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2006-09-09 Purchase Agreement ~ WENDLAND, UTZ, STAHL AND MINTZ, LTD. ., . ATTORNEYS AT LAW 300 WELLS FARGO CENTER P.O. BOX 939 ROCHESTER. MINNESOTA 55903 TELEPHONE (507) 288-5440 FAX (507) 281-8288 RECEIVED JUL 1 , 2006 CRAIG W. WENDUu'\D' MARK E. UTZt ROGER M. STAHL JEFFERY A. MINTZ. DANIEL P. DODA Building Inspections . Also admined in California t Cenified Real Prope",' SpeCialISt .. Also admitted in illinOis and ~f'\.ada June 9, 2006 Mr. Dave Hanson JLC Properties of Rochester, LLLP 2480 Superior Drive N.W. Rochester, MN 55901 Dear Dave: Attached please find a copy of the fully executed Purchase Agreement regarding the Albertville property. Consistent yvith the terms of the Purchase Agreement, we will forward the $5,000.00 earnest money payment to Tri-County Title within 10 days of the date of acceptance (June 8, 2006). We should also be looking closely at the time-lines and due diligence requirements to ensure that we are complying with any duties or obligations on our part as buyer. I understand from a voice-mai I from Jim Pflepsen that there is a June 19th City Counsel meeting in Albertville to address, among other items, changes to the development plan or development agreement and permission or authority to place a pylon sign on the property we are purchasing. To the extent you would like our assistance with respect to those matters, please let me know. In the meantime, as I wrote in my prior e-mail, I will be reviewing th~ due diligence information I have received to date regarding the property and discussing that with you. Sincerely, ~Q:TAHL Attorney at Law RMS/cmz Enclosure O$61A!4L THIS AGREEMENT is made this' PURCHASE AGREEMENT /)~ . l:7' day of June, 2006, between JLC Properties of Rochester, LLLP, its successors and/or assigns, 2480 Superior Drive NW, Rochester, MN 55901, hereinafter referred t6 as Buyer, and Albertville Phase II, LLC" 2750 County Road 74, St. Cloud, Minnesota 56301, hereinafter referred to as Seller, Inconsideration of this Agreement, Seller and Buyer agree as follows: 1, Sale of Property, Seller agrees to sell all of Seller's rights, title, and interest to Buyer, and Buyer agrees to buy from Seller the following property: Subject Property situated in the County of Wright, State of Minnesota described as follows: Lot 5, Block One, Shoppes at Towne Lakes Two, Wright County, Minnesota (formerly Lot F, Outlot D, Towne Lakes 5th Addition) identified by the attached Exhibit A ("Subject Property"). Actual legal to govern The Subject Property is located in Phase II of the Shoppes at Towne Lakes development, Albertville, Minnesota ("Development") and consists of approximately 59,709 square feet. 2, Purchase Price and Manner of PaYment. The total purchase price to be paid by Buyer to Seller for the Subject Property shall be FNE HUNDRED FIFTEEN THOUSAND DOLLARS ($515,000.00) ("Purchase Price"). Within ten (10) days of acceptance of this offer by the Seller, the Buyer shall make an earnest money payment of$5,000.00 ("Earnest Money") to be deposited to the trust .~ccount ofTri County Title and Abstract Company ofSt. Cloud Minnesota ("Closing Agent") to be held pending the Closing (as defined herein), Earnest Money shall be applied to the Purchase Price .and be fully refundable to Buyer as described herein; the balance of the Purchase Price shall be paid by Buyer at Closing. 3. Documents to be Provided by Seller. a. Within ten (10) days ofthe execution of this Purchase Agreement, Seller shall provide all engineering, plat, surveys, environmental inspection materials, soil test results, geotechnical reports, all plans, specifications and/or any other written information Seller may have in its possession or under its control, including any and all such items in the possession and control of Seller's attorneys and agents, arising from and involving or rFlated to the Subject Property. b. Updated Abstract of Title or Torrens CertifIcate for the Subject Property with 1 all searches and certificates as is set out in Paragraph 9 (a), 4, Representations and Warranties by the Seller. The Seller represents and warrants to the Buyer, as of the date of execution ofthis Agreement and as of the Closing Date, unless otherwise specified herein, as follows: (a)' The Seller has the requisite power and authority to enter into and perform this " Agreement and the Seller's closing documents signed by it, such closing documents having been duly authorized by the necessary action on the part of the Seller and have been duly executed and delivered; each execution, delivery, and performance by the Seller of such closing documents do not conflict with or result in a violation of the Seller's articles of organization, bylaws, or a judgment, order, or decree of any court or arbiter to which the Seller is a party; such closing documents are valid and binding obligations of the Seller, and are enforceable in accordance with their terms. (b) The Seller currently owns the Subject Property, and will, as of the Closing Date, own the Subject Property free and clear of all encumbrances. (c) The Seller has not entered into any other contracts for the sale of the Subject Property, nor are there any rights of first refusal or options to purchase the Subject Property or any other rights of others that might prevent the consummation ofthis Agreement on the terms hereof, or t~e use of the Subject Property for Buyer's current intended purpose following the Clos'ing. (d) The Seller is not a "foreign person", "foreign partnership", "foreign trust", or "foreign corporation" as those terms are defined in Section 1445 of the Internal Revenue Code or any other federal statute or regulation requiring filing or notification of such identity. (e) There is no action, litigation, investigation, or proceeding of any kind pending or to the best k?owledge of the Seller threatened against the Seller or any portion of the Subject Property. (f) To the best of Seller's knowledge, there are no pending or threatened governmental proceedings in eminent domain, for rezoning, for building moratorium or otherwise, which would affect the Subject Property, the Development; or any portion thereof, nor are there any facts in existence that may give rise to any such action or proceeding. (g) To the best of Seller's knowledge, there are no plans, studies or efforts by any governmental agency to widen, rnodify or realign any street or highway provi~ing access to the Subject Property or the Development. 2 (h) To the best of Seller's knowledge, there are no intended public improvements. or special assessments affecting the Subject Property or the Development which will result in any charge being levied or assessed against them or in the creation of any lien against them. (i) Seller has made available to Buyer a true and correct copy of all environmental reports in its possession or about which it has knowledge, including all transaction screens, Phase 1 or Phase 2 Environmental Site Assessment or assessments, and all reports, correspondence and communications with the Minnesota Pollution Control Agency related to those environmental reports, (j) Seller has not entered into any commitments or agreements with any governmental agency or public or private utility affecting the Subject Property or the Development. (k) To the best of Seller's knowledge, Seller represents that the Subject Property is lawfully zoned and can be occupied for use as a Perkins restaurant in accordance with applicable governmental regulations, (I) Except as detailed on Exhibit C attached hereto, to the best of Seller's knowledge after due inquiry, no toxic or hazardous substances (including, without limitation, asbestos, urea fonn formaldehyde, the group of organic compounds known as polychlorinated biphenyls, and any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601-9657, as amended) have been generated, treated, stored, released or disposed of, or otherwise deposited in or located on the Subject Property or the Development, including without limitation, the surface and subsurface waters of the Subject Property or the Development, nor has any activity been undertaken on the Subject Property or the Development which would cause (i) the Subject Property or the Development to become a hazardous waste treatment, storage or disposal facility within the meaning of, or otherwise bring the Subject Property or the Development within the ambit of, the Resource Conservation and Recovery Act of 1976 ("RCRAIf), 41 U,S.C. Section 6901 et seq., or any similar state law or local ordinance or any other environmental law, (ii) a release or threatened release of hazardous waste from the Subject Property or the Development within the meaning of, or otherwise bring the Subject Property or the Development within the ambit of CERCLA, or any similar state law or local ordinance or any other environmental law or (iii) the discharge of pollutants or effluents into any water source or system, or the discharge into the air of any emissions, which would require a permit under the Federal Water Pollution Control Act, 33 U,S,C. Section 1251 et seq., or the Clean Air Act, 42 US.C. Section 7401 et seq., or any similar state law or local ordinance of any other, environmental law. To the best of Seller's knowledge after due inquiry, there are no substances or conditions in or on the Subject Property or the Development which may support a claim or cause of action under RCRA, CERCLA or any other fe~eral, state or local environmental 3 statutes, regulations, ordinances or other environmental regulatory requirements. To the best of Seller's knowledge after due inquiry, no underground deposits which cause hazardous wastes or underground storage tanks are located on the Subj ect Property or the Development. 5. Contingencies. The obligations of the parties under this Agreement are contingent upon each of the following: a. Title. Title to the Subject Property shall have been found good and marketable and otherwise acceptable to Buyer in all respects, b. Performance of Seller's Obligations. Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement. Included within the obligations of Seller under this Agreement shall be the following: (1) Seller shall allow Buyer, and Buyer's agents, access to the Subject Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing of same. Buyer shall pay all costs and expenses of such investigation and testing. c. Testing and Inspection, Buyer shall have completed and detennined that it is satisfied with the results of and matters disclosed by any soil tests, well tests, septic inspections, engineering inspections, hazardous waste and environmental reviews of the Subject Property, inspections, all such tests, inspections and reviews to be obtained at Buyer's sole cost and expense, d. Document Review. Buyer shall have determined that it is satisfied in all respects with its review and analysis of the information to be provided by Seller pursuant to Section 3 herein. Buyer shall also be satisfied in all respects the Subject Property is free and clear of liens and encumbrances, e, Feasibility, Buyer shall have determined that the Subject Property is feasible for Buyer's current intended use as shall be determined by Buyer; Buyer shall have determined that the Subject Property is zoned to permit a Perkins restaurant of the size, configuration and style required by Buyer's Perkins Franchisor/Licensor and desired and intended by Buyer; Buyer shall have determined that all other applicable approvals from government regulatory agencies have been appropriately received; and Buyer shall have determined that Buyer will be permitted to construct and place the customary oversized Perkins flag and flag pole on the Subject Property. '1 f Representations. Seller's representations and warranties shall be true and correct as of the Closing Date. 4 g. Due Diligence. Buyer shall have completed all of its due diligence, including' but not limited to receipt of all necessary approvals for the proposed development, financing, governmental approvals, environmental, geotechnical, title, survey, access, parking, signage, construction costs and other due diligence as will be set forth in this Agreement, all on terms acceptable to Buyer in all respects and at Buyer's sole discretion. h, Environmental Issues. Any environmental issues shall be resolved in a manner acceptable to Buyer in all respects by the Seller at the Seller's cost. , , i. Perkins Approval. Buyer shall have received final approval from Buyer's Perkins Franchisor/Licensor of the Subject Property as and for a Perkins Restaurant. j, Access, Seller shall have secured, on terms acceptable to Buyer in all respects, permits and approvals regarding access from public roadways from all applicable governmental authorities assuring access to the Subject Property from County Road 19 via 68th Street N.E. and West Laketown Drive, and access to the Subject Property from Linwood Drive (via the westerly extension of Laurel Street) all as shown on the overall site plan attached hereto as Exhibit "B", k. Cross Easement. Seller shall have prepared and recorded, at Seller's sole expense, a cross easement for parking, ingress and egress with respect to the Subj ect Property acceptable to Buyer in all respects, 1. Utilities/Site Preparation. Seller shall, by or before the Closing Date (i) extend or cause to be extended to the boundary line of the Subject Property all utilities necessary for Buyer's intended use of the Subject Property, including water, sewer, gas, electric and telephone services, and (ii) complete the grading of the Subject Property in a manner suitable to render the same "build ready". m. Financing. Buyer shall have secured financing upon terms acceptable to Buyer in all respects, n. Association/Common Area Fees. Buyer shall have received and approved (i) \ \ the method and basis upon which association fees and C<l1ilmon ar. ea maintenance ("CAM") '\') '(' charges are assessed to landowners in the Development, and (ii) a pro forma estimate of \ '() ( actual anticipated association fees and CAM charges for the calendar years 2006 _ 200g. ~ o. Signage. Seller shall have obtained, with the assistance of. Buyer, City approval to erect a pylon sign and the "traditional" Perkins oval sign directly on the Subject Property; provided. however. if such approval cannot be obtained, Seller agrees to allow the installation of the Perkins oval directly at the top of the ~evelopment pylon sign located on 5 County Road 19. Such pylon sign is currently approved and a preliminary design is attached to this agreement as Exhibit "C". Buyer shall pay all additional costs (over the base cost of' such pylon sign) to add the Perkins oval. Buyer shall have also obtained City approval of Buyer's building signage. p, Exclusivity, Seller shall prepare and record, at Seller's sole expense, appropriate amendments to the covenants and declarations affecting the Development , , preventing or prohibiting, in perpetuity, (i) any restaurant or food service operation of any type, to operate on Lot 4, Block 1, Towne Lakes Two, (formerly known as lot E) and (ii) the use of any other portion of the Development as or for a "Family-style", sit down/table service or buffet restaurant business which offers, serves or sells any ready-made breakfast food items or entree. This limitation shall exclude businesses such as (but not necessarily limited to) Denny's, mop, Embers, Village Inn and Bob Evans restaurants from being located or operating within the Development. The foregoing limitations and use restrictions shall run with the land and shall be appurtenant to the Subject Property, q. Seller's Contingency. This Agreement shall be contingent upon the City of Albertville giving approval to deviate from Seller's previously approved Conditional Use and/or Developers Agreement. If the Conditional Use/Developers Agreement will not be amended to allow the herein described property to be used for a Restaurant operation within 40 days from the execution date of this Agreement, this Agreement shall, at the option of Buyer, become nul} and void and all Earnest Money shall be returned to the Buyer. Buyer and Seller agree, time is of the essence, E~cept as set forth in subpart q. above, if any contingency has not been satisfied on or before the Closing Date, then this Agreernent may be terminated at Buyer's sole option, by written notice from Buyer to Seller at the specific address listed above. Such notice of termination may be given at any time on or before the . Closing Date. Upon such termination, the Earnest Money shall be released to Buyer and upon such return neither party will have any further rights or obligations regarding this Agreement or the Subject Property. If any failure to close the purchase and sale contemplated by this Agreement is due solely to the default hereunder of Buyer which default Buyer has failed to cure within fifteen (15) days of receipt of written notice of default, describing the alleged breach, from Seller, then Seller shall retain all Earnest Money as liquidated damages, ill such event, neither Buyer nor Seller shall have any further obligation or liability hereunder. 6. Closing. Closing shall occur on July 31,2006. All references in this Agreement to "Closing" and "Closing Date" are to this date and event. The Closing shall take place at the offices ofTri County Title and Abstract Company, 122 12th Ave, North, St. Cloud, MN 56301 at a time to be agreed upon between the parties. Seller agrees to deliver possession of the Subject, Property to Buyer on the Closing Date. a. Seller's Closing Docurnents. On the Closipg Date, Seller shall execute and/or 6 deliver to Buyer the following documents: (1) Deed. A Warranty Deed, in form reasonably satisfactory to Buyer, conveying good and marketable title to the Subject Property to Buyer, free and clear of all liens and encumbrances, together with all covenants, conditions, restrictions, and easements which must be acceptable to Buyer. (2) Assignment of Rights, An Assignment of Sellers interest in any and all easements, rights of access, and signage rights, (3) AssilIDIllent of Contracts, To the extent Buyer agrees to assume the same, an assignment of any and all contracts, permits and warranties on the Subject .' Property in a form reasonably satisfactory to Buyer, conveying all contracts and permits relating to the Property to Buyer. (4) Seller's Affidavit. An Affidavit by Seller indicating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Subject Property; that there has been no skill, labor or material furnished to the Subject Property for which payment has not been made or for which mechanics liens could be filed; and that there are no other unrecorded interests in the Subject Property, together with whatever standard owners affidavit and/or, indemnity (ALT A Form) which may be reasonably required by Title Company to issue an Owners and/or a Mortgagees Policy of Title Insurance. (5) Abstract. The Abstract of Title regarding the Subject Property. (6) IRS Reporting Form. The appropriate Federal Income Tax reporting form, if any, as required, (7) FIRPT A Affidavit. A non-foreign affidavit, properly executed and in recordable form, containing such information as is required by Internal Revenue Code Section 1445(b)(2) and its regulations, (8) All other documents reasonably determined by Buyer to be necessary to transfer the Subject Property to the Buyer. b. Buyer's Closing Documents. On the Closing Date, Buyer will execute and/or deliver to Seller the following (collectively, "Buyer Closing Documents"): I, (1) Purchase Price. The Purchase Price, by cash, certified check, bank cashiers check, or wire transfer, less the Earnest Money. 7 (2) Title Documents. Such affidavits of Buyer, Certificates of Value or other documents as may be reasonably required in order to record the Seller Closing Documents and issue the Title Insurance Policy, if any, 7. Prorations. Seller and Buyer agree to the following prorations and allocation of costs regarding this Agreement and the Subject Property: a. The real estate taxes in the year 2006 shall be prorated to the date of Closing. .' Neither the Seller nor the Seller's agent makes any representation or warranty whatsoever concerning the amount of real estate taxes which shall be assessed against the Subject Property subsequent to the date of Closing.. b. All pending or levied assessments as of the date of Closing, whether or not the same have been certified to taxes, shall be paid at Closing by Seller. c. The Buyer shall pay the real estate taxes due in the year 2007 and any installments of assessments assessed and payable therewith and thereafter. 8. Survey. Seller shall provide at its cost and expense, a current survey of the Subject Property. Seller shall take or cause to be taken any action as may be necessary to convey the Subject Property as a single lot, in ,recordable form at no cost or expense to the Buyer, On or before Closing, Seller shall extinguish any'and all leasehold interests, The costs of extinguishing leasehold rights and obligations shall be borne solely by Seller. 9. Title Examination. Title Examination will be conducted as follows: a. Seller's Title Evidence. Seller shall, within thirty (30) days after the final execution of this Agreement, furnish to Buyer an Abstract of Title certified to date to include proper searche~, bankruptcy, state and federal judgments and liens ("Title Evidence"). b. Buyer's Objections. Within twenty (20) days after receiving the Title Evidence, Buyer will make written objections to the form and/or contents of the Title Evidence ("Objections"). Seller will have 30 days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed as necessary. Seller shall use its best efforts to correct any Objections, Objections which are not cured but which can be cured by payment ofliquidated amounts shall not postpone Closing, and may be paid directly out of Seller's proceeds, If the Objections are not cured within such 30-day period, Buyer will have the option to do any of the following: (1) Terminate this Agreement and receive a refund of the Earnest Money; 8 (2) Withhold amounts in an escrow account, maintained by Closing Agent, determined necessary by the Buyer to clear the title objections (and if the . objections are not cleared by Seller within 60 days, the Closing Agent shall, upon receipt of written demand of Buyer, release the escrow funds to Buyer); or (3) Proceed to close without waiving Buyer's rights under this Agreement. " c, Survey, Buyer may obtain, at Buyers sole cost and expense, a survey of the Subject Property. In the event Buyer obtains a survey, the survey shall constitute additional Title Evidence, and Buyer may make objections based upon the contents ofthe survey, or the contents of the survey provided by Seller pursuant to Section 8, 10. Easements. The Subject Property shall be benefited by such access easements (including those described above) and utilities easements, as is necessary for its development and operation as a restaurant. The Seller shall provide within ten (10) days of executing this Agreement copies of all covenants, conditions, and restrictions, and easements that benefit or burden the Subject Property, including any development specific association or merchant's association covenants or agreements. Seller shall also provide association budgets and actual operating data from Phase I; The Shoppes at Towne Lakes to help the Buyer determine its expected common area and association costs in Phase II of The Shoppes at Towne Lakes. 11. Broker Disclosure. In this transaction, Seller is represented by Jim Pflepsen, Granite City Real Estate. Buyer is not represented by any broker., 12. Assignment of Interest. The parties agree that the Buyer's interest created herein shall be assignable prior to the date of Closing, 13, Covenants and Conditions. All the covenants and conditions of this Agreement shall survive the closing. 14. Opportunity to Bid. Buyer agrees to allow, at no expense to Buyer, Granite City Innovative Builders, Inc. to submit a bid for the construction of any proposed improvement on the Sl.!bj ect Property; provided, however. nothing herein shall obligate Buyer, under any circumstances, to accept such bid, even in the event such bid is lower than the bid or estimate of any other contractor. 15. Construction Timeline. Buyer shall use best reasonable efforts to begin construction of a restaurant facility on the Subject Property within the year 2006. In addition, the Buyer shall erect a 12 x 8 foot temporary wood panel sign on posts directly on the site, Such sign shall be installed shortly after the expiration of the contingency date and shall announce the forthcoming development of a Perkins Restaurant. Said sign shall include the Perkins logo ~d shall be constructed of three 4x8 9 I '.' " i, foot plywood signboards mounted vertical to create a 12 x 8 foot sign with a white background. If Buyer does not start construction of the restaurant building within the year 2006, an additional' "development fee" shall be paid to the Seller on or before January 10, 2007 in the amount of $20,000.00. Buyer understands that the purchase price of the property described herein is largely based on the benefit a Perkins Restaurant will bring to the continued success of the development. Any significant delay in starting construction of the improvements will negate the benefits to the Seller and require the payment of the additional development fee described above as additional " compensation. Dated: Dated: 0-8-o~ By: Its: ~t~ By: Its: In Witness Whereof, the parties hereto have executed this agreement. . Albertville Phase II, LLC (SELLER) ~~ (( ~/?'~ .A//~ (Prihted name) ~- of Rochester, LLLP ve--- (L ~~s.J ~vc (Printed ~ - e) ~. 10 . . It " '3 " MONUMENT " SIGN " ~ I. er a a 0 ~ Z :J JTLOT 'A' -'-....... ...... -.-........-........-. ...............-........- -'- -'- "-'-'- 1 POND FOR PHASE " & PHASE III 6 ~f4r~;T A- jt 10 T7~\' /~ :~f~;~~~r \jtjtt }, i" 'f/ ~~' [X('XJ ~\= h '}':f~~<< . ~ U- '-: /~~'~~~ 68TH-STREET" ,E. ~~ gBBB~ =B8~w ~ ~ ~19 .~ B~ 8B'~ln~FJ~'r::f't~ .25 - "'"'-'1-" ~ J. J "~.. LAllREl ~ET '. ==; "" A 38 _ B- ,-~ ~~~ ~ft rn [ ~6111m ~ 11!lr ~v - ~ ~ ..".. LL-1-J ~ [ "' ~~~ ~... -~ ~""'[ /0) .~~ ~ -&~"-~\'\:...c. ': ~ ~ t- \- ~ ~ ~~= "~ ~ ~ )~ . /~~~ r ~ ~~\ "-:: ~ . I &~~'~ T'~ ~ = ~A -i >- VJ/ ~~ 2~.; ~~~t1 )( ~ ~f/ IINJ/~~'B .:::~ :: ~~ ~ '1JJ -/10 ~*" ." ~ ~ A~ J *D- '1 ~~::l ~ P viI), //JU ~ ;('.. >~~ A~ I '-1 f# .~~: l~ A~~~~ ~ ,,~..-N: J( ~~~ ~W~ >-", ~ ~ l ~ ~." ,~~~ ~ ~ tS'f. " V L' Ii" "\. Iii ~ >< '" ",'l ~p\ \ 11>. ~ V~ I<~, f, '~_ ~\.'2l~,&'~ ~~~~ ~ '~ iiF.. ' ] \J)\~~/U'?~~t>,' "sx" ~ 1F / . 'jrF'itt'\~~~~ ~~ I JlIIIIIIIIII IIIIIIIIIIIIU oJ &., ~ I 1111111111111111111I110 ) ~ . . .' =:;;:::-- w (f) ~ I 0.. '- 68TH STREET"N,E. , \ w (f) <( I 0.. ~ --:::::: - w (j) <( I 0.. .... "".. ;IIL/Ii ~#'\ Exhibit "C" to that Certain Purchase Agreement dated June ~, 2006, by and between JLC Properties of Rochester, LLLP, Buyer, and Albertville Phase II, LLC, Seller. EXHIBIT "c" HAZARDOUS SUBSTANCES " /VbNE- 11