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HomeMy WebLinkAbout#07- Purchase Agreement with North Point DevelopmentSTAFF REPORT DATE: June 15, 2021 CONSENT AGENDA ITEM: Purchase Agreement with NorthPoint Development TO: Mayor and City Council SUBMITTED BY: Kristina Handt, City Administrator BACKGROUND: At the June 1, 2021 meeting, council approved a Letter of Intent with NorthPoint Development for the sale and development of approximately 77 acres of city owned property along Ideal Ave, south of CSAH 14. The next step in the process is to approve a purchase agreement which layout out more details. ISSUE BEFORE COUNCIL: Should the council approve the purchase agreement with NorthPoint Development? PROPOSAL: Included in your packet is the proposed purchase agreement. The purchase price is $9.2 million. Escrow of $920,000 will be deposited with the escrow agent. Closing would occur within 30 days of the end of the Approvals Period (which is 180 days after the due diligence period). The due diligence period is 90 days after the city delivers the due diligence materials. We have 5 days from approval of the agreement to do so. The buyer is covering most of the closing costs and payment of commission fee. The city will pay its own legal fees and prepare the limited warranty deed. Taxes on the property will be prorated at closing. If the buyer has not commenced construction (installation of building footings and foundations), within 6 months of the closing date, buyer will pay the city a one-time fee of $500,000 unless there is a Force Majeure Event as defined in Sec. 27. FISCAL IMPACT: The sale price of $9.2 million would be deposited to the water fund since the land is an asset of the water fund following the 3M settlement in 2019. City costs related to the closing would also be paid out of the water fund. OPTIONS: 1) Approve Resolution No. 2021-067 2) Amend and then Approve Resolution No. 2021-067 3) Do not approve the purchase agreement RECOMMENDATION: If removed from the consent agenda: Motion to approve Resolution No.2021-067 ATTACHMENTS: • Resolution No 2021-067 Approving Purchase Agreement with NorthPoint Development • Real Estate Sales Contract 1 REAL ESTATE SALE CONTRACT THIS REAL ESTATE SALE CONTRACT (this “Contract”) is made as of the Effective Date (as defined in Section 25 below) by and between NorthPoint Development, LLC, a Missouri limited liability company, or assigns (“Buyer”) and the City of Lake Elmo, a Minnesota municipal corporation (“Seller”). WITNESSETH: 1. Property. Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms and conditions hereinafter set forth, that certain real property comprising approximately 75 acres located at Ideal Ave., South of CSAH 14, Lake Elmo, Washington County, Minnesota (a portion of Tax ID 16.029.21.24.0002), together with all improvements of any kind located thereon, all surface and subsurface rights, and any appurtenant easements and rights of parking and access (all hereinafter referred to as the “Property”). A depiction of the Property is attached hereto as Exhibit A. The parties agree that upon the completion of the Survey (as defined in Section 5 below), the legal description set forth in the Survey shall be utilized for all purposes in connection with the sale of the Property, as contemplated herein. 2. Purchase Price. The “Purchase Price” for the Property shall be Nine Million Two Hundred Thousand and 00/100 Dollars ($9,200,000.00). Buyer agrees to pay the Purchase Price as follows: (a) Nine Hundred Twenty Thousand and 00/100 Dollars ($920,000.00) (the “Earnest Deposit”) to be delivered to Escrow Agent (as hereinafter defined) within three (3) business days following the Effective Date, in the form of a check payable to, and to be deposited in escrow with, Chicago Title Insurance Company, having an address at 6700 College Boulevard, Ste. 300, Overland Park, Kansas 66211, Attn: Randi Canon (the “Escrow Agent”), which Earnest Deposit shall be refundable or nonrefundable based upon the further terms of this Contract, and the Earnest Deposit shall be fully applicable to the Purchase Price; (b) On the Closing Date (as defined in Section 3), Buyer shall deliver the Purchase Price to the Escrow Agent for distribution to Seller, less the Earnest Deposit, by cashier’s or certified check or by wire transfer in immediately-available funds, and subject to any prorations set forth in this Contract. 3. Closing; Costs at Closing. (a) Subject to the terms and conditions hereof, the closing of the transaction contemplated herein (the “Closing”) shall occur no later than the date occurring thirty (30) days following the expiration of the Approvals Period (as defined herein) (the “Closing Date”). (b) On the Closing Date, the parties shall pay any and all closing costs as follows: 2 (i) The costs of any escrow charges, or similar costs, charged by Escrow Agent, shall be paid by Buyer. (ii) Any costs related to the recording of the Deed or other conveyance documents (except in connection with the release of any liens or encumbrances by Seller) shall be paid by Buyer. (iii) The costs of releasing any and all liens, judgments, and other encumbrances, as well as any recording costs in connection therewith, shall be paid by Seller. (iv) Any and all transfer taxes, deed taxes, stamp taxes, and other similar fees and taxes shall be paid by Buyer. (v) The cost of the title commitment and any title search and examination fees shall be paid by Buyer. (vi) The cost of the title insurance premium, the cost of all endorsements requested by Buyer, and the cost of any lender’s policy of title insurance shall be paid by Buyer. (vii) The closing fee charged by the Escrow Agent to close this transaction shall be paid by Buyer. (viii) Except as otherwise specifically set forth herein, any costs attributable only to one party, such as each party’s attorneys’ fees, shall be paid by such party. 4. Taxes. Seller shall pay all taxes, general and special, against the Property which are due and have accrued before the Closing Date, and Buyer shall assume all of such taxes and assessments becoming due and accruing on the Closing Date and thereafter, except that all general state, county, school and municipal taxes (exclusive of rebates, penalties and interest) becoming due and accruing during the calendar year in which Closing occurs shall be prorated between Seller and Buyer on the basis of said calendar year as of the Closing Date. If the amount of any such tax or assessment to be prorated cannot be then ascertained, proration shall be computed on the basis of the rate(s) for the preceding year applied to the last assessed valuation prior to the Closing Date, without any right to subsequent adjustment once the actual amounts are known. Seller represents that there are no special assessments or other impositions of any nature which are pending with respect to the Property or any portion thereof. 5. Title Insurance and Survey. (a) As of the Closing Date, Seller shall cause to be issued and delivered to Buyer, at Buyer’s expense, an ALTA owner’s policy of title insurance (the “Title Policy”) with respect to the Property. Costs of the extended coverage Title Policy and any endorsements to the Title Policy and any lender’s title policy issued in connection with the Closing, if applicable, shall also be paid by Buyer. The Title Policy shall conform to the following specifications: 3 (i) The form of the Title Policy will be ALTA Form B or such other form as may be available from the Title Company and reasonably acceptable to Buyer; (ii) The Title Policy will be issued by Chicago Title Insurance Company (the “Title Company”); (iii) The insured will be Buyer (or assigns); (iv) The Title Policy will be in the amount of the Purchase Price; and (v) There will be no exceptions to extended coverage other than the Permitted Exceptions (as defined below). (b) Subject to the foregoing provisions, the Title Policy shall not contain exceptions with respect to any of the following (except to the extent they become Permitted Exceptions): (i) Defects, liens, encumbrances, adverse claim, or other matters first appearing in the public records or attaching subsequent to the Effective Date but prior to the Closing Date; (ii) Rights or claims of parties in possession; (iii) Easements, or claims of easements, not shown by the public records, with the exception of any utility easements that are necessary for sanitary sewer service to be brought to the Property, said terms and locations of said easements shall be mutually agreed to by Buyer and Seller; (iv) Any encroachment, encumbrance, violation, or adverse circumstance that would be disclosed by an accurate and complete survey of the Property; (v) Any lien, or right to a lien, for services, labor or materials furnished; (vi) Taxes or installments of assessments due or payable as of the Closing Date; or (vii) Tenancies, either by month-to-month or by virtue of a written or oral lease, by a party in possession of any part of the Property. (c) Buyer shall order, at Buyer’s cost, within ten (10) days following the Effective Date, a commitment from the Title Company setting forth the basis upon which the Title Company is willing to insure title to the Property, together with legible copies of all documents identified therein as exceptions to title (excluding mortgages, deeds of trust and similar matters which shall be released at Closing) (collectively, the “Title Commitment”). 4 (d) Buyer shall obtain a new or updated ALTA/NSPS survey for the Property (the “Survey) and provide a copy of the Survey to Seller. Such Survey shall be performed by a surveyor licensed in the State of Minnesota. Upon the completion of the Survey, the legal description set forth therein shall be the legal description of the Property for all purposes in connection with this Contract, including the Deed and the Title Policy. (e) If the Title Commitment or the Survey discloses any defects, liens, or encumbrances objectionable to Buyer, in Buyer’s sole and absolute discretion, Buyer may object in writing to the same no later than the date occurring sixty (60) days following the Effective Date. Matters listed in the Title Commitment or Survey and not objected to by Buyer within such period and matters later accepted by Buyer shall constitute “Permitted Exceptions”. As to any matters to which Buyer so objects in a timely manner, Seller shall notify Buyer in writing, within ten (10) days after receipt by Seller of Buyer’s objection letter, as to which specific matters Seller is unable or unwilling to remedy and which specific matters Seller will exercise reasonable efforts to attempt to remedy. As to those matters to be remedied, Seller shall deliver to Buyer a revised Title Commitment reflecting that such remedy has been affected, or Seller shall otherwise assure Buyer, to Buyer’s reasonable satisfaction, that such remedy will be made on or before the Closing Date. If Seller is unable or unwilling to remedy all matters objected to by Buyer and to deliver the Title Policy in accordance with the foregoing requirements, Buyer shall have the option of either: (i) consummating the transaction contemplated hereby and accepting such title as Seller is so able or willing to convey, and without any claim against Seller or any adjustment in the Purchase Price with respect thereto, or (ii) terminating this Contract by giving written notice to Seller of the same on to prior to the expiration of the Due Diligence Period, in which event the entire Earnest Deposit shall be returned to Buyer. If Buyer fails to give the termination notice under clause (ii) above within such period, Buyer shall be deemed to have elected clause (i) above as to those specific matters that are set forth in such written notice from Seller. In the event that Seller indicates that Seller will cure any of Buyer’s objections on or prior to Closing but fails to so cure such objections, the same shall be deemed a default by Seller pursuant to Section 13(b) hereof, and Buyer shall have all remedies set forth therein against Seller. Notwithstanding the foregoing, prior to or at Closing, Seller shall remove all encumbrances on title to the Property created by, through or under Seller that may be removed by the payment of money regardless of whether such encumbrances are listed in an objection notice delivered by Buyer and such encumbrances shall not be deemed to be Permitted Exceptions. 6. Right of Entry; Existing Materials. (a) Seller hereby grants to Buyer, and its contractors and agents, a non- exclusive right and license to enter the Property from time to time prior to the earlier of the Closing or the termination of this Contract for purposes of conducting review and planning activities, including, without limitation, site reviewing, engineering, surveying, environmental audits, inspections, photographing, client tours, rock borings, soil tests, and utility locating. Buyer shall indemnify and hold Seller harmless from and against any and all (i) damage caused to the Property or any other property by Buyer or its agents or contractors, (ii) loss, damage or injury to any person or property to the extent resulting directly or indirectly from any hazard or other condition created by Buyer or its agents or 5 contractors, (iii) any injury to Buyer or any of its agents or contractors, or any person arising out of the exercise of Buyer’s rights under this Contract, and (iv) any expenses incurred by or for Buyer, in connection with such planning or other activities. This indemnification provision shall survive any termination of this Contract for a period of one (1) year from such termination. Further, Buyer shall, in the event that Buyer elects not to purchase the Property and Buyer’s inspections and testing materially altered the Property, restore the Property to the condition that it existed prior to Buyer’s inspections and testing. (b) Seller shall, within five (5) business days following the Effective Date, provide to Buyer copies of the following, if any, in Seller’s possession or control (the “Due Diligence Materials”): (i) Any and all leases, contracts, licenses, permits, and agreements with any other party, person, or entity in connection with the Property, including without limitation, those affecting ownership, operation, maintenance, repair, or development of the Property; (ii) Any and all information and correspondence regarding any liens, lien claimants, attachments, executions, or assignments for the benefit of creditors, including those still pending and those that have received a priority determination; (iii) Any and all existing environmental reports, engineering reports, surveys, soil and substrata studies and reports, soil boring logs, development assessments, and any other similar studies, reviews, surveys, assessments, audits, or reports in connection with the Property; (iv) Any title policies or title reports in possession of Seller related to the Property; (v) Any operating agreements, covenants, restrictions, or other similar documents affecting the Property; and (vi) Any other documents related to the Property as may be reasonably requested by Buyer that are in the possession of Seller. 7. Due Diligence Period; Approvals Period. (a) Buyer shall have until 11:59 p.m. (Lake Elmo, Minnesota local time) on the date occurring ninety (90) days following the later of (i) the Effective Date, and (ii) the date upon which all Due Diligence Materials are delivered to Buyer (the “Due Diligence Period”) to inspect the legal and physical condition of the Property, conduct such due diligence activities and inspections, pursue such governmental approvals, and conduct such other activities and reviews with respect to the Property and Buyer’s intended use thereof as Buyer shall deem appropriate. During the term of this Contract, Seller shall cooperate with Buyer in connection with such due diligence activities, including, without limitation, authorizing and executing the submittal of zoning, planning, and platting applications, and applications or petitions in connection with any financial incentives sought by Buyer in 6 connection with the Property. Buyer shall be responsible for the costs of said applications and petitions, including the costs to prepare said applications and petitions. (b) If Buyer determines for any or no reason, in its sole and absolute discretion, that it does not desire to purchase the Property, Buyer shall have the right to terminate this Contract by giving written notice to Seller on or before the expiration of the Due Diligence Period, in which event the entire Earnest Deposit shall be returned to Buyer, and the parties shall have no further obligations to one another. (c) Buyer shall have from the expiration of the Due Diligence Period until 11:59 p.m. (Lake Elmo, Minnesota local time) on the date occurring one hundred eighty (180) days following the expiration of the Due Diligence Period (the “Approvals Period”) to continue pursuing any and all governmental and/or quasi-governmental approvals deemed necessary by Buyer in connection with Buyer’s intended use of the Property, in Buyer’s sole and absolute discretion (collectively, the “Approvals”). (d) If Buyer is unable to obtain, or reasonably believes that it will be unable to obtain, any and all Approvals on or prior to the expiration of the Approvals Period, Buyer shall have the right to terminate this Contract by giving written notice to Seller on or before the expiration of the Approvals Period. In the event that Buyer terminates this Contract pursuant to this Section 7(d), the entire Earnest Deposit shall be returned to Buyer, and the parties shall have no further obligations to one another. 8. Closing Conditions. Notwithstanding any provisions of this Contract to the contrary, Buyer’s obligation to close the transactions set forth herein shall be subject to, and conditioned upon, the satisfaction of each of the following “Closing Conditions”: (a) no physical condition, event, or circumstance has occurred since the expiration of the Due Diligence Period, not caused by Buyer, that materially adversely affects the value of the Property; and (b) the Title Company is irrevocably committed to issuing the Title Policy in compliance with the provisions set forth in Section 5 above. In the event that any of the aforementioned Closing Conditions are not satisfied as of the Closing Date, Buyer shall have the right to terminate this Contract on the Closing Date, in its sole and absolute discretion, in which event, notwithstanding any provisions of this Contract to the contrary, the entire Earnest Deposit shall be immediately returned to Buyer, and the parties shall have no further obligations hereunder each to the other. Notwithstanding the foregoing, in the event of the occurrence of any condition, event, or circumstance as described in Section 8(a) above, Buyer shall thereafter have the right to so terminate this Contract at any time prior to and including the Closing Date, in which event, notwithstanding any provisions of this Contract to the contrary, the entire Earnest Deposit shall be immediately returned to Buyer, and the parties shall have no further obligations hereunder each to the other. 9. Closing Obligations. 7 (a) On the Closing Date, Seller shall be obligated, at its sole cost and expense, to deliver, or cause to be delivered, the following: (i) a Limited Warranty Deed (the “Deed”), in a form reasonably acceptable to Buyer and the Title Company, properly executed and conveying marketable fee simple title to the Property, subject only to the Permitted Exceptions; (ii) Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transactions contemplated by this Contract. (b) On the Closing Date, Buyer shall be obligated, at its sole cost and expense, to deliver, or cause to be delivered, the following. (i) The Purchase Price, less the Earnest Deposit, after all adjustments and prorations are made at the Closing; (ii) Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transactions contemplated by this Contract. 10. Condemnation. Seller represents that it has no actual knowledge of any pending or threatened condemnation, eminent domain or equivalent proceeding or action which would affect the Property. If, after the Effective Date and before the date and time of Closing, any such proceeding or action is commenced or threatened against the Property or the owner(s) thereof, Seller shall provide Buyer with written notice thereof promptly after Seller has knowledge thereof, and Buyer shall have the option of continuing with this Contract and receiving all proceeds of such action or proceedings (or sale in lieu thereof), or terminating this Contract by written notice to Seller within ten (10) days after receiving such written notice from Seller. If this Contract is so terminated, notwithstanding any provisions of this Contract to the contrary, the entire Earnest Deposit shall be immediately returned to Buyer and the parties shall have no further obligations each to the other. 11. Representations. (a) Each party represents and warrants to the other party that: (i) this Contract has been duly executed and delivered by such party, and constitutes the valid and binding obligation of such party, enforceable against it in accordance with the terms hereof; and (ii) the execution, delivery and performance of this Contract does not violate or breach the terms of any agreement to which it is a party or by which it or its property may be bound. (b) Seller represents that it is the fee simple owner of the Property, and Seller has the legal power and authority to enter into and perform this Contract. 8 (c) Seller further represents and warrants to Buyer that there are no recorded or unrecorded leases, contracts, and/or options pertaining to or affecting the Property, or any part thereof, and there is no party other than Seller in possession, or with a claim of possession, of the Property or any part thereof. (d) Seller further represents and warrants that: (i) Seller has not received any written notice that the Property is in default under, or not in compliance with, any laws, ordinances, regulations, covenants, conditions and restrictions affecting the Property, including without limitation, all applicable federal, state and local laws pertaining to air and water quality, hazardous waste, waste disposal, air emissions and other environmental matters and rules, regulations and ordinances of the United States Environmental Protection Agency and all other applicable federal, state and local agencies and bureaus, nor has Seller received written notice of any proceeding initiated under or with respect to any of the foregoing; (ii) no substances designated as, or containing components designated as, hazardous, dangerous, toxic or harmful, and/or subject to regulation under any federal, state or local law, regulations or ordinance (“Hazardous Substances”), are stored on the Property by or for Seller; and (iii) to Seller’s actual knowledge, there are no Hazardous Substances present on the Property. (e) Seller represents and warrants that to Seller’s knowledge the Property is not subject to any pending or threatened litigation. (f) So long as this Contract remains in effect, Seller shall not do any of the following, without the prior written consent of Buyer: (i) Sell, grant, convey, lease or dispose of, or negotiate or contract to sell, grant, convey, lease or dispose of, the Property or any part thereof; (ii) Grant or record any easement, license or right-of-way in, to or through the Property or any part thereof, with the exception of utility easements necessary to bring sanitary sewer to service the Property. Said terms and location of said easements shall be mutually agreed upon by Buyer and Seller; (iii) Create, record, nor allow to be created or recorded, any restriction or covenant of any kind, character, or nature whatsoever with respect to the Property or any part thereof; or (iv) Cause, or allow, any material physical modifications to the Property, with the exception of the installation of any sanitary sewer facilities, which the terms and location of said easements shall be mutually agreed upon by Buyer and Seller. 12. Foreign Investment in Real Property Tax Act and Tax Reform Act Reporting. Seller agrees to execute and deliver any instrument, affidavit and statement and to perform any acts reasonably necessary to comply with the provisions of the Foreign Investment in Real Property Act. 13. Breach At or Prior to Closing. 9 (a) If Buyer should fail to consummate the transaction contemplated in Section 1 of this Contract for any reason other than a default or misrepresentation by Seller under this Contract, or the exercise by Buyer of a right to terminate this Contract as provided herein, then the Earnest Deposit shall be paid to Seller as total liquidated damages (due to the difficulty and inconvenience of measuring actual damages and the fact that the Earnest Deposit represents as fair an approximation of actual damages as the parties can now determine) and in full satisfaction of all of Buyer’s obligations hereunder except for Buyer’s indemnity obligations set forth in Section 6(a) hereof which shall be in addition to said liquidated damages. (b) If Buyer has performed all of its obligations under this Contract and Seller breaches its obligations hereunder, then Buyer may, as its exclusive remedies: (i) seek specific performance of the terms of this Contract, or if specific performance is not available to Buyer as a result of the nature of Seller’s default, receive from Seller reimbursement of any and all of Buyer’s actual costs incurred in connection with this Contract and the transactions contemplated hereby, including without limitation, Buyer’s legal costs, design costs in connection with Buyer’s intended use of the Property, and costs related to Buyer’s due diligence activities in connection with this Contract, or (ii) terminate this Contract, in either of which case, notwithstanding any provisions of this Contract to the contrary, the entire Earnest Deposit shall be immediately returned to Buyer. 14. Survival. Except as otherwise herein expressly provided, all the promises, representations, warranties, and undertakings expressed in this Contract (unless otherwise stated herein) shall be deemed made on and as of the Closing Date, as well as on the date hereof, and shall survive consummation of this Contract and delivery of the Deed to the Property for a period of one (1) year following the Closing Date. 15. AS IS. Except for the express representations and agreements of Seller set out herein, Buyer hereby acknowledges that Buyer has made or will make its decision to purchase the Property solely in reliance upon the representations and warranties expressly made in this Contract, if any, and upon Buyer’s own inspection and review of the Property. Except as otherwise provided herein to the contrary (including Seller’s specific covenants, representations, and warranties), Buyer agrees to accept the physical condition of the Property “as is”, “where is”, “with all faults”, and without express or implied warranties of any nature whatsoever. The warranties being disclaimed include, without limitation, express or implied warranties of income potential, uses, merchantability, habitability, tenantability, or suitability or fitness for any particular purpose. 16. Notices. All notices required or permitted hereunder shall be in writing and shall be deemed made when delivered in person, delivery service, electronic mail, or when mailed by certified mail, postage prepaid, return receipt requested, addressed as follows: If to Buyer: NorthPoint Development, LLC Attn: Nathaniel Hagedorn, CEO 4825 NW 41st Street, Ste. 500 Riverside, MO 64150 Phone: (816) 888-7381 nathaniel@northpointkc.com 10 with a copy to: NorthPoint Development, LLC Attn: Austin Dowling 4825 NW 41st Street, Ste. 500 Riverside, MO 64150 Phone: (816) 768-8109 adowling@northpointkc.com If to Seller: City of Lake Elmo Attn: Kristina Handt, City Administrator 3880 Laverne Ave. N, Suite 100 Lake Elmo, MN 55042 khandt@lakeelmo.org with a copy to: Sarah Sonsalla, Esq. Kennedy & Graven, Chartered 150 South 5th Street, Suite 700 Minneapolis, MN 55402 ssonsalla@kennedy-graven.com 17. Miscellaneous. (a) This Contract (i) supersedes any letter of intent or prior agreement between the Buyer and Seller and constitutes the entire agreement between Buyer and Seller relating to the subject matter hereof and there are no other terms, conditions, promises, understandings, statements or representations, express or implied, concerning the sale contemplated hereunder, (ii) shall be governed by the laws of the State of Minnesota, (iii) shall be freely assignable by Buyer without the consent of Seller so long as such assignee is an affiliate of Buyer (including a subsidiary or joint venture in which Buyer or an affiliate of Buyer has an ownership interest or management authority in such entity) and such assignee agrees to fully assume Buyer’s obligations under this Contract, but otherwise shall not be assignable by Buyer without the consent of Seller, and (iv) shall not be modified or amended other than by a written instrument executed by both parties hereto. For purposes of this Section 17(a), the term “affiliate” shall mean any entity which directly controls, is under common control with, or is directly or indirectly controlled by Buyer. (b) If for any reason the Closing does not occur pursuant to the provisions of this Contract and either party makes a written demand upon Escrow Agent in the manner required for notices herein for payment of the Earnest Deposit, then such party or Escrow Agent shall give written notice, in accordance with the notice provision set forth herein, to the other party of such demand. If Escrow Agent does not receive a written objection from the other party to the proposed payment of the Earnest Deposit pursuant to the aforesaid demand within five (5) days after the delivery of such notice by such party or Escrow 11 Agent, then Escrow Agent is hereby authorized to make such payment in accordance with the aforesaid demand. If Escrow Agent receives written objection from the other party to the proposed payment of the Earnest Deposit pursuant to the aforesaid demand within such five (5) day period, then Escrow Agent shall continue to hold the Escrow Deposit until otherwise directed by written instructions from Seller and Buyer. 18. Attorneys’ Fees. In case a lawsuit shall be brought because of the breach or alleged breach of any agreement or obligation contained in this Contract on the part of either party to be kept or performed, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and expenses in connection with such lawsuit. 19. Partial Invalidity. If any provisions of this Contract or the application thereof to any party or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Contract shall not be affected thereby and each provision of this Contract shall be valid and enforceable to the fullest extent permitted by law. 20. Commission and Consulting Fees. Buyer and Seller agree that the only brokers involved in the transactions set forth herein Cushman & Wakefield (Chris Weirens and Jon Rausch), representing Buyer (collectively, “Brokers”). Buyer shall be responsible at Closing for the payment to Brokers of commissions pursuant to separate agreements. Each party hereto represents and warrants to the other that no persons or entities, other than as identified pursuant to the provisions of this Section 20, are entitled to a brokerage commission, finder’s fee, or other compensation with respect to the transactions contemplated hereby, and each party (an “Indemnitor”) hereby indemnifies the other party for any damages related to a breach of said representation and warranty by Indemnitor, and for the failure of such Indemnitor to pay any commission, finder’s fee, or other compensation claimed through said Indemnitor. 21. Right to Exchange Real Property. Either party, through the use of a qualified intermediary, may transfer or acquire the Property through a tax free exchange, deferred exchange or reverse exchange of real property pursuant to Section 1031 of the Internal Revenue Code; provided, however (i) in no event shall any such exchange, or the exchanging party’s inability to complete any such exchange, impair or otherwise affect the Closing Date, (ii) the non-exchanging party shall have no obligation or liability to the exchanging party or any other person or entity in any respect for any matters in connection with any such exchange other than executing an acknowledgement of such exchange and payment of the Purchase Price in exchange for the conveyance to Buyer of fee simple title to the Property by deed subject only to those matters permitted under this Contract, and (iii) the exchanging party shall indemnify and hold the non-exchanging party harmless from and against any claims, actions, liability and expense in connection with each such exchange. 22. Waiver of Jury Trial. BUYER AND SELLER HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING, COUNTERCLAIM OR DEFENSE BASED ON THIS CONTRACT, OR ARISING OUT OF, UNDER OR IN ANY CONNECTION WITH THIS CONTRACT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO RELATING TO THIS CONTRACT. THIS PROVISION 12 IS A MATERIAL INDUCEMENT FOR BUYER AND SELLER ENTERING INTO THIS CONTRACT. 23. Legal Holidays and Business Days. If any date herein set forth for the performance of any obligations by Seller or Buyer or for the delivery of any instrument or notice as herein provided should be on a Saturday, Sunday or legal holiday, the compliance with such obligations or delivery shall be deemed acceptable on the next business day following such Saturday, Sunday, or legal holiday. As used herein, the term “legal holiday” means any federal holiday for which financial institutions or post offices in the State of Minnesota are generally closed for observance thereof. As used herein, the term “business day” shall mean a day which is not a Saturday, Sunday, or legal holiday. 24. Construction of Contract. This Contract shall not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties. Both Seller and Buyer have contributed or had the opportunity to contribute substantially and materially to the preparation of this Contract. 25. Effective Date. The “Effective Date” of this Contract shall be the date this Contract is fully executed by the last of Seller and Buyer to sign. 26. Time is of the Essence. Time is of the essence of this Contract. 27. Commencement of Construction. If Buyer has not commenced construction on its proposed development of the Property on or before the six-month anniversary of the Closing Date, then Buyer shall pay to Seller an additional payment in the amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Commencement Fee”). For purposes of this Contract “commenced construction” shall mean the grading of the Property and the installation of building footings and the construction of building foundations with respect to any such building to be constructed by Buyer on the Property. Buyer shall be excused, without payment of the Commencement Fee, for the period of any delay in the performance of its obligations in this Section 27 when prevented from doing so by causes beyond its control, which shall include acts of God, governmental restrictions, pandemic, strikes, labor disturbances, shortages of materials or supplies and the inability to obtain said materials or reasonable substitutes at reasonable cost, and actions or inactions of governmental authorities (but not violations of applicable laws) (a “Force Majeure Event”). In connection with any Force Majeure Event, Buyer must use good faith and commercially reasonable efforts to mitigate the effect of such Force Majeure Event including, without limitation, using good faith efforts to procure substitute materials from alternative sources if necessary, which such good faith efforts shall include, without limitation, a requirement that Buyer obtain a minimum of three (3) bids (which such bids shall include the price and timing of delivery of such substitute materials) from well-recognized and industry standard general contractors, which Buyer shall deliver such bids to Seller once obtained. 28. Execution in Counterparts, Electronic Mail and Fax. This Contract may be executed in several counterparts. All counterparts so executed shall constitute one agreement and shall be binding on all parties, even though all the parties did not sign the original or the same counterpart signature page. Hand signatures transmitted by fax or electronic mail such as PDF are also permitted as binding signatures to this Contract. 13 [Remainder of Page Intentionally Blank] 14 IN WITNESS WHEREOF, the parties have caused this Contract to be duly executed as of the Effective Date. BUYER: NorthPoint Development, LLC, a Missouri limited liability company Dated: , 2021 By: Nathaniel Hagedorn, Manager SELLER: City of Lake Elmo Dated: , 2021 By: Charles Cadenhead Its: Mayor By: Julie Johnson Its: City Clerk 15 EXHIBIT A Depiction of Property LA515-1-727314.v1 CITY OF LAKE ELMO WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. 2021-067 A RESOLUTION APPROVING A REAL ESTATE SALE CONTRACT WITH NORTHPOINT DEVELOPMENT, LLC FOR THE SALE OF THE FORMER 3M PROPERTY (A PORTION OF TAX ID 16.029.21.24.0002) WHEREAS, the City of Lake Elmo (the “City”) is the owner of that certain real property comprising approximately 75 acres located at Ideal Avenue, South of CSAH 14, Lake Elmo, Washington County, Minnesota (a portion of Tax ID 16.029.21.24.0002), commonly referred to as the “former 3M property” (the “Property”); and WHEREAS, NorthPoint Development, LLC (“NorthPoint”) has offered to purchase the Property from the City for $9,200,000; and WHEREAS, the City and NorthPoint desire to enter into a purchase agreement, pursuant to which the City will convey the Property to NorthPoint; and NOW, THEREFORE, BE IT RESOLVED, 1. That the City Council hereby approves the Purchase Agreement in substantially the form presented to the City Council, subject to modifications that do not alter the substance of the transaction and that are approved by the Mayor and City Clerk, provided that execution of the Purchase Agreement by those officials shall be conclusive evidence of their approval. 2. City officials, staff, and consultants are authorized to take all actions necessary to perform the City’s obligations under the Purchase Agreement as a whole, including without limitation, execution of any documents to which the City is a party referenced in or attached to the Purchase Agreement, and of any deed or other documents necessary for the Property to be conveyed by City to NorthPoint, all as described in the Purchase Agreement. ADOPTED BY THE LAKE ELMO CITY COUNCIL ON 15TH DAY OF JUNE, 2021. CITY OF LAKE ELMO By: __________________________ Charles Cadenhead (Seal) Mayor ATTEST: ________________________________ Julie Johnson City Clerk