2001 11 21FILE COPY
Agenda
Economic Development Authority
Wednesday, November 21, 2001, 5:15 p.m.
Chanhassen City Hall, 7700 Market Blvd.
Consider Approval of Purchase Agreement Regarding the Sale of the
Chanhassen Bowl Property, 581 West 78th Street.
CITYOF
690 Ci0, Ce,ret Drive
PO Box I47
Chanhmse,. 3~li,,esoz 55317
])holle
952.93Z 1900
General
952.93Z5739
E, gi, eeri,g Departme,t Fax
952.93Z9152
&dlding Departme,t Fax
952.934.2524
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www. ci.c/m, hasse,.l)lil.
MEMORANDUM
TO:
Economic Development Authority
FROM:
Todd Gerhardt, City Manager
DATE:
November 20, 2001
SUB J:
Consider Approval of the Purchase Agreement on the
Chanhassen Bowl Property with Kraus Anderson
At your last meeting, staff was directed to work with Kraus Anderson in
finalizing some of the terms and conditions in the purchase agreement for the
Chanhassen Bowl Property.
The significant changes in the purchase agreement are as follows:
1. Latest closing date would be August 1, 2002.
2. City must complete the survey by December 15, 2001.
3. Buyer must have a written financing commitment by May 1, 2002.
4. Buyer must make a site-plan application with the City by February i,
2002 and approved by the City on or before May 1, 2002.
5. Buyer shall determine by February 1, 2002 that the demolition can
occur after satisfying all the conditions of the Party Wall Agreement.
6. Buyer can object to the restrictive uses against liquor stores,
automotive sales or fast food restaurants, but the City retains the hght
to include these restrictions. If the Buyer requests that the City waive
any or all of the use restrictions, and the City denies that request, the
Buyer may elect to terminate this agreement.
7. The Buyer must have entered into a fully signed and binding non-
contingent lease agreement with one or more tenants by May 2, 2002.
8. If Buyer elects to terminate the agreement, they must deliver to the
City, without charge, a copy of all environmental and technical reports
of the subject property.
RECOMMENDATION
Based on the following changes, staff would recommend approval of the
attached purchase agreement between Kraus Anderson and the Economic
Development Authority for a purchase price of $1.1 million.
Attachment
1. Black lined purchase agreement dated November 19, 2001.
G:Ladmin\tg\chanbowlpurchaseagreeapproval
BLACK-LINED 11-19-01
REAL ESTATE PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") made and entered into this 26th day of Sep-
........ 'November, 2001, by and between KRAUS-ANDERSON, INCORPORATED, a Min-
nesota corporation, and its assigns, whose address is 523 South 8th Street, Minneapolis, Minne-
sota 55404 (referred to herein as the "Buyer"), and the ECONOMIC DEVELOPMENT AU-
THORITY IN AND FOR THE CITY OF CHANHASSEN, a public body corporate and poli-
tic under the laws of the State of Minnesota, with offices at 690 City Center Drive, P.O. Box
147, Chanhassen, Minnesota 55317 (referred to herein as the "Seller").
IN CONSIDERATION of the mutual covenants and agreements herein, it is hereby mu-
tually agreed by Seller and Buyer as follows:
SECTION 1.
SALE AND PURCHASE OF LAND
AND GRANT OF EASEMENTS
1.1) Seller shall sell to Buyer and Buyer shall purchase from Seller, upon the terms and
conditions hereof, the following property and all buildings and other improvements thereon
("Buildings") and all appurtenances thereto (all collectively referred to as the "Subject Prop-
erty"):
1.1.1) The land in Carver County, Minnesota, legally described as follows:
Lot Two (2), Block One (1), Chanhassen Mall, according to the plat
thereof now on file and of record in the Office of the County Recorder,
Carver County, Minnesota.
94790
1.2) Seller shall grant to Buyer a non-exclusive easement for ingress, egress and park-
ing ("Parking Easement Area") in a form acceptable to Buyer on the property described and
shown in Exhibit A attached hereto pursuant to the provisions of Section 8 hereof.
SECTION 2.
PURCHASE PRICE
2.1) The purchase price for the Subject Property and the grant of ingress, egress and
parking easements, within the Parking Easement Area (the "Purchase Price") shall be in a dollar
amount equal to One Million One Hundred Thousand and No/100 Dollars ($1,100,000.00) and
shall be payable by Buyer to Seller as follows:
2.1.1) Ten Thousand Dollars ($10,000.00) earnest money ("Earnest Money"), to
be deposited with Seller (as hereinafter defined). The Earnest Money shall be distributed
to Seller (i) at the time of closing to be applied against the Purchase Price, or (ii) as liqui-
dated damages and as Seller's sole remedy, in the event the Seller performs all of its ob-
ligations under this Agreement and Buyer fails to close as required in this Agreement.
The Earnest Money shall be returned to the Buyer in the event of (i) refusal of the Seller
to perform its obligations under this Agreement, or (ii) Buyer's termination of this
Agreement within the Contingency Period, as hereinafter set forth.
2.1.2) One Million Ninety Thousand and No/100 Dollars ($1,090,000.00) in cash
on the date of closing.
SECTION 3.
TITLE MATTERS
3.1) Seller shall caused to be furnished to Buyer within twenty (20) days of execution
hereof by Seller a current commitment for the issuance of an ALTA Form B (1990) owner's pol-
icy of title insurance (the "Commitment") issued by First American Title Insurance Company by
its agent Universal Title Company ("Title Company") in the proposed amount of One Million
One Hundred Thousand and No/100 Dollars ($1,100,000.00), committing to insure that Buyer
will have good and marketable title to the Subject Property and the Parking Easement Area, sub-
ject to the following easements, declarations, restrictions and covenants:
(a) Declaration of Covenants, Conditions, Restrictions and Easements and Partywall
Agreement dated May 1, 1985, recorded May 13, 1985 as Doc. No. 71070, as amended on June
26, 1985 and December 1, 1989 ("Covenants");
(b) Partywall Agreement dated July 18, 1997, recorded July 24, 1997 as Doc. No.
213637 ("Partywall Agreement");
(c) Easement Declaration for Parking and Access, dated July 18, 1997, recorded July
24, 1997 as Doc. No. 213628 ("Parking and Access Easement");
(d) Power Line Easement in favor of Northern States Power Company as contained in
the instrument dated January 3, 1968, recorded January 3, 1968 as Doc. No. 3185 ("Power Line
Easement");
(e) Easement Agreement dated June 11, 1970, recorded June 12, 1970 as Doc. No.
9295 ("Road Easement Agreement");
(f) Easement for street and utility purposes in favor of the City of Chanhassen as con-
tained in the instrument dated August 26, 1976, recorded August 30, 1976 as Doc. No. 30098
("Street Easement");
(g) Conditional Use Permit by the City of Chanhassen dated April 15, 1985, recorded
July 16, 1985 as Doc. No. 72186 ("CUP");
(h) standard exceptions to title;
and
(i)
zoning and all other governmental ordinances, regulations, requirements and laws;
(j) except matters to which, Buyer may consent in writing.
Copies of all of the recorded documents set forth above are attached hereto as Exhibits B
through H. Buyer shall have twenty (20) days after Buyer's receipt of the last of (1) the Com-
mitment, and (2) the Survey defined in Section 3.3 hereof, to make any objections to the matters
disclosed in the Commitment and/or Survey. Such objections to be made in writing or deemed
to be waived. The Commitment shall show all matters affecting title to the Subject Property,
with copies of all instruments referenced therein, and shall bind the title company to issue to and
in favor of Buyer at Closing an owner's policy of title insurance insuring marketable title to the
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Subject Property, affirmatively insuring any appurtenant easements, deleting the standard excep-
tions upon receipt of the Survey and the title affidavit, and containing such endorsements as
Buyer requires, including, without limitation, 3.1 zoning (including parking) endorsement, com-
prehensive endorsement, separate tax lot endorsement, access endorsement, usury, and survey
endorsement.
3.2) In the event any exceptions are listed in the Commitment, other the items listed in
Section 3. l(a), (b), (c), (d), (e), (f), (g), (h), (i), and (j), if the same results from any voluntary
action by the Seller after the date hereof, the Seller shall cause the exception to be removed on or
before the Closing Date. Notwithstanding the foregoing, Buyer acknowledges that Seller is in
the process of creating additional restrictions on the use of the Subject Property to provide that
the Subject Property may not be used for the following purposes: liquor stores, automotive sales
or fast food restaurants i.e. drive through. With regard to any other exceptions, or objections to
title or the Survey, if the Seller fails to remove the same within the time allowed for closing on
the Subject Property, the Buyer shall have as/ts sole remedy the right to terminate this Agree-
ment and receive a full refund of the Earnest Money. Notwithstanding anything herein to the
contrary, Buyer shall have the right to object to (1) all of the matters listed in Section 3. l(a)
through (h), inclusive, and/or (2) the terms of the proposed agreement or declaration which es-
tablishes the restrictions against liquor stores, automotive sales, or fast food restaurants on the
Subject Property. 3.3) Seller shall furnish to Buyer a copy of any surveys of the Subject
Property and the Parking Easement Area that Seller has in its possession within fifteen (15) days
of the execution of this Agreement. In addition, within a reasonable period of time after the date
hereof, Seller shall provide, at Seller's expense, an ALTA Survey of the Subject Property (the
"Survey") prepared by a surveyor reasonably acceptable to Buyer, and certified to Buyer, the ti-
95135 -4-
tie company and Buyer's lender, and meeting the minimum standard detail requirements for an
ALTA/ACSM Land Title Survey for Urban Surveys (1997) standards, including items 1, 2, 3, 4,
6, 7, 8, 9, 10, 11, 13, 14, 15 and 16 of Table A. The Survey shall show and/or certify, without
limitation, the total area of the Subject Property and the Parking Easement Area, the location of
all improvements, recorded easements and encroachments, if any, located thereon and all build-
ing and set back lines and other matters of record with respect thereto.
SECTION 4.
CLOSING
4.1) The closing (the "Closing") shall be at a location designated by Seller in the Twin
Cities metropolitan area, and shall occur on or before one hundred eighty (! 80) days from the
date of execution of the Agreement by the City ("Closing Date"). Notwithstanding any other
provision herein to the contrary, Buyer may extend the Closing Date for an additional ninety
(90) days if all of the contingencies set forth in Section 7 (Buyer's Contingencies) and other
conditions set forth in Sections 8, 9 and 10 have not been satisfied, provided Buyer is diligently
pursuing the satisfaction thereof. If the Closing is not completed prior to ~-ty-~' August 1, 2002,
this Agreement may be cancelled at the election of Seller or Buyer by the party canceling this
Agreement giving the other party fifteen (15) days written notice. In the event of such cancella-
tion by either Seller or Buyer, the Earnest Money shall be returned promptly to Buyer and nei-
ther party shall have any further rights under this Agreement.
4.2) On the Closing Date, Seller shall deliver to Buyer possession of the Subject Prop-
erty and Building "as is" and also provide Seller with a right of entry or other document rea-
sonably determined to be necessary for Buyer to reconfigure the Parking Easement Area as pro-
vided in Section 8 hereof.
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4.3) On the Closing Date, Seller shall execute and deliver to Buyer:
4.3.1) A duly executed warranty deed, subject only to any exceptions consented
to by Buyer; and
4.3.2) Easement for ingress, egress and parking over the Parking Easement Area
in a form and substance acceptable to Buyer and Seller; and
4.3.3) A customary title affidavit that there are no unsatisfied judgments of re-
cord, no actions pending in any state or federal courts, no tax liens, and no bankruptcy
proceeding filed against Seller, and no labor or materials have been furnished to the Sub~
ject Property for which payment has not been made, and that to the best of Seller's
knowledge there are no unrecorded interests relating to the Subject Property.
4.3.4) A non-foreign affidavit, properly executed, containing such information as
is required by Internal Revenue Code Section 1445(b)(2) and its regulations.
4.3.5) A Certificate signed by Seller warranting that there are no "~gells" on the
Subject Property within the meaning of Minn. Stat. § 103I or if there are "Wells", a Well
Certificate in the forn~ required by law..
4.4) Seller shall pay at Closing all general real estate taxes levied against the Subject
Property due and payable for all years prior to the year of Closing, together with the unpaid bal-
ance of all special assessments levied and/or pending on or before the date of Closing. Seller
and Buyer shall prorate, as of the date of Closing, general real estate taxes due and payable in the
year of Closing. Buyer shall be responsible for payment of all assessments levied against the
Subject Property after the Closing. Such assessments shall include, but not limited to, assess-
ments associated with Buyerts anticipated development of the Subject Property. Buyer shall pay
for all general real estate taxes due and payable in years subsequent to the year of Closing.
4.5) Seller shall pay at or before Closing:
4.5.1) state deed tax;
4.5.2) all costs associated with obtaining a title insurance commitment, including
name searches, tax searches, bankruptcy searches, and property inspection fees;
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4.6)
4.5.3) recording fees for corrective instruments required to remove encumbrances
and place marketable title in Buyer's name;
4.5.4) one-half of the Closing fee charged by the title company; and
4.5.5) the cost of the Survey described in Section 3.3 hereof;
Buyer shall pay at Closing:
4.6.1) all recording fees and charges relating to the filing of the deed;
4.6.2) title insurance fees and premiums;
4.6.3) one-half of the Closing fee charged by the title company;
SECTION 5.
COVENANTS~ REPRESENTATIONS~ AND WARRANTIES OF SELLER
5.1) Seller, as an inducement to Buyer to enter into this Agreement, and as part of the
consideration therefor, represents, warrants, and covenants with Buyer and its successors and
assigns that:
5.1.1) There are no leases, options, purchase agreements, rights to redeem, ten-
ancy agreements, written or verbal, and no person or party has, or will have any rights of
adverse possession, regarding the Subject Property or the Parking Easement Area except
as set forth in Section 3.1 (a) through (j);
5.1.2) Seller will maintain in force insurance against public liability from such
risk and to such limits as in accordance with prudent business practice and suitable to the
Subject Property from the date hereof to the Closing Date;
5.1.3) To the best knowledge of Seller, no entity or person has, at any time:
i)
"released" or actively or passively consented to the "release" or
"threatened release" of any Hazardous Substance (as defined below)
from any "facility" or "vessel" located on or used in connection
with the Subject Property or adjacent tracts; or
ii)
taken any action in "response" to a "release" in connection with the
Subject Property or adjacent tracts; or
iii)
otherwise engaged in any activity or omitted to take any action
which could subject Seller or Buyer to claims for intentional or neg-
95135 -7-
ligent torts, strict or absolute liability, either pursuant to statute or
common law, in connection with Hazardous Substances (as defined
below) located in or on the Subject Property or adjacent tracts, in-
cluding the generating, transporting, treating, storage, or manufac-
ture of any Hazardous Substance (as defined below). The terms set
within quotation marks above shall have the meaning given to them
in the Comprehensive Environmental Response and Liability Act,
42 U.S.C. Sec. 9601 et seq., as amended ("CERCLA") and any state
environmental laws.
5.1.4) Seller, or any other person or entity, has not, at any time, ever installed,
used, or removed any underground storage tank on or in connection with the Subject
Property; and
5.1.5) There are no wells located upon the Subject Property.
5.1.6) Seller has the present full authority and power to execute this Agreement
and to close the sale of the Subject Property and grant the easement for ingress, egress
and parking within the Parking Easement Area.
5.1.7) Seller represents that it is aware of asbestos on the Subject Property but it
has not done a survey thereof to determine the amount thereof.
5.2) The covenants, representations, and warranties contained in Section 5 shall be
deemed to benefit Buyer and its successors and assigns and shall survive any termination or ex-
piration of this Purchase Agreement or the giving of the Deed. All of Seller's covenants, repre-
sentations and warranties in this Agreement shall be true as of the date hereof and of the Closing
Date, and shall be a condition precedent to the performance of Buyer's obligations hereunder.
Subject to the liability limits set forth in Minn. Stat. Chapter 466, Seller indemnifies Buyer from
any breaches of the covenants, warranties and representations set forth in this Section 5. If
Buyer discovers that any such covenant, representation, or warranty is not true, Buyer may elect
prior to Closing, in addition to any of its other rights and remedies, to cancel this Agreement, or
Buyer may postpone the Closing Date up to ninety (90) days to allow time for correction.
95135 -8-
SECTION 6.
ENVIRONMENTAL/SOIL INVESTIGATION AND TESTING
6.1) Buyer and its agents shall have the right, at the sole option of Buyer and at Buyer's
cost and expense, to enter upon the Subject Property without charge and at all reasonable times
from the date of the execution of this Agreement to perform such inspections of the Building,
environmental investigation and soil tests as Buyer may reasonably deem appropriate. If Buyer
investigates and tests the Subject Property pursuant to this section, Buyer shall pay all costs and
expenses of such investigation and testing and shall hold Seller harmless from all costs and li-
abilities arising out of Buyer's activities, except that Buyer shall have no liability with respect to
the investigation, clean up, removal or remediation of any existing hazardous substances which
are encountered or discovered upon the Subject Property in connection with Buyer's inspections.
Subject to the exception in the immediately preceding sentence, if the purchase and sale contem-
plated by this Agreement is not closed, Buyer shall, at its own expense, repair and restore any
damage to the Subject Property caused by Buyer'S investigation and testing, and shall return the
Subject Property to substantially the same condition as existed prior to such entry, Buyer shall
contract for any inspections of the Building, environmental investigations and soil tests within
twenty (20) business days from the date of execution of the Agreement by the Seller and com-
plete all inspections and testing within seventy-five (75) days of the execution of this Agreement
by the Seller and shall inform Seller in writing within ninety-five (95) days after the execution of
this Agreement by Seller whether or not Buyer is satisfied in its sole disCretion with the results
of the inspections, environmental investigation and/or soil test and whether or not Buyer waives
this contingency. If Buyer does not object to the Building's condition, environmental condition
of the Subject Property or the soil condition within said ninety-five (95) day period, Buyer will
95135 -9-
be deemed to have waived its right to object thereto. If Buyer is not satisfied with the environ-
mental condition or the condition of the soil as it relates to construction of the improvements
contemplated by Buyer, Buyer may terminate this Agreement and shall be entitled to a refund of
the Earnest Money.
ing:
SECTION 7.
BUYER'S CONTINGENCIES
The obligations of Buyer under this Agreement are contingent upon each of the follow-
7.1) Seller providing Buyer with the Survey of the Subject Property and the Parking
Easement Area at Seller's sole cost and expense, on or before December 4-15, 2001.
7.2) Buyer,-lguyer's 1~ and the title company dete~xnining on or before February 1,
2002, that they are satisfied with the results of the matters disclosed by the Survey of the Subject
Property and the Parking Easement Area and the Cormnitment, both as referenced in this
Agreement, in accordance with the terms of Section 3.1 hereof, and Buyer receiving, on the date
of Closing, an owner's policy of title insurance in the form described in such Section 3.1.
7.3) On or before Apri! 2May 1, 2002, Buyer shall have obtained a written financing
commitment from the Lender of Buyer's choice for a first mortgage loan in the amount of not
less than seventy-five percent (75%) of the value of the Subject Property upon completion of
Buyer's proposed development.
7.4) The use of the Subject Property as contemplated by the Buyer for a building con-
taining forty-eight (48) apartment units and twenty-eight thousand (28,000) square feet of retail
space ("Improvements") shall have been submitted to the City by February t, 2002, and ap-
proved by the City of Chanhassen on or before February May 1, 2002. All customary fees and
95135 -10-
charges associated with the obtaining of the approval by the City of Chanhassen shall be paid by
the Buyer.
7.5) Buyer shall have determined h¥ Februm'v 1. 2002, whether all necessary govern-
mental or quasi-governmental permits, licenses and approvals for the construction of the Im-
provements can be obtained on or before February !, 2002.
7.6) Buyer shall have determined on or before February 1, 2002 whether utility ser-
vices, surface water disposal and/or drainage required for the Improvements will be available
and in a size and capacity reasonably acceptable to Buyer.
7.7) Buyer shall have determined in its sole discretion on or before February 1, 2002,
whether reasonable ingress, egress and adequate parking are available to the Subject Property
and whether or not the terms, covenants and conditions of the Covenants, Partywall Agreement,
Road Easement Agreement, Street Easement and the Parking and Access Easement Agreement
are acceptable to the Buyer or that the foregoing have been amended or modified in a form and
substance acceptable to Buyer or the same have been or will be terminated prior to the Closing.
7.8) Buyer shall have entered into a purchase agreement or other agreement satisfac~
tory to Buyer on or before February 1, 2002, wherein Buyer can acquire the Additional Property
(as hereinafter defined), and Buyer shall have acquired title to the Additional Property on or be-
fore the date of Closing.
7.9) Buyer has determined on or before December February 1, 2001 2002 that Buyer
can demolish the Building as provided in Section 9 hereof.
7.10) On or before February 1, 2002, Seller and Buyer shall have agreed upon the form
of the agreement which establishes the use restrictions described in Section 3.2 hereof.
95135 -1 1-
7.11) On or before April 2, 2002, Buyer shall have entered into agreements with the
proposed owner/developer of the apartment units (the "Apartment Developer") for the Apart-
ment Developer's acquisition of the residential portion of the proposed development, and the
.joint use and operation of common elements in the proposed development, all in form acceptable
to Buyer.
7.12) On or before May 1, 2002, Buyer shall have entered into fully-signed and binding,
non-contingent lease agreements, in form and number acceptable to Buyer in Buyer's sole dis-
cretion, with one or more tenants for space in the building to be constructed by Buyer upon the
Subject Property.
Bm'er. ska-l-l., bv~ At)ri! 2, ---,,-,~nr~'~ ,,,"~~"~',~,,~, ~* o o,~,,, co.,.¢t_and_e,,q~mse,_al~r_t_he .4oa+~_as ref--
~enced in-Section-7.3 hereof<md for a,w-anOd4-pc-n-nits, h~c-erises-m~d-app~vatsmec~ssary-~
j~gpe~¢~h e c mm~4ion~,~r ,~.o.,~ ~,,,v, ~ ........,~,,,~.,,,o~*~ th~on=If any of the contingencies have
not been satisfied on or before the dates listed above, the Buyer may, at Buyer's option, te~i-
nate this A~'eement by giving wri~en notice to Seller on or before the Closing Date or Buyer
may extend the period of time for the satisfaction of the contingencies set foah above for an ad-
ditional period of ninety (90) days by giving written notice to the Seller on or before ninety (90)
days fi'om the date of the execution of this Ageement by Seller. If Buyer elects to terminate this
Ageement, neither paay shall have any fu~her rights or obligations under this Ageement and
the Earnest Money shall be returned to Buyer and the Buyer shall execute and deliver to Seller a
95135 -12-
Quit Claim Deed at the time of the delivery of the Earnest Money, which Quit Claim Deed shall
memorialize the termination of this Agreement.
lfBuyer elects to terminate this A~reemm~t pursuant to this Section 7. then. after such
termination, Buyer shall promptly deliver to Seller. without charge, a copy of all environmental
m~d geotechnical reports, if any, which Buyer has obtained as part of Buyer's investigation and
testing of tim Subject Property under this Agreement. Buyer agrees to reasonably cooperate with
Seller to accomplish the assignment of such reports to Seller, including the execution of any
necessary consents to such assignrnents, provided that such assignments shall be without war-
ranty by Buyer and at no cost to Buyer.
SECTION 8.
INGRESS~ EGRESS AND PARKING
8.1) Buyer and Seller acknowledge and agree that the current ingress and egress and
parking on the Subject Property, Parking Easement Area and parts of Pauly Drive need to be re-
configured and that it will be necessary to obtain the consent of the other parties who currently
have interest therein for ingress, egress and parking including but not limited to Southwest
Metro Transit Commission, the current owners of Lots 1 and 2, Block 1, Frontier Cinema Addi-
tion and City of Chanhassen. Buyer and Seller agree upon execution of this Agreement to
jointly enter into negotiation with all parties who have an interest in the Parking Easement Area,
to amend, modify, terminate the Covenant, Partywall Agreement, Parking and Access Easement,
Street Easement, and the Road Easement, and/or enter into new agreements with all parties,
which agreements shall be in a form and substance acceptable to Buyer and Seller in their sole
discretion. Buyer agrees that the cost to reconfigure the ingress, egress and parking shall be at
-13-
the Buyer's sole cost and expense and shall comply with all requirements of the City of Chan-
hassen and any agreements with other parties.
SECTION 9.
BUILDING - PARTYV~ALL
9.1) Buyer acknowledges and agrees that it is purchasing the Subject Property "as is"
and that it will be responsible for demolishing the Building on the Subject Property at its sole
cost and expense in accordance with all laws and/or ordinances of any governmental authority
having jurisdiction over the same, including but not limited to the laws of the State of Minnesota
and the ordinances of the City of Chanhassen relating to the removal and disposal of asbestos.
Buyer further acknowledges and agrees that it will be necessary in demolishing the Building to
maintain and repair the partywall and the joint roof between the Building and the Cinema Build-
ing according to the Partywall Agreement and that the Buyer shall be responsible for all of the
cost of repairing and maintaining the partywall and the roof.
SECTION 10.
ACQUISITION OF ADDITIONAL PROPERTY
10,t) Buyer and Seller acknowledge and agree that in order for the Buyer to make the
proposed Improvements and to reconfigure the ingress, egress and parking all as shown on Ex-
hibit I ("Proposed Site Plan"), it will be necessary for the Buyer, at its sole cost and expense, to
acquire fee title to Outlets B, C and D, Frontier Cinema Addition, and that certain crosshatched
parcel, all as shown on Exhibit J ("Additional Property") from the current owners thereof. The
Seller agrees to use its best efforts in assisting Buyer in the acquisition of fee title to the Addi-
tional Property.
95135 -14-
SECTION 11.
DEVELOPMENT FEES
11.1) Buyer shall be responsible for all fees normally charged by the City of Chanhas-
sen for development of property, including but not limited to sewer area charges (SAC), water
area charges (WAC) and hook-up fees, provided however that Buyer shall be given credit for all
SAC, WAC and other fees already paid that relate to the Subject Property.
SECTION 12.
MISCELLANEOUS
12.1) The covenants, warranties and representations made by Seller shall survive the
Closing of this transaction.
12.2) Any notice, demand, or request which may be permitted, required or desired to be
given in connection herewith shall be in writing and sent by certified mail. Any notice shall be
deemed effective when delivered to the party to whom it is directed. Unless other addresses are
given in writing, notices shall be sent to Seller or Buyer at the applicable address stated on the
first page of this Agreement.
12.3) Time shall be of the essence in this Agreement. If any date or time prescribed by
this Agreement falls on a Saturday, Sunday or holiday, such date or time shall automatically be
extended to the next normal business day.
12.4) Each party hereto shall promptly, on the request of the other party, have acknowl-
edged and delivered to the other party any and all further instruments and assurances reasonably
requested or appropriate to evidence or give effect to the provisions of this Agreement.
12.5) This Agreement represents the entire agreement of the parties with respect to the
Subject Property and all prior agreements, understandings, or negotiations between the parties
are hereby revoked and superseded hereby. No representations, warranties, inducements, or oral
95135 -15-
agreements have been made by any of the part/es, except as expressly set forth herein, or in other
contemporaneous written agreements. This Agreement may not be changed or modified except
by a written agreement signed by Seller and Buyer.
12.6) If Buyer defaults under any of the terms hereof, Seller shall have the right to retain
the Earnest Money but shall not have a further right to other damages or specific performance.
12.7) If Seller defaults under any of the terms hereof, including, without limitation, the
delivery of marketable title to the Subject Property as set forth in Section 4 hereof, then Buyer
shall promptly receive a full refund of all Earnest Money, and, in addition, Buyer shall have, as
its sole remedies, the right to either (i) seek specific performance of this Agreement, or (ii) re-
cover from Seller, in an amount not to exceed $10,000, all out-of-pocket costs and expenses in-
curred by Buyer arising out of this Agreement.
12.8) If any provision of this Agreement is declared void or unenforceable, such provi-
sion shall be deemed severed from this Agreement, which shall otherwise remain in full force
and effect.
12.9) Failure of any party to exercise any right arising out of a breach of this Agreement
shall not be deemed a waiver of any right with respect to any subsequent or different breach, or
the continuance of any existing breach.
12.10) This Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, personal representatives, successors and assigns. Buyer shall have the
right to assign its rights and obligations under this Agreement at any time; provided, however,
that no such assignment shall relieve Kraus-Anderson, Incorporated of its obligations under this
Agreement.
95135 -16-
12.11) Seller and Buyer represent and warrant to each other that they have not engaged or
dealt with any broker or agent with respect to the Subject Property. Notwithstanding the forego-
ing, Buyer and Seller shall each defend, indemnify and hold the other harmless from and against
all claims, losses and liabilities incurred by the indemnified party in connection with any claim
or demand by any person or entity for any brokers, finders, or other fee or compensation in con-
nection with the indemnifying party's entry into this Agreement.
12.12} Any and all other offers and/or agreements to purchase the Subject Proper _ty which
have been executed and delivered by Buyer to Seller before the date hereof, are void and of no
effect.
T- -~ T T
[THE REMAINDER OF THIS PAGE ~,¥AS INTENTIONALLY LEFT BLANKl
9s~3s -17-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
BUYER:
KRAUS-ANDERSON, INCORPORATED
By:
Its:
SELLER:
CITY OF CHANHASSEN
By:
Its:
By:
Its:
THIS INSTRUMENT WAS DRAFTED BY:
CAMPBELL KNUTSON, P.A.
317 Eagandale Office Center
1380 Corporate Center Curve
Eagan, MN 55121
Telephone: (651) 452-5000
I-JFK]
-18-
EXHIBIT A
(Page 1 of 2)
INGRESS, EGRESS AND PARKING EASEMENT PROPERTIES
PARCEL I
Outlot A, Easy Rider Addition
PARCEL II
Outlot B, Easy Rider Addition
PARCEL III
Outlot C, Easy Rider Addition
95135
EXHIBITS B THROUGH H
RECORDED COPIES
95135
EXHIBIT I
PROPOSED SITE PLAN
95135
EXHIBIT J
ADDITIONAL PROPERTY
95135