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HomeMy WebLinkAbout2008.03.17 RESO 2008-0008RESOLUTION 2008 - 8 RESOLUTION APPROVING ASSIGNMENT AND ASSUMPTION OF RIGHTS AND OBLIGATIONS RECITALS WHEREAS, the City and Nor -Lakes Holding Co., L.L.C. ("Nor -Lakes") entered into that certain Development Agreement (the "Agreement") dated the 14" day of December, 1999 pertaining to certain real property located in Development District No. 1 in the City of Hugo, Minnesota (the "Property"); and WHEREAS, Nor -Lakes desires to sell the Property to 4L, LLC; and WHEREAS, the City has requested that 4L, LLC assume the Agreement as a condition to the purchase of the Property; NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUGO, WASHINGTON COUNTY, MINNESOTA as follows: 1. The City of Hugo hereby expressly consents to the assignment of the Development Agreement to 4L, LLC, pursuant to the terms and conditions of the attached Assignment and Assumption of Rights and Obligations. 2. Upon the effective date of the Assignment, Nor -Lakes shall be released from all of its duties, obligations and responsibilities under the Development Agreement. 3. To the knowledge of the City of Hugo, Nor -Lakes is not in default under the terms and conditions of the Development Agreement. 4. The Mayor and City Administrator are hereby authorized to execute such documents as recommended by the City Attorney. Upon roll call, the following Members voting AYE: Upon roll call, the following Members voting NAY: Whereupon said resolution was declared passed and adopted this 17th day of March, 2008. Fran Wn, Mayor ATTEST: AJ - Michele C Lindau, City Clerk ASSIGNMENT AND ASSUMPTION OF RIGHTS AND OBLIGATIONS This instrument drafted by: Briggs and Morgan, Professional Association (MLI) 2200 First National Bank Bldg. Saint Paul, Minnesota 55101 2122621 v3 1. The Parties: (a) NOR -LAKES HOLDING CO., L.L.C., a Minnesota limited liability company, with a mailing address of 606 Vandalia Street, St. Paul, MN 55114 and the Developer under a Development Agreement with the City of Hugo, Minnesota, (the "City"), dated December 14, 1999 as amended on or about April , 2008 (the "Development Agreement"), and is hereinafter referred to as Developer or Assignor. (b) 4L, LLC, a Delaware limited liability corporation, with a mailing address of 144 Citation Court, Birmingham, Alabama 35209 is hereinafter referred to as Assignee. 2. Date: (a) This Assignment d sumption of Rights and Obligations is dated and shall be effective on April A' 3. Recitals: The Assignor desires to assign all of its rights, and be released from all of its duties, obligations and responsibilities under the Development Agreement in connection with the Development Agreement to the Assignee and the Assignee is willing to accept such rights and assume all duties, obligations and responsibilities under the Development Agreement, as amended. NOW THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 4. Assignment of Development Agreement: The Assignor hereby assigns, transfers and quitclaims all rights, duties, obligations and responsibilities under the Development Agreement to the Assignee, subject to the terms of this Agreement. The Assignee hereby accepts such rights and assumes such duties, obligations and responsibilities under the Development Agreement, as amended, subject to the terms of this Agreement. 5. Guaranty and Letter of Credit. Richard L. Stewart, an individual, has on or before the effective date hereof, delivered to the City a Guaranty in a form satisfactory to the City. The Assignee has delivered to the City on or before the effective date hereof, a letter of credit in the amount of $94, 920 in a form satisfactory to the City. 6. Covenants of Assignor: The Assignor warrants: 2122621 v3 2 (a) The Assignor is the owner of the Developer's interest in the Development Agreement assigned by this instrument and all of the rights which the Development Agreement purports to create, with full right to convey the same. (b) The Development Agreement is now unencumbered, valid, and in full force and effect in accordance with its terms. (c) All amounts due on or before the date hereof from the Assignor under the Development Agreement have been paid in full as of the date hereof and there are no setoffs, defenses, or counterclaims on the part of the Assignor to the payment or performance of the obligations under Development Agreement. (d) The Assignor, to the best of its knowledge, is not in default under any of the terms, conditions or covenants of the Development Agreement. 7. Covenants of Assignee: (a) As a condition of the assignment herein, the Assignee hereby expressly assumes the duties, obligations and responsibilities of the Assignor as the "Developer" under the Development Agreement, as amended. (b) The Assignee hereby expressly subordinates its rights under this Assignment to the rights of the City as set forth in the Development Agreement, and further expressly agrees to take no action in derogation of any other rights of the City as set forth in the Development Agreement, as amended. (c) The Assignee acknowledges that it may not re -assign the Developer's rights under the Development Agreement without the express prior written consent of the City or as provided in the Development Agreement complying with the provisions of Article IX of the Development Agreement, as amended. (d) The Assignee certifies that it has the qualifications and financial responsibility necessary and adequate to fulfill the obligations undertaken by the Developer in the Development Agreement, as amended. (e) The Assignee acknowledges that the Development Property (as defined in the Development Agreement) is subject to an Assessment Agreement, dated as of December 14, 1999, between the Developer and the City setting the minimum market value for the Development Property at $2,484,000. (f) The Assignee hereby agrees to assume the indemnity obligations specified in the Development Agreement and hold the City harmless from all claims by third parties arising from and after the date of this Assignment, according to the terms of the Development Agreement, as amended. (g) The Assignee hereby acknowledges that the Development Agreement was based upon the Assignor's representation that the Project (as defined in the Development Agreement) was for a light industrial facility. The Assignee, by accepting assignment of 21226210 3 the rights, duties, obligations and responsibilities of the Assignor, agrees to operate the Project as a light industrial facility. 8. Assignee Default: In the event the Assignee defaults under the terms and obligations of the Development Agreement, as amended, assigned hereunder and does not cure the default in accordance with the terms of the Development Agreement, the Assignee acknowledges the City has the right to pursue any remedies against the Assignee and the Guarantors as provided in the Development Agreement without any notice to and without seeking any remedy from the Assignor. 9. Governing Law: It is agreed that this Assignment shall be governed by, construed and enforced in accordance with the laws of the State of Minnesota. 10. Attorneys Fees: In any action brought by the City of Hugo to enforce the terms of this Assignment, the City shall be entitled to recover the reasonable attorney's fees, costs and disbursements incurred by it. 11. Effect of Agreement: This Agreement is intended to effect the assignment of the Development Agreement, as amended, to 4L, LLC. Nothing set forth herein is intended to expand the terms of the Development Agreement. In the event of any conflict between this Agreement and the Development Agreement, the Development Agreement shall control. 12. Partial Invalidity: The invalidity of any portion of this Assignment will not and shall not be deemed to affect the validity of any other provision. In the event that any provision of this Assignment is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision. 13. Entirety of Agreement: This Assignment shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Assignment shall not be binding upon either party except to the extent incorporated in this Agreement. 14. Modification: Any modification of this Agreement or additional obligation assumed by either party in connection with this Assignment shall be binding only if placed in writing and signed by each party or an authorized representative of each party. 15. Paragraph Headings: The titles to the paragraphs of this Agreement are solely for the convenience of the parties and shall not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this Agreement. 16. Execution in Counterparts: This Agreement may be executed, acknowledged and delivered in any number of counterparts and each of such counterparts shall constitute an original but all of which together.shall constitute one agreement. 2122621x3 4 IN WITNESS WHEREOF, each party to this Agreement has caused it to be executed on this /$ Ary of April, 2008. ASSIGNOR: NOR LAS HOLDING CO., L.L.C., ' a Mes limited liability company By Its Chief Manager 2122621 v3 S-1 ASSIGNEE: 4L, LLC, s By R -'�- i1. r� L Its a,✓ �Y..G_.�^ 21226210 S-2 CONSENT AND ACKNOWLEDGMENT OF THE CITY OF HUGO The City of Hugo, Minnesota (the "City"), by its undersigned designated representatives, hereby expressly consents to the assignment of the Development Agreement to 4L, LLC pursuant to the terms and conditions of the foregoing Assignment and Assumption of Rights and Obligations. Upon the effective date of the Assignment, the Assignor shall be released from all of its duties, obligations and responsibilities under the Development Agreement and the Assignor and James A. Taglia, Thor J. Larson, Robert E. Larson and Stephen P. Palmquist are released from that certain Guaranty dated and delivered to the City in connection with the Development Agreement. To the knowledge of the undersigned, the Assignor is not in default under the terms and conditions of the Development Agreement. CITY OF HUGO, MINNESOTA 21226210