2021 by Dennis Peine and Eric Maass, the President and Secretary respectively, of the Hastings Economic Development and Redevelopment Authority, a public body corporate and politic organized and existing under the Constitution and laws of Minnesota, on behalf of HEDRA.
Notary Public
This instrument was drafted by: SEND TAX STATEMENT TO:
Korine L. Land, #262432
LeVander, Gillen & Miller, P.A. 633 South Concord Street, Suite 400 South St. Paul, MN 55075 651-451-1831 TITLE NOT EXAMINED
DREAM1 LLC
1325 Eagandale Court, Suite 190 Eagan, MN 55121