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HRA Report 10-11 Option Agreement-Park NicolletCITY pF September 2, 2010 y p P K N S HRA Report 2010-11 • OPTION AGREEMENT — PARK NICOLLET PROPERTY Proposed Action Staff recommends adoption of the following motion: Move to exercise the option between the Hopkins HRA and Park Nicollet Clinic and authorize the execution of the purchase agreement for the former Park Nicollet Clinic property. With this motion, the purchase agreement will be executed and the earnest money provided to Park Nicollet. Overview Over the past several years, through two planning processes, a vision for 8th Avenue as the connector between the Downtown SW LRT station and Mainstreet has emerged. The vision calls for the redevelopment of 8th Avenue into a "pedestrian seductive" two - block area of mixed -uses with active retail on the street level. This concept supports ridership and maximizes the benefits of LRT for downtown Hopkins. The Park Nicollet site at 1St Street South and 8th Avenue was vacated in August 2009. Park Nicollet and the Hopkins HRA then entered into an option agreement that gave the HRA six months to evaluate the redevelopment potential and possible funding sources, • and enter into a purchase agreement for the property. The HRA (City) issued a request for proposals, secured a portion of the funds necessary to purchase the property through grant funds, and received three proposals from developers for the site. • The original option required a purchase price of $2 million. Based on an appraisal and negotiations with Park Nicollet, the option agreement was amended to reduce the purchase price to $1.7 million. Primary Issues to Consider • What are the plans for the property? • How will the purchase be financed? • Is the purchase price reasonable? Supporting Information • O,�Dtion A reement andAmendment • �Purc Anrem uKI Kersten Werurn ell Director/6f Planning & Development Financial Impact: $825,000 Budgeted: Y/N Source: ED Fund Related Documents (CIP, ERP, etc.): Notes: HRA Report 2010-11 Page 2 • Analysis of the Issues: • What are the plans for the property? The intention is to select a developer, enter into a development agreement, design the project and work through financing and land use approvals over the next year. The property would then be transferred to the developer. The agreement does give the HRA 60 days to conduct our due diligence during which time a Phase I environmental investigation will be undertaken. The HRA has the right to cancel the agreement if title and environmental defects are identified during this period. The closing on the property would occur in March 2011. • How will the purchase be financed? The City/HRA has been awarded $875,000 in Transit Oriented Development (TOD) funds through Hennepin County to be used towards the acquisition of this property. The balance of the funds will come from the development account. It is planned that these funds will be reimbursed by the developer when the property title is transferred. • Is the purchase price reasonable? • The original purchase price detailed in the option agreement was $2 million. This was based on a 2007 appraisal that established the value at $2,370,000. Because Park Nicollet would avoid a broker fee if they sold to the HRA, they were willing to take less than appraised value. Since the 2007 appraisal, property values have declined. The HRA had an appraisal conducted in July 2010 that established the value at $1,250,000. Based on this, staff went back to Park Nicollet seeking a reduction in the purchase price. After negotiations, $1.7 million was agreed to by Park Nicollet.. They have indicated that is as low as they are willing to go as they have several interested buyers at this time. Estimated value for Hennepin County tax purposes indicates a value of $1,813,000 for pay 2010 and $1,370,000 for pay 2011. In evaluating the offered price, staff considered the following: • The option was given for a nominal price and over the option period the value declined and Park Nicollet incurred carrying costs • Typically, public entities pay a premium for redevelopment property • The risk of another buyer gaining control of the property Based on these factors, staff is recommending exercising the option for the purchase • price of $1.7 million. HRA Report 2010-11 Page 3 . Alternatives: The HRA has the following options in regards to this issue: • Authorize the execution of the purchase agreement as presented. • Elect to allow the option to expire. With this action, Park Nicollet will likely list the property and the HRA would compete for the purchase on the open market. 0 0 • Execution Version OPTION AGREEMENT This Option Agreement (this "Agreement") is dated as of the 6th day of April 2010, 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 the state of Minnesota (the "Authority") and Park Nicollet Clinic, a Minnesota non-profit corporation (the "Owner"). RECITALS A. Owner 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. In consideration of the payment of One Dollar ($1.00) and other good and valuable consideration by the Authority, Owner has agreed to enter into this Agreement and grant ari Option to purchase the Property to the Authority. 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 -B, above, are incorporated in and made a part of this Agreement in their entirety. 2. Grant of Option. The Owner hereby grants to the Authority the exclusive, irrevocable right and option (the "Option") to be exercised on or before the end of the Option Term stated in Paragraph 7 of this Agreement, to purchase the Property, subject to the terms and conditions of this Agreement. 3. Consideration for Option. Owner agrees that the only cash payment to be paid by the Authority for the Option is One Dollar ($1.00). The Owner understands that the Authority may have access to funding sources from other governmental units to assist the Authority in securing a portion of the financing necessary to purchase the Property and that permitting the Authority the time to see whether such funds are available to the Authority is in the best interest of the Owner. Therefore, Owner agrees that the Authority's efforts to seek such financing • HopCivil/ParkNicolletOptionAgreement-Clean 1 constitutes good, valuable and adequate consideration for the granting of the Option sufficient to • support all of Owner's obligations, undertakings and agreements under this Agreement. 4. Purchase Price. The purchase price for the Property (the "Purchase Price") in the event the Authority exercises the Option, shall be $2,000,000, payable as set forth in the Purchase Agreement (defined below). 5. Exercise of Option. If the Authority elects to exercise the Option, the Option shall be exercised by the delivery to Owner, on or before the end of the Option Term as described in Paragraph 7 of this Agreement, of (a) the Purchase Agreement, in triplicate, in the form attached hereto as Exhibit B ("Purchase Agreement"), duly executed by the Authority, and (b) a simultaneous deposit of the Earnest Money (as defined in the Purchase Agreement) with Title Company (as defined in the Purchase Agreement). The Purchase Agreement shall be deemed properly delivered for all purposes if delivered in accordance with the provisions of Paragraph 11 of this Agreement. Upon receipt of the executed Purchase Agreements, Owner • shall cause the Purchase Agreements to be duly executed on its behalf, returning two originals to the Authority within three (3) business days. Owner acknowledges that it has agreed to be bound • by the terms and conditions set forth in the Purchase Agreement in the event the Authority exercises the Option. If the Authority fails to deposit the Earnest Money with Title Company and fails to deliver the signed Purchase Agreements to Owner on or before the expiration of the Option Term in the manner and within the time period specified in this paragraph, this Agreement shall become null and void, the Option shall terminate and be of no further force or effect and Owner shall have no obligation to sell the Property to the Authority. Authority agrees that TIME IS STRICTLY OF THE ESSENCE in connection with duly exercising the Option. 6. Date of Closing. The closing of the purchase and sale of the Property shall be on a business day designated by the Authority in the Purchase Agreement (the "Closing Date") which is at least thirty (30) but no more than one hundred eighty (180) days after the date of delivery of the Purchase Agreement to Owner. HopCivil/ParkNicolletOptionAgreement-Clean 2 7. Option Term. The term of the Option (the "Option Term") shall commence on the date hereof and shall extend until 5:00 p.m. Central time on June 30, 2010; provided, the Authority may extend the Option Term by an additional sixty (60) days by delivering notice to Owner in writing no later than fifteen (15) days prior to June 30, 2010, in which case the Option Term shall be extended and shall end on August 31, 2010. Such notice shall be deemed properly delivered for all purposes if delivered in accordance with the provisions of Paragraph 11 of this Agreement. 8. Real Estate Taxes and Assessments. In the event the Authority 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 Authority exercises the Option, Owner shall deliver title to the Property as specified in the Purchase Agreement. 10. Entire Aar eement. This Agreement contains the entire understanding of the • parties hereto with respect to the granting of the Option and supersedes all prior agreements and understandings between the parties with respect thereto. 11. 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 Authority or Owner named in this paragraph or when mailed by first class United States mail, postage prepaid, addressed as follows: • To Owner: Park Nicollet Clinic 3800 Park Nicollet Boulevard St. Louis Park, MN 55416 Attn: Duane Spiegle With copy to: Faegre & Benson LLP 2200 Wells Fargo Center 90 Seventh Street South Minneapolis, MN 55402 Attn: John R. Wheaton HopC ivil/ParkN icol letOptionAgreement-Clean 3 • • To the Authority: Hopkins Housing and Redevelopment Authority Attention: Executive Director 1010 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. 12. Waiver of Relocation Assistance. In the event the Authority exercises the Option, Owner shall waive relocation assistance or similar benefits, if any, which might otherwise be required by any state or federal statute or regulation. 13. 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. Owner represents that it has the authority to enter into this Agreement and that the party executing this Agreement on behalf of Owner has the requisite authority to do so. 14. 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. 15. 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. 16. Captions, Headinj4s 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. 17. • Costs of Enforcement. In the event either the Authority or Owner 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 is and reasonable attorneys' fees from the other party. HopCivil/ParkNicolletOptionAgreement-Clean 4 18. Assignment by Authority. The Authority may not assign or transfer its rights under this Agreement except with the prior written consent of Owner; provided, however, the Authority shall have the right to assign its rights under this Option Agreement to the City of Hopkins, Minnesota without Owner's consent. Upon such assignment, the Authority shall give notice thereof to the Owner. 19. Delivery of Information Concerning Property. The Authority acknowledges it has received a current commitment for an ALTA Owner's Title Insurance Policy covering the Property and issued by First American Title Insurance Company (the "Commitment"). The Commitment was provided to the Authority at Owner's sole expense. Within thirty (30) days after the date of this Option Agreement, the Owner shall provide to the Authority copies of the following information to the extent that it exists and is in the Owner's possession: title commitments and surveys of the Property, environmental assessments of the Property and any reports on tests relating to the soil conditions on the Property. • IN WITNESS WHEREOF, the parties have hereto caused this Agreement to be executed effective as of the date and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS By Its By �u;►�j� Its PARK By Name: Du � ieg. Title: Vice Presi eal Estate and • Support Services HopCiviUParkNicolletOptionAgreement-Clean 5 0 0 EXHIBIT A TO OPTION AGREEMENT Description of Property Parcel 1: The South 36 feet of Lot 13, and all of Lots 14, 15, 16, 17, 18, 19, and Block 4, "West Minneapolis", Hennepin County, Minnesota, together with the East half of the vacated alley in said Block 4, lying between the westerly extension of the North line of the South 36 feet of said Lot 13, and the westerly extension of the South line of said Lot 14, and including that part of the vacated alley in said Block 4 lying between the westerly extension of the North line of said Lot 15 and the Westerly extension of the South line of said Lot 17, all in "West Minneapolis", except those portions embraced within the following -described two tracts: Exception Tract A: Lot 13, except the North 14 feet thereof, and the North 18 feet of Lot 14, Block 4, together with the easterly half of the vacated alley in said Block 4, lying between the . Westerly extension of the South line of the North 14 feet of said Lot 13, and westerly extension of the South line of the North 18 feet of said Lot 14, all in "West Minneapolis", Hennepin County, Minnesota. Exception Tract B: That part of Lots 15 and 16, Block 4, "West Minneapolis", described as follows: Beginning at the Southeast corner of said Lot 15, thence Southerly along the East line of said Lot 16 a distance of 8.49 feet; thence Westerly, deflecting 89 degrees 42 minutes 54 seconds to the right a distance of 127.44 feet; thence Northerly, deflecting 90 degrees to the right a distance of 50.00 feet; thence Easterly, defecting 90 degrees to the right a distance of 127.69 feet to the East line of said Lot 15; thence South along said East line to the point of beginning. Parcel 2: Tract A: Lot 13, except the North 14 feet thereof, and the North 18 feet of Lot 14, Block 4, together with the easterly half of the vacated alley in said Block 4, lying between the Westerly extension of the .South line of the North 14 feet of said Lot 13, and the westerly extension of the South line of the North 18 feet of said Lot 14, all in "West Minneapolis", Hennepin County, Minnesota. Tract B: That part of Lots 15 and 16, Block 4, "West Minneapolis", described as follows: Beginning at the Southeast corner of said Lot 15; thence Southerly along the East line of said Lot .16 a distance of 8.49 feet; thence Westerly, deflecting 89 degrees 42 minutes 54 seconds to the right a distance of 127.44 feet; thence Northerly, deflecting 90 degrees to the right a distance of 50.00 feet; thence Easterly, deflecting 90 degrees to the right a distance of 127.69 feet to the East line of said Lot 15; thence South along said East line to the point of beginning. HopCivi"arkNicolletOptionAgreement-Clean A-1 EXHIBIT B TO OPTION AGREEMENT REAL ESTATE PURCHASE AGREEMENT THIS AGREEMENT, made on or as of the day of , 2010 (the "Effective Date"), by and between the Housing and Redevelopment Authority In and For the City of Hopkins (the "Purchaser") and Park Nicollet Clinic (the "Seller"). In consideration of the mutual covenants and undertakings contained herein the parties agree as follows: 1. Sale and Purchase of Property. Seller agrees to sell, and Purchaser agrees to purchase, certain real property situated in the City of Hopkins, County of Hennepin, State of Minnesota, consisting of certain land legally described as follows, to -wit: See Exhibit A attached hereto and incorporated herein. together with all the appurtenant rights, privileges, and easements belonging thereto (collectively the "Land") and all buildings, structures, and other improvements located on the Land as well as all fixtures located therein and thereon as of the Closing Date (collectively the "Improvements") (The Land and Improvements are hereinafter collectively referred to as the "Real Property"). 2. Purchase Price. Purchaser agrees to pay to Seller, as the purchase price for the • Real Property (the "Purchase Price"), the sum of Two Million Dollars ($2,000,000) as follows (a) Twenty -Five Thousand and No/100 Dollars ($25,000) as earnest money hereunder ("Earnest Money"), to be deposited into escrow with First American Title Insurance Company ("Title Company") simultaneously with Purchaser's execution of this Agreement, and (b) the remainder payable in cash or certified funds at closing. The Earnest Money shall be held and disbursed as more particularly provided in this Agreement. 3. Title and Survey. Purchaser has received the First Supplemental Title Commitment issued by Title Company as Commitment No. NCS -429866 dated February 8, 2010 (the "Commitment"). Promptly following the Effective Date, Purchaser shall cause the Commitment to be updated (the "Updated Commitment"), and may obtain a survey of the Land, prepared by a registered land surveyor at Purchaser's sole cost and expense, certified and acceptable to Purchaser and the issuer of the Commitment (the "Survey"). Purchaser will be allowed twenty (20) days after receipt of the last of the Updated Commitment and the Survey, if Purchaser elects to obtain the Survey, to undertake an examination thereof and to make any objections to the marketability of the title to the Real Property, said objections to be made on or before the expiration of said twenty (20) day period by written notice,. or shall be deemed waived. Notwithstanding anything herein to the contrary, Purchaser may not object to, and hereby approves, those matters listed on Exhibit B-1 attached hereto. Seller shall have no obligation to cure any of Purchaser's objections; provided, however, Seller shall cause to be cured and/or released at or prior to Closing (a) the matters listed on Exhibit B-2 and (b) any lien, encumbrance or title defect which Seller has created or permitted to accrue and is identified in the Updated Commitment that was not identified in the Commitment and to which Purchaser has • HopCivil/ParkNicolletOptionAgreement-Clean B-1 objected. All matters revealed in the Commitment, the Updated Commitment and Survey that Seller has not hereby agreed, or does not agree, to cure at or prior to Closing shall be "Permitted Encumbrances". All matters listed on Exhibit B-1 and Exhibit B-2 are referred to herein as the "Scheduled Encumbrances". 4. Conduct Prior to Closing. Following the Effective Date, Seller shall not enter into any leases or other contracts or encumbrances that will encumber or affect the Real Property after the Closing Date without the prior written consent of Purchaser, which consent may be withheld in Purchaser's sole discretion. At or prior to Closing, Seller shall remove any personal property, equipment and attached specialized medical equipment from the Real Property. 5. Condition of Real Estate. 5.1 Riaht of Entry. At Purchaser's expense, Purchaser, its agents and designees, are hereby granted the right at any time or times after the date hereof, upon reasonable prior notice to Seller, to inspect, analyze, and test the Real Property consistent with the purposes of this Agreement (the "Inspection"). The Inspection to be performed by Purchaser shall include any inspections, analyses and tests of the Real Property deemed necessary by Purchaser, in Purchaser's sole discretion, and consistent with the purposes of this Agreement, and may include a Phase I Environmental Assessment and soils or geotechnical testing, as deemed necessary by Purchaser. Seller may have a representative present during any entry by Purchaser onto the Real Property. Purchaser shall restore any damage to the Real Property caused by the Inspection and Purchaser • shall hold Seller harmless from any liability, damages, claims, liens, fees and expenses (including reasonable attorneys' fees and costs) resulting from the entering upon the Real Property or the performing of any of the tests or the Inspection referred to in this Section 5 by Purchaser, its agents, employees, contractors or designees, but not from liability resulting from the presence or discovery of Hazardous Substances (as hereinafter defined) on the Real Property. The foregoing indemnity shall survive Closing or the termination of this Agreement. For the purposes of this Agreement, the term "Hazardous Substance" means that and/or similar terms as defined in Section 104(14) of the Comprehensive Environmental Response, Compensation & Liability Act of 1980, and as amended, 42 U.S.C. Sec. 9601 et seq. (14), and Section 2(8) of the Minnesota Environmental Response and Liability Act, and as amended, Minnesota Statutes Sec. 115B.02(8), and includes the term "regulated substance" as defined in Section 9001(2) of the Underground Storage Tank Act, and as amended, 42 U.S.C. Sec. 6991(2) and the term "hazardous waste" as defined in Section 1004(5) of the Resource Conservation and Recovery Act, and as amended, 42 U.S.C. Sec. 6903(5), and includes all regulations issued pursuant to any of the above statutes, and any unsafe, noxious, toxic or hazardous substance or similar terms under any other state, federal or local law, and any other applicable environmental, land use or similar act, statute, ordinance or regulation or as alleged or determined under common law. The term "Hazardous Substance" includes asbestos and related substances, PCBs, and gasoline, kerosene and all other liquid or viscous petroleum products. • HopCivil/ParkNicolIetOptionAgreement-Clean B-2 5.2 Requirements for Inspection. Purchaser shall deliver to Seller copies of any reports Purchaser obtains in connection with the Inspection within a reasonable time after the same are received by Purchaser. Purchaser shall require that prior to entering the Real Property pursuant to this Section 5, all of its agents and contractors shall carry a policy of commercial general liability insurance with a company licensed to do business in the State of Minnesota in amounts reasonably acceptable to Seller, insuring all activity and conduct of such agents or contractors during any such entry. Seller shall be named as an additional insured on such policy or policies, and Purchaser shall provide proof of the same upon request of Seller. Purchaser shall not permit any laborer's, materialman's, mechanic's or other similar liens to be filed on any part of the Real Property prior to Closing, and if any such lien is filed, Purchaser shall take all steps necessary to release or discharge such lien as promptly as possible. 5.3 AS -IS SALE. PURCHASER ACKNOWLEDGES THAT IT WILL HAVE ADEQUATE OPPORTUNITY TO INSPECT THE REAL PROPERTY AND ACCEPTS THE RISK THAT ANY INSPECTION MAY NOT DISCLOSE ALL MATERIAL MATTERS AFFECTING THE REAL PROPERTY. SUBJECT ONLY TO THE TERMS OF SECTION 6, PURCHASER AGREES TO ACCEPT THE REAL PROPERTY IN ITS "AS IS" "WHERE IS" AND "WITH ALL FAULTS" CONDITION AT CLOSING WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER INCLUDING, WITHOUT LIMITATION, AS TO THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON THE REAL PROPERTY, THE COMPLIANCE OF THE REAL PROPERTY WITH ANY LAWS OR THE • MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND WITHOUT ANY RIGHT OF SET-OFF OR REDUCTION IN THE PURCHASE PRICE. 6. Covenants and Warranties of Seller. Seller covenants and warrants to Purchaser as follows: 6.1. Ownership of Real Property. Except for Scheduled Encumbrances, Seller is not aware of any unrecorded leases or encumbrances affecting the Real Property. 6.2. Condemnation. Seller has not received any notice of, nor does Seller have any knowledge of, any pending, threatened or contemplated condemnation proceeding affecting the Real Property, or any part thereof, or of any sale or other disposition of the Real Property or any portion thereof in lieu of condemnation. 6.3. Real Property Taxes. Seller does not have knowledge of any pending or contemplated assessment or reassessment of the Real Property, 6.4. Minnesota Required Disclosures. There are no wells or sewage treatment systems located on any portion of the Real Property. There has been no methamphetamine production on or about any portion of the Real Property. The sewage generated by the Real Property, if any, goes to a facility permitted by the Minnesota Pollution Control Agency and there is no "individual sewage treatment HopCivil/ParkNicolletOptionAgreement-Clean B-3 system" (as defined in Minnesota Statutes § 115.55, Subd. 1(g)) located on the Real Property. 7. Closing. Subject to the conditions contained herein, the closing shall take place on , 2010, or such other date as is mutually agreed upon (the "Closing Date"). The closing shall take place at the offices of the Title Company or at such other place as is mutually agreeable. At the closing, Seller shall deliver to Purchaser: 8. Documents at Closiniz. 8.1. A Warranty Deed, properly executed on behalf of Seller in recordable form with all applicable transfer taxes paid and stamps, if any, affixed thereto, conveying the Real Property to Purchaser and warranting title thereto subject to no exceptions other than Permitted Encumbrances. 8.2. All certificates, instruments and other documents determined by Title Companyto be necessary to permit the recording of the Warranty Deed. 8.3. A standard Seller's Affidavit with respect to judgments, bankruptcies, tax liens., mechanics liens, parties in possession, unrecorded interests, encroachment or boundary line questions, and related matters, properly executed on behalf of Seller. 8.4. Assignments to Purchaser of any assignable warranties which pertain to the Real • Property, or any portion thereof, if any. 8.5. An affidavit of Seller in form and content satisfactory to Purchaser stating that Seller is nota "foreign person" within the meaning of Section 1445 of the Internal Revenue Code. 8.6. A bill of sale, in a mutually acceptable form, conveying to Purchaser Seller's interest, if any, in any fixtures and/or equipment on the Real Property as of the Closing Date. 8.7 At closing, Purchaser and Seller shall execute and deliver settlement statements consistent with this Agreement. Purchaser shall deliver the portion of the Purchase Price payable at the closing, and assumptions of any of. the assigned warranties pursuant to Sections 8.4. 9. Closing Costs. Real estate taxes due and payable in the year of closing shall be prorated between the parties as of the Closing Date, with Seller paying those allocable to the period prior to the Closing Date and Purchaser being responsible for those allocable to the Closing Date and the period subsequent thereto. All levied and pending special assessments shall be paid by the Seller on the Closing Date. Seller shall pay the following charges: (a) all state deed tax regarding the deed, (b) all service charges for and costs of the Commitment, and (c) one-half of any closing fee payable to Title Company with respect to the purchase and sale HopCivWarkNicol I etOptionAgreement-Cl e an B-4 contemplated by this Agreement. Purchaser shall pay the following charges: (i) all premiums required for any" owner's or mortgagee's title insurance policy issued in connection with this transaction, (ii) all costs of the Survey, (iii) the cost to record the deed, and (iv) .one-half of any closing fee payable to Title Company with respect to the purchase and sale contemplated by this Agreement. 10. Income and Expenses, Possession. Seller agrees to deliver possession of the Real Property to Purchaser on the.Closing Date. All income and expenses shall be prorated and adjusted as of the Closing Date. 11. Contingencies. Notwithstanding anything to the contrary contained in this Agreement, the consummation of this Agreement and the closing provided in paragraphs 7 and 8 hereof is hereby expressly conditioned upon Purchaser determining, in Purchaser's sole discretion, that: 11.1. Accuracy of Representations and Warranties. The representations and warranties of Seller contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (i.e., a representation that a state of facts exists on or as of the date hereof shall be deemed to be a representation that such state of fact exists on or as of the Closing Date, and a representation that a state of facts has or has not changed between a date prior to the date hereof and the date hereof shall be deemed to be a representation that such state of facts has or has not • changed between such prior date and the Closing Date), except as affected by transactions contemplated hereby and except to the extent that any such representations or warranties which were made as of a specified date shall have been true on and as of such date. 11.2. Performance of Agreement. Seller has performed all obligations and agreements and conditions contained in this Agreement on Seller's part to be performed or complied with at or prior to the Closing Date. 11.3. Satisfaction with Title and Survey and Environmental Concerns. On or before the date that is the earlier of (a) sixty (60) days following the Effective Date, or (b) the Closing Date (the "Contingency Date"), Purchaser has satisfied itself that (i) all matters revealed in the Updated Commitment and Survey that Seller has not agreed to cure at or prior to Closing, and (ii) the results of and all conditions disclosed by the Inspection are acceptable to Purchaser, in Purchaser's sole discretion. If the contingencies set forth in this paragraph 11 are not satisfied on or before the Closing Date or the Contingency Date, as applicable, Purchaser shall have the right to terminate this Agreement by giving written notice of termination to Seller on or before the applicable date. If Purchaser does not terminate this Agreement on or before the Contingency Date on account of the contingencies set forth in paragraph 11.3, Purchaser will be deemed to have waived such • contingencies and the Earnest Money shall become non-refundable to Purchaser and shall be HopCivil/ParkNicol.letOptionAgreement-Clean B-5 disbursed to Seller if this Agreement fails to close for any reason other than Purchaser's exercise • of the contingencies in paragraphs 11.1 and 11.2 above or an uncured default by Seller under this Agreement. In the event that Purchaser gives Seller any written notice of termination on or prior to the Closing Date or the Contingency Date, as applicable, this Agreement shall be null and void and neither party shall have any further rights, obligations, or liability hereunder, except as provided in Section 5.1 and Section 15, and the Earnest Money shall be disbursed to Purchaser. Notwithstanding anything in this Agreement to the contrary, either party may terminate this Agreement if the other party is in default hereunder following at least 30 days prior written notice to the other party and the other party's failure to cure the same within such time period (provided that no notice or cure period shall be required for obligations to be performed at closing). In the case of any default by Purchaser, Seller's sole and exclusive remedy shall be termination of this Agreement as provided above and, upon any such termination, the Earnest Money shall be forfeited to Seller as agreed and final liquidated damages. In the case of any default by Seller, upon termination of this Agreement, the Earnest Money shall be returned to Purchaser. 12. Risk of Loss. Risk of loss to the Real Property prior to the time of closing shall remain in Seller. In the event that, prior to the time of closing, proceedings for the condemnation of the Real Property, or any interest therein, or any portion thereof are commenced by governmental authority having jurisdiction to do so, or the Real Property, or any interest therein, or any portion thereof, is damaged or destroyed, Purchaser may, at its option, terminate this Agreement by written notice to Seller whereupon this Agreement shall be null and void and neither party shall have any further rights, obligations, or liability hereunder and the Earnest • Money shall be returned to Purchaser. In the event of any such condemnation, destruction or any damage to the Real Property, or any interest therein, or any portion thereof, Seller agrees to fully inform Purchaser regarding any insurance providing coverage with respect thereto and the probable amount of any condemnation award or insurance proceeds recoverable on account thereof, and Seller shall, if this Agreement is not terminated on account thereof, at closing assign to Purchaser its rights to any such condemnation award or insurance proceeds. • 13. Notices. All documents to be delivered and all correspondence and notices to be given in connection with this Agreement shall be in writing and given by personal delivery or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to Purchaser: Hopkins Housing and Redevelopment Authority Attention: Executive Director 1010 First Street South Hopkins, Minnesota 55343 If to Seller: Park Nicollet Clinic 3800 Park Nicollet Boulevard St. Louis Park, MN 55416 Attn: Duane Spiegle HopCivil/ParkNicolletOptionAgreement-Clean B-6 • • • With copy,to: Faegre & Benson LLP 2200 Wells Fargo Center 90 Seventh Street South Minneapolis, MN 55402 Attn: John R. Wheaton Each such mailed notice or communication shall be deemed to have been given to or served upon, the party to whom it is addressed on the date the same is deposited in the United States mail, postage prepaid, property addressed in the manner above provided. Either party hereto may change such party's address for the service of notice hereunder by written notice of said change to the other party hereto, in the manner above specified ten (10) days prior to the effective date of said change. 14. Assignment. Purchaser may not assign this Agreement without Seller's prior written consent, which may be withheld in Seller's discretion: This Agreement shall be binding upon and inure to the benefit of each of the parties hereto, their respective successors and assigns. 15. Commissions. Seller warrants and represents that it has dealt with no realtor or broker in connection with this transaction and will indemnify, defend and hold harmless Purchaser against any claim made by an agent or broker for a commission or fee based on acts or agreements of Seller. Purchaser warrants and represents that it has dealt with no realtor or broker in connection with this transaction and that it will indemnify, defend and hold harmless Seller against any claim made by an agent or broker for a commission or fee based on acts or agreements of Purchaser. This Section 15 shall survive Closing or earlier termination of this Agreement. 16. Complete Agreement. This is a final Agreement between the parties and contains their entire agreement and supersedes all previous understandings and agreements, oral or written, relative to the subject matter of this Agreement. 17. Time of the Essence. Time is of the essence in the performance of this Agreement. 18. 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. HopCiviVParkNicolletOptionAgreement-Clean B-7 IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be duly • executed in its name and behalf by its duly authorized representatives, and the Seller has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives on or as of the date first above written. • Dated: SELLER PARK NICOLLET CLINIC Name: Duane Spiegle Title: Vice President, Real Estate and Support Services Seller Execution Page: Real Estate Purchase Agreement HopCiviVParkNicolIetOptionAgreement-Clean B-8 Dated: • • PURCHASER HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS as -0 Its Its . Purchaser Execution Page - Real Estate Purchase Agreement HopCivi"arkNicolletOptionAgreement-Clean B-9 • ACKNOWLEDGMENT BY TITLE COMPANY First American Title Insurance Company ("Title Company") hereby acknowledges receipt of Earnest Money in the amount of Twenty -Five Thousand Dollars ($25,000) pursuant to the attached Purchase Agreement (the "Purchase Agreement"), and agrees to act as escrow agent and hold and disburse the Earnest Money in accordance with the terms of this Joinder and the attached Purchase Agreement. All Earnest Money shall be held in an FDIC insured, interest-bearing account with interest accruing to the benefit of Purchaser, unless Seller receives the Earnest Money pursuant to the Purchase Agreement, in which event the interest shall also be disbursed to the Seller. The sole duties of Title Company shall be those described herein, and Title Company shall be under no obligation to determine whether the other parties hereto are complying with. any requirements of law or the terms and conditions of any other agreements among said parties. Title Company may conclusively rely upon and shall be protected in acting upon any notice, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties, consistent with reasonable due diligence on Title Company's part. Title Company may consult the advice of counsel with respect to any issue concerning the interpretation of its duties hereunder. Purchaser and Seller hereby acknowledge such fact and indemnify and hold harmless Title Company from any action taken by it in good faith in reliance thereon. Title Company shall have no duty of liability to verify any such notice, consent, order or other document, and its sole responsibility shall be to act as expressly set forth in the Purchase Agreement. Title Company shall be under no obligation to institute or defend . any action, suit or proceeding in connection with this Joinder. If any dispute arises with respect to the disbursement of any monies, Title Company may continue to hold the same or commence an action in interpleader and in connection therewith remit the same to a court of competent jurisdiction pending resolution of such dispute, and the parties hereto hereby indemnify and hold harmless Title Company for any action taken by it in good faith in the execution of its duties hereunder. C] Title Company has executed this Joinder as of the date provided below. TITLE COMPANY: First American Title Insurance Company By:_ Name: Title: Date: HopCivil/ParkNicolletOptionAgreement-Clean B-10 EXHIBIT A TO REAL ESTATE PURCHASE AGREEMENT Description of Land Parcel 1: The South 36 feet of Lot 13, and all of Lots 14, 15, 16, 17, 18, 19, and Block 4, "West Minneapolis", Hennepin County, Minnesota, together with the East half of the vacated alley in said Block 4, lying between the westerly extension of the North line of the South 36 feet of said Lot 13, and the westerly extension of the South line of said Lot 14, and including that part of the vacated alley in said Block 4 lying between the westerly extension of the North line of said Lot 15 and the Westerly extension of the South line of said Lot 17, all in "West Minneapolis", except those portions embraced within the following -described two tracts: Exception Tract A: Lot 13, except the North 14 feet thereof, and the North 18 feet of Lot 14, Block 4, together with the easterly half of the vacated alley in said Block 4, lying between the Westerly extension of the South line of the North 14 feet of said Lot 13, and westerly extension of the South line of the North 18 feet of said Lot 14, all in "West Minneapolis", Hennepin County, Minnesota. Exception Tract B: That part of Lots 15 and 16, Block 4, "West Minneapolis", described as follows: • Beginning at the Southeast corner of said Lot 15, thence Southerly along the East line of said Lot 16 a distance of 8.49 feet; thence Westerly, deflecting 89 degrees 42 minutes 54 seconds to the right a distance of 127.44 feet; thence Northerly, deflecting 90 degrees to the right a distance of 50.00 feet; thence Easterly, defecting 90 degrees to the right a distance of 127.69 feet to the East line of said Lot 15; thence South along said East line to the point of beginning. • Parcel 2: Tract A: Lot 13, except the North 14 feet thereof, and the North 18 feet of Lot 14, Block 4, together with the easterly half of the vacated alley in said Block 4, lying between the Westerly extension of the South line of the North 14 feet of said Lot 13, and the westerly extension of the South line of the North 18 feet of said Lot 14, all in "West Minneapolis", Hennepin County, Minnesota. Tract B: That part of Lots 15 and 16, Block 4, "West Minneapolis", described as follows: Beginning at the Southeast corner of said Lot 15; thence Southerly along the East line of said Lot 16 a distance of 8.49 feet; thence Westerly, deflecting 89 degrees 42 minutes 54 seconds to the right a distance of 127.44 feet; thence Northerly, deflecting 90 degrees to the right a distance of 50.00 feet; thence Easterly, deflecting 90 degrees to the right a distance of 127.69 feet to the East line of said Lot 15; thence South along said East line to the point of beginning. HopCivi"arkNicolletOptionAgreement-Clean B-11 • • EXHIBIT B-1 TO REAL ESTATE PURCHASE AGREEMENT Approved Encumbrances 1. Real estate taxes not yet due and payable, and special assessments not yet levied or pending. 2. Use restrictions and obligations set forth in Quit Claim Deed dated November 14, 1977, and filed April 3, 1978 as Document No. 4366881, and subject to the terms, conditions and obligations of the Urban Renewal Plan referenced therein. 3. Covenants, obligations and restrictions set forth in Quit Claim Deed dated January 18, 1978, filed January 20, 1978, as Document No. 4350679, except as to the use restriction in (a) of Section 2, which expired January 4, 1997, and subject to the Urban Renewal Plan for the First Street South Area Project No. R-46 as referenced therein. 4. Reservation of minerals and mineral rights by the State of Minnesota as to Lot 15, Block 4, West Minneapolis, as set forth in recital in Deed filed as Document No. 5342602, and subject to reservations of minerals and mineral rights by the State of Minnesota, as to all of the land, as evidenced by recitals in deeds of record conveying the land. HopCivil/ParkNicoIletOptionAgreement-Clean B-12 EXHIBIT B-2 TO REAL ESTATE PURCHASE AGREEMENT 0 Encumbrances to be Removed is Combination Mortgage, Security Agreement, Assignment of Leases and Rents, and Financing Statement dated November 1, 2003, filed November 14, 2003, as Document No. 8225741, as amended by that First Amendment to Mortgage dated December 16, 2003, filed December 17, 2003 as Document No. 8253043, by that Second Amendment to Mortgage dated May 16, 2005, filed June 9, 2005 as Document No. 8596202, by that Fourth Amendment to Mortgage dated November 1, 2007, filed January 10, 2008 as Document No. 9083677, by that Sixth Amendment to Mortgage dated August 14, 2008, filed August 18, 2008 as Document No. 9172702, by that Seventh Amendment to Mortgage dated August 14, 2008, filed August 18, 2008 as Document No. 9172703, by that 2008B Amendment to Mortgage dated August 14, 2008, filed March 31, 2009 as Document No. 9338430, and by that Ninth Amendment to Mortgage dated December 31, 2009, filed December 31, 2009 as Document No. 9460529. 2. Life estate of Frank B. Nitz as evidenced of record by Decree of Descent in the matter of the estate of Hattie R. Nitz dated February 20, 1973, filed as Document No. 4007226. HopCivil/ParkNicolletOptionAgreement-Clean B-13 • AMENDMENT TO OPTION AGREEMENT This Amendment to Option Agreement (this "Amendment") is dated as of the 31 st day of August, 2010, 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 the state of Minnesota (the "Authority") and Park Nicollet Clinic, a Minnesota non-profit corporation (the "Owner"). RECITALS A. The Authority and Owner are the parties to an Option Agreement dated April 6, 2010 ("Option Agreement") by which Owner has granted the Authority an option to purchase certain real property as described in the Option Agreement (the "Property") B. The Owner and Authority have agreed to amend the Option Agreement as stated below and are entering into this Amendment for that purpose. NOW, THEREFORE, in consideration of the foregoing Recitals, of the mutual • covenants and agreements herein contained and One Dollar ($1.00) and other good and valuable consideration, it is agreed as follows: 1. Recital Paragraphs A -B, above, are incorporated in and made a part of this Amendment in their entirety. 2. Owner and the Authority agree that Paragraph 4 of the Option Agreement is modified to read as follows: 4. Purchase Price. The purchase price for the Property (the "Purchase Price") in the event the Authority exercises the Option, shall be $1,700,000, payable as set forth in the Purchase Agreement (defined below). 3. Owner and the Authority agree that Paragraph 7 of the Option Agreement is modified to read as follows: . 7. Option Term. The term of the Option (the "Option Term") shall commence on the date hereof and. shall extend until 5:00 p.m. Central time on September 10, 2010. 0 1 HopciviPParkNicolletAmendmenttoOptionAgreement • 4. Paragraph 2 of the Real Estate Purchase Agreement attached to the Option. Agreement as Exhibit B is modified to change the Purchase Price to $1,700,000. 5. The Option Agreement shall remain in full force and effect in all of its terms and conditions, as modified by this Amendment. All words and phrases that are defined in the . Option Agreement shall, when used in this Amendment, have the same meanings stated in the Option Agreement unless. the context clearly requires a different meaning. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be one in the same instrument. IN WITNESS WHEREOF, the parties have hereto caused this Amendment to be executed effective as of the date and year first above written. HOUSING AND REDEVELOPMENT • AUTHORITY IN AND FOR THE CITY OV By Its By Its PARK NICOLLET CLINIC By Name: Ruane Spiegle Title: Vice President, Real Estate and Support Services • 2 HopcivWarkNicolletAmendmenttooptionABreement 4. Paragraph 2 of the Real Estate Purchase Agreement attached to the Option Agreement as Exhibit B is modified to change the Purchase Price to $1,700,000. 5. The Option Agreement shall remain in full force and effect in all of its terms and conditions, as modified by this Amendment. All words and phrases that are defined in the Option Agreement shall, when used in this Amendment, have the same meanings stated in the Option Agreement unless the context clearly requires a different meaning. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be one in the same instrument. IN WITNESS WHEREOF, the parties have hereto caused this Amendment to be executed effective as of the date and year first above written. HOUSING AND REDEVELOPMENT • AUTHORITY IN AND FOR THE CITY OF HOPKINS n U Hopcivil\ParkNicolletAmendmenttoOptionAgreement 2 By Its By Its PARK NICOMET CLINIC By Name: DSpiegl Title: Vice ident, eal state and Support Services • REAL ESTATE PURCHASE AGREEMENT THIS AGREEMENT, made on or as of the day of September, 2010 (the "Effective Date"), by and between the Housing and Redevelopment Authority In and For the City of Hopkins (the "Purchaser") and Park Nicollet Clinic (the "Seller"). In consideration of the mutual covenants and undertakings contained herein the parties agree as follows: 1. Sale and Purchase of Property. Seller agrees to sell, and Purchaser agrees to purchase, certain real property situated in the City of Hopkins, County of Hennepin, State of Minnesota, consisting of certain land legally described as follows, to -wit: See Exhibit A attached hereto and incorporated herein. together with all the appurtenant rights, privileges, and easements belonging thereto (collectively the "Land") and all buildings, structures, and other improvements located on the Land as well as all fixtures located therein and thereon as of the Closing Date (collectively the "Improvements") (The Land and Improvements are hereinafter collectively referred to as the "Real Property"). • 2. Purchase Price. Purchaser agrees to pay to Seller, as the purchase price for the Real Property (the "Purchase Price"), the sum of One Million Seven Hundred Thousand Dollars ($1,700,000) as follows (a) Twenty -Five Thousand and No/100 Dollars ($25,000) as earnest money hereunder ("Earnest Money"), to be deposited into escrow with First American Title Insurance Company ("Title Company") simultaneously with Purchaser's execution of this Agreement, and (b) the remainder payable in cash or certified funds at closing. The Earnest Money shall be held and disbursed as more particularly provided in this Agreement. 3. Title and Survey. Purchaser has received the First Supplemental Title Commitment issued by Title Company as as Commitment No. NCS -429866 dated. February 8, 2010 (the "Commitment"). Promptly following the Effective Date, Purchaser shall cause the Commitment to be updated (the "Updated Commitment"), and may obtain a survey of the Land, prepared by a registered land surveyor at Purchaser's sole cost and expense, certified and acceptable to Purchaser and the issuer of the Commitment (the "Survey"). Purchaser will be allowed twenty (20) days after receipt of the last of the Updated Commitment and the Survey, if Purchaser elects to obtain the Survey, to undertake an examination thereof and to make any objections to the marketability of the title to the Real Property, said objections to be made on or before the expiration of said twenty (20) day period by written notice, or shall be deemed waived. Notwithstanding anything herein to the contrary, Purchaser may not object to, and hereby approves, those matters listed on Exhibit B-1 attached hereto. Seller shall have no obligation to cure any of Purchaser's objections; provided, however, Seller shall cause to be cured and/or released at or prior to Closing (a) the matters listed on Exhibit B-2 and (b) any lien, encumbrance or title defect which Seller has created or permitted to accrue and is identified in • the Updated Commitment that was not identified in the Commitment and to which Purchaser has HopCivil/ParkNicolletRealEstatePurchaseAgmt objected. All matters revealed in the Commitment, the Updated Commitment and Survey that Seller has not hereby agreed, or does not agree, to cure at or prior to Closing shall be "Permitted Encumbrances". All matters listed on Exhibit B-1 and Exhibit B-2 are referred to herein as the "Scheduled Encumbrances". 4. Conduct Prior to Closing. Following the Effective Date, Seller shall not enter into any leases or other contracts or encumbrances that will encumber or affect the Real Property after the Closing Date without the prior written consent of Purchaser, which consent may be withheld in Purchaser's sole discretion. At or prior to Closing, Seller shall remove any personal property, equipment and trade fixtures from the Real Property. 5. Condition of Real Estate. 5.1 Right of Entry. At Purchaser's expense, Purchaser, its agents and designees, are hereby granted the right at any time or times after the date hereof, upon reasonable prior notice to Seller, to inspect, analyze, and test the Real Property consistent with the purposes of this Agreement (the "Inspection"). The Inspection to be performed by Purchaser shall include any inspections, analyses and tests of the Real Property deemed necessary by Purchaser, in Purchaser's sole discretion, and consistent with the purposes of this Agreement, and may include a Phase I Environmental Assessment and soils or geotechnical testing, as deemed necessary by Purchaser. Seller may have a representative present during any entry by Purchaser onto the Real Property. Purchaser • shall restore any damage to the Real Property caused by the Inspection and Purchaser shall hold Seller harmless from any liability, damages, claims, liens, fees and expenses (including reasonable attorneys' fees and costs) resulting from the entering upon the Real Property or the performing of any of the tests or the Inspection referred to in this Section 5 by Purchaser, its agents, employees, contractors or designees, but not from liability resulting from the presence or discovery of Hazardous Substances (as hereinafter defined) on the Real Property. The foregoing indemnity shall survive Closing or the termination of this Agreement. For the purposes of this Agreement, the term "Hazardous Substance" means that and/or similar terms as defined in Section 104(14) of the Comprehensive Environmental Response, Compensation & Liability Act of 1980, and as amended, 42 U.S.C. Sec. 9601 et seq. (14), and Section 2(8) of the Minnesota Environmental Response and Liability Act, and as amended, Minnesota Statutes Sec. 115B.02(8), and includes the term"regulated substance" as defined in Section 9001(2) of the Underground Storage Tank Act, and as amended, 42 U.S.C. Sec. 6991(2) and the term "hazardous waste" as defined in Section 1004(5) of the Resource Conservation and Recovery Act, and as amended, 42 U.S.C. Sec. 6903(5), and includes all regulations issued pursuant to any of the above statutes, and any unsafe, noxious, toxic or hazardous substance or similar terms under any other state, federal or local law, and any other applicable environmental, land use or similar act, statute, ordinance or regulation or as alleged or determined under common law. The term "Hazardous Substance" includes asbestos and related substances, PCBs, and gasoline, kerosene and all other liquid or viscous petroleum products. is HopCivil/ParkNicolletRealEstatePurchaseAgmt 2 5.2 Requirements for Inspection. Purchaser shall deliver to Seller copies of any reports Purchaser obtains in connection with the Inspection within a reasonable time after the same are received by Purchaser. Purchaser shall require that prior to entering the Real Property pursuant to this Section 5, all of its agents and contractors shall carry a policy of commercial general liability insurance with a company licensed to do business in the State of Minnesota in amounts reasonably acceptable to Seller, insuring all activity and conduct of such agents or contractors during any such entry. Seller shall be named as an additional insured on such policy or policies, and Purchaser shall provide proof of the same upon request of Seller. Purchaser shall not permit any laborer's, materialman's, mechanic's or other similar liens to be filed on any part of the Real Property prior to Closing, and if any such lien is filed, Purchaser shall take all steps necessary to release or discharge such lien as promptly as possible. 5.3 AS -IS SALE. PURCHASER ACKNOWLEDGES THAT IT WILL HAVE ADEQUATE OPPORTUNITY TO INSPECT THE REAL PROPERTY AND ACCEPTS THE RISK THAT ANY INSPECTION MAY NOT DISCLOSE ALL MATERIAL MATTERS AFFECTING THE REAL PROPERTY. SUBJECT ONLY TO THE TERMS OF SECTION 6, PURCHASER AGREES TO ACCEPT THE REAL PROPERTY IN ITS "AS IS" "WHERE IS" AND "WITH ALL FAULTS" CONDITION AT CLOSING WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER INCLUDING, WITHOUT LIMITATION, AS TO THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON THE REAL PROPERTY, THE • COMPLIANCE OF THE REAL PROPERTY WITH ANY LAWS OR THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND WITHOUT ANY RIGHT OF SET-OFF OR REDUCTION IN THE PURCHASE PRICE. 6. Covenants and Warranties of Seller. Seller covenants and warrants to Purchaser as follows: 6.1. Ownership of Real Property. Except for Scheduled Encumbrances, Seller is not aware of any unrecorded leases or encumbrances affecting the Real Property. 6.2. Condemnation. Seller has not received any notice of, nor does Seller have any knowledge of, any pending, threatened or contemplated condemnation proceeding affecting the Real Property, or any part thereof, or of any sale or other disposition of the Real Property or any portion thereof in lieu of condemnation. 6.3. Real Property Taxes. Seller does not have knowledge of any pending or contemplated assessment or reassessment of the Real Property. 6.4. Minnesota RequiredDisclosures. There are no wells or sewage treatment systems located on any portion of the Real Property. There has been no methamphetamine production on or about any portion of the Real Property. The sewage generated by the Real Property, if any, goes to a facility permitted by the Minnesota Pollution Control Agency and there is no "individual sewage treatment • HopCivillParkNicolletReal6statePurchaseAgcnt • system" (as defined in Minnesota Statutes § 115.55, Subd. 1(g)) located on the Real Property. 7. Closilnz. Subject to the conditions contained herein, the closing shall take place on March 3, 2011, or such other date as is mutually agreed upon (the "Closing Date"). The closing shall take place at the offices of the Title Company or at- such other place as is mutually agreeable. At the closing, Seller shall deliver to Purchaser: 8. Documents at Closine. 8.1. A Warranty Deed, properly executed on behalf of Seller in recordable form with all applicable transfer taxes paid and stamps, if any, affixed thereto, conveying the Real Property to Purchaser and warranting title thereto subject to no exceptions other than Permitted Encumbrances. 8.2. All certificates, instruments and other documents determined by Title Company to be necessary to permit the recording of the Warranty Deed. 8.3. A standard Seller's Affidavit with respect to judgments, bankruptcies, tax liens, mechanics liens, parties in possession, unrecorded interests, encroachment or boundary line questions, and related matters, properly executed on behalf of Seller. • 8.4. Assignments to Purchaser of any assignable warranties which. pertain to the Real Property, or any portion thereof, if any. 8.5. An affidavit of Seller in form and content satisfactory to Purchaser stating that Seller isnot a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code. 8.6. A bill of sale, in a mutually acceptable form, conveying to Purchaser Seller's interest, if any, in any fixtures and/or equipment on the Real Property as of the Closing Date. 8.7 At closing, Purchaser and Seller shall execute and deliver settlement statements consistent with this Agreement. Purchaser shall deliver the portion of the Purchase Price payable at the closing, and assumptions of any of the assigned warranties pursuant to Sections 8.4. 9. Closing Costs. Real estate taxes due and payable in the year of closing shall be prorated between the parties as of the Closing Date, with Seller paying those allocable to the period prior to the Closing Date and Purchaser being responsible for those allocable to the Closing Date and the period subsequent thereto. All levied and pending special assessments shall be paid by the Seller on the Closing Date. Seller shall pay the following charges: (a) all state deed tax regarding the deed, (b) all service charges for and costs of the Commitment, and (c) one-half of any closing fee payable to Title Company with respect to the purchase and sale HopCiviVParkNicolletReaiEstatePurchaseAgmt 4 contemplated by this Agreement. Purchaser shall pay the following charges: (i) all premiums required for any owner's or mortgagee's title insurance policy issued in connection with this transaction, (ii) all costs of the Survey, (iii) the cost to record the deed, and (iv) one-half of any closing fee payable to Title Company with respect to the purchase and sale contemplated by this Agreement. 10. Income and Expenses,, Possession. Seller agrees to deliver possession of the Real Property to Purchaser on the Closing Date. All income and expenses shall be prorated and adjusted as of the Closing Date. 11. Contingencies. Notwithstanding anything to the contrary contained in this Agreement, the consummation of this Agreement and the closing provided in paragraphs 7 and 8 hereof is hereby expressly conditioned upon Purchaser determining, in Purchaser's sole discretion, that: 11.1. Accuracy of Representations and Warranties. The representations and warranties of Seller contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing -Date (i.e., a representation that a state of facts exists on or as of the date hereof shall be deemed to be a representation that such state of fact exists on or as of the Closing Date, and a representation that a state of facts has or has not changed between a date prior to the date hereof and the date hereof shall be deemed to be a representation that such state of facts has or has not changed between such prior date and the Closing Date), except as affected by transactions contemplated hereby and except to the extent that any such representations or warranties which were made as of a specified date shall have been true on and as of such date. 11.2. Performance of Agreement. Seller has performed all obligations and agreements and conditions contained in this Agreement on Seller's part to be performed or complied with at or prior to the Closing Date. 11.3. Satisfaction with Title and Survey and Environmental Concerns. On or before the date that is the earlier of (a) sixty (60) days following the Effective Date, or (b) the Closing Date (the "Contingency Date"), Purchaser has satisfied itself that (i) all matters revealed in the Updated Commitment and Survey that Seller has not agreed to cure at or prior to Closing, and (ii) the results of and all conditions disclosed by the Inspection are acceptable to Purchaser, in Purchaser's sole discretion. If the contingencies set forth in this paragraph 11 are not satisfied on or before the Closing Date or the Contingency Date, as applicable, Purchaser shall have the right to terminate this Agreement by giving written notice of termination to Seller on or before the applicable date. If Purchaser does not terminate this Agreement on or before the Contingency Date on account of the contingencies set forth in paragraph 11.3, Purchaser will be deemed to have waived such contingencies and the Earnest Money shall become non-refundable to Purchaser and shall be HopCiviUParkNicolletRealEstatePurchaseAgmt 5 disbursed to Seller if this Agreement fails to close for any reason other than Purchaser's exercise of the contingencies in paragraphs 11.1 and 11.2 above or an uncured default by Seller under this Agreement. In the event that Purchaser gives Seller any written notice of termination on or prior to the Closing Date or the Contingency Date, as applicable, this Agreement shall be null and void and neither party shall have any further rights, obligations, or liability hereunder, except as provided in Section 5.1 and Section 15, and the Earnest Money shall be disbursed to Purchaser. Notwithstanding anything in this Agreement to the contrary, either party may terminate this Agreement if the other party is in default hereunder following at least 30 days prior written notice to the other party and the other party's failure to cure the same within such time period (provided that no notice or cure period shall be required for obligations to be performed at closing). In the case of any default by Purchaser, Seller's sole and exclusive remedy shall be termination of this Agreement as provided above and, upon any such termination, the Earnest Money shall be forfeited to Seller as agreed and final liquidated damages. In the case of any default by Seller, upon termination of this Agreement, the Earnest Money shall be returned to Purchaser. 12. Risk of Loss. Risk of loss to the Real Property prior to the time of closing shall remain in Seller. In the event that, prior to the time of closing, proceedings for the condemnation of the Real Property, or any interest therein, or any portion thereof are commenced by governmental authority having jurisdiction to do so, or the Real Property, or any interest therein, or any portion thereof, is damaged or destroyed, Purchaser may, at its option, terminate this Agreement by written notice to Seller whereupon this Agreement shall be null and void and • neither party shall have any further rights, obligations, or liability hereunder and the Earnest Money shall be returned to Purchaser. In the event of any such condemnation, destruction or any damage to the Real Property, or any interest therein, or any portion thereof, Seller agrees to fully inform Purchaser regarding any insurance providing coverage with respect thereto and the probable amount of any condemnation award or insurance proceeds recoverable on account thereof, and Seller shall, if this Agreement is not terminated on account thereof, at closing assign to Purchaser its rights to any such condemnation award or insurance proceeds. • 13. Notices. All documents to be delivered and all correspondence and notices to be given in connection with this Agreement shall be in writing and given by personal delivery or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to Purchaser: Hopkins Housing and Redevelopment Authority Attention: Executive Director 1010 First Street South Hopkins, Minnesota 55343, If to Seller: Park Nicollet Clinic 3800 Park Nicollet Boulevard St. Louis Park, MN 55416 Attn: Duane Spiegle HopCiviVParkNicolletRealEstatePurchaseAgmt 6 • With copy to: Faegre & Benson LLP 2200 Wells Fargo Center 90 Seventh Street South Minneapolis, MN 55402 Attn: John R. Wheaton Each such mailed notice or communication shall be deemed to have been given to or served upon, the party to whom it is addressed on the date the same is deposited in the United States mail, postage prepaid, property addressed in the manner above provided. Either party hereto may change such party's address for the service of notice hereunder by written notice of said change to the other party hereto, in the manner above specified ten (10) days prior to the effective date of said change. 14. Assignment. Purchaser may not assign this Agreement without Seller's prior written consent, which may be withheld in Seller's discretion. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto, their respective successors and assigns. 15. Commissions. Seller warrants and represents that it has dealt with no realtor or broker in connection with this transaction and will indemnify, defend and hold harmless Purchaser against any claim made by an agent or broker for a commission or fee based on acts or agreements of Seller. Purchaser warrants and represents that it has dealt with no realtor or broker is in connection with this transaction and that it will indemnify, defend and hold harmless Seller against any claim made by an agent or broker for a commission or fee based on acts or agreements of Purchaser. This Section 15 shall survive Closing or earlier termination of this Agreement. • 16. Complete Agreement. This is a final Agreement between the parties and contains their entire agreement and supersedes all previous understandings and agreements, oral or written, relative to the subject matter of this Agreement. 17. Time of the Essence. Time is of the essence in the performance of this Agreement. 18. 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. HopCivil/ParkNicolletRealEstatePurchaseAgtnt 7 IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Seller has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives on or as of the date first above written. Dated: • SELLER PARK NICOLLET CLINIC Name: Duane Spiegle Title: Vice President, Real Estate and Support Services • Seller Execution Page: Real Estate Purchase Agreement HopCiviVParkNieolletRealEstatePurchaseAgmt Dated: PURCHASER HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS LIM Its Its • Purchaser Execution Page - Real Estate Purchase Agreement HopCivil/ParkNicolletReaLEstatePurchaseAgmt 9 • ACKNOWLEDGMENT BY TITLE COMPANY First American Title Insurance Company ("Title Company") hereby acknowledges receipt of Earnest Money in the amount of Twenty -Five Thousand Dollars ($25,000) pursuant to the attached Purchase Agreement (the "Purchase Agreement"), and agrees to act as escrow agent and hold and disburse the Earnest Money in accordance with the terms of this Joinder and the attached Purchase Agreement. All Earnest Money shall be held in an FDIC insured, interest-bearing account with interest accruing to the benefit of Purchaser, unless Seller receives the Earnest Money pursuant to the Purchase Agreement, in which event the interest shall also be disbursed to the Seller. The sole duties of Title Company shall be those described herein, and Title Company shall be under no obligation to determine whether the other parties hereto are complying with any requirements of law or the terms and conditions of any other agreements among said parties. Title Company may conclusively rely upon and shall be protected in acting upon any notice, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties, consistent with reasonable due diligence on Title Company's part. Title Company may consult the advice of counsel with respect to any issue concerning the interpretation of its duties hereunder. Purchaser and Seller hereby acknowledge such fact and indemnify and hold harmless Title Company from any action taken by it in good faith in reliance thereon. Title Company shall have no duty of liability to verify any such notice, consent, order or other document, and its sole responsibility shall be to act as expressly set forth • in the Purchase Agreement. Title Company shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Joinder. If any dispute arises with respect to the disbursement of any monies, Title Company may continue to hold the same or commence an action in interpleader and in connection therewith remit the same to a court of competent jurisdiction pending resolution of such dispute, and the parties hereto hereby indemnify and hold harmless Title Company for any action taken by it in good faith in the execution of its duties hereunder. r 1 U Title Company has executed this Joinder as of the date provided below. TITLE COMPANY: First American Title Insurance Company By:_ Name: Title: Date: HopCivii/ParkNicolletRealEstatePurchaseAgmt 10 r� U • EXHIBIT A T4 REAL ESTATE PURCHASE AGREEMENT Description of Land Parcel 1: The South 36 feet of Lot 13, and all of Lots 14, 15, 16, 17, 18, 19, and Block 4, "West Minneapolis", Hennepin County, Minnesota, together with the East half of the vacated alley in said Block 4, lying between the westerly extension of the North line of the South 36 feet of said Lot 13, and the westerly extension of the South line of said Lot 14, and including that part of the vacated alley in said Block 4 lying between the westerly extension of the North line of said Lot 15 and the Westerly extension of the South line of said Lot 17, all in "West Minneapolis", except those portions embraced within the following -described two tracts: Exception Tract A: Lot 13, except the North 14 feet thereof, and the North 18 feet of Lot 14, Block 4, together with the easterly half of the vacated alley in said Block 4, lying between the Westerly extension of the South line of the North 14 feet of said Lot 13, and westerly extension of the South line of the North 18 feet of said Lot 14, all in "West Minneapolis", Hennepin County, Minnesota. Exception Tract B: That part of Lots 15 and 16, Block 4, "West Minneapolis", described as follows: Beginning at the Southeast corner of said Lot 15, thence Southerly along the East line of said Lot 16 a distance of 8.49 feet; thence Westerly, deflecting 89 degrees 42 minutes 54 seconds to the right a distance of 127.44 feet; thence Northerly, deflecting 90 degrees to the right a distance of 50.00 feet; thence Easterly, defecting 90 degrees to the right a distance of 127.69 feet to the East line of said Lot 15; thence South along said East line to the point of beginning. Parcel 2: Tract A: Lot 13, except the North 14 feet thereof, and the North 18 feet of Lot 14, Block 4, together with the easterly half of the vacated alley in said Block 4, lying between the Westerly extension of the South line of the North 14 feet of said Lot 13, and the westerly extension of the South line of the North 18 feet of said Lot 14, all in "West Minneapolis Hennepin County, Minnesota. Tract B: That part of Lots 15 and 16, Block 4, "West Minneapolis", described as follows: Beginning at the Southeast corner of said Lot 15; thence Southerly along the East line of said Lot 16 a distance of 8.49 feet; thence Westerly, deflecting 89 degrees 42 minutes 54 seconds to the right a distance of 127.44 feet; thence Northerly, deflecting 90 degrees to the right a distance of 50.00 feet; thence Easterly, deflecting 90 degrees to the right a distance of 127.69 feet to the East line of said Lot 15; thence South along said East line to the point of beginning. HopCivillParkNicolletRealEstateParchaseAgmt A is • EXHIBIT B-1 TO REAL ESTATE PURCHASE AGREEMENT Approved Encumbrances 1. Real estate taxes not yet due and payable, and special assessments net yet levied or pending. 2. Use restrictions and obligations set forth in Quit Claim Deed dated November 14, 1977, and filed April 3, 1978 as Document No. 4366881, and subject to the terms, conditions and obligations of the Urban Renewal Plan referenced therein. 3. Covenants, obligations and restrictions set forth in Quit Claim Deed dated January 18, 1978, filed January 20, 1978, as Document No. 43 50679, except as to the use restriction in (a) of Section 2, which expired January 4, 1997, and subject to the Urban Renewal Plan for the First Street South Area Project No. R-46 as referenced therein. 4. Reservation of minerals and mineral rights by the State of Minnesota as to Lot 15, Block 4, West Minneapolis, as set forth in recital in Deed filed as Document No. 5342602, and subject to reservations of minerals and mineral rights by the State of Minnesota, as to all of the land, as evidenced by recitals in deeds of record conveying the land. HopCiviUParkNicolletRealEstatePurchaseAgmt B-1 • • L EXHIBIT B-2 TO REAL ESTATE PURCHASE AGREEMENT Encumbrances to be Removed 1. Combination Mortgage, Security Agreement, Assignment of Leases and Rents, and Financing Statement dated November 1, 2003, filed November 14, 2003, as Document No. 8225741, as amended by that First Amendment to Mortgage dated December 16, 2003, filed December 17, 2003 as Document No. 8253043, by that Second Amendment to Mortgage dated May 16, 2005, filed June 9, 2005 as Document No. 8596202, by that Fourth Amendment to Mortgage dated November l; 2007, filed January 10, 2008 as ., Document No. 9083677, by that Sixth Amendment to Mortgage dated August 14, 2008, filed August 18, 2008 as Document No. 9172702, by that Seventh Amendment to Mortgage dated August 14, 2008, filed August 18, 2008 as Document No. 9172703, by that 2008B Amendment to Mortgage dated August 14, 2008, filed March 31, 2009 as Document No. 9338430, and by that Ninth Amendment to Mortgage dated December 31, 2009, filed December 31, 2009 as Document No. 9460529. 2. Life estate of Frank B. Nitz as evidenced of record by Decree of Descent in the matter of the estate of Hattie R. Nitz dated February 20, 1973, filed as Document No. 4007226. HopCivil/ParkNicolletRealEstatePurchaseAgmt B-2