Loading...
HRA Report 2013-04 Purchase Agreement - Leaman's Liquor Inc.-4m Cily of' Hopkin€; May 30, 2013 HRA Report 2013-04 PURCHASE AGREEMENT — LEAMAN'S LIQUOR INC. Proposed Action Staff recommends adoption of the following motion: Move to approve the Purchase Agreement between the Hopkins Housing and Redevelopment Authority and Leaman's Liquor Inc. With this motion the Purchase Agreement will be executed with the closing anticipated to occur on June 27, 2013. It is understood that staff has the authority to make modifications that do not change the intent of the agreement. Overview In 2014, Hennepin County, in partnership with the cities of Hopkins and Minnetonka, will begin construction on the widening of County Road 61, also known as Shady Oak Road. This project will require the acquisition of additional Right of Way. In order to maximize the benefits of the road project, and minimize the impacts, Hennepin County awarded the cities $3 million in Community Works funds to conduct a variety of activities including property acquisition, demolition and construction of new parking areas. The City of Hopkins has been in negotiations with several of the property owners and is now in a position to move forward with three property acquisitions that will utilize the Community Works funds to create redevelopment opportunities and replacement parking in the corridor. The Leaman's property will be demolished to make available a development site of at least 10,000 square feet, anticipated to be developed by Mokabaka LLC as the new location for Snap Print and two additional tenants. Primary Issues to Consider • What is the overall plan for the use of Community Works funds in the corridor? • What are the terms of this agreement? Supporting Documents Purchase Agreement with Leaman's Liquor Inc. • Co peratvive A nt for Shady Oak Road Community Works Project Kersten(verum Director of Planning & Development Analysis of Issues: • What is the overall plan for the use of Community Works funds in the corridor? The following scenario was developed based on the needs of the property owners and the availability of Community Works funds: The HRA will purchase the following properties: Address: Occupants: 120 & 112 Shady Oak Rd Leaman's Liquor/Nelson's Meats & Bakery 108 Shady Oak Rd Syndicate Sales 20 & 24 Shady Oak Rd Snap Print/Studio Tan (owned by Mokabaka, LLC) The tenants — Nelson's Meats, Studio Tan and Snap Print — will receive their relocation eligibility letters on June 5, 2013. Nelson's Meats will be relocated within 90 days. The closing on Leaman's Liquor, Inc., property will take place on June 27, 2013. From June 27. 2013, until the 90 -day period is up, the HRA will own the property and lease back the space to both Leaman's Liquors and Nelson's Meats, with the tenants paying all operating costs. The closing on the remaining properties will take place after the Leaman's/Nelson's building has been vacated, anticipated to occur in early September. At this time, the Leaman's/Nelson's building will be demolished and the property will be conveyed to Mokabaka, LLC, for the construction of a new building that will be the new home to Snap Print and up to two additional tenants, which may include Studio Tan. When the new building is constructed, the northern portion of the former Mokabaka property will be demolished and a new supporting wall constructed. Additional improvements will be made to the property to accommodate Syndicate Sales, who will then move into the former Snap Print location. At this time, the current Syndicate Sales building will be demolished to create parking for the new Snap Print (and tenants), as well as shared parking with the VFW. Additional shared parking will also be created using the northern portion of the Mokabaka property. • What are the terms of this agreement? The purchase price is $952,500. The agreement gives Leaman's Liquor the right to continue to occupy the property until August 20, 2013, but obligates Leaman's to pay for all operating costs associated with the building. Nelson's Meats will also be allowed to occupy the property for 90 days while they find another suitable location. Alternatives The HRA has the following alternatives regarding this item: • Approve the Purchase Agreement as recommended. • Recommend changes to the Purchase Agreement. • Elect not to enter into a Purchase Agreement with the property owner. PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the "Agreement") is made and entered effective as of the latest date set forth opposite the parties' signatures at the end of this Agreement (the "Effective Date"), by and between Leaman's Liquor Inc., a Corporation under the laws of the State of Minnesota (referred to hereinafter as "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 the State of Minnesota (referred to hereinafter as "Buyer"). This offer to Purchase is only valid until 12013. A. RECITALS A. Seller is the fee owner of certain real property located at 112 and 120 Shady Oak Road, City of Hopkins, Hennepin County, Minnesota, and legally described in Exhibit A attached hereto and incorporated herein by this reference, including, without limitation, (i) all buildings, improvements, and fixtures situated thereon; and (ii) all easements and rights including, without limitation, any right, title or interest in any public streets or other public rights-of-way, whether vacated or unvacated, and all other right, title, tenements, hereditaments and interest benefiting or appurtenant thereto (collectively, the "Property"). B. Buyer desires to purchase the Property and Seller is willing to sell the Property to Buyer upon the terms and conditions set forth'hereinafter. NOW, THEREFORE, in consideration of the payments to be made hereunder and the foregoing premises and the mutual covenants and agreements set forth herein, it is hereby agreed as follows: 1. RECITALS INCORPORATED. The foregoing recitals are incorporated as if fully set forth herein. 2. SALE AND PURCHASE OF PROPERTY. Seller agrees to sell, and Buyer agrees to purchase the Property legally described in Exhibit A. The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property is Nine Hundred Fifty-two Thousand Five Hundred Dollars ($952,500.00). The Purchase Price shall be payable as follows: a. $5,000, cash, as Earnest Money (the "Earnest Money") to be deposited in escrow by Buyer on the Effective Date with Commercial Partners Title, LLC (the "Title Company") which the Title Company is instructed to hold and disburse in accordance with the terms of this Hopcivil\Leamansl.iquorPurchaseAgreement.5.8.13 Agreement. The Earnest Money shall be deposited in an interest-bearing account with interest to be applied to the Purchase Price on the Closing Date, except as otherwise stated in this Agreement. b. The balance of $947,500.00 shall be paid by cashier's check or wire transfer, on the Closing Date stated in Section 8 of this Agreement. 3. DUE DILIGENCE PERIOD. Buyer's obligations under this Agreement are subject to and contingent upon satisfaction of the contingencies stated in this Section 3. The time period commencing on the Effective Date of this Agreement and ending on the first business day that is sixty (60) days after the Effective Date is referred to herein as the "Due Diligence Period". During such Due Diligence Period, Buyer shall satisfy itself as to the condition of, and matters relating to, the Property, including: (a) Title. Buyer shall be satisfied that title to the Property is good and marketable or shall be good and marketable on the Closing Date. No later than ten (10) days after the Effective Date, Seller shall deliver to Buyer the original Abstract of Title covering the Property or a copy of Seller's Owner's Title Insurance Policy if in Seller's possession or available to Seller. Within twenty (20) business days of the Effective Date, Buyer shall obtain a commitment to issue an ALTA Owner's title insurance policy (the "Title Commitment") for the Property issued by the Title Company naming Buyer as the proposed owner/insured of the Property for the insured amount of the Purchase Price. Seller shall pay the fees of the Title Company for examination of title and issuance of the Title Commitment. The premium for issuance of the Title Insurance Policy to be issued to Buyer shall be paid by Buyer. The Title Commitment shall commit to insure marketable title in fee simple in Buyer, free and clear of all mechanic's liens, questions of survey, unrecorded interests or rights of parties in possession and subject only to such matters or exceptions to title as Buyer may approve pursuant to this Agreement. The Title Commitment must be accompanied by legible copies of all title exceptions and Schedule B documents noted therein. Buyer will be allowed 30 days after receipt of the Title Commitment for examination thereof and for making any objections to the marketability of the title to the Property, said objections to be made by written notice or to be deemed waived. If any objections are so made to the marketability of the title to the Property, Seller shall immediately commence and diligently endeavor to complete all actions necessary to cure such objections and shall be allowed sixty (60) days after the making of such objections by Buyer to cure such objections and make the title to the Property good and marketable of record in Seller and to obtain and deliver to Buyer appropriate endorsements to the Title Commitment, indicating that any such objections have been cured. Pending the correction of the title, the Closing Date and the payment hereunder required shall be postponed, but upon correction of the title and within 15 days after written notice of such correction given by Seller to Buyer, Seller and Buyer shall perform this Agreement according to its terms. If Seller refuses or fails to have such additional objections cured or removed on or before Closing, Buyer may, at its sole election, either (a) terminate this Agreement without any liability on its part; or (b) consummate the purchase and sale contemplated hereby, and withhold from the 2 HopcivilUxamansLiquorPurchaseAgreement.5.8.13 Purchase Price such sums as are necessary, in the judgment of the Title Company, to cure the objections. Waiver of any such objections shall not relieve Seller of its warranty obligations under the Warranty Deed. Buyer may deduct from the Purchase Price such sums as are reasonably necessary to cure any breach of Seller's representation and warranties or to cure any other default by Seller. (b) Survey. Buyer may, at Buyer's expense, at any time during the Due Diligence Period, obtain an ALTA survey of the Property certified to Buyer and the Title Company by a registered land surveyor (the "Survey"). Within ten (10) days after the Effective Date, Seller shall deliver to Buyer copies of any existing surveys of the Property that are in Seller's possession or are available to Seller. If the Survey obtained by Buyer discloses any matter that makes title to the Property unmarketable and to which Seller has not previously made objection under Paragraph (a), above, Buyer may notify Seller of such additional title objection and Seller shall be obligated to diligently endeavor to complete all actions necessary to cure such additional objection in the manner provided in Paragraph (a), above. (c) Environmental Reports. Seller shall provide, within ten (10) days after the Effective Date, copies of all environmental assessment reports, remediation reports, governmental statutory or regulatory filings and reports, and all other correspondence and other documentation regarding the environmental condition of the Property in the Seller's possession (the "Existing Environmental Reports"). Buyer may obtain, at Buyer's expense, a current environmental site assessment (the "Buyer's Phase I Report"). The Existing Environmental Reports and Buyer's Phase I Report are referred to hereinafter together as the `Environmental Reports". All matters disclosed by the existing Environmental Reports and the Buyer's Phase I Report shall be satisfactory and acceptable to Buyer in Buyer's sole discretion. (d) Seller's Documents. Seller shall provide to Buyer within twenty (20) days after the Effective Date (or such other period of time as may be specified as to individual documents) the documents, material and information described below (collectively "Seller's Documents"): (i) Copies of any site plans, topographical drawings, soil reports, utility plans and the like related to the Property in Seller's possession or control; (ii) Copies of all contracts related to the Property which are not terminable upon thirty (30) days' notice or less, and related files, if any; (iii) Copies of any existing surveys, including wetlands surveys, within Seller's possession; and (iv) Copies of any reports, assessments and other information in Seller's possession, and copies of all reports and information, if any, filed by Seller with the MPCA, the State Health Department, the County Recorder, or any M Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 other regulatory body, regarding any existing or former underground storage tanks or any other environmental condition of the Property. All matters disclosed by the Seller's Documents shall be satisfactory and acceptable to Buyer, in Buyer's unqualified discretion. (e) Inspection. Buyer shall have the right to undertake inspections, tests, and investigations of the Property and all improvements located thereon during the Due Diligence Period. Seller shall provide Buyer with access to the Property without charge and at all reasonable times during the Due Diligence Period for purposes of inspection, testing and approval of the Property, and completion of environmental, engineering, and such additional investigation and testing as is deemed desirable by Buyer. In the event Closing (as hereinafter defined) does not occur for any reason, Buyer shall repair and restore any damage to the Property caused by Buyer's testing and shall return the Property to the same condition as existed prior to the testing. All matters disclosed by such inspections shall be satisfactory and acceptable to Buyer, in Buyer's sole and unqualified discretion. (f) Acquisition of Adiacent Properties. As of the Closing Date stated in Section 8 of this Agreement, Buyer shall have acquired all of the adjacent tracts of real property identified in Exhibit B attached hereto and incorporated herein by reference (the "Adjacent Properties"), upon terms and conditions acceptable to Buyer in Buyer's sole discretion. If any of the above contingencies have not been satisfied on or before the end of the Due Diligence Period or, in the case of Paragraphs (a) and (b), above, the applicable dates stated in such paragraphs, 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, this Agreement shall become null and void and neither party will have any further rights or obligations regarding this Agreement or the 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. Buyer shall have the right to unilaterally waive any contingency by written notice to Seller. Seller shall allow Buyer, and Buyer's agents, access to the 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 expressly stated, and shall hold Seller and the Property harmless from all costs and liabilities relating to Buyer's activities. Buyer shall further repair and restore any damage to the Property caused by or occurring during Buyer's testing and return the Property to substantially the same condition as existed prior to such entry - 4 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 Seller agrees that Buyer's undertaking to acquire the Property and Buyer's commitment and expenditure of skill and Buyer's funds to perform the investigations described in this Section 3 constitute reasonable and adequate consideration for Seller's execution of this Agreement and the performance of Seller's obligations hereunder, notwithstanding the fact that, under certain circumstances, the Earnest Money is refundable to Buyer if the contingencies stated in this Section 3 are not satisfied. 4. REPRESENTATIONS OF SELLER. Seller hereby represents and warrants to Buyer the following: (a) Environmental Compliance. Seller has received no notice of and is not aware of any violation related to the Property of applicable law, statute, ordinance, rule, regulation, order or determination of any governmental authority with respect to hazardous substances or of the presence of hazardous substances in or on the Property; and that except as disclosed in any of the Environmental Reports, to Seller's knowledge, the Property has not been used for storage, destruction or disposal of hazardous substances, no hazardous substances have been released from the Property and Seller has received no notice, and is not aware of any prior notice, from the Minnesota Pollution Control Agency or any other governmental authority relating to hazardous substances at the. Property. For purposes hereof "hazardous substances" means any substance designated pursuant to the Clean Water Act, Title 33 U.S.C. Section 1321, any element, compound, mixture, solution or substance designated pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, Title 42 U.S.C. Section 9602, any hazardous waste having the characteristics identified under or listed pursuant to the Solid Waste Disposal Act, Title 42, U.S.C. Section 6921, any toxic pollutant listed under Section 307(a) of the Clean Water Act, Title 33 U.S.C. Section 1317(a), any hazardous air pollutant listed under Section 112 of the Clean Air Act, Title 342 U.S.C. Section 7412, any imminently hazardous chemical substance or mixture with respect to which the Administrator of the Environmental Protection Agency has taken action pursuant to Section 7 of the Toxic Substances Control Act, Title 15 U.S.C. Section 2606 and any hazardous waste, hazardous substance, pollutant or contaminant, as defined in the Minnesota Environmental Response and Liability Act, Minnesota Statutes, Section 11513.02. The term also includes, but is not limited to, polychlorinated biphenyls, asbestos, petroleum products and various constituents of such products, urea formaldehyde and related substances. (b) Storage Tanks. Seller is not aware of any underground storage tanks located on or in the Property. If the investigation to be undertaken in connection with the Buyer's Phase I Report shall confirm the existence of one or more storage tanks not identified in this Section, or if any tank identified in this Section is not in use or is leaking, then Seller shall have such tank(s) removed by a qualified contractor prior to Closing at Seller's expense, such removal to be undertaken in compliance with all applicable statutes, rules, and regulations and are required reports to be filed with appropriate authorities. Upon removal, testing of the surrounding soil shall be completed at Seller's expense to determine if any leakage or spillage may have occurred, resulting in any soil contamination and Seller shall perform all remediation required by the MPCA 5 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 or any other governmental authority having jurisdiction, all at Seller's sole expense, prior to Closing. As to existing storage tanks, if any, Seller shall provide evidence satisfactory to Buyer that such tanks are leak free and adequate information concerning the use of such tanks. Buyer's obligation to close shall be contingent upon Buyer's satisfaction, in the Buyer's sole judgment, with Seller's performance of the foregoing obligations. (c) Pending Litigation. There is no litigation or other proceeding presently pending or, to Seller's knowledge, under consideration by any party affecting, directly or indirectly, the Property which would in any way impair Seller's ability to perform its obligations under this Agreement, with the exception of the condemnation proceeding to be undertaken in connection with the proposed improvements to Shady Oak Road (the "Shady Oak Road Project"). (d) Governmental Action. Seller has not received notice of any action, suit or proceeding instituted by any person or entity against or affecting the Property before any federal, state, municipal or other governmental authority, including without limitation notice of any condemnation or taking for any public right-of-way or utility, with the exception of the Shady Oak Road Project. (e) Authorization. Seller is the sole owner of the Property, and has the right, power and capacity to enter into this Agreement, to consummate the transactions contemplated hereby, and to comply with the terms, conditions .and provisions hereof. (f) Condition of Property. Seller has received no notice, order or other communication from any governmental body having jurisdiction over the Property requiring any improvement to or alteration of the Property which has not been remedied, and Seller agrees to give Buyer prompt written notice of any such communication received on or prior to Closing Date. (g) Underground Storage Tanks Affidavit. In the event that there are any underground storage tanks on the Property, Seller agrees to file a storage tank affidavit complying with Minnesota Statutes § 116.48, subd. 6, as amended, prior to Closing. (h) Wells/Septic Systems. Seller certifies and warrants that it is not aware of the existence of any wells on the Property within the meaning of Minn. Stat. § 103I.005, or of any individual sewage treatment system on the Property within the meaning of Minn. Stat. § 115.55. (i) Right to Sell. Seller has not entered into any other unterminated contracts for the sale of the Property, is not aware of any rights of first refusal or options to purchase the Property, and consummation of the sale will not violate the provisions of any governmental regulation or law applicable to Seller, nor of any agreement or instrument by which Seller is bound. (j) Unrecorded Documents. With the exception of the Leases identified in Section 16, below, there are no unrecorded leases, contracts, easements, licenses or any other documents 31 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 creating rights in parties other than Seller which cannot be terminated by Seller prior to Closing and which will continue to affect the Property after Closing. (k) Removal of Personal Property. Seller shall remove, and shall require all tenants to remove, all personal property and debris, if any, from the Property by the Closing Date. (1) 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. Seller will indemnify Buyer against and will hold Buyer 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 contained shall survive the Closing for a period of 24 months. Any claim for breach of the representations and warranties contained in this Agreement must be brought by Seller within 24 months after the date of Closing, and all such claims shall be barred if not brought within that time period. Buyer is purchasing the Property based upon its own investigation and inquiry and, except for the representations and warranties of Seller stated herein, is not otherwise relying on any representation of Seller or other person and agrees to accept and purchase the Property "as is, where is". 5. RIGHTS/DUTIES. At all times prior to Closing, Seller shall comply with the following: (a) Seller shall maintain the Property in the same condition as in existence on the date hereof and shall comply at all times with all applicable codes and ordinances; (b) Seller shall continue to pay all real estate taxes and any installments of special assessments certified thereto which become due and payable. (c) Seller shall not permit the storage, release or disposal of hazardous or toxic substances or contaminants on the Property; and (d) Seller shall not encumber, permit liens to attach to, or convey any interest in the Property to any other party. (e) No permanent improvements shall be constructed on the Property without Buyer's written consent. (f) Seller shall pay all utilities due up to and including the Closing Date. (g) During the time period between the Effective Date and the Closing Date, Seller shall not amend or modify the existing Leases identified in Section 16, below, nor shall Seller enter into any new leases or other contracts affecting the Property which may not be terminated on or before the Closing Date. 7 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 6. CONTINGENCIES TO CLOSING. Buyer's obligation to close shall be subject to the following contingencies: (a) Buyer's receipt at Closing of a satisfactorily marked -up Title Commitment or Pro Forma owner's title insurance policy to issue an Owner's Title Insurance Policy meeting the requirements set forth in Section 3(a) hereof as of the Closing Date. (b) Seller's performance of each of its obligations under this Agreement. (c) Seller's representations and warranties being true and correct in all matters on and as of the Closing Date and Seller's delivery of a certificate (a "Bring Down Certificate") to Buyer at Closing to such effect. (d) Seller shall not have entered into any leases, license' agreements or material contracts for all or any portion of the Property, or constructed any permanent improvements, without Buyer's consent. (e) Seller's satisfaction with the Survey if one is obtained by Buyer as allowed under Section 3(b). (f) The contingencies stated in Section 3 of this Agreement shall have been satisfied or waived in accordance with the terms and conditions of Section 3. (g) As of the Closing Date, the Hennepin County Housing And Redevelopment Authority ("HCHRA") shall have approved this Agreement in accordance with the terms and conditions of the Cooperative Agreement between Buyer and the HCHRA for the Shady Oak Road Community Works Project. The contingencies set forth in this Section 6 are solely for Buyer's benefit and may be waived or enforced only by Buyer. If any of the above contingencies have not been satisfied on or before the applicable dates for satisfaction of each such contingency, then this Agreement may be terminated, at Buyer's option, by written notice from Buyer to Seller given at any time on or before the applicable contingency date. Upon such termination, the Earnest Money shall be refunded to Buyer and, upon such return, this Agreement shall become null and void and neither party shall have any further rights or obligations regarding this Agreement. Should Buyer fail to give notice of termination on or before the applicable date with respect to any of the foregoing contingencies, the contingency in question shall be conclusively deemed to have been waived by Buyer. 7. CONTROL OF PROPERTY, CONDEMNATION, CASUALTY LOSS. (a) Seller's Risk of Loss. Until Closing, Seller shall have the full responsibility and the entire liability for any and all damages or injury of any kind whatsoever to the Property, and to Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 any and all persons, whether employees or otherwise, and all property from and connected to the Property; except that Buyer shall be responsible for damages or injury caused by Buyer or Buyer's representatives during Buyer's inspection and testing of the Property. (b) Condemnation. If the Property (or any part thereof) is threatened with condemnation, or legal proceedings are commenced under the power of eminent domain, Seller shall promptly notify Buyer of such fact; in writing, this Agreement shall remain in effect in all of its terms and conditions and Buyer call be entitled to receive all condemnation payments and awards, in which event the Purchase Price shall remain the same, and Seller shall assign to Buyer, and Buyer shall be entitled to receive, all rights to the condemnation awards. (c) Damage/Destruction. If, prior to Closing, the Property (or any part thereof) is destroyed or damaged, Seller shall notify Buyer of such destruction or damage, and Buyer shall then have the option to terminate this Agreement or to proceed with the Closing. If Buyer elects to proceed with the Closing, Buyer shall have the option of receiving all insurance proceeds payable to Seller as a result of such damage and, to the extent the same may be necessary or appropriate, Seller shall assign to Buyer at Closing Seller's rights to such proceeds, or the Buyer shall receive a reduction to the Purchase Price in an amount equal to such proceeds. Seller shall bear all risk of loss prior to Closing. 8. CLOSING. The closing shall take place on , 2013, or such other date as is mutually agreed upon in writing by the parties (the "Closing Date"). The closing of this transaction (the "Closing") shall take place at the office of the Title Company, or another location mutually agreeable to the parties. Possession of the Property shall be delivered on the Closing Date. 9. SELLER'S CLOSING OBLIGATIONS. Each of the following shall be a necessary precondition to Buyer's obligation to close hereunder: (a) Seller's Deliveries. At or prior to the Closing, Seller shall execute, acknowledge and/or deliver, as appropriate, the following: (i) A Warranty Deed to the Property conveying marketable fee simple title, subject only to the Permitted Encumbrances. If there are no wells on the Property, the Warranty Deed shall include the following statement: "Seller certifies that Seller does not know of any wells on the described Real Property." If there are wells located on the Real Property, Seller shall deliver a well disclosure certificate as required by Minn. Stat. § 103I.235 disclosing the location and status of all wells located on the Property and providing such well disclosure documentation as required. (ii) Bring Down Certificate regarding Seller's representations and warranties. 0 HopciviNxanimUquorPunchaseAgreement.5.8.13 (iii) Standard Seller's Form Affidavit, in form and content acceptable to Buyer and sufficient to permit the Title Company to delete from the Title Commitment any exception regarding mechanic's liens, rights of parties in possession and unrecorded interests. (iv) Affidavit required pursuant to Section 1445 of the Internal Revenue Code and/or the regulations relating thereto stating, under the penalties of perjury, that (i) neither Seller nor any other party so swearing is a foreign person, (ii) the U. S. taxpayer identification number of Seller and such other parties, if any, and (iii) such other information as may be required by regulations enacted by the U. S. Department of the Treasury in connection with Section 1445 of the Internal Revenue Code. (v) Certificate of Real Estate Value required by the Minnesota Department of Revenue. (vi) Septic Disclosure Statements and well sealing certificates, if applicable, in accordance with applicable law. (vii) The Lease attached hereto as Exhibit C and identified in Section 16 and, if requested by Buyer, a written notice of termination of the month-to-month Lease with Mamida Corporation identified in Section 16. (viii) Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transaction contemplated in this Agreement. (b) Title Commitment. Buyer shall be satisfied with the marked -up Title Commitment, which Title Commitment shall reflect that all of the standard exceptions have been deleted, and shall show no exceptions except those known and not objected to by Buyer as provided in Section 3(a). 10. BUYER'S OBLIGATIONS AT CLOSING. At Closing, and subject to the terms, conditions, contingencies and provisions hereof and the performance by Seller of its obligations as set forth herein, the Buyer shall pay to Seller the Purchase Price. All sums paid by Buyer to Seller shall be credited against the Purchase Price. Buyer shall also execute and deliver the Lease attached hereto as Exhibit C. 11. CLOSING COSTS. The following costs and expenses shall be paid as follows in connection with the Closing: (a) Seller's Costs. Seller shall pay: 10 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 (i) The recording fee for recording all documents required to convey marketable title to the Property, including the conservation fee due upon recording the deed. (ii) The state deed tax. (iii) The costs of the Title Commitment and exam fee shall be paid by Seller. (iv) One-half of the closing fee charged by the Title Company. (b) Buyer's Costs. Buyer shall pay: (i) One-half of the closing fee charged by Title Company. (ii) The premium for the Owner's Title Policy. (iii) Recording costs for the deed. (e) Legal Fees. Each party shall pay the fees and costs of their respective legal counsel. 12. PRORATIONS. Real estate taxes, governmental use fees, area charges and the like (collectively "Real Estate Taxes") due and payable in the year of Closing shall be prorated between Seller and Buyer as of Closing Date, based upon a calendar year. Real Estate Taxes due and payable in the year prior to the year of Closing shall be paid in full by Seller on or before the Closing. Any Real Estate Taxes or special assessments which have been deferred and become or will become due and payable as a result of the conveyance of the Property shall be paid in full by Seller on or before the Closing. All special assessments levied and pending as of the date of Closing shall be paid by Seller at Closing. An assessment shall be deemed pending if the assessing authority has approved the improvement which will result in the assessment and has entered into a contract to construct the improvement. All utilities and other operating costs of the Property will be prorated between Seller and Buyer as of the Closing Date, so that Seller pays that part of such operating costs payable for dates before the Closing Date and Buyer pays that part of such operating costs payable for dates after the Closing Date. 13. BROKERAGE. Buyer and Seller each represent to the other that they are not liable to any broker or agent with regard to the sale contemplated hereby. Seller agrees to indemnify, defend and hold harmless the Buyer from brokerage fees and commissions and from any claim made by any broker or sales agent or similar party for a commission due under the terms of any agreement entered into by the Seller, including without limitation reasonable attorneys' fees. Buyer agrees to indemnify, defend and hold harmless the Seller from brokerage fees and commissions and from any claim made by any broker or sales agent or similar party for a 11 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 commission due under the terms of any agreement entered into by the Buyer, including without limitation reasonable attorneys' fees. 14. DEFAULT. (a) Seller's Default. In the event that Seller should fail to consummate the transactions contemplated herein for any reason, except the default by Buyer, Buyer may pursue any remedies available to it under Minnesota law, including seeking specific performance of this Agreement and recovering all costs, disbursement and attorneys' fees incurred in said specific performance action. (b) Buyer's Default. If Buyer should fail to consummate the transactions contemplated herein for any reason, except the default by Seller, or the failure of any of the contingencies or conditions to the Buyer's obligations set forth herein, the Seller may pursue any remedies available to it under Minnesota law, including seeking specific performance of this Agreement and recovering all costs, disbursement and attorneys' fees incurred in said specific performance action. 15. MISCELLANEOUS. The following general provisions govern this Agreement. (a) Time of Essence. Time is of the essence of this Agreement. (b) Governing Law. This Agreement is made and executed under and in all respects to be governed and construed by the laws of the State of Minnesota. (c) Notices. Any notice required to be given to Seller or Buyer pursuant to this Agreement shall be in writing and shall be deemed duly given at the date of delivery by messenger or by recognized overnight courier, or one (1) business day after the date of mailing if sent by certified mail, return receipt requested, to the addresses stated below. Any party, by notice given as aforesaid, may change the address to which subsequent notices are to be sent. If to Buyer: Housing and Redevelopment Authority in and for the City of Hopkins Atten: Kersten Elverum, Director of Planning and Development 1010 1 st Street South Hopkins, MN 55343 with a copy to: Jeremy S. Steiner Steiner & Curtiss, P.A. 400 Wells Fargo Bank Building 1011 First Street South Hopkins, MN 55343 12 Hopcivil\LeamawLiquorPurchaseAgreement.5.8.13 If to Seller: Leaman's Liquor, Inc. Atten: Mr. James Mason 4330 Manitou Road Tonka Bay, MN 55331 (d) Buyer's Waiver Rights. Buyer, at its option, may waive any right conferred upon the Buyer by this Agreement. Except as provided otherwise herein, such waiver may be made by, and only by, giving Seller written notice specifically describing the right waived. (e) Amendment. This Agreement shall be amended only by a written instrument signed by Seller and Buyer. (f) Construction. The captions and headings of the various sections of this Agreement are for convenience only and are not to be construed as defining or as limiting in any way the scope or intent of the provisions hereof. Wherever the context requires or permits, the singular shall include the plural, the plural shall include the singular and the masculine, feminine and neuter shall be freely interchangeable. (g) Assignment. Neither party shall have the right to assign its interest under this Agreement, without first obtaining the consent of the other party, provided Buyer has signed Buyer's rights under this Agreement without Seller's consent but only if Buyer remains liable for Buyer's obligations hereunder. (h) Invalidity. If for any reason any portion or section of this Agreement shall be declared void and unenforceable by any court of law or equity it shall only affect such particular portion or section of this Agreement and the balance of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto. (i) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and either of the parties hereto may execute this Agreement by signing any such counterpart. 0) Merger/Survival. All prior understandings and agreements between the parties are merged into this Agreement which alone fully and completely expresses their agreement. All representations, covenants, obligations and agreements contained herein shall survive the Closing and delivery of the Warranty Deed by Seller. (k) Right of First Refusal. Seller expressly waives the right of first refusal provided by Minn. Stat. 117.226 that requires Buyer to offer the Seller the first right to purchase any excess land acquired pursuant to this Agreement. 13 Hopc ivil\LeamansLiquorPurchaseAgreement.5.8. l3 16. TERMINATION OF LEASE AND POST CLOSING OCCUPYANCY BY SELLER. Seller represents to Buyer that, as of the Effective Date, the Property is subject to the following Lease, and no others, namely: Name of Tenant Date of Lease Termination Date of Lease Mamida Corporation d/ba/ Month to Month Month to Month Nelson's Meats, Bakery & Deli Seller represents to Buyer that the above tenant is occupying the Property on a month to month basis and has no options to renew or extend the term of its lease and no right of first refusal or option to purchase the Property that would affect Seller's ability to perform its obligations under this Agreement. Buyer agrees that Seller shall be entitled to remain in possession of the space it currently occupies at 120 Shady Oak Road after the Closing Date in accordance with the terms and conditions of the Lease Agreement attached hereto as Exhibit C (the "Lease"). The term of the Lease shall commence on the Closing Date and terminate on August 20 2013. Buyer and Seller shall execute the Lease on the Closing Date. 17. WAIVER OF RELOCATION ASSISTANCE AND COMPENSATION FOR RIGHT OF WAY ACOUISTION. Seller acknowledges that, by receiving the Purchase Price, Seller shall be fully and fairly compensated for the fair market value of all of the Property. Therefore, Seller hereby waives any and all claims for compensation or awards that would otherwise have been payable for the acquisition of right of way by Hennepin County for County Road 61/Shady Oak Road. Seller also hereby waives all relocation assistance payments or similar benefits to which Seller might otherwise be entitled under state or federal law to the fullest extent permitted thereby. At Closing, Seller shall execute and deliver to Buyer any documents that shall reasonably be required to evidence such waivers by Seller. 18. IRC SECTION 1031 EXCHANGE. Buyer has been advised Seller may elect to effectuate a like kind exchange transaction under Section 1031 of the Internal Revenue Code. Buyer agrees to cooperate with Seller in effectuating Seller's Section 1031 Exchange, and agrees Seller may assign Seller's interest in this Agreement to a "qualified intermediary" for that purpose, provided Buyer shall not be required to incur or suffer, and Seller agrees to hold Buyer harmless from any expense, liability or obligation in connection with Seller's Section 1031 Exchange. The remainder of this page has been intentionally left blank. Signatures on Page 15 14 Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth after their signature below: Date: Dated Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 SELLER: Leaman's Liquor, Inc. By: Its: 15 BUYER: The Housing and Redevelopment Authority in and for the City of Hopkins L -In Eugene J. Maxwell, Chairman Kersten Elverum, Assistant Executive Director EXHIBIT A Legal Description of the Property Address: 112 Shady Oak Road Hopkins, MN 55343 Tax ID: 23-117-22-43-0022 Legal Description: Lot 10, Block 1, Oak Ridge 2nd Addition, Hennepin County, Minnesota Address: 120 Shady Oak Road Hopkins, MN 55343 Tax ID: 23-117-22-43-0023 Legal Description: Lot 11, Block 1, Oak Ridge 2nd Addition, Hennepin County, Minnesota Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 EXHIBIT B Description Of Adjacent Properties Address: 20 Shady Oak Road Hopkins, MN 55343 Tax ID: 23-117-22-43-0016 Address: 24 Shady Oak Road Hopkins, MN 55343 Tax ID: 23-117-22-43-0017 Address: 108 Shady Oak Road Hopkins, MN 55343 Tax ID: 23-117-22-43-0021 Hopei vil\Leamans LiquorPurchaseAgreement.5.8.13 EXHIBIT C LEASE AGREEMENT THIS LEASE AGREEMENT, made this day of , 2013, by and between The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota, a public body corporate and politic ("Landlord") and Leaman's Liquor, Inc., a Minnesota corporation ("Tenant"); WITNESSETH THAT: 1. DEFINITIONS. When used in this Lease Agreement the following words or phrases shall have the following meanings: BUILDING. Shall mean the commercial Building located on the Real Estate described in Exhibit A attached hereto, the address of which is: 120 Shady Oak Road, Hopkins, MN 55343. LEASED PREMISES. Shall mean all of the Building, parking areas and appurtenances to the Building. PROJECT. Shall mean and refer to the Leased Premises and the Real Estate. The Project shall not include any part of the land transferred to Hennepin County for right-of-way purposes by Landlord. REAL ESTATE. Shall mean that certain parcel of Real Estate legally described in Exhibit A hereto. The Real Estate shall not include any part of the land transferred to Hennepin County for right-of-way purposes by Landlord. THIS LEASE. Shall mean and refer to this Lease Agreement and all Exhibits attached hereto. 2. DEMISE AND PREMISES. Subject to the terms and conditions of this Lease, Landlord leases to Tenant, and Tenant hires and takes of and from Landlord the Leased Premises. 3. TERM. The Term of this Lease shall commence on , 2013 (the "Commencement Date") and shall terminate on August 20, 2013, unless this Lease shall be earlier terminated as provided herein. 4. BASE RENT. Tenant shall not be obligated to pay Landlord Base Rent during the term of this Lease stated in Section 3. Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 5. OPERATING EXPENSES. Tenant shall pay, either directly or as a reimbursement to Landlord, for the entire term of this Lease, as additional rent hereunder (in the case of a reimbursement to Landlord), without deduction or set-off therefrom, payable at the same time and location as the Base Rent, Tenant's Percentage (100%) of the following costs, expenses and amounts (which are hereinafter collectively referred to as "Operating Expenses"): a. All real estate taxes and installments of special assessments which shall accrue or become a lien against, or are payable in respect of, any part of the Project during the term of this Lease and all amounts payable under assessment agreements, gross receipts taxes and taxes on rentals (other than income taxes) relating to the Project. b. Subject to Tenant=s obligation to maintain and repair the premises as hereinafter provided, all other costs and expenses, if any, which Landlord may incur in maintaining and operating the Project regardless of whether such costs and expenses may be expensed or capitalized for federal income tax purposes, including, but not limited to, the costs of heating, cooling, sewer, water, utilities, insurance (including but not limited to liability insurance and fire and casualty insurance with rental abatement endorsement, boiler and pressure vessel insurance, war risk insurance, builders risk insurance, and owners protective liability insurance), security, landscaping, janitorial and cleaning services; recycling; cleaning, maintaining, resurfacing, striping, repairing and snow removal of walkways, driveways and parking areas; charges under maintenance and service contracts; all supplies purchased for use in the Project; all maintenance and repair costs, including expenses related to maintenance of the roof, structural and utility systems of the Building; any equipment rental; any and all other reasonable costs of maintaining and operating the Project regardless of whether such costs and expenses may be expensed or capitalized for federal income tax purposes. Tenant shall assume responsibility for the performance or payment of the foregoing obligations, Operating Expenses, with the exception of those that may only be paid by Landlord, in which case Tenant shall reimburse Landlord for 100% of such Operating Expenses. 6. SERVICES AND UTILITIES. Tenant shall be solely responsible for providing and paying for all services and utilities to the Leased Premises including, but not limited to, heating, ventilating and air conditioning, janitorial and cleaning services, recycling and rubbish removal, cleaning, maintaining and snow removal of walkways, driveways and parking areas, exterior maintenance, repair and maintenance of the Leased Premises, including all repairs to fixtures and improvements whether owned by Landlord or Tenant, maintenance of all utility systems, and any and all services, utilities, maintenance and repairs, ordinary or extraordinary. Landlord shall not be liable for, and there shall be no abatement of rent by reason of, failure to furnish, or for delay or suspension in the availability of any services or utilities, regardless of the cause thereof. Tenant shall pay, promptly when due, all charges for natural gas, electricity, telephone, water, sanitary sewer and refuse disposal provided to Tenant or the Leased Premises. Hopeivil\LeamansLiquorPurchaseAgreement.5.8.13 7. USE OF PREMISES. Tenant agrees that it will use and occupy the Leased Premises solely for the operation of Tenant's off sale liquor business. Tenant will not use or occupy the Leased Premises for any unlawful purpose and hereby assumes responsibility for and agrees to comply with all present and future laws, ordinances, regulations and orders of federal, state or local governmental units or agencies pertaining to the Leased Premises or the operation of Tenant's business thereon. Tenant shall not cause or permit any unusual noise, odors or nuisance in or about the Leased Premises and the Building and grounds nor shall Tenant permit any debris or property of Tenant, its officers, employees or agents to be placed or left upon the Project (other than within the Leased Premises). Landlord disclaims any warranty that the Leased Premises are suitable for Tenant's use and Tenant acknowledges that it has had full opportunity to make its own determination in this regard. Tenant warrants that the operation of its business will not be harmful to the Building or the mechanical equipment within the Building and Tenant shall be liable in the event of damage arising from such harmful operation. In the event Landlord's insurance premiums are increased above the standard Building rate as a result of Tenant's use of the Leased Premises, Tenant will pay to Landlord as additional rent the amount of such increase. In the event Tenant shall cause or permit any unusual noise, odor or nuisance or the storage of any debris or property of Tenant, its officers, employees or agents, in or about the Leased Premises or Project in violation of the terms of this Section 7, Landlord shall be entitled to take any steps it deems reasonably necessary to correct or remove such violation and Tenant shall pay Landlord, as additional rent hereunder, all costs and expenses incurred in such correction or removal including all costs and expenses incurred in ascertaining which Tenant is responsible for such violation. 8. , ASSIGNMENT AND SUBLETTING. Tenant will not assign, transfer, mortgage or encumber its interest in this Lease or sublet or rent or permit occupancy or use of the Leased Premises, or any part thereof by any third party; nor shall any assignment or transfer of this Lease be effectuated by operation of law or otherwise, without in each such case obtaining the prior written consent of Landlord, which consent which consent may be withheld in Landlord's sole discretion. Either of the following events shall be deemed to be an assignment of Tenant's interest in this Lease: a. Any transaction in which more than fifty percent (50%) of the legal or beneficial ownership or control of Tenant is transferred, if Tenant is a corporation, limited liability company, trust or partnership, or b. The sale or transfer of all or substantially all of the business and assets of Tenant. Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 9. SUBORDINATION. Without the necessity of any additional document being executed by Tenant for the purpose of effecting a subordination, this Lease shall be subject and subordinate at all times to the lien of any mortgage which may now or hereafter encumber the Project or Landlord's interest or estate therein; provided, however, that if the Landlord, any mortgagee or holder of any mortgage elects to have Tenant's interest in this Lease be superior to any such mortgage, then by notice to Tenant, this Lease shall be deemed superior, whether this Lease was executed before or after said mortgage. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver upon demand any certificate or Subordination Agreement evidencing such subordination or superiority of this Lease as may be requested by Landlord or any mortgagee, provided, however, that any subordination by Tenant (under this Section 9 or pursuant to a separate agreement) shall only be effective if Tenant has first received a nondisturbance agreement from the Mortgagee, by which the Mortgagee shall agree not to disturb Tenant's possession (provided Tenant is not in default under this Lease) and shall agree to honor the terms of this Lease. Tenant further agrees that in the event that any proceedings are brought for the foreclosure of any mortgage, Tenant shall attorn to the purchaser at the foreclosure sale and recognize such purchaser as the Landlord under this Lease, if requested to do so by such purchaser, provided that said purchaser agrees that Tenant's possession of the Leased Premises shall not be disturbed so long as Tenant shall continue to perform all of the covenants and conditions of this Lease, in which case Tenant's obligations to perform such covenants and conditions shall not be in any way diminished thereby. Tenant further waives the provisions of any statute or rule of law, now or hereafter in effect, which may give or purport to give Tenant any right to terminate or otherwise adversely affect this Lease and the obligations of Tenant hereunder in the event that any such foreclosure proceeding is prosecuted or completed. 10. SALE OF THE PROJECT/ESTOPPEL CERTIFICATES. In the event of a sale of the Project, Landlord shall be relieved of all liability under this Lease accruing from and after the date of sale provided Landlord has obtained the written agreement of its transferee or assignee to assume and carry out all of the covenants and obligations of the Landlord hereunder. Tenant agrees at any time and from time to time, upon not less than five (5) days' prior written notice by Landlord, to execute, acknowledge and deliver to Landlord or a party designated by Landlord a statement in writing (i) certifying that this Lease is unmodified and in full force and effect, or if there have been modifications, that this Lease is in full force and effect as modified and stating the modifications, (ii) stating the dates to which the Base Rent, Operating Expenses and other charges hereunder have been paid by Tenant, (iii) stating whether or not Landlord is in default in the performance of any covenant, agreement or condition contained in this Lease, and, if so, specifying each such default, (iv) agreeing that Tenant and Landlord will not thereafter modify the Lease without the approval of any mortgagee identified by Landlord, and (v) agreeing that, except for any security deposit required herein, Tenant shall not prepay any rent more than thirty (30) days in advance, and (vi) such other matters relating to this Lease as may reasonably be requested. Any such statement delivered pursuant hereto may be relied upon by any owner of the Project, any prospective purchaser of the Project, any mortgagee or prospective mortgagee of the Project or of Landlord's interest, or any prospective assignee of any such mortgagee. Hopeivil\leamansLiquorPurchaseAgreement.5.8.13 11. INSURANCE. Tenant agrees that it shall purchase in advance and carry the following insurance at is own expense: a) "All Risk" fire and extended coverage insurance insuring Tenant's personal property, furniture, trade fixtures, inventory, business record and leasehold improvements against loss from all insurable events for the full replacement value thereof; b) insurance against interruption of Tenant's business activities; c) comprehensive general public liability insurance, providing coverage on an "occurrence" and, not a "claims made" basis, covering all acts of Tenant, its employees, agents, representatives and guests and insuring against all claims arising from injury to persons or damage to property in or about the Leased Premises, Building or the Project in a single limit amount of not less than $2,000,000.00 for personal injury or death and not less than $500,000.00 for property damage and fire legal liability. All such insurance shall name Landlord as an additional insured and shall provide for thirty (30) days written notice to Landlord prior to cancellation, non -renewal or material modification. Certificates of all such insurance shall be delivered to Landlord prior to occupancy of the Leased Premises by Tenant and at least thirty (30) days prior to the termination date of any existing policy. Tenant shall pay to Landlord, upon demand, as additional rent the cost of securing such insurance in the event Tenant fails to furnish certificates of insurance to Landlord. However, it is not Landlord's duty nor obligation to secure such insurance for Tenant. 12. FIRE OR OTHER CASUALTY. If the Leased Premises shall be damaged or destroyed by fire or other cause, Landlord shall at its sole option either (a) undertake to restore such damage (provided, however, that Landlord shall not be required to spend amounts in excess of insurance proceeds available to Landlord to effect such restoration), or (b) terminate this Lease, by notice given to Tenant within sixty (60) days after the date of damage. If Landlord elects to terminate this Lease, such termination shall be effective as of the date of the damage. If Landlord elects to restore, Landlord shall not be obligated to restore any improvements to the Leased Premises which were not owned and constructed by Landlord. Upon substantial completion by Landlord of its work, Tenant shall undertake to restore its leasehold improvements and trade fixtures with all due diligence. This Lease shall, unless terminated by Landlord pursuant to this Section 12, remain in full force and effect following such damage, and, the Base Rent, prorated to the extent that the Premises are rendered untenantable, shall be equitably abated until such repairs are completed; provided, however, that if Tenant does not restore its leasehold improvements and trade fixtures with due diligence, abatement shall cease as of the date restoration could have been completed using due diligence. 13. CONDEMNATION. The Leased Premises does not include any part of the land transferred by Landlord to Hennepin County for right-of-way for Shady Oak Road. Tenant shall have not claim against Landlord or Hennepin County for relocation assistance benefits, loss of business, costs of relocation or the value of Tenant's trade fixtures. 14. ALTERATIONS AND SIGNS. Tenant will not make or permit anyone to make any alterations, additions or improvements, structural or otherwise, in or to the Leased Premises or the Building without the prior written consent of Landlord, provided that Landlord shall not Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 unreasonably withhold such consent. As a condition precedent to written consent of Landlord hereunder, Tenant agrees to obtain and deliver to Landlord such security against mechanic's liens as Landlord shall reasonably request. If any mechanic's lien is filed against any part of the Building or the Project for work claimed to have been done for or labor or materials claimed to have been furnished to or authorized by Tenant, such mechanic's lien shall be discharged by Tenant within ten (10) days thereafter, at Tenant's sole cost and expense, by the payment and satisfaction thereof or by making any deposit required by law. Should Tenant fail to obtain the discharge of any such mechanic's lien within ten (10) days of the filing thereof, Landlord shall be entitled to obtain such discharge by whatever reasonable means Landlord deems expedient, and all costs incurred by Landlord in obtaining such discharge including reasonable attorneys' fees, shall be paid by Tenant as additional rent hereunder. Tenant shall remove, at Tenant's sole expense, prior to the expiration or termination of the term of this Lease, all movable furniture or trade fixtures installed in the Leased Premises and shall restore or repair any damage to the Leased Premises caused by such removal. Tenant shall not install any equipment which will or may necessitate any changes, replacements or additions to, or in the use of, the heating, ventilating or air conditioning system, or electrical system of the Leased Premises or the Project nor any equipment containing Hazardous Materials or chlorofluorocarbons without obtaining the prior written consent of Landlord. 15. WAIVER OF SUBROGATION. Notwithstanding any other provision in this Lease to the contrary, Tenant hereby releases Landlord and Landlord=s commissioners, agents, representatives and employees, from any and all liability or responsibility (to Tenant or anyone claiming through or under Tenant by way of subrogation or otherwise) for any loss or damage covered by insurance actually carried or coverable by the insurance required by Section 11 hereof, even if such loss or damage shall have been caused by the fault or negligence of Landlord, or anyone for whom Landlord may be responsible. 16. WAIVER AND INDEMNITY. Tenant agrees that Landlord and Landlord=s commissioners, agents, representatives and employees shall not be liable to Tenant or those claiming through or under Tenant for any personal injury, death or property damage occurring in, on or about the Leased Premises, the Building or the Project except to the extent such injury, death or property damage was caused by the intentional misconduct or negligence of Landlord, its agents or employees. Without limitation of the foregoing, Landlord shall not be liable to Tenant for any damage, compensation or claims arising from: loss or damage to books, records, files, money, securities, negotiable instruments or other papers in or about the Leased Premises; the necessity of repairing any portion of the Project; the interruption in the use of the Leased Premises; accident or damage resulting from the use or operation by Landlord, Tenant, or any other person or persons whatsoever of elevators, or heating, cooling, electrical or plumbing equipment or apparatus; the termination of this Lease by reason of the destruction or condemnation of the Leased Premises; any fire, robbery, theft, or any other casualty; any leakage or bursting of pipes or water vessels or any roof or wall leakage in any part or portion of the Hopeivil\LeamansLiquorPurchaseAgreement.5.8.13 Leased Premises or the Building; water, rain, snow or underground water that may leak into, flow on, or flow from, any part of the Leased Premises or the Project. Tenant agrees to indemnify and hold harmless Landlord and Landlord=s commissioners, agents, representatives and employees from and against all claims, costs, liabilities and expenses, of whatever nature a) arising or resulting from any act, omission or negligence of Tenant, its officers, employees and agents in or about the Leased Premises, Building or the Project or, b) arising in connection with Tenant's use or occupancy of the Leased Premises or the conduct of Tenant's business thereon, and agrees to indemnify and hold harmless Landlord from and against all costs, expenses and liabilities, including reasonable attorneys fees, incurred in connection with any such claims or proceedings brought thereon, and the defense thereof. 17. REPAIRS AND MAINTENANCE. Tenant shall put, keep, repair and maintain the Leased Premises and the fixtures and equipment therein at all times in a good, properly functioning, safe and sanitary condition and state of repair, free of debris and other similar obstructions, and Landlord shall have no responsibility for any repair, upkeep, maintenance, improvement, alteration, or other work to or upon the Leased Premises of any kind or nature. Tenant=s repair and maintenance obligations shall include, but are not limited to, the obligation to: i) make all necessary repairs to the outer walls, roof, and structural elements of the Building, ii) keep the plumbing, sewage, heating, air conditioning, electrical and ventilating systems of the Building in good repair, ordinary wear and tear excepted, and iii) maintain and keep the common areas, grounds, walkways, driveways and parking areas in a neat and clean condition. Tenant shall pay for electric lamps and ballasts used in the Leased Premises. Any cost of repairs, modifications, alterations or improvements to the Building, the Leased Premises or the Project which are occasioned by the negligence or default of Tenant, its officers, employees, agents or invitees, or by the requirements of law, ordinance or other governmental directive and which arise out of the nature of Tenant's use and occupancy of the Leased Premises or the installations of Tenant in the Leased Premises shall be paid solely by Tenant. Without limiting the foregoing, Landlord shall have no obligation to maintain, repair or restore the Building, Leased Premises, or any part or component thereof or improvements thereon. Tenant accepts possession of the Building and the Leased Premises Aas is@ and Awhere is@ and agrees that Tenant shall be responsible for all maintenance, repair and upkeep of the Building, the Leased Premises and any fixtures or improvements located thereon. Tenant will not suffer or permit any waste or injury to the Leased Premises and will, at the expiration of the term of this Lease, surrender the same with all walls, floor coverings and other components thereof in the same order and condition as on the Commencement Date, ordinary wear and tear, subsequent alterations or improvements consented to by Landlord as provided in Section 14 of this Lease and casualty damage covered by insurance excepted. 18. ENTRY AND INSPECTION. Upon twenty-four (24) hours prior notice, except in the case of emergencies, Tenant shall permit Landlord, its agents or representatives to enter the Leased Premises to examine and inspect the same. Landlord shall make reasonable efforts not to Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 unreasonably interfere with the conduct of Tenant's business, but Landlord shall in no event be liable to Tenant or those claiming under or through Tenant for any loss or damages in connection with such entry or inspection. 19. IMPROVEMENTS. [INTENTIONALLY OMITTED] 20. WAIVER. No waiver by either party of any breach of any covenant, condition or agreement herein contained shall operate as a waiver of such covenant, condition, or agreement itself, or of any subsequent breach thereof. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly installments of rent herein stipulated shall be deemed to be other than on account of the earliest stipulated rent nor shall any endorsement or statement on any check or letter accompanying a check for payment of rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent, to terminate this Lease, to repossess the Leased Premises or to pursue any other remedy provided in this Lease. No re-entry by Landlord, and no acceptance by Landlord of keys from Tenant, shall be considered an acceptance of a surrender of this Lease or the Leased Premises. 21. COVENANTS OF LANDLORD. Landlord covenants that it has the right to make this Lease for the term aforesaid and covenants that if Tenant shall pay the rent and perform all of the covenants, terms and conditions of this Lease to be performed by Tenant, Tenant shall, during the term of this Lease freely, peaceably and quietly occupy and enjoy the full possession of the Leased Premises. The term "Landlord" as used in this Lease shall mean solely the owner of the Project. In case the original or any successor Landlord shall convey or otherwise dispose of its entire interest in the Project and turn over to the transferee any funds held by it hereunder in which Tenant has an interest, all liabilities of such Landlord under this Lease shall terminate. 22. NO REPRESENTATIONS BY LANDLORD. Neither Landlord nor any agent, employee or property manager of Landlord has made any representations with respect to the Leased Premises or the Project except as herein expressly stated, and no right, privileges, easements or licenses are acquired by Tenant except as herein expressly stated. 23. DEFAULT. a. Any one of the following events shall constitute an Event of Default: i) Tenant shall fail to pay any monthly installment of Base Rent or any other sum due Landlord as herein provided; ii) Tenant shall violate or fail to perform any of the other terms, covenants or conditions of this Lease and such default shall continue for thirty (30) days after notice from Landlord; Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 iii) Tenant shall file or have filed against it or any guarantor of this Lease any bankruptcy or other creditor's action, or make an assignment for the benefit of its creditors; b. If an Event of Default shall have occurred and be continuing, Landlord may at its sole option by written notice to Tenant terminate this Lease. Neither the passage of time after the occurrence of the Event of Default nor exercise by Landlord of any other remedy with regard to such Event of Default shall limit Landlord's rights under this Paragraph 23, b). C. If an Event of Default shall have occurred and be continuing, whether or not Landlord elects to terminate this Lease, Landlord may enter upon and repossess the Leased Premises (said repossession being hereinafter referred to as "Repossession") by force, summary proceedings, unlawful detainer, ejectment or otherwise, and may remove Tenant and all other persons and property therefrom. d. From time to time after Repossession of the Leased Premises, whether or not this Lease has been terminated, Landlord shall exercise reasonable efforts to relet the Leased Premises for the account of Tenant in the name of Landlord or otherwise, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the Term) and for such terms (which may include concessions or free rent) and for such uses as Landlord, in its sole and unqualified discretion, may determine, and may collect and receive the rent therefor. Landlord shall not be responsible or liable for any failure to collect any rent due upon any such reletting. When used in this Paragraph 23, d), the phrase "reasonable efforts to relet" shall mean and refer to commercially reasonable efforts to relet the Leased Premises after all other vacant space in the Building has been leased by Landlord upon such terms and conditions as Landlord, in its sole discretion, may determine, and Landlord shall in no event be determined not to have exercised reasonable efforts to relet for any period of time that is less than one year after all comparable vacant space in the Building has been so leased. e. No termination of this Lease pursuant to Paragraph 23, b) and no Repossession of the Leased Premises pursuant to Paragraph 23, c) or otherwise shall relieve Tenant of its liabilities and obligations under this Lease, all of which shall survive any such termination or Repossession. In the event of any such termination or Repossession, whether or not the Leased Premises shall have been relet, Tenant shall pay to Landlord the Base Rent and other sums and charges to be paid by Tenant up to the time of such termination or Repossession, and thereafter Tenant, until the end of what would have been the term in the absence of such termination or Repossession, shall pay to Landlord, as and for liquidated and agreed current damages for Tenant's default, the equivalent of the amount of the Base Rent, Operating Expenses and such other sums and charges which would be payable under this Lease by Tenant if this Lease were still in effect, less the net proceeds, if any, of HopcivilU_eamansUquorPurchaseAgreement.5.8.13 any reletting effected pursuant to the provisions of Paragraph d) after deducting all of Landlord's expenses in connection with such reletting, including without limitation, all repossession costs, brokerage and management commissions, operating expenses, legal expenses, reasonable attorneys' fees, alteration costs, and expenses of preparation for such reletting. Tenant shall pay such current damages to Landlord monthly on the days on which the Base Rent would have been payable under this Lease if this Lease were still in effect, and Landlord shall be entitled to recover the same from Tenant on each such day. At any time, after such termination or Repossession, whether or not Landlord shall have collected any current damages as aforesaid, Landlord shall be entitled to recover from Tenant, and Tenant shall pay to Landlord on demand, as and for liquidated and agreed final damages for Tenant's default, an amount equal to the then present worth of the excess of the Base Rent, Operating Expenses and other sums or charges reserved under this Lease from the day of such termination or repossession for what would be the then unexpired term of this Lease if the same had remained in effect, over the then net fair rental value of the Leased Premises for the same period. E If an Event of Default shall have occurred and Landlord places in the hands of an attorney the enforcement of all or any of the terms, covenants, agreements or conditions of this Lease, the collection of any rent due or to become due, or the recovery of possession of the Leased Premises, Tenant agrees to reimburse Landlord, as additional rent hereunder, for Landlord's reasonable attorneys fees, together with the actual cost of maintaining any action commenced in law or equity by Landlord, whether suit is actually filed or not. g. Landlord shall in no event be considered to be in default hereunder until the expiration of a reasonable period of time after written notice of default from Tenant. Tenant agrees that it will look solely to the interest of Landlord in the Project and the rentals therefrom for the collection of any judgment or award requiring the payment of money by Landlord in the event of any default by Landlord in any of the terms, covenants or conditions of this Lease; and no other assets of Landlord or its partners, officers, directors, members or shareholders shall be subject to levy, execution or other legal process for the payment of Tenant's claims. h. Tenant waives any demand for possession of the Leased Premises, demand for payment of rent and notice of intent to re-enter, or of intention to terminate this Lease, other than the notices provided in this Section 23. 24. SURRENDER. Tenant shall surrender the Leased Premises to Landlord upon termination of this Lease, whether such termination occurs at the end of the lease term or sooner, together with all utility systems, equipment, improvements, replacements, alterations and decorations thereto and operating bulbs or tubes in all light fixtures, broom clean and in good order, condition and repair except for ordinary wear and tear. Tenant shall remove promptly, upon Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 request by Landlord, alterations, modifications and the like to the Leased Premises made by Tenant or on behalf of Tenant and shall restore and repair damage caused by such removal. Should Tenant fail to surrender the Leased Premises in the condition required by this section, Landlord shall be entitled to take whatever steps may, in Landlord's sole discretion, be required to restore the Leased Premises to said condition and Tenant agrees that it shall pay to Landlord all costs incurred by Landlord in so restoring the Leased Premises. Notwithstanding any provision of this Lease to the contrary, Tenant shall remove all of Tenants fixtures, equipment, inventory, supplies, materials, furnishings, personal property and debris (collectively the Apersonal property and debris@) from the Project no later than the Termination Date or such earlier date on which Tenant vacates the Leased Premises. 25. HOLDING OVER. Should the Tenant continue to occupy the Leased Premises, or any part thereof, after the expiration or termination of the Term of this Lease whether with or without the consent of the Landlord, such tenancy shall be from month to month and Tenant shall pay Landlord the sum of $200.00 per day for each day Tenant continues in possession after the Termination Date in addition to all other sums Tenant is obligated to pay pursuant to the terms of this Lease during the entire period that Tenant continues to so occupy the Leased Premises after the term of this Lease. 26. LATE PAYMENT. Other remedies for nonpayment of rent notwithstanding and without prejudice to such remedies, if Tenant fails to pay the Base Rent, Operating Expenses or any other payment due hereunder, within the ten (10) days immediately following the date on which such payment is due, Tenant shall pay to Landlord, as additional rent hereunder, interest on all such past due payments at the rate of one percent (1 %) per month or at the maximum rate permitted by law, whichever rate is lower. Interest shall accrue from the date each such late payment became due and shall be payable to the date of payment thereof by Tenant. 27. SECURITY AND DAMAGE DEPOSIT. [INTENTIONALLY OMITTED] 28. HAZARDOUS SUBSTANCES AND ENVIRONMENTAL REGULATIONS. a. When used in this Section 28, the terms "Environmental Regulations" and "Hazardous Substances" shall have the following meanings: i) Environmental Regulations shall mean and refer to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq., the Minnesota Environmental Response and Liability Act, Minn. Stat. Chapter 115B, all amendments thereto, and all other laws, acts, statutes, ordinances, rules, regulations, orders or determinations of any governmental authority pertaining to or regulating Hazardous Substances, Infectious Waste, asbestos, radiation, radioactive material, health or the environment. Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 u) Hazardous Substances shall mean and refer to all hazardous substances, hazardous waste, toxic waste, asbestos, lead-based paint, solvents, radiation, radioactive material, pollutants or contaminants as defined in or regulated by Environmental Regulations. Tenant warrants, represents and agrees that: b. Its use of the Leased Premises, the Project, and the operation of its business thereon, shall not violate any Environmental Regulations. C. Tenant has obtained and shall continue to maintain all permits, licenses, certificates or similar authorizations required by Environmental Regulations to conduct its business on the Leased Premises and the Project. Tenant shall, upon request therefore by Landlord, deliver to Landlord copies of all such permits, licenses, certificates and authorizations. d. Tenant's use of the Leased Premises will not result in the disposal, discharge, emission or release of any Hazardous Substance on or about the Leased Premises, Building or the Project or the contamination of any part of the Project thereby. e. Upon request by Landlord, Tenant shall deliver to Landlord copies of all contracts, programs, management plans or certifications regarding the generation, storage, use, removal or disposal of Hazardous Substances which are required in order for Tenant to be compliance with Environmental Regulations. Tenant shall, upon request by Landlord, provide Landlord with copies of permits, inspection reports, monitoring reports, licenses, orders, compliance requests or other documentation filed, served, delivered or transmitted either with, to or from the Minnesota Pollution Control Agency, Minnesota Department of Health or the U.S. Environmental Protection Agency or other governmental body relating to Tenant's use of Hazardous Substances in or about the Leased Premises or the Project. In the event Tenant, its officers, partners, agents, employees or subcontractors shall breach or fail to perform any of the warranties, representations and agreements contained in this Section, then, in addition to any other remedy Landlord may have under this Lease, at law or in equity: f. Upon notice from Landlord, Tenant shall remove from the Leased Premises, Building or the Project, at Tenant's sole expense, any Hazardous Substance, machinery or equipment which is not in compliance with Environmental Regulations or this Lease Agreement; Hopcivil\LeamansLiquorPurchaseAgreement.5.8.13 g. Provided Landlord has a reasonable basis to believe Hazardous Substances have been discharged or released or any part of the Project has been contaminated thereby, Landlord and such Environmental Engineers or consultants as it may employ shall be entitled to enter upon the Leased Premises for the purpose of conducting such environmental audits or similar tests as Landlord may deem necessary and the cost and expense of such environmental audits or and tests incurred by Landlord shall be paid by Tenant as additional rent hereunder with the next installment of Base Rent; and h. Tenant shall protect, indemnify and save Landlord harmless from all costs, fines, claims, demands, actions, proceedings, judgments and damages (including court costs and reasonable attorneys' fees) resulting from or arising out of any breach or nonperformance by Tenant 'of the representations, warranties and agreements contained in this Section 28 including, without limitation, the cost of removal and/or remediation of any disposal, discharge, release or contamination of Hazardous Substances on or about the Leased Premises, Building or the Project resulting from the acts or omissions of Tenant, its managers, subtenants, agents and employees. It is expressly acknowledged by Tenant that all of the terms, covenants and conditions of this Section 28, including, but not by way of limitation, the indemnifications herein provided shall survive the termination of this Lease. 29. NOTICES. All notices or other communications hereunder shall be in writing and shall be personally served upon the representative of Landlord or Tenant identified below or sent by first class United States Mail, postage prepaid, or by a nationally -recognized overnight delivery service, to the following address: Landlord: The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Attn: Executive Director 1010 First Street South Hopkins, MN 55343 Tenant: Leaman's Liquor, Inc. Atten: Mr. James Mason 4330 Manitou Road Tonka Bay, MN 55331 If notice is given by mail or by overnight delivery service, such notice shall be deemed to have been given the day following one business day after the date of mailing or the date on which the party giving notice delivers the notice to the overnight delivery service. Leaman sLiquorPurchaseAgreement.5.8.13 30. MISCELLANEOUS. a. This Lease is made and executed in the State of Minnesota, and shall be construed according to the laws of Minnesota; b. The invalidity or unenforceability of any provision of this Lease shall not affect or impair the validity of any other provisions; and section titles and captions in this Agreement are for convenience only and do not define, limit or construe the contents of such sections and paragraphs; C. If more than one person or entity shall sign this Lease as Tenant, the obligations set forth herein shall be deemed joint and several obligations of each such party; d. This Lease shall be binding upon and inure to the benefit of the parties thereto and, subject to the restrictions and limitations herein contained, their respective heirs, successors and assigns; and e. Any modifications to this Lease must be in writing and signed by both Landlord and Tenant. f. Tenant shall not be eligible for any relocation assistance benefits or payments as a result of its right to continue in occupancy and possession of the Leased Premises under this Lease. The remainder of this page has been intentionally left blank. Signatures on Following Page LeamansLiquorPurchaseAgreement. 5.8.13 IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement this day of , 2013. LANDLORD TENANT THE HOUSING AND REDEVELOPMENT LEAMAN'S LIQUOR, INC. AUTHORITY IN AND FOR THE CITY OF HOPKINS, MINNESOTA By By Its Its Date: Date: LeamansLiquorPurchaseAgreement.5.8.13 EXHIBIT A LEGAL DESCRIPTION OF REAL ESTATE Lot 11, Block 1, Oak Ridge 2nd Addition, Hennepin County, Minnesota LeamamLiquorP=haseAgreement.5.8.13 Hennepin County Contract No. A] 20493 COOPERATIVE AGREEMENT FOR SHADY OAK ROAD COMMUNITY WORKS PROJECT This Agreement is between the County of Hennepin Housing and Redevelopment Authority ("HCHRA"), A-2300 Government Center, Minneapolis, Minnesota 55487, and the Housing and Redevelopment Authority in and for the City of Hopkins ("HHRA"), 1010 151 St S, Hopkins, Minnesota 55343 and the Economic Development Authority in and for the City of Minnetonka ("MEDA"), 14600 Minnetonka Boulevard, Minnetonka, Minnesota 55345. WHEREAS, all parties wish to complete a redevelopment project and associated public and private improvements as part of the Shady Oak Road Community Works Project ("Project"); and WHEREAS, the project area is the area between Oak Drive on the North and Bradford Road on the South; Shady Oak Road on the East and the west property boundary of properties west of Shady Oak Road (`Project Area'); and WHEREAS, the Project is consistent with the recommendations of the Redevelopment Project Area One in the City of Hopkins and the redevelopment project area to be approved by the City of Minnetonka in 2012; and WHEREAS, as part of its Redevelopment Project No. 1, the HHRA has approved a redevelopment plan for the Project Area ("Plan"); and WHEREAS, the MEDA will approve a redevelopment plan for parcels within the Project Area that are located within its boundaries ("Plan") by December 31, 2012; and WHEREAS, by Resolution No. 07- 466R1, Hennepin County authorized funds in an amount not to exceed Three Million Dollars for the Shady Oak Road Community Works Project; WHEREAS, the HCHRA wishes to contract with the HHRA and MEDA for completion of said Project; and WHEREAS, the HCHRA has the authority to contribute to the Project pursuant to Minnesota Statutes, Chapter 163 and Sections 383B.77, 383B.79, 469.001 to 469.047, 471.85, and other applicable law; and WHEREAS, the parties are authorized to enter into this agreement pursuant to Minnesota Statutes Sections 383B.79, 471.59 and other applicable law; THEREFORE, the parties agree as follows: 1. Term and Cost of the Agreement. The term of this agreement commences December 1, 2012 and terminates December 31, 2017. HCHRA agrees to reimburse HHRA and MEDA for an amount up to Three Million Dollars ($3,000,000) ("Funds") for the property acquisition, property improvements, environmental abatement, and other activities and services specified in Section 4 below and generally illustrated on Attachment A ("Improvements") or as approved by HCHRA. Additional funds from payments for roadway right-of-way, not to exceed $1,370,000 ("Additional Funds") may also be available during the project period for property acquisitions. 2. Responsibilities of Parties. The HHRA intends to purchase property for the purpose of redeveloping it with a new building with a minimum size of 10,000 square feet (the "Redevelopment Site") or an 8,000 square foot building if the building is constructed by a property owner currently in the project area and to make the Improvements to the Redevelopment Site. The HHRH also intends to make Improvements to other parcels within the Project Area, as provided in this Agreement. HHRA and the HCHRA shall determine the actual location, area and dimensions of the Redevelopment Site. The HCHRA shall not unreasonably withhold or delay its approval of any request by the HHRA for approval of the location of parcels to be acquired for the Redevelopment Site, and shall notify the HHRA of approval or disapproval of such location within ten (10) business days of submission of a request for approval by the HHRA. The MEDA will approve a redevelopment area for parcels within the Project Area that are located within its boundaries by December 31, 2012. The MEDA agrees to make the Improvements to parcels within the Project Area that are located within its boundaries, as provided in this Agreement. HCHRA agrees to reimburse HHRH and MEDA for the Improvements in accordance with Section 4 of this Agreement. Restricted Use of the Funds. The use of any Funds for acquisition of the Redevelopment Site or Improvements thereto is contingent upon the ability of the HHRA to acquire property from willing sellers for the creation of the Redevelopment Site. If the HHRA is unable to acquire the Redevelopment Site, no portion of the HCHRA Funds are expendable solely for the purpose of making improvements to private property or for the creation of new parking, provided the HHRA shall be entitled to reimbursement for Second and Third priority expenditures for which the HHRA has become unconditionally obligated in reliance on this Agreement. 4. Improvements Reimbursed. HHRA and MEDA shall use all Funds received under this Agreement for the purposes, and in the priority, described below. If additional funds are deemed necessary to meet the objectives of the HHRA, MEDA and HCHRA, the parties agree to work together to identify additional funds available for the project. Any expenditure for the particular priority that exceeds the not -to -exceed amount will be reviewed by the HHRA and the MEDA, with the HCHRA providing final approval. In order to work within time constraints and to prevent duplicative payments to property owners from both the Project and the current road project (County Project 9112), any property within the Project Area that is in an eminent domain action by Hennepin County 2 as a part of County Project 9112, will be ineligible to receive Funds for improvements to privately owned property unless HCHRA approves payment of the Funds after reviewing the circumstances of the condemnation. A. First Priority for the Expenditure of Funds: Acguire property within Project Area for the purpose of creating the Redevelopment Site. Property acquisition and redevelopment costs eligible for reimbursement from the HCHRA include: • Purchase of property for redevelopment purposes to be included in the Redevelopment Site • Relocation of tenants in acquired properties • Acquisition and/or relocation consultant services • Hazardous material abatement in acquired buildings and land including, but not limited to, costs of environmental assessments, testing, MPCA fees and environmental remediation costs • Demolition of buildings on acquired property • Legal Services related to acquisition activities • Engineering services to facilitate building removal • Restoration of building walls related to building separation • Permitting fees • Other services as preapproved by Hennepin County The expenditures for property acquisition are not to exceed $3,000,000 without review by HHRA and MEDA and approval by HCHRA. In connection with the transfer of the Redevelopment Site to a redeveloper, the HHRA may enter into a subrecipient agreement or redevelopment agreement with the redeveloper allowing use of the Funds for the purposes described in this Paragraph A, subject to all of the terms and conditions state in this Agreement. The HCHRA will reimburse HHRA for costs listed above. Prior to expending funds for any of the following priorities, purchase agreement(s) must be signed for the purchase of property that will create an adequately sized development parcel as determined by the HHRA and the HCHRA. B. Second Priority for the Expenditure of Funds: Construct new parking lots as determined necessary to support adjoining businesses similar to the manner depicted in the schematic development concept found in Attachment A. Eligible reimbursable expenses include: • Removals, grading and other site preparation • Installing Parking Lot Base • Asphalt Paving, Seal Coating, and Striping of New Parking Areas • Lighting of Parking Areas • Landscaping New parking lots shall be subject to the following terms and conditions unless otherwise allowed by the HCHRA: i) Title to the land on which new parking lot(s) are constructed or will be constructed in the future may be sold to adjacent property owner(s) for an amount equal to the fair market value as established by the Hennepin County Assessor, which will take into account the non-exclusive parking easement(s), or such value as is otherwise allowed by the HCHRA. ii) As a condition of the sale of new parking lot property to an adjacent property owner, the parking lot may be subject to a non-exclusive parking easement that provides for the sharing of the parking with adjacent commercial properties., The expenditures for new parking lots are not to exceed $300,000 without review by HHRA and MEDA and approval of HCHRA. C. Third Priority for the Expenditure of Funds: Improvements to existing private parking lots within the project area as designated "ICN" in Attachment A. Eligible reimbursable expenses include: • Asphalt Overlay, Seal Coating, and Striping • Lighting within the parking lot using the chosen light standard for the project area. Private property owners may be eligible to receive cost to cure payments for parking lot improvements (seal coating, stripping, etc.) from Hennepin County Transportation for the Shady Oak Road project. Whether in the city of Hopkins or Minnetonka, the parking lot improvements will be managed and monitored by Minnetonka city staff. All parking lots improvements and payments will be coordinated with Hennepin County staff and the roadway construction contractor(s) for County Project 9112. The expenditures for parking lot improvements are not to exceed $300,000 without review by HHRA and MEDA and approval by HCHRA. D. Fourth Priority for the Expenditure of Funds: Facade improvements to existing businesses that conform to the current city zoning code and are immediately adjacent to the Shady Oak Road construction project between Highway 7 and Excelsior Boulevard. Property owners are required to provide a 50 percent cash match to any funds provided by HCHRA for fagade improvements. HHRA and MEDA will manage the fagade improvements for properties in their cities. Facade improvements are only possible if funding remains after completion of the first three priority activities. 4 E. Fifth Priority for Expenditure of Funds: Other public amenities that support Community Works principles within the Shady Oak Road corridor (for example, streetscape and park improvements). 5. Disposal of Acquired Property. The HHRA shall use its best efforts to sell or otherwise transfer the Redevelopment Site to a qualified and responsible redevelopment party or parties (as determined by the HHRA) who will assume the obligation of completing the Minimum Improvements by December 31, 2017. The terms and conditions for the sale or transfer of the Redevelopment Site to a redeveloper shall be determined by the HHRA in its reasonable discretion and such transfer may be made for less than fair market value in order to facilitate redevelopment of the Redevelopment Site. The Minimum Improvements are abuilding of new construction with a minimum size of 10,000 square feet or 8,000 square feet if the building is constructed by a project area property owner and an associated landscaped, lighted parking lot(s), as generally illustrated in Attachment A, attached and incorporated by this reference. Any land sale proceeds must be used only for the purposes stated in Section 4 of this agreement. It is understood that relocation to or acquisition of the Redevelopment Site may be offered to one or more of the project area owners in exchange for the property presently occupied by such oAmer(s). If this occurs, and the HHRA acquires such property in exchange, the HHRA agrees to convey to Hennepin County that part of the property acquired in such exchange that is needed for roadway and/or right-of-way purposes as described in item 8. 6. Development Agreement. Any development agreement that is negotiated by the HHRA with a developer of the Redevelopment Site purchased with HCHRA funds must receive HCHRA approval. Approval will not be withheld if the project meets the Minimum Improvements requirements. 7. Parkin Lot of Improvements. Construction of parking lot improvements within the project area, whether in the city of Hopkins or Minnetonka, will be managed and monitored by Minnetonka city staff, subject to reasonable approval of Hopkins city staff as to location and design for properties located in Hopkins. All parking lots improvements will be coordinated with Hennepin County staff and the roadway construction contractor(s). 8. Conveyance of Roadway/Right-of-Way Property., The HHRA and MEDA agree to convey to Hennepin County for no cost any real property acquired which is identified by Hennepin County as required for roadway construction and/or right-of-way purposes as part of County Project 9112 provided such real property has been acquired with the use of Funds or Additional Funds provided by HCHRA. Conveyance to Hennepin County shall be completed before the sale or transfer of any property acquired under this agreement or before the road project construction commences, whichever is earlier. 9. Payment. Payment for property acquisition costs and the Improvements shall be made directly to the HHRA and MEDA after completion of the acquisition or incurring costs for other Improvements and upon the presentation of a claim in the manner provided by 5 law governing the HCHRA's payment of claims. Payment shall be made within forty- five (45) days from receipt of the invoice. 10. Independent Contractor. The HHRA and MEDA shall select the means, method, and manner of performing the services. Nothing is intended or should be construed as creating or establishing the relationship of a partnership or a joint venture between the parties or as constituting the HHRA and MEDA as the agent, representative, or employee of the HCHRA for any purpose. The HHRA and MEDA are and shall remain independent contractors for all services performed under this Agreement. The HHRA and MEDA shall secure all personnel required in performing services under this Agreement. Any personnel of the HHRA and MEDA or other persons while engaged in the perfonnance of any work or services required by the HHRA and MEDA will have no contractual relationship with the HCHRA and will not be considered employees of the HCHRA. The HCHRA shall not be responsible for any claims that arise out of employment or alleged employment under the Minnesota Economic Security Law or the Workers' Compensation Act of the State of Minnesota on behalf of any personnel, including, without limitation, claims of discrimination against the HHRA and MEDA, its officers, agents, contractors, or employees. The HHRA and MEDA shall defend, indemnify, and hold harmless Hennepin County and the HCHRA, their officials, officers, agents, volunteers, and employees from all such claims irrespective of any determination of any pertinent tribunal, agency, board, commission, or court. Such personnel or other persons shall neither require nor be entitled to any compensation, rights, or benefits of any kind from the HCHRA, including, without limitation, tenure rights, medical and hospital care, sick and vacation leave, Workers' Compensation, Re-employment Compensation, disability, severance pay, and retirement benefits. 11. Indemnification. The HHRA and MEDA agree to defend, indemnify, and hold harmless Hennepin County and the HCHRA, their officials, officers, agents, volunteers and employees from any liability, claims, causes of action, judgments, damages, losses, costs, or expenses, including reasonable attorney's fees, resulting directly or indirectly from any act or omission of the HHRA and MEDA, a subcontractor, anyone directly or indirectly employed by them, and/or anyone for whose acts and/or omissions they may be liable in the performance of the services required by this Agreement, and against all loss by reason of the failure of the HHRA and MEDA to perform any obligation under this Agreement. Nothing in this Agreement constitutes a waiver by the parties of any statutory or common law defenses, immunities, or limits on liability. The obligation of a party under this section cannot exceed the amount that the party would be obligated to pay under the provisions and limitations of Minn. Stat. Chap. 466 without this indemnification language. Under no circumstances will a party be required to pay on behalf of itself and other parties, any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to any one party. 12. Data Practices. The HHRA and MEDA, its officers, agents, owners, partners, employees, volunteers and subcontractors shall abide by the provisions of the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13 (MGDPA), the Health Insurance Portability and Accountability Act (HIPAA) and implementing regulations, if applicable, P and all other applicable state and federal laws, rules, regulations and orders relating to data privacy or confidentiality. If the HHRA or MEDA creates, collects, receives, stores, uses, maintains or disseminates data because it performs functions of the HCHRA pursuant to this Agreement, then the HHRA and MEDA must comply with the requirements of the MGDPA as if it were a government entity, and may be held liable under the MGDPA for noncompliance. The HHRA and MEDA agree to defend, indemnify and hold harmless Hennepin County and the HCHRA, its officials, officers, agents, employees, and volunteers from any claims resulting from the HHRA and MEDA's officers', agents', owners', partners', employees', volunteers', assignees' or subcontractors' unlawful disclosure and/or use of such protected data, or other noncompliance with the requirements of this section. The HHRA and MEDA agree to promptly notify the HCHRA if it becomes aware of any potential claims, or facts giving rise to such claims, under the MGDPA. The terms of this section shall survive the cancellation or termination of this Agreement. 13. Records — AN-ailabili /Access. Subject to the requirements of Minnesota Statutes Section 16C.05, Subd. 5, the HHRA and MEDA agree that the HCHRA, the State Auditor, or any of their authorized representatives, at any time during normal business hours, and as often as they may reasonably deem necessary, shall have access to and the right to examine, audit, excerpt, and transcribe any books, documents, papers, records, etc., which are pertinent to the accounting practices and procedures of the HHRA and MEDA and involve transactions relating to this Agreement. The HHRA and MEDA shall maintain these materials and allow access during the period of this Agreement and for six (6) years after its termination or cancellation. 14. Liability. It is further understood that neither the HCHRA, nor its elected officials, officers, agents and employees, either in their individual or official capacity, shall be responsible or liable in any manner to the HHRA and MEDA for any claims, demands, judgments, fines, penalties, expenses, actions or causes of actions of any kind or character arising out of or by reason of negligent performance of the work by the HHRA and MEDA, or arising out of the negligence of any contractor under the contract let by the HHRA and MEDA for the performance of that work; and subject to the limitations in Section 11, the HHRA and MEDA agree to defend, save and keep said HCHRA, its elected officials, officers, agents and employees harmless from all claims, demands, judgments, fines, penalties, expense, action or causes of actions and expenses (including, without limitation, reasonable attorneys' fees, witness fees, and disbursements incurred in the defense thereof) arising out of negligent performance by the HHRA and MEDA, its officers, agents or employees. 15. Merger and Modification. A. It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supersedes, all oral agreements and negotiations between the parties relating to the subject matter. All items that are referenced or that are attached are incorporated and made a part of this 7 Agreement. If there is any conflict between the terms of this Agreement and referenced or attached items, the terms of this Agreement shall prevail. B. Any alterations, variations, modifications, or waivers of provisions of this Agreement shall only be valid when they have been reduced to writing as an amendment to this Agreement signed by the parties. 16. Default and Cancellation. A. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement either of the following events: (i) Failure to comply with the terms of this Agreement. (ii) Provided the HHRA is able to acquire the Redevelopment Site with the use of Funds, the failure by the HHRA or a developer selected by the HHRH to commence and complete construction of the Minimum Improvements described as a new building of at least 10,000 square feet or 8,000 if new building is constructed by existing project area property owner pursuant to the terms, conditions and limitations of this Agreement by December 31, 2017. B. If there is an Event of Default, at the discretion of the HCHRA, the following remedies are possible upon written notice by the HCHRA: (i) Suspend performance under this Agreement until the HCHRA receives assurances of performance. No additional financial payments will be made to the HHRA until the suspension has been released. (ii) Renegotiate or terminate this Agreement, provided the HHRA and MEDA shall have been given thirty (30) days notice and opportunity to cure the Event of Default before such termination. (iii) Require the transfer of any property purchased with HCHRA funds by the HHRA or MEDA to the HCHRA whereupon the HCHRA shall have the right to take possession of the property. Any property transferred to the HCHRA shall have a clear title and be free of any special assessments and unpaid utility bills, but subject to any encumbrances to which such property is subject upon its acquisition by HHRA or MEDA. (iv) Require the HHRA or MEDA to sell any property purchased with HCHRA funds. The net proceeds (sale price minus closing costs) from the sale of the property shall be paid to the HCHRA in an amount not to exceed the Funds used to acquire such property and any other expenses incurred by HCHRA for the purchase of the property. The remedies specified in this Paragraph 16.B. shall be the sole and exclusive remedies available to the HCHRA upon an event of default by the HHRA under Subparagraph 16.A. (ii). C. Notwithstanding any provision of this Agreement to the contrary, and as except as provided in the last sentence of Paragraph B., above, the HHRA and MEDA shall remain liable to the HCHRA for damages sustained by the HCHRA by virtue of any breach of this Agreement by the HHRA and MEDA. Upon notice to the HHRA and MEDA of the claimed breach and the amount of the claimed damage, the HHRA and MEDA shall have a period of time not to exceed thirty (30) days to cure the claimed breach and, if such breach is cured within the thirty (30) day period, this Agreement shall remain in full force and effect in all of its terms and conditions. If the claimed breach is not cured within the thirty (30) day period specified in the preceding sentence, the HCHRA may withhold any payments to the HHRA and MEDA for the purpose of set-off until such time as the exact amount of damages due the HCHRA from the HHRA and MEDA is determined. Following notice from the HCHRA of the claimed breach and damage, the HHRA and MEDA and the HCHRA shall attempt to resolve the dispute in good faith. D. Except as provided in the last sentence of Paragraph 16.13., above, the above remedies shall be in addition to any other right or remedy available to the HCHRA, the HHRA or the MEDA for a breach of this Agreement, including remedies available to law, statute, rule, and/or equity. E. The failure of any party to insist upon strict performance of any provision or to exercise any right under this Agreement shall not be deemed a relinquishment or waiver of the same, unless consented to in writing. Such consent shall not constitute a general waiver or relinquishinent throughout the entire term of the Agreement. F. Upon written notice, HCHRA may immediately suspend or cancel this Agreement in the event any of the following occur: (i) the City of Hopkins and the City of Minnetonka do not obtain anticipated funding for right-of-way acquisition costs payable by such cities pursuant to the Agreement For Right -of -Way Acquisition with the County of Hennepin; (ii) funding for this project is withdrawn, frozen, shut -down, is otherwise made unavailable; or (iii) HCHRA determines, in its sole discretion, that funding is, or has become, insufficient. G. Notwithstanding anything to the contrary, if this Agreement is cancelled by the HCHRA for any reason other than a material default by the HHRA and MEDA after notice and a 90 day opportunity to cure, the HCHRA shall be obligated to reimburse the HHRA and MEDA for all Project -related expenditures (up to the $3,000,000 not to exceed amount in Section 1) made in reliance on this Agreement. E 17. Contract Administration. To coordinate the work or services of the HHRA and MEDA with the activities of the HCHRA so as to accomplish the purposes of this contract, Patrick Connoy, or his successor, shall manage this contract on behalf of the HCHRA and serve as liaison between the HCHRA and the HHRA and MEDA. Kersten Elverum, or her successor, shall be the contact person for the HHRA. Julie Wischnack, or her successor, shall be the contact person for the MEDA. 18. Notices. Any notice or demand which must be given or made by a party under the terms of this Agreement or any statute or ordinance shall be in writing, and shall be sent registered or certified mail. Notices to the HCHRA shall be sent to the HCHRA Administrator with a copy to the originating Department at the address given in the opening paragraph of the Agreement. Notice to the MEDA shall be sent to the City Administrator at the address stated in the opening paragraph of the Agreement. Notices to the HHRA shall be sent to the Executive Director at the address stated in the opening paragraph of this Agreement. 19. Survival of Provisions. Provisions that by their nature are intended to survive the term, cancellation or termination of this Agreement include but are not limited to: INDEPENDENT CONTRACTOR; INDEMNIFICATION; DATA PRACTICES; RECORDS-AVAILABILITY/ACCESS; DEFAULT AND CANCELLATION; and MINNESOTA LAW GOVERNS. 20. Minnesota Laws Govern. The Laws of the State of Minnesota shall govern all questions and interpretations concerning the validity and construction of this Agreement and the legal relations between the parties and their performance. The appropriate venue and jurisdiction for any litigation will be those courts located within the County of Hennepin, State of Minnesota. Litigation, however, in the federal courts involving the parties will be in the appropriate federal court within the State of Minnesota. If any provision of this Agreement is held invalid, illegal or unenforceable, the remaining provisions will not be affected. 21. Reporting. The HHRA and MEDA must provide a written narrative on a bi-annual basis to the HCHRA describing the Project activities that have been completed in accordance with this Agreement. THIS PORTION OF PAGE INTENTIONALLY LEFT BLANK 10 AUTHORITY BOARD AUTHORIZATION HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY STATE OF MINNESOTA Reviewed b e County Atto is , By: / hair of Its Board Date: 1 Date: / t— Ice —1L APPRO A TO X T ATTEST: WAL"� Deput Jerk of County Board By: Date: i 1 ' 1(0' 1-2— Assistant 2Assistant County Attorney Date:t,� By: Executive Director Date: By: Deputy Ex cutive Director Date:�-- HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HOPKINS By: Chair And: _ Elkliti4e birector Date: 10-\6- 1 ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MINNEETONKA By: i ?,�, /9 / Presi ent And: Executive DiMcto Date:�-- 11 yttachmeAt , F o LEGEND 4� , Curbs to be Constructed as _ — Project . ,,eegg ��, F � Part o°Transportation + a )•. p'cpCP trm 73 : improvement ,. ICN Costs Negotiated �` Y r Opti S New Shared Parking � r r y -... ^. Hennepin County Trans Pmjecet t ortanon .: - Future Site.or 411i Development $ h Ring - — - ! Building { q k t•: New Parking and Access Drive_ocations are Dependent on the Ability to Acquire Property and the Development Plan. r .n: Ax e - Main Street Toam•� � JL Bl Johnson' ,�s �m `,,ICM Vcsew t Dorholt Building 6 N- CN— Fien- n..Co. Ken- - u.F.W. T137T5_ W+ B-dfordBoed yttachmeAt