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Memo- SuperValu Redevelopment Project, Status Of Agreementsi; III Memorandum r PLANNING & s LECON OM IC DEVELOPMENT To: Honorable Mayor and City Council From: Jim Kerrigan Date: March 31, 1998 Subject: SuperValu Redevelopment Project, Status of Agreements At the April 14 work session, staff will provide an overview on the terms of the two agreements that are presently being negotiated and will need to be approved by the HRA at some future date for the SuperValu redevelopment project to proceed forward. As has previously been detailed to Council, these two agreements are as follows: • Development agreement which would be executed between the HRA and SuperValu. Attached to this document will be an option agreement for the HRA purchase of SuperValu's North Annex property. • The purchase agreement for the Hennepin County Public Works property. This document would be executed by the HRA and County. Attached to this memo are copies of both documents and a summary of the development agreement. At this meeting staff will be looking for any comments, concerns, questions, etc., the Council might have specifically concerning the development agreement. It is hoped that both bodies will be able to agree on the terms of this document within the near future, at which time staff will return to the HRA for possible approval. SUMMARY OF DEVELOPMENT AGREEMENT BETWEEN HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY AND SUPERVALU, INC. 1. Redeveloper. The Redeveloper is SUPERVALU, INC., a Delaware corporation. 2. Description of infect. The development consists of the construction of an office/warehouse project of a size yet to be determined. 3. AC, gar o f Property. The development will be constructed . on the approximately 42 acre Hennepin County Shops property. The agreement contemplates that at the time that it is signed, the Authority will have executed a Purchase Agreement with the County allowing the Authority to buy the County Property. The Authority agrees that, subject to the conditions in the development agreement, it will assign the County Purchase Agreement to the Redeveloper and the Redeveloper will acquire the County Property. 4. • I s • . n _ .: '....en • K _ t41. . Before the Authority will assign the County Purchase Agreement to the Redeveloper, all of the following conditions will have to be satisfied: (a) (b) (c) (d) (e) (f) The Redeveloper will have obtained all governmental approvals, except building permit approval, necessary to construct the project. Title to the County Property will have been reviewed and approved. The Redeveloper will have demonstrated financing sufficient to build the project. The environmental condition of the property and the property's soil conditions will have been reviewed and approved. The Option, discussed in 8. below, will have been placed of record. All conditions precedent contained in the County Purchase Agreement will have been satisfied 5. Approval of _Construction P ns. The Redeveloper is responsible to take all necessary actions to obtain all governmental approvals of the Redeveloper's construction plans by a date that will enable the Authority to terminate the County Purchase Agreement if appropriate. These approvals include conditional use permit approval, right -of -way vacations, variance approvals, and platting of the property, if necessary. The project must be designed and constructed in accordance with the design standards attached to the agreement. 6. Public Improve. Certain road improvements described in the Agreement will be constructed in connection with the construction of the project. (realignment of Fifth Street South and construction of frontage road west of Highway 169) The Redeveloper is responsible for constructing such improvements in accordance with specifications for City roads. The current draft of the agreement also provides that the Redeveloper will be responsible for the payment of all costs of such improvements. 7. Remedy if eveloper Fail. iQ,,, ins t. If the Redeveloper acquires the County Property but fails to construct the agreed upon project, the Authority will have the right to secure another developer and purchase the property for development. The purchase price to be paid will be the price paid to the County, minus the Authority's costs of enforcing this remedy. The Redeveloper will also be required to, at the option of the Authority, either complete or remove any improvements that have been started in any public right -of -way. The • Redeveloper can also develop or sell to a third party who will develop improvements other than the proposed office /warehouse project. Any such improvements must comply with the draft Business Park Zoning Ordinance attached to the Agreement or, if the City has adopted a Business Park Zoning Ordinance, the improvements must comply with that ordinance. 8. North Anne_ x Properly. Prior to the Authority's assignment of the County Purchase Agreement to the Redeveloper the Redeveloper must execute an Option and Declaration of Restrictive Covenant granting to the Authority certain rights to acquire the North Annex Property. See Accompanying Summary. SUMMARY OF OPTION AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANT BETWEEN HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY AND SUPERVALU, INC. 1. font o Qption, The option provides for a time period during which the Authority has the right to buy the North Annex Property from the Redeveloper. 2. .Option Term. The option agreement covers a period of time starting at the closing on the Redeveloper's acquisition of the County Property and ending on a date five years after the date that the Redeveloper receives a certificate of occupancy for the Redeveloper's office /warehouse development on the County Property. For the first two years after the completion of the County Property development, the Redeveloper has the rights to submit development proposals that is described in number 4. below. If the Redeveloper does not submit a proposal that complies with 4. below, the Authority can market the property for development. The actual period during which the Authority can exercise the option and buy the North Annex Property is during the fifth year after completion of the office/warehouse development on the County Property. 3. Purchase Price. The purchase price to be paid by the Authority is fair market value. Fair market value will be determined through an appraisal process under which the Redeveloper and the Authority will each have an appraisal of the property done. If the two appraisals no more than 5% apart, the purchase price will be the average of the two appraisals. If the two appraisals are more than 5% apart, a third appraisal will be done. If the highest and lowest of the three appraisals are within 5% of the middle appraisal, the price will be the middle appraisal. If the highest and lowest of the three appraisals are more than 5% higher or lower of the middle appraisal., the price will be the average of the two closest appraisals. 4. developer o leeye_1op. Notwithstanding the option, the Redeveloper will have the right within the first two years of the option term to submit a proposal to the Authority for development of the North Annex Property. The proposal must provide for a development that complies with the draft Business Park Zoning Ordinance attached to the development agreement or, if the City has adopted a Business Park Zoning Ordinance, the improvements must comply with that ordinance. If the Authority approves that development and the Authority and Redeveloper enter into an agreement detailing the rights and obligations of the parties with respect to such development, the Authority will refrain from exercising the option. If the Redeveloper fails to construct such development, the option rights will remain in effect for a period of time, as described in the agreement to be entered into between the Authority and the Redeveloper. 5. Declaration of Restrictive Covenant. Until termination of the option term, the Redeveloper can not sell the North Annex Property without the Authority's consent. The Authority can withhold its consent for any reason. TOTAL P.04 April 3, 1998 REDEVELOPMENT AGREEMENT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS This document was drafted by: BRADLEY & DEIKE, P. A. 5100 Eden Avenue, Suite 300 Edina, MN 55436 Telephone: 926 -5337 Rjd/agreement/hopkins supervalu revised and SUPERVALU INC. Dated: 1998 PREAMBLE Section 1.1. Definitions TABLE OF CO ___ML5I ARTICLE I Definitions ARTICLE II Page 1 ARTICLE III 2 Representations Section 2.1. Representations by the Authority 4 Section 2.2. Representations by the Redeveloper 4 Conveyance of Property Section 3.1. Status of Property 5 Section 3.2. Payment of Costs 5 Section 3.3. Conditions Precedent to Conveyance 6 Section 3.4. Title 7 Section 3.5. Environmental Assessment 7 Section 3.6. Closing 8 Section 3.7. Access to Property 8 Section 3.8. Copies of Reports 8 Section 3.9. North Annex Property 8 Section 3.11. Performance of County Purchase Agreement 9 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements 11 Section 4.2. Construction Plans 11 Section 4.3. Commencement and Completion of Construction 12 Section 4.4. Construction of Public Improvements 13 Section 4.5. Authority's Remedies if Minimum Improvements not Constructed 13 (i) ARTICLE V Insurance Section 5.1. Insurance 15 Section 6.1. Real Property Taxes 17 Section 6.2. Transit - Related Development Tax Incentive 17 Prohibi 'ons A ' ain t A si ARTICLE VI Taxes; Assessment Agreement ARTICLE VII Financing Section 7.1. Financing 18 Section 7.2. Limitation on Encumbrance of Property 18 ARTICLE VIII ent and Tran fey• Indemnification n Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement Section 8.2. Release and Indemnification Covenants ARTICLE IX Events of Default Section 9.1. Events of Default Defined 21 Section 9.2. Remedies on Default 21 Section 9.3. No Remedy Exclusive 21 Section 9.4. No Additional Waiver Implied by One Waiver 21 Section 9.4. Attorneys' Fees 22 19 19 Section 10.1. Representatives Not Individually Liable 23 Section 10.2. Provisions Not Merged With Deed 23 Section 10.3. Titles of Articles and Sections 23 Section 10.4. Notices and Demands 23 Section 10.5. Disclaimer of Relationships 23 Section 10.6. Modifications 23 Section 10.7. Counterparts 24 Section 10.8. Judicial Interpretation 24 Section 10.9. Wage and Job Goals 24 Section 10.10. Effect of Termination of Agreement 24 SCHEDULE A SCHEDULE B SCHEDULE C SCHEDULE D SCHEDULE E SCHEDULE F SCHEDULE G SCHEDULE H SCHEDULE I ARTICLE X Additional Provisions Description of Redevelopment Property County Purchase Agreement Site Plan Form of Deed Form of Option Business Park Zoning Ordinance Description of Public Improvements Design Standards Form of Purchase Agreement REDEVELOPMENT AGREEMENT THIS AGREEMENT, made on or as of the day of , 1998, by and between the Housing and Redevelopment Authority In and For the City of Hopkins, a public body corporate and politic (hereinafter referred to as the "Authority ") which was created pursuant to Minnesota Statutes, section 469.001- 469.047 (the `Act "), having its principal office at 1010 First Street South, Hopkins, Minnesota 55343, and SUPERVALU INC., a Delaware corporation (hereinafter referred to as the "Redeveloper "), having its principal office at 11840 Valley View Road, Eden Prairie, Minnesota 55344 -3691. WITNESSETH: WHEREAS, the Authority was created and authorized to transact business and exercise its powers by a resolution of the City Council of the City of Hopkins (the City of Hopkins is hereinafter referred to as the "City ") adopted pursuant to Minnesota Statutes, Section 469.003; and WHEREAS, pursuant to the Act the Authority has the legal authority to undertake redevelopment projects for the purpose of eliminating blighted and substandard buildings and properties within areas designated as redevelopment projects within the City; and WHEREAS, the Redeveloper has presented to the Authority a proposal pursuant to which the Redeveloper would acquire certain real property located in the City (which property is referred to herein as the "Redevelopment Property ") for the purpose of demolishing the structures currently located thereon and constructing a new office /warehouse development (the "Minimum Improvements "); and WHEREAS, the Authority and the Redeveloper have entered into a Preliminary Development Agreement (the "Preliminary Agreement ") in which they agreed to negotiate the terms of a formal Redevelopment Agreement which would state the obligations and covenants of the Authority and the Redeveloper with respect to the redevelopment of the Redevelopment Property; and WHEREAS, the Authority and the Developer desire to enter into this Agreement and intend that this Agreement constitute the Redevelopment Agreement referred to in the Preliminary Agreement; and WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property is in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and, therefore, the Authority is prepared to enter into this Agreement and to perform its obligations contained herein. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.001- 469.047, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Housing and Redevelopment Authority In and For the City of Hopkins, or any successor or assign. "Business Park Zoning Ordinance" means the draft zoning ordinance attached to this Agreement as Schedule F or, if the City has at the time in question adopted a business park zoning ordinance that differs from the attached draft ordinance, the ordinance in effect at such time. "City" means the City of Hopkins. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property to be submitted to the Authority or City pursuant to Article IV of this Agreement. "County" means Hennepin County, Minnesota. "County Purchase Agreement" means the Purchase Agreement between the Authority, as Buyer, and the County, as Seller, dated as of , 1998, a copy of which is attached to this Agreement as Schedule B and made a part hereof by reference. "Deed" means the quit claim deed in the form of the deed contained in Schedule D to this Agreement. "Design Standards" means the standards for the design of the Minimum Improvements contained on Schedule 11 to this Agreement. "Event of Default" means an action listed in Section 9.1 of this Agreement. "Holder" means the owner of a Mortgage. "Minimum Improvements" means the construction by the Redeveloper on the Redevelopment Property of an approximately square foot office /warehouse development in accordance with the Construction Plans. 2 "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, by the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "North Annex Property" means the real property owned by the Redeveloper and described as such on the attached Schedule A. "Option" means the Option Agreement and Declaration of Restrictive Covenant in the form of the instrument attached to this Agreement as Schedule E and made a part hereof by reference. "Permitted Encumbrances" means this Agreement, the Deed (if applicable), the Option, the Right of First Refusal, and "Permitted Encumbrances ", as such term is defined in the County Purchase Agreement. "Project" means the Authority's Redevelopment Project No. 1. "Project Area" means the real property located within the boundaries of the Project. "Public Improvements" means the public improvements project described on the attached Schedule G to be constructed by the Authority or City, or the Redeveloper on behalf of the City or Authority, pursuant to Section 4.4 of this Agreement. "Redeveloper" means SUPERVALU INC, a Delaware corporation, its successors and assigns, and any future owners of any interest in the Redevelopment Property. "Redevelopment Property" means the real property described as such on Schedule A attached to this Agreement. "Site Plan" means the preliminary Site Plan attached to this Agreement as Schedule C, which generally shows the location of the proposed Minimum Improvements and Public Improvements. "State" means the State of Minnesota. "Title Evidence" means the information defined as such in the County Purchase Agreement. "Unavoidable Delays" means delays which are the direct result of acts of God, unforeseen adverse weather conditions, strikes, other labor troubles, fire or other casualty to the Minimum Improvements or Public Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in enforcing its rights under this Agreement) which directly result in delays. 3 ARTICLE II Representations Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a municipal housing and redevelopment authority organized and existing under the Act. Under the laws of the State, the Authority has the power to enter into this Agreement and to perform its obligations hereunder and has duly authorized the execution, delivery and performance of this Agreement by proper action of its Board of Commissioners. (b) The Authority will cooperate with the Redeveloper with respect to any litigation commenced with respect to Redevelopment Property and Minimum Improvements. (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any evidences of indebtedness, agreement or instrument of whatever nature to which the Authority is now a party or by which it is bound, or constitutes a default under any of the foregoing. Section 2.2. Representations by the Redeveloper. The Redeveloper represents that: (a) The Redeveloper is a corporation duly organized under the laws of the state of Delaware and in good standing under the laws of the state of Minnesota, has the power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its directors. (b) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. (c) The Redeveloper will cooperate with the Authority with respect to any litigation commenced with respect to Redevelopment Property and Minimum Improvements. (d) To the best of the Redeveloper's knowledge and belief, no investigation, administrative order, consent order or agreement, litigation, or settlement with respect to Hazardous Substances is proposed, threatened, anticipated or in existence with respect to the Redeveloper Property. 4 ARTICLE III Conveyance of Property Section 3.1. Status of Property. (a) Fee title to the Redevelopment Property is currently owned by the County. The Authority has negotiated and entered into the County Purchase Agreement under which the Authority is entitled to acquire the Redevelopment Property. Subject to the term and conditions of this Agreement, the Authority proposes to acquire the Redevelopment Property and convey the Redevelopment Property to the Redeveloper or to assign to the Redeveloper the Authority's rights under the County Purchase Agreement. (b) The Authority will assign the County Purchase Agreement to the Redeveloper and the Redeveloper will acquire the Redevelopment Property directly from the County, unless the Authority is prohibited from doing so pursuant to the Purchase Agreement, in which case the Authority will acquire the Redevelopment Property under the County Purchase Agreement and convey the Redevelopment Property to the Redeveloper. (c) The Redeveloper acknowledges that it has reviewed, approved, and consented to the terms and conditions of the County Purchase Agreement. 3.2 Payment of Costs. (a) The consideration to be given by the Redeveloper for the Authority's conveyance of the Redevelopment Property or assignment of the County Purchase Agreement consists of performance of the Redeveloper's covenants under this Agreement and the payment of all amounts required to be paid under this Agreement. If the Authority assigns the County Purchase Agreement to the Redeveloper, the price to be paid by the Redeveloper for such assignment shall be One Dollar ($1.00). If the Authority acquires and conveys the Redevelopment Property, the purchase price to be paid by the Redeveloper shall also be One Dollar ($1.00). However, the Redeveloper shall in either event be responsible for the payment of any earnest money and purchase price payable under the County Purchase Agreement. The Redeveloper has paid to the Authority the sum of $ which has been used by the Authority to pay the earnest money payable under the County Purchase Agreement. The Redeveloper shall also be responsible for the payment of all costs incurred by the Authority, the City or the Redeveloper in implementing the terms of the County Purchase Agreement, including, without limitation, all costs of environmental and title review, survey costs, and closing costs. All costs required to be paid or necessary to be incurred under the County Purchase Agreement shall be paid by the Redeveloper when the same comes due. (b) In consideration of the Authority's covenants and agreements set forth herein, the Redeveloper agrees that it will also pay all out -of- pocket costs incurred by the Authority or City with respect to the Authority's activities under this Agreement and the County Purchase Agreement and the City's activities in connection with the Redeveloper's development. The costs for which the Redeveloper shall be responsible shall include all out -of- pocket costs incurred by the Authority or City with respect to this Agreement or their activities in connection herewith, including, without limitation, all fees, whether incurred before or after the date of this Agreement, owed to traffic, development, fiscal, environmental, geotechnical and other consultants, and all reasonable attorneys' fees incurred by the Authority in connection with the 5 negotiation and preparation of the Preliminary Agreement, the County Purchase Agreement, this Agreement, and all related documents or transactions, or in enforcing the Redeveloper's obligations under this Agreement. All of the Authority's consultants shall be under contract with the Authority, unless the Authority otherwise agrees in writing. The Authority agrees that it will not incur costs or liability for costs for the items described above without first providing the Redeveloper a copy of the proposal received from the Authority's consultant for such work. In addition, the Authority agrees that, with respect to its other costs, it will prior to incurring such costs diligently attempt to provide the Redeveloper with a description of such costs and the rates or fees to be charged by the parties retained by the Authority and to whom such costs will be payable; provided, that a failure to provide such information shall not relieve the Redeveloper of the obligation to pay such costs to the extent that the costs for which no such information was provided with respect to a particular person or entity do not exceed $2,000. The Authority shall provide to the Redeveloper requests for payment of the costs incurred by the Authority from time to time accompanied by statements or invoices documenting such costs. Such costs shall be payable by the Redeveloper to the Authority within 21 days after request by the Authority. At the option of the Authority, the Authority may require that the Redeveloper make payments of costs incurred by the Authority directly to the persons or entities to whom such costs are owed, in which case such payments shall be made within 21 days after the Authority provides documentation of the costs to the Redeveloper. Section 3.3. Conditions Precedent to Conveyance. The Authority's obligation to acquire the Redevelopment Property and to convey the Redevelopment Property to the Redeveloper or to assign the County Purchase Agreement to the Redeveloper and the Redeveloper's obligation to accept conveyance of the Redevelopment Property or assignment of the County Purchase Agreement shall be subject to the condition that the other party not be in default under any term of this Agreement and shall be subject to the satisfaction of all of the following conditions precedent: (a) The Redeveloper having obtained the .following to the extent required: (i) amendments, revisions, exceptions or changes as may be necessary to applicable zoning codes and ordinances; (ii) conditional use permit approval from the City, (iii) roadway access rights and permits; (iv) environmental consents, if necessary; (v) approval of the platting of the Redevelopment Property, if necessary; (vi) watershed district permits and approvals; and (vii) all other governmental approvals, except for building permit approvals, that are necessary in order to allow the construction and operation of the Minimum Improvements in accordance with the Redeveloper's Construction Plans. (b) The Redeveloper having reviewed and approved, or waived any objections to, title to the Redevelopment Property pursuant to Section 3.4 of this Agreement. (c) Redeveloper shall have secured construction and permanent mortgage loan financing sufficient for the acquisition of the Redevelopment Property and construction of the Minimum Improvements or shall have demonstrated to the reasonable satisfaction of the Authority that the Redeveloper has sufficient funds available for such purposes. 6 • (d) The Redeveloper shall have satisfied itself as to the environmental condition of the Redevelopment Property pursuant to Section 3.5 of this Agreement, or shall have waived its right to object to such environmental condition. (e) The Authority shall have approved the sale of the Redevelopment Property following the holding by the Authority of a public hearing on the matter if required pursuant to Minnesota Statutes, section 469.029. (f) The Redeveloper shall have determined that the soils and building conditions on the Redevelopment Property are adequate for its purposes. (g) The Option shall have been executed and placed of record, as an encumbrance prior to all other interest in the North Annex Property, other than such interests as the Authority may in writing except, in the appropriate office for the recording of such instruments against the North Annex Property. (h) The County Purchase Agreement shall be in full force and effect and all conditions stated therein that must be satisfied prior to the Authority being entitled to acquire the Redevelopment Property shall have been satisfied. In the event that the above conditions precedent have not been satisfied, or waived in writing by both the Authority and Redeveloper, by (Note -This date will have to be at least 5 days prior to the final contingency date in the County Purchase Agreement), either the Authority or Redeveloper may terminate this Agreement by giving written notice of termination to the other party, whereupon this Agreement shall, subject to Section 10.11, be null and void and the Redeveloper and Authority shall execute an instrument in recordable form canceling this Agreement. Approval by the Authority or City of any documents submitted to it by the Redeveloper to satisfy the conditions precedent stated in this Agreement and, except as may be specifically stated to the contrary in this Agreement, the determination to proceed with the conveyance of the Redevelopment Property shall be in the sole discretion of the City and the Authority, respectively. Section 3.4. Title. Within a reasonable time after the Authority receives the Title Evidence from the County, the Authority shall provide copies of the same to the Redeveloper. The Redeveloper shall review the Title Evidence and provide its written objections to the Authority by such time as will allow the Authority to make any objections to the condition of title within the time periods provided in the County Purchase Agreement. Section 3.5 Environmental Assessment, Within a reasonable time after the Authority receives the Environmental Reports described in the County Purchase Agreement, the Authority shall provide copies of the same to the Redeveloper. The Redeveloper shall be responsible for taking all actions required or permitted under the County Purchase Agreement to ascertain whether the environmental conditions existing on the Redevelopment Property are acceptable to the Authority. In addition, the Redeveloper, at its expense, shall secure any necessary additional environmental reports or assessments so as to satisfy the Redeveloper as to the condition of the Redevelopment Property and to provide the Authority with notices of objections by such times as 7 will allow the Authority to make any objections or assert any contingencies under the County Purchase Agreement. Section 3.6 Closing. (a) Closing on the conveyance of the Redevelopment Property to the Redeveloper or the Authority's assignment of the County Purchase Agreement to the Redeveloper shall occur on or before ten (10) business days after satisfaction, or waiver, of all of the conditions precedent set forth in Section 3.3 of this Agreement. If the Authority acquires the Redevelopment Property it will convey such property to the Redeveloper at the same time as it acquires the Redevelopment Property. (b) If the Authority acquires the Redevelopment Property and conveys the Redevelopment Property to the Redeveloper, instead of assigning the County Purchase Agreement to the Redeveloper, at closing on the conveyance of the Redevelopment Property, the Authority shall deliver to the Redeveloper: (i) the Deed duly executed and acknowledged conveying to the Redeveloper marketable title to the Redevelopment Property subject only to Permitted Encumbrances; (ii) the abstract or title insurance policy described in Section 3.4; (iii) a Seller's Affidavit, in customary form, relative to judgments, federal tax liens, mechanic's liens and outstanding interests in the Redevelopment Property; (iii) a FIRPTA Affidavit properly executed and in recordable form, containing such information as is required by IRC Section 1445(b)(2) and regulations promulgated pursuant thereto; and (iv) copies of all other documents received by the Authority from the County under the County Purchase Agreement, together with an assignment of the Environmental Indemnity Agreement to be executed by the County. Section 3.7 Access to Property. During the term of this Agreement, the Authority will make arrangements with the County to permit the Redeveloper and its authorized representatives to enter upon the Redevelopment Property at reasonable times for the purpose of architectural inspection and design studies and the taking of such soil borings and environmental assessments as are deemed reasonably necessary by Redeveloper and as are permitted under the County Purchase Agreement. Redeveloper hereby agrees to indemnify, defend, and hold harmless the Authority, its officers, agents, employees and commissioners from and against any and all' damage to property or injury to person arising out of the Redeveloper's exercise of its right of access to the Redevelopment Property under this Section. The Authority makes no representations whatsoever as to the condition of the Redevelopment Property, the soils thereon, or the building located on the Redevelopment Property or that the same is suitable for the Redeveloper's proposed development. If the Redeveloper determines to proceed with its acquisition of the Redevelopment Property neither the Authority nor the City shall have any liability to the Redeveloper on account of any conditions or defects with respect thereto. Section 3.8. Copies of Reports. The Redeveloper shall furnish to the Authority, at no cost to the Authority, copies of all reports, assessments, studies, surveys and other documentation acquired by or prepared on behalf of the Redeveloper in connection with its proposed acquisition of the Redevelopment Property. Section 3.9. North Annex Property. (a) At or prior to the conveyance of the Redevelopment Property or assignment of the County Purchase Agreement, the Redeveloper shall execute and deliver the Option for execution and recording against the North Annex 8 Property. The Authority's participation in the Redeveloper's development of the Minimum Improvements as described in this Agreement is predicated, in part, on the Redeveloper's granting to the Authority the rights contained in the Option. The Authority agrees that it will not exercise its rights under the Option to acquire the North Annex Property, or will delay exercising such rights, if either of the following conditions has been satisfied: (b) Until the end of the second year following the Commencement Date, as defined in the Option, the Redeveloper shall be entitled to present to the Authority and the City for their consideration a proposal describing a plan for the development of the North Annex Property by the Redeveloper. The Authority agrees that it will not exercise its rights under the Option if the following conditions are met with respect to such development proposal: (i) The proposed development is acceptable, in the sole discretion of the Authority and the City; (ii) The proposed development complies with the Business Park Zoning Ordinance; (iii) The Redeveloper demonstrates to the satisfaction of the Authority that the proposed development will occur within a time frame acceptable to the Authority and the City; and (iv) The Authority and the Redeveloper enter into an agreement detailing the improvements to be constructed by the Redeveloper on the North Annex Property, the timing of such construction, the rights of the Authority if such construction does not occur, including an extension of the Authority's rights under the Option, and such other terms as the Authority or the Redeveloper deem appropriate. (c) Upon the completion of construction of the Redeveloper's development approved in accordance with (b) above, the Authority will execute an instrument, in recordable form, evidencing the termination of the Option. Section 3.11. Performance of the County Purchase Agreement. The Authority and the Redeveloper acknowledge that the Authority's execution of the County Purchase Agreement occurred solely in anticipation of the execution of this Agreement and for the purpose of acquiring the Redevelopment Property for the development by the Redeveloper of the Minimum Improvements. Further, it is the intent that under no circumstances will the Authority or the City be obligated to acquire the Redevelopment Property or to pay any costs under the County Purchase Agreement except in order to secure such property for the Redeveloper's development. Therefore, all of the conditions precedent and contingencies stated in this Article III are subject to and are not in addition to the contingencies stated in Section 3 of the County Purchase Agreement. The Authority and the Redeveloper shall cooperate with one another in the performance of all inspections, tests and approvals that are necessary to fulfill such contingencies, and the Redeveloper shall notify the Authority, in writing prior to the expiration of the time period for exercising contingencies provided in the County Purchase Agreement should the Redeveloper desire to exercise any of the conditions precedent provided in this Agreement or have the Authority exercise any of the contingencies stated in the County Purchase 9 Agreement. At such time as a contingency stated in the County Purchase Agreement has been removed or waived, this Agreement shall no longer be subject to or contingent upon any contingency or condition precedent relating to the same matter or issue. At such time as the Authority is unconditionally bound to perform the County Purchase Agreement, the Redeveloper shall also be unconditionally bound to perform this Agreement and, notwithstanding anything to the contrary contained in this Agreement, this Agreement may no longer be terminated by the Redeveloper or the Authority. 10 ARTICLE IV Construction of Improvementts Section 4.1. Construction of Minimum Improvements. (a) The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans. (b) In the event the Redevelopment Property is acquired by the Redeveloper, then the Redeveloper will construct the Minimum Improvements in accordance with the terms of this Agreement and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations), except for variances necessary to construct the improvements contemplated in the Construction Plans approved by the Authority. (c) The Minimum Improvements will be constructed at a cost to Redeveloper of at least $ , including soft costs and the costs of acquiring the Redevelopment Property. (d) The Redeveloper has, to the best of its knowledge, received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation. The Redeveloper, to the best of its knowledge, 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 would give any person a valid claim under any of the foregoing. (e) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. Section 4.2. Construction Plans. (a) The Authority's willingness to convey the Redevelopment Property to the Redeveloper is predicated upon and subject to the Redeveloper's agreement that it will construct the Minimum Improvements and that the Minimum Improvements will be of such quality and nature as will satisfy the Authority's and City's goals for the development of the Redevelopment Property. Attached to this Agreement is the Site Plan that has been submitted to the City and the Authority showing the general nature and location of the Minimum Improvements. The Site Plan has not been finally approved by the City or the Authority and is subject to change. On or before , 1998, the Redeveloper shall submit to the City and the Authority applications, together with supporting documentation, for conditional use permit, right -of -way vacation, and variance approvals and, if necessary, a preliminary and final plat of the Redevelopment Property. If the Redeveloper fails to provide such information by such date this 11 Agreement shall be terminable by the Authority in the manner described in the last paragraph of Section 3.3. Within a period of time that will allow the Redeveloper to satisfy the condition contained in Section 3.3(a), taking into account the time necessary for review by the Authority, the Redeveloper shall provide to the Authority and the City for their review and approval Construction Plans for the Minimum Improvements and documentation necessary to obtain all other necessary approvals that must be obtained prior to the construction and operation of the Minimum Improvements. The Construction Plans and other documentation shall provide for the construction of the Minimum Improvements and shall be in conformity with this Agreement and all applicable state and local laws and regulations. The Authority shall approve the Construction Plans and other documentation in writing if, in the sole discretion of the Authority, the proposed Minimum Improvements are of such a nature and quality as to justify the Authority's conveyance of the Redevelopment Property or assignment of the County Purchase Agreement and if they are consistent with the provisions of this Agreement. Such Construction Plans and other documentation shall, in any event, be deemed approved by the Authority, but not the City, unless rejected in writing by the Authority, in whole or in part within thirty (30) days after the date of their receipt by the Authority. Nothing in this Section shall be deemed to relieve the Redeveloper of its obligations to comply with the requirements of the City's normal construction permitting process. In addition, the Redeveloper acknowledges and agrees that, in consideration for the Authority's undertakings and agreements under this Agreement, the City shall be entitled to impose standards and conditions with respect to its approvals of the Redeveloper's development that are in excess of those permitted by current zoning. (b) If the Redeveloper desires to make any material change in any Construction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. For purposes of this Agreement, a "material change" in the Construction Plans is a change that materially alters the nature, quality, value or exterior appearance of the Minimum Improvements. If the Authority approves the change, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Any requested change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper shall commence construction of the Minimum Improvements within ( ) days after it acquires the Redevelopment Property and shall complete such construction by The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and its successors and assigns, shall promptly begin and diligently prosecute to completion construction of the Minimum Improvements within the period specified in this Section 4.3 of this Agreement. Until construction of the Minimum Improvements has been completed, the Redeveloper shall make construction progress reports, at such times as may reasonably be requested by the Authority as to the actual progress of the Redeveloper with respect to such construction. 12 Section 4.4. Construction of Public Iinproveriierit . (a) The development of the Minimum Improvements necessitates the construction of certain street and utility improvements on and adjacent to the Redevelopment Property (the "Public Improvements "). The Public Improvements are generally described on the attached Schedule G to this Agreement. The Authority and City are willing to assist the Redeveloper by allowing the construction of such Public Improvements but only on the terms and conditions contained in this Agreement. (b) The Public Improvements shall be constructed in accordance with plans and specifications prepared based on the final approved plans for the Redeveloper's development of the Minimum Improvements. The plans for the Public Improvements shall be prepared by a consulting firm acceptable to the City and shall be prepared in accordance with City policies and requirements applicable to the construction of such public improvement projects. (c) The Redeveloper shall be responsible for contracting with contractors for the construction of the Public Improvements and the payment of all costs related to such construction. Section 4.5. Authority's Remedy If Minimum Improvements Not Constructed. (a) In addition to and not in substitution for any other remedy available to the Authority as a result of the occurrence of an Event of Default under this Agreement, if the Redeveloper defaults in its obligations to commence or complete construction of the Minimum Improvements as required under this Agreement and such default is not cured within the time for cure set forth in Section 9.2 of this Agreement, the Authority shall have the right to acquire the Redevelopment Property on the following terms: (i) The Authority may exercise its right to acquire the Redevelopment Property by giving written notice to the Redeveloper of its intent to acquire. Such notice shall be given by the Authority's execution and delivery to Redeveloper of a purchase agreement, in triplicate, in the form of the purchase agreement attached to this Agreement as Schedule I with all blanks filled in and exhibits attached. The purchase agreement shall be deemed properly delivered if delivered in accordance with the provisions of Section 10.4 of this Agreement. Within three (3) business days of delivery of the purchase agreement to the Redeveloper, the Redeveloper shall cause the purchase agreement to be duly executed on its behalf and shall return two (2) originals thereof to the Authority. The Redeveloper acknowledges that it has agreed to be bound by the terms of the purchase agreement in the event that the Authority exercises its rights under this Section. In the event that the Redeveloper fails to executed and deliver the purchase agreement in the manner and within the time period required by this Section, the Redeveloper shall be conclusively deemed to have accepted and executed the purchase agreements and shall be bound by all of the terms and conditions thereof. (ii) The closing on the purchase and sale of the Redevelopment Property shall be on a business day designated by the Authority in the purchase agreement described in 13 (i) above which shall be at least Cj but not more than U days after the date of delivery of the purchase agreement to Redeveloper. (iii) The purchase price to be paid by the Authority to acquire the Redevelopment Property shall be $ , which is the price to be paid by the Redeveloper to acquire the Redevelopment Property under the County Purchase Agreement, less the Authority's actual and documented costs incurred in implementing the provisions of this Section 4.5. (b) If at the time that the Authority is entitled to exercise the right to acquire the Redevelopment Property as described in this Section 4.5, the Redeveloper has commenced construction of any portion of the Public Improvements, the Authority shall have the right, at is option, to require that the Redeveloper either complete construction of any portion of the Public Improvements that have commenced in a public right -of -way or remove the partially constructed improvements in the public right -of -way and restore that portion of the Redevelopment Property to the condition that existed at the time that the Redeveloper acquired the Redevelopment Property. (c) If the Redeveloper defaults in its obligation to commence and complete construction of the Minimum Improvements so as to allow the Authority exercise its right to acquire the Redevelopment Property under this Section 4.5, the Redeveloper shall have the right to undertake an alternative development on the Redevelopment Property and the Authority will refrain from exercising its right to acquire the Redevelopment Property if the following conditions are met: (v) The proposed alternative development is acceptable, in the sole discretion of the Authority and the City; (vi) The proposed development consists of the construction of at least square feet of buildings in one phase of construction and complies in all respects with the Business Park Zoning Ordinance; (vii) The Redeveloper demonstrates to the satisfaction of the Authority that the proposed development will occur within a time frame acceptable to the Authority and the City; and (viii) The Authority and the Redeveloper enter into an agreement detailing the improvements to be constructed by the Redeveloper on the Redevelopment Property, the timing of such construction, the rights of the Authority if such construction does not occur, including an extension of the Authority's rights under this Section 4.5, and such other terms as the Authority or the Redeveloper deem appropriate. 14 Section 5.1. Insurance. ARTICLE V Insurance (a) The Redeveloper will provide and maintain or cause to be provided and maintained at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (i) 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. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, Broadening Endorsement including contractual liability insurance) together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $ for each occurrence (to accomplish the above - required limits, an umbrella excess liability policy may be used); and (iii) Worker's compensation insurance, with statutory coverage and employer's liability protection. The policies of insurance required pursuant to clauses (i) and (ii) above shall be in form and content reasonably satisfactory to the Authority and shall be placed with financially sound and reputable insurers licensed to transact business in the State, the liability insurer to be rated A or better in Best's Insurance Guide. The policy of insurance delivered pursuant to clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days' advance written notice to the Authority in the event of cancellation of such policy or change affecting the coverage thereunder. (b) Upon completion of construction of the Minimum Improvements and prior to , the Redeveloper shall maintain, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on comprehensive general public liability insurance, including personal injury liability (with employee exclusion deleted), and automobile insurance, including owned, non -owned and hired automobiles, against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $ , for public liability and shall be endorsed to show the Authority as an additional insured. 15 (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risk covered thereby. The Redeveloper will deposit annually with the Authority binders evidencing all such insurance, or a certificate or certificates of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it without giving written notice to the Redeveloper and the Authority 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, the Redeveloper shall furnish the Authority evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V of this Agreement, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. 16 ARTICLE VI Taxes and Special Assessments Section 6.1. Real Property Taxes. (a) Real estate taxes and special assessments due with respect to the Redevelopment Property shall apportioned and paid in accordance with the provisions of the County Purchase Agreement, with the Redeveloper to assume all of the Authority's liabilities for the payment of real estate taxes and special assessments under the County Purchase Agreement. The Authority shall have no responsibility to pay any real estate taxes or special assessments even if it acquires the Redevelopment Property and conveys the Redevelopment Property to the Redeveloper. (b) All general real estate taxes levied against the Redeveloper Property shall be prorated between Redeveloper and the Authority as of the date of closing on the conveyance of the Redeveloper Property to the Authority. The Redeveloper shall on the date of closing on the conveyance of the Redeveloper Property to the Authority pay all special assessments levied or pending against the Redeveloper Property. Section 6.2. Transit - Related Development Tax Incentive. The Authority and the Redeveloper anticipate that the by virtue of the development of the Minimum Improvements the Redevelopment Property will be eligible for a Transit - Related Development Tax Incentive pursuant to Minnesota Statutes, section 273.13, subd. 24(c). In order to induce the Redeveloper to undertake the development of the Minimum Improvements and, in consideration for the Redeveloper's payment of the costs of the Public Improvements, the Authority will cooperate with and assist the Redeveloper in its efforts to secure such tax classification for the Redevelopment Property. The Authority agrees that within twenty (20) days after the date of this Agreement, it will secure from the City Assessor a letter stating whether the Redevelopment Property will qualify for tax classification under Minnesota Statutes, section 273.13, subd. 24(c). 17 ARTICLE VII Financing Section 7.1. Financing. Prior to the Authority's acquisition and conveyance of the Redevelopment Property or assignment of the County Purchase Agreement to the Redeveloper, the Redeveloper shall submit to the Authority evidence, satisfactory to the Authority, that the Redeveloper has obtained mortgage or other construction and permanent financing in an amount sufficient to pay the cost of acquiring the Redevelopment Property and constructing the Minimum Improvements and Public Improvements. Section 7.2. Limitation Upon Encumbrance of Property. Prior to the completion of the Minimum Improvements, as certified by the Authority, neither the Redeveloper nor any successor in interest to the Redevelopment Property, or any part thereof, shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Redevelopment Property, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Redevelopment Property, except for the purposes of obtaining funds only to the extent necessary for acquiring and constructing the Minimum Improvements without the prior written approval of the Authority. 18 ARTICLE VIII Prohibitions Against Assignment and Transfer, Indemnification Section 8.1. Prohibition Against Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to completion of construction of the Minimum Improvements, except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to constructing the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) has not made or created, and will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest herein or therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval thereof by the Authority shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement from any of its obligations herein contained. Section 8.2. Release and Indemnification Covenants. (a) The Redeveloper, on behalf of the Redeveloper, its agents, successors and assigns, releases from and covenants and agrees that the Authority, the City, and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify, defend and hold harmless the Authority, the City, and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect or condition in the Redevelopment Property or the Minimum Improvements. (b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence of the following named parties, the Redeveloper agrees to release, indemnity, defend and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action, liability (including reasonable attorneys' fees and costs of defense), or other proceeding whatsoever by any person or entity whatsoever, including the Redeveloper and its successors and assigns, arising or purportedly arising from this Agreement, or the County Purchase Agreement or the transactions contemplated hereby or the acquisition of the Redevelopment Property or the construction, installation, ownership, and operation of the Minimum Improvements, including, but not limited to, liabilities and claims related to or arising from the presence of Hazardous Substances or adverse environmental conditions, soils and geotechnical conditions or any other matter relating to the physical condition of the Redevelopment Property. (c) The Redeveloper acknowledges and agrees that it shall rely solely on its own investigation, testing and due diligence in regard to the acquisition of the Redevelopment Property and the 19 development, design and construction of the Minimum Improvements and that neither the Authority nor the City have made any representation, warranties or agreements to or with the Redeveloper regarding the physical condition of the Redevelopment Property, environmental, soils or geotechnical conditions or the suitability of the Redevelopment Property for the development and construction of the Minimum Improvements. 20 • ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides); (i) any failure by the Authority or the Redeveloper to substantially observe or perform any material covenant, condition, obligation or agreement on its part to be observed or performed hereunder or (ii) a material breach of any representation set forth herein on or prior to the closing on conveyance of the Redevelopment Property. Section 9.2. Remedies on Default. Whenever any Event of Default occurs, the non- defaulting party may suspend its performance under this Agreement and may take any one or more of the following actions after providing thirty (30) days written notice to the other party of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days: (a) If the Event of Default occurs prior to the date on which the Authority has become unconditionally obligated to purchase the Redevelopment property, terminate this Agreement. (b) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce the specific performance and observance of any obligation, agreement, or covenant under this Agreement. The Redeveloper stipulates and agrees that the Authority shall have no adequate remedy at law should the Redeveloper default in the performance of its obligations hereunder and that the Authority shall be entitled to enforce the specific performance of such obligations. (c) The Authority may exercise the right to acquire the Redevelopment Property as described in Section 4.5 of this Agreement. Section 9.3. No Remedy Exclusive. With the exception of the completed termination of this Agreement as provided in section 9.2(a), no remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Redeveloper to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 9.5. Attorneys' Fees. Whenever any Event of Default on the part of the Redeveloper occurs which is not cured within the time period for such cure in Section 9.2 and the Authority shall employ attorneys or incur other reasonable expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Redeveloper under this Agreement, the Redeveloper agrees that it shall, within thirty (30) days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Authority. 22 ARTICLE X Additional Provisions Section 10.1. Representatives Not Individually Liable. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach or on any obligations under the terms of the Agreement. Section 10.2. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.3. Titles of Articles and Sections. , Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.4. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at 11840 Valley View Road, Eden Prairie, Minnesota 55344 -3691; and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 1010 First Street South, Hopkins , Minnesota 55343, Attention: James Karin, or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this. Section. Mailed notices shall be deemed duly delivered two (2) business days after the date of mailing. Section 10.5. Disclaimer of Relationships. The Redeveloper acknowledges that nothing contained in this Agreement nor any act by the Authority or the Redeveloper shall be deemed or construed by the Redeveloper or by any third person to create any relationship of third -party beneficiary, principal and agent, limited or general partner, or joint venture between the Authority and/or the Redeveloper and any third party. Notwithstanding the foregoing, the City shall be a third party beneficiary of those provisions of this Agreement which are intended t benefit the City, and the City shall be entitled to enforce such provisions. Section 10.6. Modifications. This Agreement may be modified solely through written amendments hereto executed by the Redeveloper and the Authority. Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 23 Section 10.8. Judicial Interpretation. Should any provision of this Agreement require judicial interpretation, the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent or attorney prepared the same, it being agreed that the agents and attorneys of both parties have participated in the preparation hereof. Section 10.9. Wage and Job Goals. The Redeveloper and the Authority acknowledge that the no financial assistance is being provided by the Authority to the Redeveloper in connection with the Redeveloper's development of the Minimum Improvements. The Authority therefore finds that the provisions of Minnesota Statutes, section 116J.991, requiring the establishment of wage and job goals are not applicable. However, in the event that it is determined by a court or other governmental entity with jurisdiction to make such determination that Minnesota Statutes, section 116J.991, is applicable, the job and wage goal to be met for such purpose shall be (D new job paying a wage no less than Section 10.10. Effect of Termination of Agreement. In the event that this Agreement is terminated pursuant to any provision hereof, including, without limitation, Section 9.2, or by court order, all provisions hereof shall terminate except that the Redeveloper's representations and agreements under Section 2.2, Section 3.2 and Section 8.2 shall survive such termination and any cause of action arising hereunder prior to such termination shall not be affected. 24 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. 25 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS By By SUPERVALU INC. By By STATE OF MINNESOTA) )SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1998, by and , the and of the Housing and Redevelopment Authority In and For the City of Hopkins, a public body politic and corporate, on behalf of the Authority. Notary Public STATE OF MINNESOTA) )SS. COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this day of 1998, by , and , the and of SUPERVALU INC., a Delaware corporation, on behalf of the corporation. Notary Public Redevelopment Property North Annex Property SCHEDULE A Description of Redevelopment Property t SCHEDULE B County Purchase Agreement SCHEDULE C Site Plan Provided: SECTION 1. SECTION 2. SCHEDULE D QUIT CLAIM DEED THIS INDENTURE, between the Housing and Redevelopment Authority In and For the City of Hopkins, Minnesota, a public body corporate and politic created pursuant to the Laws of Minnesota (the "Grantor "), and SUPERVALU INC., Minnesota, Inc., a Delaware corporation (the "Grantee "). WITNESSETH, that Grantor, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows, to -wit (such tract or parcel of land is hereinafter referred to as the "Property "): LEGAL DESCRIPTION To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging in any wise appertaining, to the said Grantee, its successors and assigns, forever, It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of a certain Redevelopment Agreement entered into between the Grantor and Grantee on the day of , 1998, (hereafter referred to as the "Agreement ") which Agreement is incorporated herein and made a part hereof by reference. It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the improvements thereon, as provided in the Agreement. In the event the Grantee herein shall, prior to the completion of construction of the improvements to be constructed under the Agreement, default in its obligations to construct such improvements and such default is not cured within the time permitted for such cure within the Agreement, the Grantor shall have the right to acquire the Property from the Grantee for the price and on the terms set forth in the Agreement. SECTION 3. This Deed is also given subject to: (a) Provision of the ordinances, building and zoning laws of the City of Hopkins, state and federal laws and regulations in so far as they affect this real estate. (b) Taxes payable subsequent to the date of this conveyance. IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its Executive Director this day of , 1998. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS This instrument was drafted by: BRADLEY & DEIK.E, P.A. 5100 Eden Avenue, Suite 300 Edina, Minnesota 55436. By: Its: By: Its: STATE OF MINNESOTA) )ss. COUNTY OF HENNEPIN) The foregoing instrument was acknowledge before me this day of 1998, by and , the and of the Housing and Redevelopment Authority In and For the City of Hopkins, a public body politic and corporate, on behalf of the Authority. Notary Public SCHEDULE E Form of Option SCHEDULE F Business Park Zoning Ordinance SCHEDULE G Description of Public Improvements SCHEDULE H Design Standards SCHEDULE 1 Form of Purchase Agreement 03/17/98 Draft • PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (this "Agreement ") is made as of ,1998, between the County of Hennepin, a political subdivision of the State of Minnesota ( "Seller ") and the Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota, a public body corporate and politic under the laws of Minnesota ( "Buyer "). In consideration of the terms covenants and conditions of this Agreement, Seller and Buyer agree as follows: 1. Sale of Property. Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller the real property located in Hennepin County, Minnesota, legally described in Exhibit A attached hereto and incorporated herein by reference together with all hereditaments, easements and appurtenances thereto (the "Real Property "). 2. Purchase Price and Manner of Payment. The total purchase price ( "Purchase Price ") to be paid by Buyer to Seller for the Real Property shall be $5,000,000.00 and shall be payable as follows: (a) $225,000,00, cash, as earnest money (the "Earnest Money ") to be deposited by Buyer on the date of this Agreement with First American Title Insurance Company (the "Title Company "), which the Title Company is instructed to hold and disburse in accordance with the terms of this Agreement. Seller and Buyer agree to execute an Escrow Agreement containing such terms as shall be reasonably required by the Title Company in connection with the deposit of the Earnest Money and establish -ment of an escrow account. (b) The balance of $4,775,000.00, shall be paid, in cash, on the Closing Date stated in Section 4 of this Agreement. 3. Contingencies. The obligations of Buyer under this Agreement are subject to and contingent upon each of the following contingencies: (a) Representations and Warranties. The representations and warranties of Seller contained in this Agreement must be true on the date of this Agreement and on the Closing Date as if made on the Closing Date. (b) Title. Title shall have been found acceptable as of the Closing Date, or been made acceptable, in accordance with the requirements and terms of Section 6 of this Agreement. c: \file\hopcivil \purchas2.hen (g) (i) c: \file \hopcivil \purchas2.hen the Environmental Reports have been addressed to the satisfaction of the MPCA. Environmental Assessment. In addition to the Environmental Reports, Buyer may obtain a current Phase I Environmental Assessment and, if deemed necessary by Buyer, a current Phase II Environmental Assessment (the "Phase II "), prepared by a qualified environmental engineer acceptable to Buyer at Buyer's sole expense (which may include tests or inspections for the presence of cemeteries, artifacts or burial mounds). On or before July 1, 1998, Buyer shall have determined that all matters disclosed by the environmental assessments referred to in this subparagraph are acceptable to Buyer in Buyer's sole discretion subject to any remediation to be performed by Seller pursuant to Paragraph (f), above. (h) Governmental Approvals. On or before July 1, 1998, Buyer shall have received all governmental approvals and accepted all governmental requirements for Buyer's intended redevelopment of the Real Property, including, but not limited to, zoning or rezoning approval, conditional use permit, changes in access to public roads, subdivision or platting, and/or vacation of plats or street rights -of -way from the City of Hopkins, Minnesota, Minnesota Department of Natural Resources, Army Corps of Engineers and/or Watershed District approval and, if required for Buyer's intended redevelopment of the Real Property, Environmental Assessment Worksheet and Environmental Impact Statement approvals, provided Buyer shall have a minimum of sixty (60) days following Seller's completion of the remediation described in Paragraph (f), above, in which to obtain an environmental assessment worksheet and/or environmental impact statement. Development Agreement. On or before July 1, 1998, Buyer and SUPERVALU, INC. ( "SUPERVALU ") shall have entered into a final Redevelopment Agreement establishing the terms and conditions under which the Real Property is to be redeveloped, all upon terms and conditions acceptable to Buyer. If any of the above contingencies have not been satisfied on or before the applicable dates stated above, then this Agreement may be terminated, at Buyer's option, by written notice from Buyer to Seller. Such notice of termination may be given at any time on or before the applicable dates stated above. Upon such termination, the Earnest Money shall be refunded to Buyer and upon such return, neither party will have any further rights or obligations regarding this Agreement or the Real Property. Should Buyer fail to give notice of termination on or before the applicable date stated above with respect to any of the foregoing contingencies, the contingency in question shall be conclusively deemed to have been waived by Buyer. All the contingencies set forth in this Agreement are specifically stated and agreed to be for the benefit of the Buyer and the Buyer shall have the right to unilaterally waive any contingency by written notice to Seller. Seller shall allow Buyer, and Buyer's agents and designees, access to the Real Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing. Buyer shall pay all costs and expenses of such investigation and testing, except as herein otherwise 3 (c) Performance of Seller's Obligations. Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement. (d) Soil Tests. Buyer shall have determined, on or before June 1, 1998, that Buyer is satisfied with the results of and matters disclosed by such soils, geotechnical and related tests of the Property as Buyer may deem necessary (which may include tests or inspections for the presence of cemeteries, artifacts or burial mounds), all such tests to be obtained at Buyer's sole cost and expense. Seller shall deliver to Buyer within ten (10) business days after the date of this Agreement copies of all soils and geotechnical test data and soils and geotechnical engineers' reports and similar documents and reports pertaining to the Real Property that are in Seller's possession or control or have been previously prepared on Seller's behalf, including any reports relating to cemeteries, artifacts or burial mounds. (e) Roads and Utilities. Buyer shall have determined, on or before July 1, 1998, that there is or shall be available to the Real Property all necessary utilities in order to support Buyer's proposed redevelopment of the Real Property and that the Real Property has or shall have adequate unrestricted access to public roads. (f) Environmental Remediation. On or before the Closing Date, Seller shall have, at Seller's sole cost and expense: c: \file \hopcivil \purchas2.hen i) Completed all of the environmental remediation, hazardous waste disposal, testing, monitoring and remediation (such environmental remediation, hazardous waste disposal, testing, monitoring and remediation being hereinafter collectively referred to as the "Remediation Work ") recommended or identified in the following environmental engineers' reports: and in the Phase II (as defined below). 2 The foregoing environmental engineers' reports are hereinafter referred to as the "Environmental Reports ". ii) Obtained a so- called "No Action Letter ", "Closure Letter" and, if applicable, a Certificate of Completion from the Minnesota Pollution Control Agency ( "MPCA ") acknowledging or establishing the Remediation Work has been satisfactorily completed and/or that all environmental concerns identified in (7) Other Documents. Such other documents as shall reasonably be required to carry out the intent of this Agreement. B. Buyer's Closing Documents. On the Closing Date, Buyer will execute and/or deliver to Seller the following (collectively, "Buyer's Closing Documents "): (1) Purchase Price. Buyer shall pay the Purchase Price to Seller in the manner required by Section 2 of this Agreement. (2) Affidavit of Purchaser. A Minnesota Uniform Conveyancing Blanks Affidavit of Purchaser in such form as shall reasonably be required by the Title Company to issue the Owners' Policy of Title Insurance as required by Section 6 of this Agreement. Opinion of Buyer's Counsel. An Opinion of Buyer's counsel, dated as of the Closing Date, in form reasonably satisfactory to Seller, stating that Buyer has the requisite power and authority to enter into this Agreement and the Buyer's Closing Documents; that such documents have been duly authorized by all necessary action on the part of Buyer and have been duly executed and delivered; that the execution, delivery and performance by the Buyer of such documents does not conflict with or result in violation of any judgment, order or decree to which Buyer is a party; and that such documents are valid and binding obligations of Buyer, enforceable in accordance with their terms. (3) (4) Other Documents. Such other documents as shall reasonably be required to carry out the intent of this Agreement. 5. Prorations. Seller and Buyer agree to the following proration and allocation of costs regarding this Agreement: (a) Real Estate Taxes. On or before the Closing, Seller shall pay all real estate taxes, if any, and any penalties and interest thereon due and payable with respect to the Property in 1997 and all years prior to the year of Closing, including all deferred taxes (including so- called "Green Acres" taxes) attributable to years prior to the year of Closing. The real estate taxes due and payable in the year of closing, if any, (other than deferred taxes) shall be pro rated between Seller and Buyer, on a per diem basis using a calendar year, to the Closing Date. Buyer shall pay all real estate taxes due and payable in years following the year of closing. (b) Special Assessments. Seller will pay, on or before the Closing Date, all special assessments levied, pending or constituting a lien against the Real Property as of the Closing Date including, without limitation, any installments of special assessments, including interest thereon, payable with general real estate taxes in the year of closing. Buyer shall assume all special assessments, if any, resulting from Buyer's proposed redevelopment of the Real Property. c:\filehopcivinpurchas2.hen 5 expressly stated, and shall hold Seller and the Real Property harmless from all costs and liabilities relating to Buyer's activities. Buyer shall further repair and restore any damage to the real property caused by or occurring during Buyer's testing and return the Real Property to substantially the same condition as existed prior to such entry. 4. Closing. The closing of the purchase and sale contemplated by this Agreement (the "Closing ") shall occur on (the Closing Date "). The Closing shall take place at the offices of the Title Company or at such other location as shall be mutually agreed to. Seller agrees to deliver possession of the Real Property to Buyer on the Closing Date. A. Seller's Closing Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following (collectively, "Seller's Closing Documents "): (1) Warranty Deed. A Warranty Deed conveying the Real Property to Buyer, free and clear of all encumbrances, except the Permitted Encumbrances hereinafter defined. (2) Seller's Affidavit. An Affidavit of Seller in the Minnesota Uniform Conveyancing Blanks form and containing such additional information as shall reasonably be required by the Title Company to issue the Owners' Policy of Title Insurance required by Section 6 of this Agreement. (3) (4) Owners Duplicate Certificate of Title or Abstract. The Owner's Duplicate Certificate(s) of Title or Abstract(s) of Title regarding the Real Property. (5) FIRPTA Affidavit. A non - foreign affidavit, properly executed and in recordable form, containing such information as is required by IRC Section 1445(b)(2) and its regulations. Environmental Indemnity Agreement. An Environmental Indemnity Agreement in the form of Exhibit B attached to this Agreement by which Seller shall agree to protect, indemnify and hold Buyer harmless from all claims, damages and liabilities arising from the presence of any hazardous wastes or substances, pollutants or contaminants on the Real Property. (6) Opinion of Seller's Counsel. An Opinion of Seller's counsel, dated as of the Closing Date, in form reasonably satisfactory to Buyer, stating that Seller has the requisite power and authority to enter into this Agreement and the Seller's Closing Documents; that such documents have been duly authorized by all necessary action on the part of Seller and have been duly executed and delivered; that the execution, delivery and performance by the Seller of such documents does not conflict with or result in violation of any judgment, order or decree to which Seller is a party; and that such documents are valid and binding obligations of Seller, enforceable in accordance with their terms. c: \file \hopcivil \purchas2.hen 4 i) Terminate this Agreement and receive a refund of the Earnest Money. Upon such termination and refund of the Earnest Money, neither party shall have any obligation to the other under this Agreement. ii) Waive the Objections and proceed to close, deducting from the Purchase Price the amount of any mortgage or monetary lien constituting an Objection which has not been removed by Seller. (c) Title Policy. At closing, Buyer will receive the Title Policy ( "Title Policy ") issued by the Title Company pursuant to the Title Commitment, or a suitably mark -up Commitment initialed by the Title Company undertaking to issue such a Title Policy in the form required by the Title Commitment as approved by Buyer. 7. Representations and Warranties by Seller. Seller represents and warrants to Buyer as follows: (a) Title to Real Property. Seller has or shall on the Closing Date have good and marketable title to the Real Property, free and clear of all encumbrances, except as specifically permitted by the provisions of Section 6 of this Agreement. (b) Leases. There are no leases or possessory rights of others affecting the Real Property. (c) Assessments. Seller has received no notice of actual or threatened special assessments or reassessments of the Real Property. (d) Environmental Laws. To the best knowledge of Seller, and except as disclosed in the Environmental Reports, no toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( "CERCLA "), 42 U.S.C. Section 9601 -9657, as amended) have been generated, treated, stored, released or disposed of, or otherwise placed, deposited in or located on the Real Property, nor has any activity been undertaken on the Real Property that would cause or contribute to (i) the Real Property to become a treatment, storage or disposal facility within the meaning of, or otherwise bring the Real Property within the ambit of, the Resource Conservation and Recovery Act of 1976 ( "RCRA "), 42 U.S.C. Section 6901 et seq., or any similar state law or local ordinance, (ii) a release or threatened release of toxic or hazardous wastes or substances, pollutants or contaminants, from the Real Property within the meaning of, or otherwise bring the Real Property within the ambit of, CERCLA, or any similar state law or local ordinance, or (iii) the discharge of pollutants or effluents into any water source or system, the dredging or filling of any waters or the discharge into the air of any c: \ file \hopcivil \purchas2. hen 7 (b) Recording Costs. Seller will pay the State Deed Tax and the cost of recording all documents necessary to place record title in the condition warranted by Seller in this Agreement. Buyer will pay the cost of recording all other documents. (c) Attorneys' Fees. Each of the parties will pay its own attorneys' fees. (d) Title Insurance and Closing Fees. Seller shall pay all costs of providing the Title Evidence required by Section 6 of this Agreement. Buyer will pay the premium for issuance of the Title Policy. Seller and Buyer shall each pay one -half of any customary closing fee or escrow fees charged by the Title Company. 6. Title Examination. Title examination will be conducted as follows: (a) Seller's Title Evidence. Seller shall, within twenty (20) days after the date of this Agreement, furnish the following (collectively "Title Evidence ") to Buyer: i) Title Insurance Commitment. A Commitment ( "Title Commitment ") for an ALTA Form B Owners' Policy of Title Insurance in the amount of the Purchase Price, issued by the Title Company and conforming with the requirements stated in Exhibit C attached hereto. If the Real Property is abstract property, Seller shall also deliver to the Title Company an Abstract of Title to the Real Property. The Title Commitment shall include a Special Assessment Search and be accompanied by copies of each recorded document evidencing a lien or encumbrance affecting the Real Property. ii) Survey. An ALTA as-built survey of the Real Property prepared by a registered land surveyor acceptable to Buyer, certified to Buyer and the Title Company and conforming to the Survey Requirements stated in Exhibit D attached hereto. iii) UCC Searches. A report of UCC Searches made of the Uniform Commercial Code records of the Secretary of State of Minnesota and the Hennepin County Recorder showing no UCC filing affecting any of the Real Property. (b) Buyer's Objections. Within thirty (30) days after receiving the last of the Title Evidence, Buyer will make written objections ( "Objections ") to the Title Evidence. Buyer's failure to make Objections within such time period will constitute waiver of Objections. Any matter shown on such Title Evidence and not objected to by Buyer shall be a "Permitted Encumbrance" hereunder. Seller will have ninety (90) days after receipt of the Objections to cure the Objections, during which period the closing will be postponed as necessary. Seller shall use its best efforts to correct any Objections. If the Objections are not cured within such ninety -day period, Buyer will have the option to do either of the following: c: \file \hopcivil \purchas2.hen 6 contained shall survive the Closing. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller will not constitute a waiver or release by Buyer of any claims due to such breach. 8. Removal of Improvements and Personal Property. On or before the Closing Date, Seller shall effect the demolition and removal of all structures, buildings, improvements, fixtures, personal property, debris and materials from the Real Property, such demolition and removal to be completed at Seller's sole expense. Seller shall also, on or before the Closing Date, fill and grade all excavations caused by the removal of structures, buildings and improvements from the Real Property, at Seller's expense. All demolition, removal, filling and grading performed by Seller shall be performed in accordance with all applicable codes, regulations and ordinances and with construction standards approved by Buyer. 9. Condemnation. If, prior to the Closing Date, eminent domain proceedings are commenced against all or any part of the Real Property, Seller shall immediately give notice to Buyer of such fact and at Buyer's option (to be exercised within thirty days after Seller's notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement and the Earnest Money shall be refunded to Buyer. If Buyer shall fail to give such notice then there shall be no reduction in the Purchase Price„ and Seller shall assign to Buyer at the Closing Date all of Seller's right, title and interest in and to any award made or to be made in the condemnation proceedings. Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with respect to the condemnation proceedings without Buyer's prior written consent. Seller shall not institute eminent domain proceedings against the Real Property during the term of this Agreement. 10. Broker's Commission. Seller and Buyer represent and warrant to each other that they have dealt with no brokers, finders or the like in connection with this transaction, and agree to indemnify each other and to hold each other harmless against all claims, damages, costs or expenses of or for any such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorneys' fees. 11. Closing. 12. the Closing. c: \file\hopcivil \purchas2.hen Assignment. Buyer may assign its rights under this Agreement before or after the Survival. All of the terms of this Agreement will survive and be enforceable after 13. Notices. Any notice, request or other communication required or provided to be given under this Agreement shall be in writing and shall be deemed to be duly given when delivered personally or when mailed by United States certified mail, postage prepaid, return receipt requested, addressed as follows: 9 (e) (1) (g) (i) c: \file\hopcivil \purchas2.hen emissions, that would require a permit ender the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et fief, or the Clean Air Act, U.S.C. Section 7401 et seq., or any similar state law or local ordinance. To the best knowledge of Seller, and except as disclosed in the Environmental Reports, there are no substances or conditions in or on the Real Property that may support a claim or cause of action under RCRA, CERCLA or any other federal, state or local environmental statutes, regulations, ordinances or other environmental regulatory requirements, including without limitation, the Minnesota Environmental Response and Liability Act, Minn. Stat. 115B ( "MERLA ") and the Minnesota Petroleum Tank Release Cleanup Act, Minn. Stat. 115C. To the best knowledge of Seller, and except as disclosed in the Environmental Reports, no above ground or underground tanks, are located in or about the Real Property, or have been located under, in or about the Real Property and have subsequently been removed or filled. Water Wells and Individual Sewage Treatment Systems. To the best of Seller's knowledge, no water wells exist on or under the Real Property or have existed on or under the Real Property. To the best of Seller's knowledge, no individual sewage treatment systems, septic systems or similar systems exist on or under the Real Property. Rights of Others to Purchase Real Property. Seller has not entered into any other contracts for the sale of the Real Property, nor are there any rights of first refusal or options to purchase the Real Property or any other rights of others that might prevent the consummation of this Agreement. FIRPTA. Seller is not a "foreign person ". "foreign partnership ", "foreign trust" or "foreign estate" as those terms are defined in Section 1445 of the Internal Revenue Code. (h) Proceedings. There is no action, litigation, investigation, condemnation or proceeding of any kind pending or to the best knowledge of Seller, threatened against Seller or any portion of the Real Property which would impair Seller's ability to perform the obligations under this Agreement. Cemetery. To the best of Seller's knowledge, the cemetery which was formerly located on the Real Property has been moved, together with all human remains, bodies and corpses. The cemetery which was formerly located on the Real Prperty was a county pauper's cemetery, and was not a Native American cemetery. There is no cemetery, or any graveyard, human remains, bodies or corpses located on the Real Property on the date of this Agreement. Seller will indemnify Buyer, its successors and assigns, against, and will hold Buyer, its successors and assigns, harmless from, any expenses or damages, including reasonable attorneys, fees, that Buyer incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after closing. Each of the representations and warranties herein 8 (a) To terminate this Agteeiient by notice to Seller, in which event the Earnest Money, including accrued interest thereon, if any, shall be immediately paid to Buyer and neither party shall have any further rights or obligations hereunder; or (b) To enforce specific performance of Seller's obligations under this Agreement, including specifically the conveyance of the Real Property in the condition required hereby. In the event of such a proceeding for specific performance, the prevailing party in such proceeding shall be entitled to be awarded its reasonable attorneys' fees. The time periods for Buyer's performance under this Agreement shall be extended as necessary while Buyer is obtaining specific performance. 19. Default by Buyer. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer in accordance with Minn. Stat. 559.21. If Buyer fails to cure such default within thirty (30) days of the date of service of such notice in accordance with Minn. Stat. 559.21, this Agreement will terminate and, upon such termination, Seller will retain the Earnest Money as liquidated damages, time being of the essence of this Agreement. The termination of this Agreement and retention of the Earnest Money will be the sole remedy available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance. 20. No Third Party Beneficiaries. There are no third party beneficiaries of this Agreement, intended or otherwise. 21. No Joint Venture or Partnership. Seller and Buyers, by entering into this Agreement and completing the transactions described herein, shall not be considered joint venturers or partners. 22. Tax Increment Financing. Seller shall have no obligation to provide tax increment financing or other financial assistance in connection with the development of the Real Property. However, Seller agrees that it shall not oppose Buyer's provision of tax increment financing or any other form of available public assistance to a purchaser or developer of the Real Property. Seller and Buyer have executed this Agreement effective as of the date first written above. c: \file \hopcivil \purchas2.hen 11 To the County: Hennepin County Administrator A -2300, Hennepin County Government Center Minneapolis, Minnesota 55487 With a Copy to be Hennepin County Attorney mailed simultaneously C -2000, Hennepin County Government Center to: Minneapolis, Minnesota 55487 To the City: Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Attention: Executive Director 1011 First Street South Hopkins, Minnesota 55343 With a Copy to be Jeremy S. Steiner mailed simultaneously Vesely, Miller & Steiner, P.A. to: 400 Norwest Bank Building 1011 First Street South Hopkins, Minnesota 55343 or to such other address as either party, by notice given as herein provided, shall designate. Mailed notice shall be conclusively deemed to have been given on the date of mailing. 14. Captions. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement and are not to be considered in interpreting this Agreement. 15. Entire Agreement; Modification. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the Real Property. There are no verbal agreements that change this Agreement and no waiver or modification of any of its terms will be effective unless in a writing executed by the parties. 16. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. 17. Controlling Law. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. 18. Default by Seller. If Seller fails to perform its obligations under this Agreement and such failure to perform continues for a period of ten (10) days after Buyer notifies Seller, in writing, of such nonperformance, Buyer may, at its option, elect one of the following remedies: c: \file \hopcivil\purchas2.hen 10 1 i , EXHIBIT A LEGAL DESCRIPTION QF THE REAL OPERTY All of Blocks 25 through 29, inclusive, and all of Blocks 43 through 47, inclusive, West Minneapolis, according to the recorded plat thereof, Hennepin County, Minnesota, including all adjacent vacated streets and alleys, and excepting the rights -of -way of all public roads which have not have been vacated and Highway No. 169. and All that part of the Northeast Quarter of the Northeast Quarter of Section 25, Township 117, Range 22. Hennepin County, Minnesota, lying South of the plat of West Minneapolis and West of Highway N:;.169, except the right -of -way of any public roads. SELLER Date of Signature: County of Hennepin , 1998 By , 1998 , 1998 , 1998 c: \file \hopcivil \purchas2.hen 12 Its By Its BUYER Date of Signature: The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota By Its By Its 1 1 NOW, THEREFORE, in consideration of the foregoing Recitals, of One Dollar and other good and valuable consideration, and of the terms and conditions of this Agreement, Indemnitor agrees as follows: 1. Recitals. The foregoing Recital Paragraphs A -C are true and correct and are by this reference incorporated in this Agreement. 2. (a) Hazardous Materials. As used in this Agreement, the term "Hazardous Materials" means any hazardous or toxic substances, materials or wastes, including, but not limited to, those identified in the Environmental Reports and substances, materials and wastes listed in the United Stated Department of Transportation Hazardous Materials Table (49 C.F.R. 172.101) and amendments thereto or designated by the United States Environmental Protection Agency as hazardous substances (40 C.F.R. Part 302) and such substances, materials and wastes which are or become regulated under any applicable local, state or federal law including, without limitation, any material, waste or substance which is: (i) petroleum; (ii) asbestos; (iii) polychlorinated biphenyls; (iv) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under any applicable federal, state or local law or regulation; (v) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. 1251 et seq. (33 U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. 1317); (vi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., (42 U.S.C. 6903); or (vii) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensa- tion, and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 9601). (b) Remains. As used in this Agreement, the term "Remains" means any human remains, body, cemetery, corpse, burial mound or burial ground. 3. Indemnification. Indemnitor agrees to exonerate, indemnify, pay and protect, defend (with counsel selected by Indemnitee), and save and hold Indemnitee and its members, officials, employees, agents, successors and assigns harmless from and against any and all claims (including, without limitation, third party claims for personal injury or real or personal property damage), actions, administrative proceedings (including informal proceedings), judgments, damages, punitive c: \file\hopcivil \environ.hen 2 The above Environmental Reports are hereinafter referred to as the "Environmental Reports ". C. Indemnitee has agreed to purchase the Property on the condition Indemnitor executes and delivers this Agreement to Indemnitee, and thereby agrees to indemnify Indemnitee from liabilities associated with the presence of "Hazardous Materials" on the Property, as hereinafter provided. c: \file \hopcivil\environ.hen EXHIBIT B ENVIRONMENTAL INDEMNITY AGREEMENT This Agreement is made and entered into this day of , 1998, by the County of Hennepin, a political subdivision of the State of Minnesota ( "Indemnitor ") to and for the benefit of The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota, a public body corporate and politic under the laws of Minnesota ("Indemnitee"). RECITALS A. Simultaneously with the execution of this Agreement, Indemnitee has purchased from Indemnitor real property (the "Property ") located in the City of Hopkins, Hennepin County, Minnesota, legally described in Exhibit A attached hereto and incorporated herein. B. There has occurred on the Property a release or threatened release of "Hazardous Materials" (as hereinafter defined) to the environment, soils or groundwater on or adjacent to the Property as disclosed in the following environmental reports: 1 i also be solely responsible for, and shall hold Indemnitee harmless from compliance with any and all requirements of the Minnesota Pollution Control Agency and/or any other governmental authority regarding any underground storage tanks or the release of any Hazardous Materials on or about the Property or any Remains. 5. Notices. Any notice, consent, correspondence or other communication that Indemnitor or Indemnitee may desire or be required to give to the other party shall be in writing and shall be mailed or delivered to the intended recipient thereof at its address set forth below or at such other address as such recipient may, from time to time, by notice in writing, designate to the other party. Any such notice, consent, correspondence or other communication shall be deemed effective: a) if given by nationally- recognized overnight courier for next day delivery, one (1) business day after delivery to such courier, or b) if given by first class United States Mail, two (2) business days after deposit with the United States Postal Service, or c) if given in person, when written acknowledgment of receipt thereof is given. If to Indemnitor: With a Copy to be Hennepin County Attorney mailed simultaneously C -2000, Hennepin County Government Center to: Minneapolis, Minnesota 55487 If to Indemnitee: c:lfilelhopcivihenviron.hen Hennepin County Administrator A -2300, Hennepin County Government Center Minneapolis, Minnesota 55487 Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Attention: Executive Director 1011 First Street South Hopkins, Minnesota 55343 4 damages, penalties, fines, costs, liabilities (including sums paid in settlement of claims), interest, or losses, including reasonable attorneys' and paralegals' fees and expenses (including without limitation, any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), investigation and remediation costs, consultants' fees and experts' fees, together with all other costs and expenses of any kind or nature (collectively, the "Costs ") that arise directly or indirectly from or in connection with (a) the presence, suspected presence, release, or suspected release of any Hazardous Materials on, in, into or about the air, soil, groundwater or surface water at, on, under, over, about or within the Property, or any portion thereof, and which were present at the Property on or before the date of this Agreement, and/or (b) the presence or suspected presence of any Remains on, in, into or about the soil at, on, under, about or within the Property, or any portion thereof, and which were present at the Property on or before the date of this Agreement. The indemnification provided in this Paragraph 3 shall specifically apply to and include: i) claims or actions brought by or on behalf of employees of Indemnitor; and ii) claims or actions based upon conditions that are known or unknown, suspected or unsuspected. 4. Compliance With Environmental Reports. Indemnitor agrees it shall be solely responsible for, and shall hold Indemnitee harmless from, all costs associated with complying with the recommendations and requirements stated in the Environmental Reports (as defined in that certain Purchase Agreement dated - , between including all fees and expenses due to the environmental engineers who prepared the Environmental Reports and the costs of monitoring groundwater from any monitoring wells installed on the Property and the subsequent removal and abandonment of said monitoring wells. Indemnitor shall c: \file\hopcivil \environ.hen 3 ), 1 1 STATE OF MINNESOTA ) )SS COUNTY OF ) c: \fle\hopcivil\environ.hen , 1998 , 1998 6 County of Hennepin By Its By Its This instrument was acknowledged before me this day of , 1998, by and , the and , respectively, of the County of Hennepin, a political subdivision of the State of Minnesota, on behalf of the political subdivision. Notary Public With a Copy to be Jeremy S. Steiner mailed simultaneously Vesely, Miller & Steiner, P.A. to: 400 Norwest Bank Building 1011 First Street South Hopkins, Minnesota 55343 6. Interest. Any Costs or other payments required to be paid by Indemnitor to Indemnitee under this Agreement which are not paid within thirty (30) days of written demand therefore shall bear interest from the thirtieth day after such written demand through and including the date of payment at the rate of eight percent (8 %) per annum. 7. Miscellaneous. If any term of this Agreement or any application thereof shall be invalid, illegal, or unenforceable, the remainder of this Agreement and any other application of such term shall not be affected thereby. No delay or omission in exercising any right hereunder shall operate as a waiver of such right or any other right. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by Indemnitor and Indemnitee, and their respective successors and assigns. This Agreement shall be governed and construed in accordance with the laws of the State of Minnesota. IN WITNESS WHEREOF, Indemnitor have executed this Agreement as of the date and year first above written. c_ \file\hopcivil \environ.hen 5 1 t • EXHIBIT C The Title Commitment to be provided to Buyer under this Agreement shall be fo Owner's Policy Form 1987 (Rev. 4/6/90) In the full amount of the purchased r' sh 11 be issued by First Amer ican__ Titre Insurance Company; shall list shall be all liens, charges, encumbrances, and other exceptions affecting title to the Real Property; shall provide for insuring all rights, easements, hereditaments, and appurtenances belonging to Real Property; shall name Buyer as the party to be insured; shall have an effective a a ov to the within 30 days after the date this Agreement was executed; shalt provide for extended a e r is rage over the standard printed exceptions in the general form of the title insurance policy referred to above; shall provide for insuring access to public roads; shall provide for an ALTA short form to 3.0 zoning endorsement; shall include proper searches covering bankruptcies and state and federal judgments and Liens; shall provide for an endorsement insuring that all parcels making up the Real Property adjoin each other along their common boundaries without gaps or overlaps; shall have attached thereto true, correct, and legible to therein; and shall contain a certificate of taxes and special assessments copies of ail documents referred Property. ssessments due as to the Beat EXHIBIT A LEGAL DESCRIPTION OF THE RED PROPERTY All of Blocks 25 through 29, inclusive, and all of Blocks 43 through 47, inclusive, West Minneapolis, according to the recorded plat thereof, Hennepin County, Minnesota, including all adjacent vacated streets and alleys, and excepting the rights -of -way of all public roads which have not have been vacated and Highway No. 169. and All that part of the Northeast Quarter of the Northeast Quarter of Section 25, Township 117, Range 22. Hennepin County, Minnesota, lying South of the plat of West Minneapolis and West of Highway N;). 169, except the right -of -way of any public roads. 1 1 • Dated: 1 fu da certify that a map or plat and the survey on whi nce with the Minimum Standard Detail Requirements were made in Title Sure ye jointly established and as adopter b the A LTAIACSM Land the y �TA/ACSM in 1992 subject to following exceptions: . Gist any exceptions] and includes the marked items (ii) pursuant to the accuracy standards (as adopted by AL TA � attached Table A; and this date of certification) of an Urban Survey, y TA and AGSM and In effect on Registration No. Name: Address ; Telephone: ( ) Registered Land Surveyor w zill all The Survey shall be prepared and certified by a land surveyor licensed in the State in which Real Property is located and who is acceptable to Buyer. The Survey shall: (a) be mad n made accordance with the Minimum Standard Detail Requirements for ALTA/ACSM Land Title n Surveys, jointly estabjished and adopted by ALTA and ACSM in 1992; (b) Inela e, , felp be made in accordance with the appropriate state land survey stan show the exact Location, boundaries, and the number of square feet in the Real Property shall shall show the elevations of the principal parts of the Real Pro disclose no rand gaps, gores, encroachments, easements, boundary overlaps or rtY'j and shall o adversely affect the marketability of title to the Red Property physical matters which would interfere with the Site Plan or the development �� or which would adversely affect or plans, Amen# of the Beat Property in accordance with Buyer's The Survey shall be certified as follows: EXHIBIT D CEgTtFICABQN This Is to certify to Buyer and Title insurance Company (and any other party that Buyer designates) that I have surveyed the property described above (the Real Property") according to the requirements for land surveyos in the State of Minnesota; that this survey was made on the ground according to the field notes shown on this survey; and that this survey is a true representation of the Real Property and correctly shows the size, location and the exterior boundaries of the Real Property. The survey also correctly shows by document number all recorded easements described in the commitment for tide insurance issued by Tide Insurance Company No, with effective date of Adequate ingress to and egress from the Real Property �� party is provided by [name of streets], which are paved and dedicated Public rights-of way maintained by �. _[name of maintaining authority]. The Real Property does not serve any adjoining property for drainage, ingress and egress or any other purpose. 1 further certify that Parcels through adjoin each other along their common boundaries without gaps or overlaps. Vesely, Miller & Steiner, P.A. Draft 03/20/98 OPTION AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANT This Option Agreement and Declaration of Restrictive Covenant (this "Agreement ") dated as of the day of , 199 , by and between the Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota, a public body corporate and politic under the laws of Minnesota (the "HRA ") and SUPERVALU Inc., a Delaware corporation ("SUPERVALU"). RECITALS A. SUPERVALU is the fee owner of certain real property (the "Property ") located in Hennepin County, Minnesota, legally described in Exhibit A hereto and incorporated herein. B. Pursuant to a Redevelopment Agreement dated 199 , (the "Redevelopment Agreement ") the HRA has agreed: i) to assign to SUPERVALU all of its right, title and interest in and to that certain Purchase Agreement between the HRA and Hennepin County, Minnesota (the "County "), dated , 199 , (the "Purchase Agreement ") pursuant to which the County has agreed to sell and the HRA has agreed to purchase certain real property (the "County Property ") consisting of an approximately forty -two (42) c: \file\hopcivil \option.sup acre site owned by the County and known as the Hennepin County Shops property; and ii) otherwise assist SUPERVALU in the redevelopment of the County Property. C. As a condition of entering into the Redevelopment Agreement with SUPERVALU and agreeing to assign its rights in the Purchase Agreement to and otherwise assist SUPERVALU, the HRA has required that SUPERVALU enter into this Agreement with the HRA and: i) grant the HRA the Option identified and defined in Paragraph 2 of this Agreement to purchase the Property upon the terms of this Agreement; and ii) declare, impose upon and subject the Property to the Restrictive Covenant established by Paragraph 10 of this Agreement (the "Restrictive Covenant "). D. In consideration of the agreement by the HRA to enter into the Redevelopment Agreement and to assign its rights in the Purchase Agreement to and otherwise assist SUPERVALU, SUPERVALU has agreed to enter into this Agreement, grant the Option to the HRA and declare, impose upon and subject the Property to the Restrictive Covenant. SUPERVALU acknowledges and agrees that the HRA's execution of the Redevelopment Agreement and agreement to assign its rights in the Purchase Agreement to SUPERVALU constitute good, valuable and adequate consideration, sufficient to support the undertakings, agreements and obligations of SUPERVALU under this Agreement. NOW, THEREFORE, in consideration of the foregoing Recitals and of the mutual covenants and agreements herein contained, it is agreed as follows: 1. Incorporation of Recitals. Recital Paragraphs A -D, above, are incorporated in and made a part of this Agreement in their entirety. 2. Grant of Option. SUPERVALU hereby grants to the HRA the exclusive, irrevocable right and option (the "Option "), to be exercised on or before the end of the Option Term c: \file\hopcivil \option.sup 2 stated in Paragraph 7 of this Agreement, to purchase the Property subject to the terms and conditions of this Agreement. 3. Consideration for Option and Restrictive Covenant. SUPERVALU agrees there shall be no cash payment due SUPERVALU for the granting of the Option and establishment of the Restrictive Covenant. The consideration for this Agreement, the granting of the Option and establishment of the Restrictive Covenant is the execution of the Redevelopment Agreement by the HRA and the agreement by the HRA to assign its rights in the Purchase Agreement to SUPERVALU and otherwise assist SUPERVALU in the development of the County Property. SUPERVALU acknowledges and agrees that such agreement and undertaking by the HRA constitutes good, valuable and adequate consideration for the granting of the Option and establishment of the Restrictive Covenant, sufficient to support all of SUPERVALU's obligations, undertakings and agreements under this Agreement. 4. Purchase Price. The purchase price for the Property (the "Purchase Price ") in the event the HRA exercises the Option, shall be determined as follows: Prior to the Commencement Date of the Option Term specified in Paragraph 7 of this Agreement, the HRA and SUPERVALU shall each retain an MAI appraiser who shall, no earlier than 120 days and no later than ninety (90) days prior to the Commencement Date of the Option Term, at the HRA's and SUPERVALU's respective expense, prepare an appraisal stating the fair market value of the Property based on and in compliance with the appraisal standards and requirements contained in the Uniform Standards of Professional Appraisal Practice ( "USPAP ") Rule 2 -2(C) for a complete appraisal report in effect at the time of the appraisal, and certified as such by the respective appraisers. The HRA and SUPERVALU shall deliver copies of the respective appraisals obtained by the HRA and c: \file\hopcivil \option.sup 3 SUPERVALU to the other party no later than ninety (90) days prior to the Commencement Date of the Option Term. If the higher of the two appraisals differs by five percent (5 %) or less from the lower appraisal, then the fair market value of the Property shall be conclusively deemed to be the average of the two appraisals, and the Purchase Price of the Property shall be established at the average of the two appraisals. (For example, by way of illustration, if the lowest appraisal states a fair market value of $2,000,000.00 and the highest appraisal states a fair market value of $2,100,000.00, the Purchase Price shall be $2,050,000.00.) In the event the higher of the two appraisals differs by more than five percent (5 %) from the lower appraisal, then a third appraisal conforming to the same standards as the first two appraisals shall be obtained, at the joint, equal expense of the HRA and SUPERVALU, from a third MAI appraiser chosen jointly by the first two appraisers, which third appraiser shall be chosen within ten (10) days after the delivery of the last of the first two appraisals (provided, however, that if the first two appraisers cannot agree on the identity of the third appraiser within said ten -day period, the third appraiser shall be chosen by means of arbitration in accordance with the Arbitration Rules of the American Arbitration Association). Upon completion of the third appraisal, the fair market value of the Property shall be etablished, as follows: a. If the average of the highest appraisal and the lowest appraisal is within five percent (5 %) or less (in terms of dollars) of the middle appraisal, the fair market value of the Property shall be conclusively deemed to be the amount of the third or middle appraisal, and the Purchase Price of the Property shall be the amount of the middle appraisal. (For example, by way of illustration, if the first two appraisals state fair market values of $2,000,000.00 and $2,200,000.00, respectively, and the third appraisal states a fair market value of $2,450,000.00, the Purchase Price shall be $2,200,000.00.) b. If the average of the highest appraisal and the lowest appraisal differs by five percent (5 %) or more from the third or middle appraisal amount, the fair market value of the c: \file \hopciv il\option. sup 4 c: \file\hopcivil \option.sup Property shall be conclusively deemed to be the average of the two closest (in terms of dollars) of the three appraisals, and the Purchase Price of the Property shall be established as the average of the two closest (in terms of dollars) of the three appraisals. (For example, by way of illustration, if the first two appraisals state fair market values of $2,000,000.00 and $2,500,000.00, respectively, and the third appraisal states a fair market value of $2,400,000.00, the Purchase Price shall be $2,450,000.00.) Upon establishment of the Purchase Price in accordance with the provisions of this Paragraph 4, the HRA and SUPERVALU shall execute an Amendment to this Agreement stating the Purchase Price so determined, which Purchase Price shall remain in effect for the duration of the Option Term stated in Paragraph 7 of this Agreement. 5. Exercise of Option. If the HRA elects to exercise the Option, the Option shall be exercised by the delivery to SUPERVALU, on or before the Termination Date defined in Paragraph 7 of this Agreement, of the Purchase Agreement, in triplicate, attached hereto as Exhibit B ( "Purchase Agreement "), duly executed by the HRA and accompanied by the Earnest Money check payable as specified in the Purchase Agreement. The Purchase Agreement shall be deemed properly delivered for all purposes if delivered in accordance with the provisions of Paragraph 12 of this Agreement. Upon receipt of the executed Purchase Agreements, SUPERVALU shall cause the Purchase Agreements to be duly executed on its behalf, returning two originals to the HRA within three (3) business days, and shall forward the earnest money check to the Title Company (as defined in the Purchase Agreement) as required by the Purchase Agreement. SUPERVALU acknowledges that it has agreed to be bound by the terms and conditions set forth in the Purchase Agreement in the event the HRA exercises the Option. In the event SUPERVALU fails to execute and deliver the Purchase Agreements in the manner and within the time period required by this paragraph, SUPERVALU shall be conclusively deemed to have accepted and executed the Purchase 5 Agreements and shall be bound by all of the terms and conditions thereof. If the HRA fails to deliver the Purchase Agreements to SUPERVALU on or before the Termination Date in the manner and within the time period specified in this paragraph, this Agreement shall become null and void, the Option shall terminate in all respects and SUPERVALU shall have no obligation to sell the Property to the HRA. 6. Date of Closing. The closing of the purchase and sale of the Property shall be on a business day designated by the HRA in the Purchase Agreement (the "Closing Date ") which is at least thirty (30) but no more than ninety (90) days after the date of delivery of the Purchase Agreement to SUPERVALU. 7. Option Term. The term of the Option (the "Option Term ") shall commence on the date (the "Commencement Date ") which is the fourth anniversary date of the date of substantial completion (as evidenced by the issuance of a Certificate of Occupancy by the building officials of the City of Hopkins, Minnesota) of the Minimum Improvements (as defined in the Redevelopment Agreement) to be constructed by SUPERVALU on the County Property. The Option and the Option Term shall terminate in all respects at midnight on the date (the "Termination Date ") which is 365 days after the Commencement Date. The Option may be exercised only during the Option Term stated in this paragraph. At the time of substantial completion of the Minimum Improvements to be constructed by SUPERVALU on the County Property (as evidenced by the issuance of a Certificate of Occupancy by the building officials of the City of Hopkins), SUPERVALU and the HRA shall execute a Certificate, in recordable form, acknowledging such date of substantial completion and establishing the Commencement Date of record. SUPERVALU shall cooperate with c: \file\hopcivil \option.sup 6 and assist the HRA in effecting the recordation of such Certificate in the offices of the County Recorder or Registrar of Titles of Hennepin County, Minnesota. Reference is made to Subparagraph (a), (i), of Section 3.10 of the Redevelopment Agreement which provides for the termination of the Option and this Agreement upon the occurrence and satisfaction of certain terms and conditions stated in said Subparagraph (a), (i). Notwithstanding any provision of this Agreement to the contrary, upon the occurrence and satisfaction of the terms and conditions stated in Subparagraph (a), (i) of Section 3.10 of the Redevelopment Agreement, the Option, the Restrictive Covenant and this Agreement shall terminate, and the Authority shall execute an instrument, in recordable form, evidencing such termination. 8. Real Estate Taxes and Assessments. In the event the HRA exercises the Option, real estate taxes and special assessments, if any, shall be paid and/or allocated as provided in the Purchase Agreement. 9. Title to be Delivered. In the event the HRA exercises the Option, SUPERVALU shall deliver title to the Property as specified in the Purchase Agreement. 10. Declaration of Restrictive Covenant. SUPERVALU hereby declares, imposes upon, burdens and subjects the Property to the following Restrictive Covenant: a . Definitions. When used in this Paragraph 10, the following words and phrases shall have the meanings stated below: "Affiliate of SUPERVALU" shall mean and refer to any corporation, partnership, limited partnership, limited liability company, trust or other entity, whether now existing or hereafter created, that directly or indirectly owns, controls, is controlled by or is under common control with SUPERVALU. (The words and phrases "controls ", "controlled by" and "under common control with" shall each have the same meanings ascribed to such words and phrases under the Securities Exchange Act of 1934 and any rules and regulations promulgated thereunder.) c: \file\hopcivil \option.sup 7 "Sale" shall mean and refer to any sale, transfer, conveyance, ground lease, lease for a term of three (3) years or more or other assignment of all or any part of the legal or equitable title in or to the Property other than a mortgage or a similar security instrument granted to secure a debt of SUPERVALU or an Affiliate of SUPERVALU. "Third Party" shall mean and refer to any individual, corporation, partnership, limited partnership, limited liability company, trust or other entity, whether now existing or hereafter created, other than SUPERVALU or an Affiliate of SUPERVALU. b. Restrictive Covenant For a term commencing on the date of this Agreement and continuing until the Termination Date of the Option Term, as stated in Paragraph 7 of this Agreement, SUPERVALU agrees that it shall not effect any Sale of the Property to a Third Party without the prior written consent of the HRA, which consent may be withheld at the sole and unqualified discretion of the HRA. SUPERVALU acknowledges and agrees that the establishment of this Restrictive Covenant is a material part of the consideration for the HRA entering into the Redevelopment Agreement, assigning its rights in the Purchase Agreement to SUPERVALU and otherwise agreeing to assist SUPERVALU in the redevelopment of the County Property, and that the HRA would not enter into the °Redevelopment Agreement but for SUPERVALU's agreement to subject the Property to this Restrictive Covenant. The foregoing Restrictive Covenant is established for the sole and exclusive benefit of the HRA and its successors and assigns, and shall be enforceable by the Hopkins HRA by an action at law or in equity. 11. Entire Agreement. This Agreement contains the entire understanding of the parties hereto with respect to the granting of the Option and establishment of the Restrictive Covenant and supersedes all prior agreements and understandings between the parties with respect thereto. In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Redevelopment Agreement relating to the terms of the Option, the Restrictive Covenant or the HRA's acquisition of the Property, the terms and conditions of this Agreement shall control. c:\file \hopcivil \option.sup 8 12. Notices. Any notice, request or other communication required or provided to be given under this Agreement shall be in writing and shall be deemed to be duly given when delivered personally to the representative of the HRA or SUPERVALU named in this paragraph or when mailed by first class United States mail, postage prepaid, addressed as follows: To SUPERVALU: SUPERVALU Inc. Attention: 11840 Valley View Road Eden Prairie, Minnesota 55344 -3691 To the HRA: With a Copy to be mailed simultaneously to: The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Attention: Executive Director 1011 First Street South Hopkins, Minnesota 55343 Jeremy S. Steiner Vesely, Miller & Steiner, P.A. 400 Norwest Bank Building 1011 First Street South Hopkins, Minnesota 55343 or to such other address as either party, by notice given as herein provided, shall designate. Mailed notice shall be conclusively deemed to have been delivered or given two (2) business days after the date of mailing. 13. Surveys, Environmental Reports, Appraisals, Right of Access. Within thirty (30) days of the date of this Agreement, SUPERVALU shall deliver to the HRA, without cost to the HRA, copies of all surveys, soils tests and geotechnical engineers' reports, title insurance policies or commitments and environmental engineers' reports relating to the Property that are in SUPERVALU's possession or are available to SUPERVALU and which have not previously been c: \file \hopcivil \option.sup 9 delivered to the HRA pursuant to the Redevelopment Agreement. SUPERVALU shall also deliver to the HRA the Abstract(s) of Title for any portion of the Property having abstract title. Unless previously delivered to the HRA pursuant to the provisions of the Redevelopment Agreement, within days of the date of this Agreement, SUPERVALU shall cause to be prepared by an environmental engineer acceptable to the HRA, at the sole expense of SUPERVALU, a Phase I Environmental Assessment of the Property and the Improvements thereon and, if recommended in said Phase I Environmental Assessment, a Phase II Environmental Assessment of the Property, at the sole expense of SUPERVALU. The Phase I Environmental Assessment and Phase II Environmental Assessment shall be certified to the HRA, and copies shall be delivered to the HRA within days of the date of this Agreement. From and after the date of this Agreement, the HRA and the HRA's engineers, surveyors, consultants and employees shall have the right to enter upon the Property and the improvements thereon at reasonable times to perform such inspection and testing as the HRA shall deem necessary, at the sole expense of the HRA. In performing such inspection and testing, the HRA and its representatives shall not unreasonably interfere with the use of the Property by SUPERVALU or with the business conducted thereon, and the HRA shall fully and forever indemnify and hold harmless SUPERVALU and the Property from any damages or liens resulting from inspection and testing by the HRA and its representatives. The HRA shall promptly deliver to SUPERVALU copies of all reports, data, surveys, tests and inspections provided to the HRA as a result of such inspection and testing. The HRA shall pay all costs and expenses associated with the inspection and testing to be conducted by the HRA and its representatives pursuant to this paragraph. c: \file\hopcivil \option.sup 10 14. Waiver of Relocation Assistance. In the event the HRA exercises the Option, SUPERVALU and all occupants of the Property shall waive relocation assistance or similar benefits, if any, which might otherwise be required by any state or federal statute or regulation, and SUPERVALU shall indemnify and hold the HRA harmless from liability for such relocation assistance or similar benefits. 15. Binding Effect. This Agreement shall be binding on and shall inure to the benefit of the parties hereto and the respective successors and assigns of the parties. SUPERVALU represents that it has the authority to enter into this Agreement, that the party executing this Agreement on behalf of SUPERVALU has the requisite authority to do so and that SUPERVALU shall, in the event the Option is exercised, have good and marketable title to the Property, subject to the terms of the Purchase Agreement. This Agreement, and all of the rights, liabilities, obligations, restrictions and agreements established by this Agreement, shall run with the title to the Property and shall be binding upon the successors, assigns and transferrees of SUPERVALU. SUPERVALU acknowledges and agrees that the HRA will not have an adequate remedy at law in the event SUPERVALU violates or fails to observe or perform the Option or the Restrictive Covenant, and SUPERVALU agrees the HRA shall be entitled to obtain specific performance or injunctive relief to enforce the Option or the Restrictive Covenant. 16. Amendment. Modification and Waiver. No amendment, modification or waiver of any condition, provision, or term of this Agreement shall be valid or of any effect unless made in writing, signed by the party or parties to be bound or a duly authorized representative, and specifying with particularity the extent and nature of such amendment, modification or waiver. c: \file \hopcivil \option.sup 11 17. Severable Provisions. Each provision, section, sentence, clause, phrase, and word of this Agreement is intended to be severable. If any provision, section, sentence, clause, phrase or word hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of this Agreement. 18. Captions, Headings or Titles. All headings or titles of the various paragraphs or sections of this Agreement are inserted for convenience of reference only and shall not effect the interpretation of this Agreement. 19. Recordation. The HRA and SUPERVALU agree this Agreement may be recorded in the office(s) of the County Recorder and/or Registrar of Titles of Hennepin County, Minnesota, and SUPERVALU shall cooperate with the HRA in effecting the recording of this Agreement. In the alternative, at the option of the HRA, SUPERVALU and the HRA shall execute a Memorandum of this Agreement, in recordable form, identifying the existence of this Agreement, the Option and the Restrictive Covenant, and the HRA's rights hereunder, and SUPERVALU agrees to execute such a Memorandum upon request by the HRA and cooperate and assist the HRA in effecting the recordation of such Memorandum. 20. Costs of Enforcement. In the event either the HRA or SUPERVALU initiates any litigation or other proceeding to enforce the provisions of this Agreement, the prevailing party in such litigation or proceeding shall be entitled to recover such prevailing party's costs, expenses and reasonable attorneys' fees from the other party. IN WITNESS WHEREOF, the parties have here caused this Agreement to be executed effective as of the date and year first above written. c: \file\hopcivil \option.sup 12 c: \file \hopcivil \option.sup 13 SUPERVALU Inc. By Its By Its The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota By Its By Its STATE OF ) )SS COUNTY OF ) The foregoing instrument was acknowledged before me this day of 199 , by and the and , respectively of SUPERVALU Inc., a corporation under the laws of Delaware, on behalf of the corporation. STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) c: \file\hopcivil \option.sup 14 Notary Public The foregoing instrument was acknowledged before me this day of 199, by and , the and , respectively, of The Housing and Redevelopment Authority in and for the City of Hopkins, a public body corporate and politic under the laws of Minnesota, on behalf of the corporation. Notary Public The undersigned, , an corporation, as holder of that certain Mortgage dated , filed for record , as Hennepin County Recorder Document No. , and , as Hennepin County Registrar of Titles Document No. , hereby consents to the foregoing Option Agreement and Declaration of Restrictive Covenant and agrees said Mortgage is subject and subordinate thereto. STATE OF ) )SS COUNTY OF ) CONSENT OF MORTGAGEE The foregoing instrument was acknowledged before me this day of 1998,by and the and , respectively, of , a under the laws of the State of , on behalf of the c:\file\hopcivil\option.sup 15 By Its By Its Notary Public THIS INSTRUMENT WAS DRAFTED BY: Vesely, Miller & Steiner, P.A. 400 Norwest Bank Building 1011 First Street South Hopkins, Minnesota 55343 c: \file\hopcivil \option.sup 16 EXHIBIT A Parc 1 1: Tracts A, B, and C, Registered Land Survey No. 1465, files of the Registrar of Titles, County of Hennepin. Except that portion of tracts A and B, lying southerly of the northerly right of way line of County Road No. 3, as Described in Final Certificate Document No. 1584165 being r gistered land as is evidenced by Certificate of Title No. 727156. Parcel 2: South 20 feet of Lots 5, 6, and 7, Block 12: Lots 3, 4, 5, 6, 7, 8, 9, and 10, Block 13; W st Minneapolis Center, together with that part of vacated alley that accrued th r to to lots in said Block 13 by reason of vacation thereof, according to the recorded plat ther of, and situate in Hennepin County, Minnesota. B ing r gistered land as is evidenced by Certificate of Title No. 727156. Parcel 3: Lots 1 and 2, Block 13, West Minneapolis Center, together with that part of vacat d alley that accrued thereto by reason of vacation thereof, according to the record d plat ther of, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 4: Lots 14 and 15, except the easterly 16 feet thereof,'all of lots 16 through 26 inclusive, Block 4, West Minneapolis Center, according to the duly recorded plat th reof. . Abstract Property Parcel 5: That part of the former right of way of Burlington Northern, Inc. in the northwest quarter of the southwest quarter of Section 19, Township 117, Range 21, Hennepin County, Minnesota, and that part of Lots 1, 2, and 3, Block 9, West Minneapolis Center, all described as follows: B ginning at the intersection of the westerly line of Tract A, Registered Land Survey No. 1465, files of the Registrar of Titles, County of Hennepin, with the south line of th north 180.00 feet of said northwest quarter of the southwest quarter; thenc on an assumed bearing of south 89 degrees 35 minutes 39 seconds west along said south lin a distanc of 97.29 feet;thence south 20 degrees 22 minutes 42 seconds west a distanc of 153.29 feet; thence southerly 410.71 feet along a tangential curve concave to the east, having a radius of 914.93 feet and a central angle of 25 degrees 43 minutes 11 seconds to the westerly line of Lot 1, Block 9, West Minneapolis Center, said westerly line bears south 20 degrees 24 minutes 32 seconds west from the point of beginning; thence south 20 degrees 24 minutes 32 seconds west along said westerly line a distance of 22.51 feet; th nce southerly 153.64 feet along a non - tangential curve concave to the ast, having a radius of 924.93 feet, a central angle of 9 degrees 31 minutes 03 seconds and chord which bears south 11 degrees 21 minutes 21 seconds east, to the easterly lin of said Block 9; thence northerly along said easterly line to the northeast corner of said Lot 1; thence westerly to the northwest corner of said Lot 1; thence north 20 d grees 24 minut s 32 seconds east to the point of beginning. Abstract Property. (*Parcel 6: All that part of vacated Adams Avenue and vacated 1st Str et North as shown and dedicated adjoining Blocks 8 and 9 in th plat W st Minneapolis C nter, according to th plat th r of on file in the offic of th County R corder, which lies ast rly of th easterly right -of -way line of Burlington Northern, Inc. and north rly of th following d scribed lin : Comm ncing at th northerly corn r of tract D, Regist red Land Sury y No. 1465, files of Registrar of Titl s; thence run northwesterly along th northwester", ext nsion of the northeast line of said Tract for a distance of 6.17 feet; thence d flect right along a tangential curve having a radius of 924.93 feet for a distanc of 150 f et more or less to the west line of Adams Avenue and there terminating. Abstract Proprty Parcel 7: That part of vacated 1st Street North lying between Monroe Avenue North and the southerly extension of the west line of the east 16 feet of Lot 14, Block 4, West Minneapolis Center. That part of vacated Monroe Avenue North which lies southerly of a southerly line of 2nd Street North and which lies northerly of the southwesterly extension of the southeasterly line of Block 13, West Minneapolis Center. Abstract Property Parcel 8: Lots 1 and 2, Block 1, Valu Addition, according to the recorded plat thereof, Hennepin County, Minnesota.