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HomeMy WebLinkAboutItem 07Memorandum To: Honorable Mayor and City Council From: Steven C Mielke, City Administrator C Copy: Brett Altergott, Director of Parks and Recreation Date: June 20, 2014 Subject: Warweg Draft Purchase Agreement Update Item #7 City of Lakeville Administration The City Council has provided guidance to proceed toward the presentation of a purchase agreement (PA) to the City Council for approval. Staff has a goal to present the PA for Council action at the July 7 Council Meeting. Attached is the draft PA. This draft has been presented to the seller's attorney for their review and comment. Several details are still missing and will be added as they become available. In as much as this is a complex agreement, it is taking additional time to craft. July 7 is a reasonable date to consider for approval. The purpose of presenting the draft at the work session is to obtain any comments or concerns regarding the agreement prior to the July 7 meeting. A suggestion has been made that the City and seller consider a contract for deed as a funding mechanism as opposed to a cash purchase. This idea will be explored with the seller and the Finance Director and if agreeable, presented to the Council at the July 7 meeting. PURCHASE AGREEMENT THIS PURCHASE AGREEMENT is effective as of the day of , 2014, by and between the CITY OF LAKEVILLE, a Minnesota municipal corporation, 20195 Holyoke Avenue, Lakeville, MN 55044 ("City"), and GEORGE W. WARWEG, a single person, residing at 9649 202nd St. W., Lakeville, MN 55044 ("Seller"). RECITALS: A Seller is the owner in fee simple of the property located in the City of Lakeville, County of Dakota, State of Minnesota, legally described in Exhibit A attached hereto and made a part hereof, including existing buildings, together with all other existing improvements located thereon, all appurtenant rights, easements, mineral rights, and all right, title and interest of Seller in and to all streets, alleys, strips, and rights-of-way over or abutting said land, for which Seller has an interest (the "Property"); B. The Property includes all or a portion of six (6) tax parcels. An administrative subdivision is required for three (3) of the tax parcels. The Seller will retain the property remaining after the subdivision of the Property legally described in the attached Exhibit B ("Remainder Parcels"); C. The City wishes to acquire the Property from Seller but is unwilling to pay more than $675,000.00 for the Property; D. Seller and the City both acknowledge and agree that the fair market value of the Property exceeds $675,000.00; E. Seller is willing to convey the Property to the City in a bargain sale transaction, pursuant to which the City will pay to Seller $675,000.00 and Seller will donate to the City the excess of the fair market value of the Property over $675,000.00; F. Seller and the City wish to set forth in writing the terms of their agreement relating to the foregoing. AGREEMENT In consideration of the mutual covenants and agreements herein contained and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. OFFER/ACCEPTANCE. Subject to compliance with the terms, covenants and conditions of this Purchase Agreement, Seller shall, donate and convey the Property to the City and the City shall accept the Property from Seller. 176470v2 2. PRICE AND TERMS. The price for the Property included under this Purchase Agreement is Six Hundred Seventy -Five Thousand No/100 Dollars ($675,000.00), which the City shall pay in cash on the Closing Date. City and Seller acknowledge, understand and agree that the fair market value of the Property is in excess of the Purchase Price, and that Seller hereby is agreeing to convey the Property to the City in a bargain sale transaction. The City, however, makes no representation or warranty to Seller as to the precise fair market value of the Property, nor as to any benefit or other effect for income taxation purposes of the bargain sale contemplated by this Agreement, and Seller shall be solely responsible for determining the actual fair market value of the Property and the income taxation treatment of the bargain sale contemplated by this Agreement. Seller and the City agree that this is a voluntary sale by Seller. The City represents that the City would not acquire the Property in the event that negotiations between Seller and the City had failed to result in an amicable agreement. If the transaction set forth by this Agreement is not completed, the City has no present intent to acquire the property by eminent domain and has not considered the use of eminent domain. If this Agreement is terminated for any reason, Seller is free to retain ownership of the Property or to sell the Property on the private market. Seller hereby waives all claims and/or possible claims to relocation benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act or other applicable law. The negotiated purchase price was agreed upon taking this waiver into consideration and is valuable consideration given for this waiver. The negotiated purchase price is, in part, the consideration negotiated for this waiver. Further consideration includes the favorable lease provisions and platting provisions. Seller acknowledges this waiver was made after being advised of the nature of possible relocation benefits, including moving costs, business relocation search and reestablishment expenses and other expenses which could qualify as relocation benefits. Seller was advised prior to signing this purchase agreement of the opportunity to receive assistance from a relocation specialist, which opportunity Seller specifically now waives. Seller has had the opportunity for attorney review of this waiver. 3. DEED/MARKETABLE TITLE. Upon performance by the City, Seller shall execute and deliver a Warranty Deed, conveying good and marketable title of record, subject to: A. Covenants, conditions, restrictions, declarations and easements of record, if any; B. Reservations of minerals or mineral rights by the State of Minnesota, if any; C. Building and zoning laws, ordinances, state and federal regulations; and D. The lien of real property taxes and the lien of special assessments and interest due thereon, if any, payable in the year of closing which by the terms of this Purchase Agreement are to be paid or assumed by the City. 17647M 2 4. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. A. Prior Years' Delinquent Real Estate Taxes and Delinquent Special Assessments. Delinquent real estate taxes payable in years prior to the year of Closing and delinquent installments of special assessments certified for collection with real estate taxes payable in years prior to the year of Closing, together with penalty, interest and costs, shall be paid by Seller not later than the Date of Closing. B. Real Estate Taxes Payable in the Year of Closing. Real estate taxes payable in the year of Closing shall be prorated between Seller and City on a calendar year basis to the Date of Closing. For those portions of the Property to be subdivided the pro - rations shall be based on the land value on a square foot basis. City shall assume installments for the Property not paid at Closing pro -rated for those parcels to be subdivided on a per square foot basis. Seller shall pay penalty, interest and costs on any delinquent installment of taxes and special assessments payable by Seller in the year of Closing. C. Deferred Real Estate Taxes. City shall pay on Date of Closing of any deferred real estate taxes (including "Green Acres" taxes under Minn. Stat. § 273.111) for the Property, payment of which is required as a result of the Closing of this sale and the recording of the Deed. Deferred real estate taxes for those portions of the Property to be subdivided shall be prorated between Seller and City on a square foot basis. D. Certified Special Assessments. All installments of special assessments certified for payment with the real estate taxes payable in the year of Closing shall be paid by City at Closing. City will also pay all sealcoat assessments, City Assessment No. 1054 for the Property, Remainder Parcels and the following tax parcels: 22-02900-35-010 22-44900-07-010 22-44900-06-010 22-44900-29-070 22-44900-29-120 22-44900-08-042 22-44900-18-120 E. Pending Special Assessments. Seller shall provide for payment of special assessments pending as of the date of this Purchase Agreement for improvements that have been ordered by the City Council or other governmental authorities. F. All Other Levied Special Assessments. Seller shall pay on the Date of Closing all other special assessments levied as of the date of this Purchase Agreement. 176470v2 3 5. SELLER'S BOUNDARY LINE, ACCESS, RESTRICTIONS AND LIEN WARRANTIES. Seller warrants that there has been no labor or material furnished to the Property for Seller for which payment has not been made. 6. ACCESS PRIOR TO CLOSING. Upon reasonable notice to Seller, City and City's authorized agents shall have the right during the period from the date of this Agreement to the Date of Closing to enter in and upon the Property in order to make, at City's expense, surveys, measurements, soil tests and other tests that City shall deem necessary. City agrees to restore any resulting damage to the Property and to indemnify, hold harmless and defend Seller from any and all claims by third persons of any nature whatsoever arising from City's right of entry hereunder, including all actions, proceedings, demands, assessments, costs, expenses and attorneys' fees. City shall not perform any invasive testing of the Property without Seller's prior written consent. Seller's consent may be conditioned upon any restrictions that Seller deems necessary. 7. POSSESSION. Seller shall deliver possession of the Property not later than the actual date of closing, subject to those certain Lease Agreements copies of which are attached as Exhibits C and D to this Agreement and made a part thereof. All interest, fuel oil, liquid petroleum gas, and all charges for city water, city sewer, electricity, and natural gas shall be prorated between the parties as of Date of Closing. 8. TITLE INSURANCE. Within twenty (20) days of execution of the date of this Agreement Seller shall cause to be issued, with a copy delivered to Purchaser, an acceptable commitment for an Owner's title insurance policy for the Subject Property (the "Commitment") issued by Dakota County Abstract and Title, Inc. ("Title Company") pursuant to which the Title Company agrees to issue to the Purchaser upon the recording of the documents of conveyance referred to herein an Owner's title insurance policy insuring the Subject Property in an amount equal to the total Purchase Price. The Commitment shall include proper searches covering bankruptcies, state and federal judgments and liens and levied and pending special assessments. The Commitment shall be issued with the following commitments: A. Insures that at Closing Purchaser shall have marketable and insurable title of record to the Property, free and clear of all liens, encumbrances, leases, claims and charges, all material easements, rights-of-way, covenants, conditions and restrictions and any other matters affecting title, and deleting all exceptions, except for such matters as are approved by Purchaser in writing. B. Waives or insures against the following standard exceptions: (i) Facts which would be disclosed by a comprehensive survey of the Property: (ii) Rights and claims of parties in possession; and (iii) Mechanic's, contractor's and material liens and lien claims. City shall be allowed twenty (20) business days after the receipt of the title commitment for 176470v2 4 examination of title and making any objections, which shall be made in writing or deemed waived. 9. TITLE CORRECTIONS AND REMEDIES. Seller shall have 120 days from receipt of City's written title objections to make title marketable. Upon receipt of City's title objections, Seller shall, within ten (10) business days, notify City of Seller's intention to make title marketable within the 120 day period. Liens or encumbrances for liquidated amounts which can be released by payment or escrow from proceeds of closing shall not delay the closing. Cure of the defects by Seller shall be reasonable, diligent, and prompt. Pending correction of title, all payments required herein and the closing shall be postponed. If any objection is so made, Seller shall have ten (10) business days from receipt of City's written title objections to notify City of Seller's intention to make title marketable within one hundred twenty (120) days from Seller's receipt of such written objection. If notice is given, payments hereunder required shall be postponed pending correction of title, but upon correction of title and within ten (10) days after written notice to City, the parties shall perform this Agreement according to its terms. If no such notice is given or if notice is given but title is not corrected within the time provided for, the City (at City's option) shall have the right to: (a) terminate this Agreement; or (b) cause the exception(s) to be removed and credit City's cost to remove the exception(s) against the Purchase Price. 10. NOTICES. All notices required herein shall be in writing and delivered personally or mailed to the address for each party as shown above and if mailed, are effective as of the date of mailing. 11. MINNESOTA LAW. This contract shall be governed by the laws of the State of Minnesota. 12. WELL DISCLOSURE. [Check one of thefollowing.] Seller certifies that Seller does not know of any wells on the Property. Wells on the Property are disclosed by Seller on the attached Well Disclosure form. 13. DISCLOSURE OF INDIVIDUAL ON-SITE SEWAGE TREATMENT SYSTEM. [Check one of the following.] Seller certifies that Seller does not know of any individual on-site sewage treatment systems on the Property. Individual on-site sewage treatment systems on the Property are disclosed by Seller on the attached Disclosure form. 14. PROTECTED HISTORICAL SITES. [Select either one of the following:] Seller represents that Seller does not know if there are historical, native American, or archeological materials on or in the Property that might be protected by law. To Seller's knowledge, the property does not have any American Indian burial 176470v2 5 grounds, other human burial grounds, ceremonial earthworks, historical materials, and/or other archeological sites that are protected by federal or state law. City's obligation to close is contingent upon City determining to City's satisfaction that the property does not have any American Indian burial grounds, other human burial grounds, ceremonial earthworks, historical materials, and/or other archeological sites that are protected by federal or state law. 15. LEAD PAINT DISCLOSURE. [Check one of the following] _ Seller represents that the dwelling was constructed on the real property in 1978 or later. Seller represents that the dwelling was constructed on the real property before 1978. (If such housing is located on the real property, attached and made a part of this Purchase Agreement is "LEAD PAINT ADDENDUM FOR HOUSING CONSTRUCTED BEFORE 1978".) 16. METHAMPHETAMINE DISCLOSURE STATEMENT. [Check one of the following: ] To the best of Seller's knowledge, methamphetamine production has not occurred on the Property. To the best of Seller's knowledge, methamphetamine production has occurred on the Property and Seller makes the following disclosure: A county or local health department or sheriff [strike one] has / has not ordered that the Property or some portion of the Property is prohibited from being occupied or used until it has been assessed and remediated as provided in the Department of Health's Clandestine Drug Labs General Clean-up Guidelines. If such order or orders have been issued complete the following statement: The above orders issued against the Property [strike one] have / have not been vacated. If such order has not been issued, state the status of removal and remediation on the Property: [Use additional sheets, if necessary.] 17. COVENANTS, REPRESENTATIONS AND WARRANTIES. A. Seller, as part of the consideration therefore, represents warrants, and covenants with City and its successors and assigns that to the best of Seller's actual knowledge and without any investigation or inquiry, as follows: Except as otherwise provided under this subsection A, Seller has or as of the 176470v2 6 Date of Closing will have marketable and insurable title to the Property of record, free and clear of all liens, encumbrances, leases, claims and charges, all material easements, rights-of-way, covenants, conditions and restrictions and any other matters affecting the title, except for the Permitted Exceptions. Seller currently leases the portion of the Property identified under the Lease to (" ") 2. To Seller's actual knowledge, the conveyance of the Property pursuant hereto will not violate any applicable statute, ordinance, governmental restriction or regulation, or any private restriction or agreement. 3. As of the Date of Closing there will be no outstanding or unpaid claims, actions or causes of action related to any transaction or obligation entered into or incurred by Seller with respect to the Property prior to the date hereof. 4. Except as provided herein, Seller shall indemnify and defend City and otherwise hold City harmless of, from and against any broker who may be entitled to any commission or finder's fee in connection with the transaction contemplated herein to the extent arising from Seller's actions. 5. Seller is not a foreign person as defined in §1445(f)(3) of the Internal Revenue Code or regulations issued thereunder. 6. To Seller's actual knowledge, there is no action, litigation, investigation, condemnation or other proceedings of any kind pending or threatened against Seller with respect to the Property. 7. To Seller's actual knowledge,: (i) no toxic materials, hazardous wastes or hazardous substances, as such terms are defined in the Resource Conservation and Recovery Act of 1996, as amended (42 U.S.C. §6901, et seq.) or in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. §9601, et seq.), including, without limitation, any asbestos or asbestos-related products or materials and any oils, petroleum -derived compounds or pesticides ("Hazardous Materials") have been generated, treated, stored, released or disposed of or otherwise placed, deposited in or located on the Property; and (ii) the Property is free of Hazardous Materials and is not subject to any "superfund" type liens or claims by governmental regulatory agencies or third parties arising from the release or threatened release of hazardous substances in, on, or about the Property. Seller shall indemnify and hold City harmless from any and all claims, causes of action, damages, losses, or costs (including reasonable lawyer's fees) relating to breach of the foregoing representations and warranties by Seller or to hazardous substances or petroleum products in the subsoil or ground water of the Property which arise from or are caused by acts or occurrences upon the Property prior to City taking possession. These warranties and indemnifications shall survive the delivery of the Warranty Deed. 8. Seller will diligently proceed with obtaining the administrative subdivision process to create the Property as separate tax parcels from the Remainder Parcels and to record the Warweg Plat. 17647M 'J The covenants, representations, and warranties contained in this Section shall be deemed to benefit City and its successors and assigns and shall survive any termination or expiration of this Purchase Agreement or the delivery of the Warranty Deed. All of Seller's covenants, representations and warranties in this Agreement shall be materially true as of the date hereof and of the Closing Date, and shall be a condition precedent to the performance of City's obligations hereunder. If City discovers that any such covenant, representation, or warranty is not true, City may elect prior to Closing, in addition to any of its other rights and remedies, to cancel this Agreement, or City may postpone the Closing Date up to ninety (90) days to allow time for correction. If City elects to proceed with the Closing following such discovery, City shall be deemed to have waived its rights to assert a claim against Seller arising from the inaccuracy or untruthfulness of any such covenant, representation, or warranty. Seller indemnifies City from any breaches of the covenants, warranties and representations set forth in this Section. B. City, as part of the consideration therefore, represents warrants, and covenants with Seller and its successors and assigns that following Closing, it will not construct any improvements on the Property within 165 feet of the northerly right of way line of 202nd Street during the duration of the Warweg Lease. 18. SELLER'S AFFIDAVIT. At closing, Seller shall supplement the warranties and representations in this Purchase Agreement by executing and delivering a Minnesota Uniform Conveyancing Blank [Form No. 116-M, 117-M, or 118-M] Affidavit of Seller. 19. CLOSING. The closing (the "Closing") of the purchase and sale contemplated by this Agreement shall occur simultaneous with the platting of the Warweg Plat at a location designated by City, but no later than January 7, 2015 ("Closing Date"). At closing, Seller and City shall disclose their Social Security Numbers or Federal Tax Identification Numbers for the purposes of completing state and federal tax forms. If closing does not occur by January 7, 2014, then this Agreement shall be null and void unless otherwise extended in writing by the parties. 20. CLOSING DOCUMENTS. A. At the Closing, Seller shall execute and/or deliver to City the following (collectively the "Closing Documents"): (1) Warranty Deed. A Warranty Deed in recordable form and reasonably satisfactory to City, which shall include the following well representations: "Seller certifies that the Seller does not know of any wells on the described Property." (2) Seller's Affidavit. A standard form affidavit by Seller indicating that on the date of Closing there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Property; that there has been no skill, labor or material furnished to the Property for which payment has 176470v2 8 not been made or for which mechanic's liens could be filed; and that there are no other unrecorded interests in the Property. (3) Non -Foreign Person Certification. A certification in form and content satisfactory to the parties hereto and their counsel, properly executed by Seller, containing such information as shall be required by the Internal Revenue Code, and the regulations issued there under, in order to establish that Seller is not a "foreign person" as defined in § 1445(f)(3) of such Code and such regulations. (4) Storage Tanks. If required, an affidavit with respect to storage tanks pursuant to Minn. Stat. § 116.48. (5) Well Certificate. If there is a well located on the Property, a well disclosure certificate in form and substance true to form for recording. (6) Certification. A certification that the representations and/or warranties made by Seller is materially the same as were in existence on the date of this Agreement or noting any changes thereto; (7) Warweg Plat. The Warweg Plat and development contract approved by the City together with all documents required for recording the Warweg Plat. (8) Option Agreement. The option agreement required pursuant to Section 23 of this Agreement. (9) Warweg Lease. The lease required pursuant to Section 24(A)(4). (10) Administrative Subdivision. Seller will provide and obtain the administrative subdivision letter to create the Property as separate tax parcels from the Remainder Parcels. (11) Other Documents. All other documents reasonably determined by either parry or the title insurance company to be necessary to transfer and provide title insurance for the Property. B. At the Closing, City shall execute and deliver to Seller the following: (1) Payment of the Purchase Price. (2) Ingress and Egress Easement. The easement required pursuant to Section 23(B) of this Agreement. (3) _Option Agreement. The option agreement required pursuant to Section 23 of this Agreement. 176470v2 9 (4) Warwea Lease and Lease. The leases required pursuant to Section 24 B. (5) Warwep, Plat. The plat and development contract approved by the City pursuant to Section 22 of this Agreement. (6) Other Documents. All documents reasonably determined by either party or the title insurance company to be necessary to provide title insurance for the Property. 21. CLOSING COSTS. The costs relating to the closing of this transaction shall be paid as follows: A. City shall pay: (1) Recording fee for the Warranty Deed; (2) One-half of the closing fees charged by the Title Company; (3) Pro -rated taxes; (4) All costs of the premium for owner's title insurance; and (5) Recording fee for Ingress and Egress Easement. B. Seller shall pay: (1) State deed tax; (2) One-half of the closing fees charged by the Title Company; (3) Pro -rated taxes; (4) Conservation fee attributable to the Warranty Deed; (5) All costs of obtaining a title insurance commitment; and (6) All fees and costs associated with the administrative subdivision and recording of the Warweg Plat, City -approved development contract, and other documents required to record the foregoing. 22. PLAT REQUIREMENTS. Closing of the conveyance contemplated under the terms of this purchase agreement is contingent upon the Seller recording a plat of certain property owned by Seller as follows ("Warweg Plat"): 176470v2 10 A. The Plat shall include Sellers property consisting of the Remainder Parcels and the following tax parcels owned by Seller: PID NOs 22-02900-35-010 22-02900-07-010 22-44900-07-010 22-44900-08-110 22-44900-08-120 22-44900-08-360 22-44900-08-050 22-44900-08-042 22-44900-09-070 22-44900-09-081 22-44900-09-270 22-44900-09-090 22-44900-00-074 22-44900-00-050 22-44900-18-120 22-44900-00-012 22-44900-04-120 22-44900-04-070 22-11500-04-080 22-44900-03-240 22-11500-19-140 B. Include dedication or grant of a twenty (20) foot wide trail easement on the parcels identified as PID Nos. 22-44900-06-010, 22-44900-29-120, and 22-02900-35-010 and adjacent to the railroad right-of-way along Kenwood Trail. C. Includes dedication of a sixty-six (66) foot wide right of way from Itasca on the North to Italy on the South, along but outside of the wetland. D. The City and Warweg entering into a development contract for the plat that includes the following provisions: (1) City waiving the following administrative fees for the plat; (a) (b) (2) City performing a wetland designation for the Warweg Plat. (3) City vacating the roadways and alleys as shown on Exhibit E. 17647M 11 (4) City agreeing for 7 years following final plat approval, unless Seller and City agree otherwise, that no amendment to a comprehensive plan or official control shall apply to or affect the use, development, density, lot size, lot layout, or dedication or platting required or permitted by the approved final plat pursuant to Minn. Stat. Section 462.358, subd. 3(c). 23. OPTION AGREEMENT. Closing of the conveyance contemplated under the terms of this purchase agreement is contingent upon the City executing in favor of the Seller an option agreement requiring City to acquire the property owned by Seller as legally described in Exhibit F ("Option Property") at Seller's option for up to five (5) years from the Date of Closing at a price of Five Thousand and No/ 100 ($5,000.00) per acre. 24. ADDITIONAL TERMS. A. City's Contingencies. City's obligations under this Agreement are contingent upon City's satisfaction with each of the following ("City's Contingencies"): (1) The representations and warranties of Seller set forth in this Agreement must be true as of the date of this Agreement and on the Closing Date, and Seller shall have delivered to City at Closing a certificate dated the Closing Date, signed by Seller, certifying that such representations and warranties are true as of the Closing Date. (2) City determining on or before the Closing Date, that it is satisfied, in its sole discretion, with the results of matters disclosed by a Phase I Environmental Audit or by any additional environmental/engineering investigation or testing of the Property performed by City or City's agent. By executing this Agreement, Seller hereby authorizes City to enter upon the Property at reasonable times to conduct the investigations and/or tests described herein. City shall be solely responsible for all environmental tests and shall hold Seller harmless from any such costs and shall indemnify Seller for breach of this provision including reasonable attorneys' fees. (3) City determining that it is satisfied with the title to the Property. (4) Seller vacating the Property or entering into a lease for the portion of the Property as provided in the lease agreement attached hereto as Exhibit C ("Warweg Lease"); (5) The Lease being terminated by Closing or amended and restated as provided in the lease agreement attached hereto as Exhibit D (" Lease"); (6) Seller recording the Warweg Plat in accordance with Section 22 of this 176470v2 12 Agreement. By executing this Agreement, Seller hereby authorizes City to enter upon the Property at reasonable times to conduct the investigations and/or tests described herein. If the City's Contingencies have not been satisfied on or before the Closing Date, then City may, at City's option, extend the Closing Date in order to satisfy the City's Contingencies or terminate this Agreement by giving notice to Seller on or before the Closing Date. The contingencies set forth in this section are for the sole and exclusive benefit of City, and City shall have the right to waive the contingencies by giving notice to Seller. B. Seller's Contingencies. Seller's obligations under this Agreement are contingent upon City's satisfaction with each of the following ("Seller's Contingencies"): (1) The City executing the Leases attached hereto as Exhibit C and D at Closing; (2) The City approving the Warweg Plat and Development Contract in conformance with Section 22 of this Agreement; (3) The City entering into the Option agreement in conformance with Section 23 of this Agreement; (4) At Closing, the City granting a non-exclusive appurtenant easement for ingress and egress over the west 15 feet of PID No. 22-44900-28-041 for the benefit of PID No. 22-44900-28-044. If the Seller's Contingencies have not been satisfied on or before the Closing Date, then Seller may, at Seller's option, extend the Closing Date in order to satisfy the Seller's Contingencies or terminate this Agreement by giving notice to City on or before the Closing Date. The contingencies set forth in this section are for the sole and exclusive benefit of Seller, and Seller shall have the right to waive the contingencies by giving notice to City. 25. DEFAULT; REMEDIES. If Seller has performed or is ready, willing and able to perform all obligations required by this Agreement and City shall fail or refuse to perform this Agreement within the time and in the manner provided, then Seller may terminate this Agreement by giving written notice thereof to City. If City has performed or is ready, willing and able to perform all obligations required by this Agreement and Seller shall fail or refuse to perform this Agreement within the time and in the manner provided, then Purchaser, at its option: (a) may elect to enforce the terms hereof by action for specific performance to the extent allowed by law; or (b) may terminate this Agreement by giving written notice thereof to Seller, in which case the parties shall have no further rights and obligations hereunder other than those rights and/or obligations which are expressly stated to survive expiration or termination of this Agreement. 176470v2 13 26. TIME IS OF THE ESSENCE. Time is of the essence for all provisions of this Purchase Agreement. 27. MINNESOTA LAW. This contract is governed by the laws of the State of Minnesota. 28. SIGNATURES BY COUNTERPARTS/FACSIMILE. This Agreement maybe executed in counterparts. Signatures may be transmitted via facsimile or in "PDF" format via e-mail. 29. BENEFIT. This Agreement shall be binding upon and inure to the benefit of Seller and City and their respective successors and assigns. 30. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties with respect to the transaction hereinabove set forth and may not be amended or modified in whole or in part except with the consent of both of the parties hereto in writing. 31. SURVIVAL. The covenants, warranties and representations made by Seller and City shall survive the Closing of this transaction. 32. MULTIPLE ORIGINALS. Seller and City have signed [number] originals of this Purchase Agreement. I agree to buy the Property for the price and terms and conditions set forth above. CITY: CITY OF LAKEVILLE Dated: 2014 Orel Matt Little, Mayor Char Friedges, City Clerk 176470v2 14 I agree to sell the Property for the price and terms and conditions set forth above. SELLER: By: Dated: , 2014 George W. Warweg 17647M 15 EXHIBIT A TO PURCHASE AGREEMENT LEGAL DESCRIPTION OF PROPERTY: 176470v2 16 EXHIBIT B TO PURCHASE AGREEMENT LEGAL DESCRIPTION OF REMAINDER PROPERTY: 176470v2 17 EXHIBIT C TO PURCHASE AGREEMENT WARWEG LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease") made and entered into this day of , 2014, by and between the CITY OF LAKEVILLE, a Minnesota municipal corporation ("City"), GEORGE W. WARWEG, a single person, residing at 9649 202nd St. W., Lakeville, MN 55044 ("Lessee"). WHEREAS, the City and Lessee entered into a Purchase Agreement dated , 2014 ("Purchase Agreement") for the sale of certain property by Lessee to City ("City Property"); and WHEREAS, the City Property consists of approximately 5.75 acres of property and includes a single family residence that Lessee desires to lease from City; and WHEREAS, under the terms of the Purchase Agreement, the City agreed to lease to Lessee a portion of the City Property used by Lessee for his residence for five years from the date of closing on the Purchase Agreement pursuant to the terms of this Lease; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein, it is hereby mutually agreed by the parties as follows: 1. LEASED PREMISES. The premises to be leased under this Lease is the portion of the City's Property legally described in Exhibit "A" attached hereto and incorporated herein ("Premises"). 2. OCCUPANCY AND USE OF PROPERTY. Lessee shall have the right to continue to use the Property as his primary residence during the term of this Lease. The Premises and utilities shall be used solely for residential purposes. 3. TERM. This Agreement shall commence on , 2014, and shall terminate on the earlier of (i) five years from the date of commencement of the Lease; or (ii) Lessee vacating the home on the Premises and moving to another location ("Termination Date"). 4. PAYMENT OF RENT. Lessee shall pay Three Hundred and no/100s Dollars ($300.00) per month as and for monthly base rent during the term of this Lease ("Rent"). Lessee shall pay Rent in advance on or before the first day of every month to the City, attention to City of Lakeville Parks and Recreation Director. If City does not receive the Rent by the fifth (5t') of the month, Lessee must pay a late fee in the amount of $50.00 as additional rent if requested by the City. Rent is "paid" when the City receives it, not when mailed or sent by Lessee. Rent payments shall be pro -rated for any partial month. 5. MAINTENANCE OF PREMISES. Lessee shall be responsible for all loss, damage, maintenance, and repairs, of any kind, to the Premises, including structures and personal property 176470v2 18 located on the Premises, and all costs associated with the foregoing. 6. ACCEPTANCE OF PROPERTY. Lessee has resided on the Premises for several years. Lessee acknowledges that he is familiar with the Premises and accepts the Premises "as is" during the term of this Agreement. Lessee further acknowledges that no representations as to the repair of the Premises or promises to alter, remodel or improve the Premises have been made by the City except as expressly provided under this Agreement. 7. TAXES AND UTILITIES. Lessee shall be responsible for arranging for and paying for all utility services required on the Premises. 8. LESSEE PROMISES: A. Lessee shall use the Premises only as a private residence. B. Lessee shall abide by and conform to all statutes, ordinances, rules and regulations of duly constituted public authorities relating to the use and occupancy of the Premises. C. Lessee shall not use the Premises in any way that would cause a cancellation, restriction or increase in premium of the City's insurance. D. Lessee shall not use or store in or near the Premises any flammable or explosive substances in an unsafe manner. E. Lessee shall at all times keep and maintain the Premises in a neat, clean and sanitary condition, free from waste or debris, and shall remove, at Lessee's expense, all ashes, garbage and refuse of any kind and shall neither permit nor commit any waste or nuisance thereon. Lessee shall recycle or dispose of trash in the outside containers provided for those purposes. F. Lessee shall maintain the yard to the Premises and the driveway in good condition including mowing and snowplowing. G. Lessee covenants and agrees that Lessee, its agents, contractors, licensees and invitees shall not handle, use, manufacture, store or dispose of any flammables, explosives, radioactive materials, hazardous wastes or materials (as may be defined by Federal or State Law), toxic wastes or materials, petroleum products, or other similar substances or derivatives thereof (collectively "Hazardous Materials"), on, under, or about the Premises, without the City's prior written consent (which consent may be withheld or denied for any or no reason). 9. LIABILITY INSURANCE. Lessee, at his own expense, shall purchase and continue in force, in the names of Lessee and the City, general liability insurance against any and all claims for injuries to persons or damage to property occurring in, upon or about the Premises during the occupancy period, such insurance to be in an amount not less than $1 million (combined single limit 176470v2 19 personal injury and property damage). The insurance shall be written by a company authorized to engage in the business of general liability insurance in the State of Minnesota, and there shall be delivered to the City customary certificates evidencing such paid-up insurance, which certificates are to be issued by the insurance company and which certificates shall further add the City as a named insured by endorsement and provide that the general liability insurance may not be cancelled unless the City is notified in writing at least thirty (30) days prior to any such proposed cancellation. 10. PERSONAL PROPERTY. All personal property belonging to Lessee shall be on the Premises at the risk of Lessee and the City shall not be liable for any damage thereto and Lessee waive all claims against the City for damages to persons or property sustained by Lessee or his occupants or invitees, except those claims caused by the grossly negligent or intentionally malicious act or omission of the City or its agents. 11. TELEPHONE. Lessee shall give the City the assigned home phone number to the Premises number within two (2) days after service is started or the phone number is changed. 12. THE CITY'S RIGHT TO ENTER. The City may enter the Premises for a reasonable business purpose. The City must first make a good faith effort to give reasonable notice to the Lessees of the intent to enter. The City may enter the Premises in an emergency. The City must disclose the date, time and purpose of the emergency entry in writing. The writing must be left in a conspicuous place in the Premises. 13. NOTICE OF DANGEROUS CONDITIONS. Lessee shall promptly notify the City of any conditions that might cause damage to the Premises. The notice may be oral or in writing. 14. ASSIGNMENT AND SUBLETTING. Lessees may not assign or sublet the Premises. 15. TERM; TERMINATION; NOTICE TO TERMINATE LEASE. A. Lessee may terminate this Lease by giving five (5) days written notice to the City. B. Upon termination, Lessee must remove all personal property from the Premises and return all keys to all buildings located on the Premises to the City. Lessee may also remove fixtures and buildings located on the Premises at Lessee's sole cost and expense, upon written approval from the City. Any possessions or property remaining on the Premises upon termination of the Lease may be considered by the City to have been abandoned. City may dispose of the possessions and personal property in the manner that City deems appropriate. City shall not be liable to Lessee, its representatives, heirs or assigns for disposing of the possessions or property. 16. PREMISES DESTROYED, UNINHABITABLE OR UNFIT FOR OCCUPANCY. If the Premises is destroyed or becomes totally uninhabitable or completely unfit for occupancy for whatever reason, either the City or Lessee may end this Lease. To end the Lease, the City or Lessee shall give prompt written notice to the other. Utilities shall be prorated as of the date the Premises 176470v2 2 0 became unfit for occupancy. 17. BREACH OF LEASE [RE-ENTRY CLAUSE]. If Lessee materially breaches this Lease, the City may: A. Demand in writing that Lessee immediately gives up possession of the Premises. If Lessee does not give up possession, the City may bring an eviction (unlawful detainer) action. B. Demand in writing that Lessee give up possession of the Premises to the City at a certain date in the future. If Lessee does not give up possession on that date, the City may bring an eviction (unlawful detainer) action. The City may accept rent for the period up to the date possession is to be transferred without giving up the City's right to evict. C. Bring an eviction (unlawful detainer) action immediately. 18. SUBROGATION. If requested, the City and Lessee give up all rights of subrogation against the other for loss or damage covered by insurance. 19. NOTICES. Any notice or document required or permitted to be delivered under the terms of this Lease shall be deemed to be delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, certified or registered mail, addressed to the parties hereto at the addresses set forth below, or at such other address as they have previously designated in written notice delivered in accordance with this Section: If to the City: City of Lakeville If to Lessees: George W. Warweg Attn: City Administrator 9649202 nd St. W. 20195 Holyoke Avenue Lakeville, Minnesota, 55446 Lakeville, MN 55044 20. NOTICE OF PROHIBITION AGAINST UNLAWFUL ACTIVITIES. A. City and Lessee shall not unlawfully allow controlled substances in or on the Premises. The Premises will not be used by Lessee or persons under Lessee's control to manufacture, sell, give away, barter, deliver, exchange, distribute or possess with the intent to sell, give, away, barter, deliver, exchange, or distribute a controlled substance in violation of any local, state, or federal law. B. City and Lessee shall not allow prostitution or prostitution -related activity as defined in Minn. Stat. § 617.80, subdivision 4, to occur on the Premises. C. The City and Lessee shall not allow the unlawful use or possession of a firearm in violation of Minn. Stat. § 609.66, subdivision la, § 609.67, or §624.713 on the property, its lands, or common area. 176470v2 2 1 The following notice is required by Minn. Stat. § 504B.305. A seizure under §609.5317, subd. 1, for which there is not a defense under § 609.5317, subd. 3, constitutes unlawful detention by Lessee. 21. AMENDMENTS. The City and Lessee may amend the terms of this Lease in writing. 22. UTILITY SERVICE AND APPLIANCES INCLUDED. Lessee shall pay all charges for gas, electricity and other utilities, including sewer and water charges, telephone, cable and trash removal, used in or furnished to the Premises during the term of this Lease. The City shall not be liable in damages or otherwise for failure to furnish such services where failure or interruption is due to causes beyond the City's reasonable control. 23. INDEMNIFICATION. Lessee shall indemnify and save harmless the City against all liabilities, damages, claims, fines, penalties, costs and other expenses, including all attorneys' fees, which may be imposed upon, incurred by or asserted against the City by reason of the following, except for any of the following that result from the grossly negligent or intentionally malicious act or omission of the City or its agents: (a) any use or condition of the Premises or any part thereof, (b) any personal injury or property damage occurring on the Premises; (c) any negligence on the part of Lessee, its agents, contractors, licensees or invitees; (d) any failure by Lessee, any agent or invitee of Lessee to comply with any requirement of any governmental authority; (e) any prosecution or defense of any suit or other proceeding in discharging the Premises or any part thereof from any liens, judgments or encumbrances created upon or against the same by Lessee, any agent or invitee of Lessee or against Lessee's interest in the Premises; (f) any proceedings in obtaining possession of the Premises after the termination of this Lease by forfeiture or otherwise; (g) any litigation commenced by or against Lessee to which the City is made a party without any fault on the part of the City; (h) any response costs, other damages and expenses (including attorneys' fees) which may be imposed upon, incurred by or asserted against the City by reason of the use, release, threatened release or disposal of Hazardous Wastes at the Premises by Lessee, any agent or invitee of Lessee; and (i) any failure on the part of Lessee to perform or comply with any covenant or agreement required to be performed or complied with by Lessee hereunder. 24. ABANDONED PERSONAL PROPERTY. When the City recovers possession of the Premises, any personal property not removed by Lessee within five (5) days, may be considered by the City to have been abandoned. The City may then dispose of the personal property in the manner that the City believes is necessary. The City shall not be liable to Lessee for disposing of the personal property. 35. ALTERATIONS AND IMPROVEMENTS. Lessee shall make no alterations to the buildings or improvements on the Premises or construct any building or make any other improvements on the Premises without the prior written consent of the City. 26. ATTORNEYS' FEES. Should it become necessary for the City to employ an attorney to enforce any of the conditions or covenants hereof, including the collection of rentals or gaining possession of the Premises, Lessee agrees to pay all expenses so incurred, including a reasonable attorneys' fee. 176470v2 22 27. RECORDING OF AGREEMENT. Lessee shall not record this Agreement on the Public Records of any public office. In the event that Lessees shall record this Agreement, this Agreement shall, at City's option, terminate immediately and City shall be entitled to all rights and remedies that it has at law or in equity. 28. GOVERNING LAW. This Agreement shall be governed, construed and interpreted by, through and under the Laws of the State of Minnesota. 29. SEVERABILITY. If any provision of this Agreement or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Agreement nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. 30. BINDING EFFECT. The covenants, obligations and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the parties hereto. 31. NON -WAIVER. No indulgence, waiver, election or non -election by City under this Agreement shall affect Tenant's duties and liabilities hereunder. CITY OF LAKEVILLE Matt Little, Mayor Charlene Friedges, City Clerk LESSEE: George W. Warweg THIS INSTRUMENT WAS DRAFTED BY: CAMPBELL KNUTSON, P.A. 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 Telephone: 651-452-5000 AMP 176470v2 23 EXHIBIT A TO WARWEG LEASE Legal Description of Premises The South 126 feet of the East 147.6 feet of Lot 4, Block 28, Lenihan's Lots, Antlers Park, according to the recorded plat thereof, Dakota County, Minnesota 176470v2 24 EXHIBIT D TO PURCHASE AGREEMENT LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease") made and entered into this day of 12014, by and between the CITY OF LAKEVILLE, a Minnesota municipal corporation ("City"), , a single person, residing at 9635 202nd St. W., Lakeville, MN 55044 ("Lessee"). WHEREAS, the City and Lessee entered into a Purchase Agreement dated 2014 ("Purchase Agreement") for the sale of certain Property by George A. Warweg to the City ("City Property"); and WHEREAS, the City Property consists of approximately 5.75 acres of property and includes a single family residence that Lessee desires to lease from City; and WHEREAS, under the terms of the Purchase Agreement, the City agreed to lease to Lessee a portion of the City Property used by Lessee for his residence for three years from the date of closing on the Purchase Agreement pursuant to the terms of this Lease; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein, it is hereby mutually agreed by the parties as follows: 1. LEASED PREMISES. The premises to be leased under this Lease is the portion of the City's Property legally described in Exhibit "A" attached hereto and incorporated herein ("Premises"). 2. OCCUPANCY AND USE OF PROPERTY. Lessee shall have the right to continue to use the Property as his primary residence during the term of this Lease. The Premises and utilities shall be used solely for residential purposes. 3. TERM. This Agreement shall commence on , 2014, and shall terminate on the earlier of (i) three years from the date of commencement of the Lease; or (ii) Lessee vacating the home on the Premises and moving to another location ("Termination Date"). 4. PAYMENT OF RENT. Lessee shall pay Six Hundred and no/100s Dollars ($600.00) per month as and for monthly base rent during the term of this Lease ("Rent"). Lessee shall pay Rent in advance on or before the first day of every month to the City, attention to City of Lakeville Director of Parks and Recreation. If City does not receive the Rent by the fifth (5t`) of the month, Lessee must pay a late fee in the amount of $50.00 as additional rent if requested by the City. Rent is "paid" when the City receives it, not when mailed or sent by Lessee. Rent payments shall be pro -rated for any partial month. 5. MAINTENANCE OF PREMISES. Lessee shall be responsible for all loss, damage, 176470v2 2 5 maintenance, and repairs, of any kind, to the Premises, including structures and personal property located on the Premises, and all costs associated with the foregoing. 6. ACCEPTANCE OF PROPERTY. Lessee has resided on the Premises for several years. Lessee acknowledges that he is familiar with the Premises and accepts the Premises "as is" during the term of this Agreement. Lessee further acknowledges that no representations as to the repair of the Premises or promises to alter, remodel or improve the Premises have been made by the City except as expressly provided under this Agreement. 7. TAXES AND UTILITIES. Lessee shall be responsible for arranging for and paying for all utility services required on the Premises. The City shall pay all property taxes. S. LESSEE PROMISES: A. Lessee shall use the Premises only as a private residence. B. Lessee shall abide by and conform to all statutes, ordinances, rules and regulations of duly constituted public authorities relating to the use and occupancy of the Premises. C. Lessee shall not use the Premises in any way that would cause a cancellation, restriction or increase in premium of the City's insurance. D. Lessee shall not use or store in or near the Premises any flammable or explosive substances in an unsafe manner. E. Lessee shall at all times keep and maintain the Premises in a neat, clean and sanitary condition, free from waste or debris, and shall remove, at Lessee's expense, all ashes, garbage and refuse of any kind and shall neither permit nor commit any waste or nuisance thereon. Lessee shall recycle or dispose of trash in the outside containers provided for those purposes. F. Lessee shall maintain the yard to the Premises and the driveway in good condition including mowing and snowplowing. G. Lessee covenants and agrees that Lessee, its agents, contractors, licensees and invitees shall not handle, use, manufacture, store or dispose of any flammables, explosives, radioactive materials, hazardous wastes or materials (as may be defined by Federal or State Law), toxic wastes or materials, petroleum products, or other similar substances or derivatives thereof (collectively "Hazardous Materials"), on, under, or about the Premises, without the City's prior written consent (which consent may be withheld or denied for any or no reason). 9. LIABILITY INSURANCE. Lessee, at his own expense, shall purchase and continue in force, in the names of Lessee and the City, general liability insurance against any and all claims for injuries to persons or damage to property occurring in, upon or about the Premises during the 176470v2 26 occupancy period, such insurance to be in an amount not less than $1 million (combined single limit personal injury and property damage). The insurance shall be written by a company authorized to engage in the business of general liability insurance in the State of Minnesota, and there shall be delivered to the City customary certificates evidencing such paid-up insurance, which certificates are to be issued by the insurance company and which certificates shall further add the City as a named insured by endorsement and provide that the general liability insurance may not be cancelled unless the City is notified in writing at least thirty (30) days prior to any such proposed cancellation. 10. PERSONAL PROPERTY. All personal property belonging to Lessee shall be on the Premises at the risk of Lessee and the City shall not be liable for any damage thereto and Lessee waive all claims against the City for damages to persons or property sustained by Lessee or his occupants or invitees, except those claims caused by the grossly negligent or intentionally malicious act or omission of the City or its agents. 11. TELEPHONE. Lessee shall give the City the assigned home phone number to the Premises number within two (2) days after service is started or the phone number is changed. 12. THE CITY'S RIGHT TO ENTER. The City may enter the Premises for a reasonable business purpose. The City must first make a good faith effort to give reasonable notice to the Lessees of the intent to enter. The City may enter the Premises in an emergency. The City must disclose the date, time and purpose of the emergency entry in writing. The writing must be left in a conspicuous place in the Premises. 13. NOTICE OF DANGEROUS CONDITIONS. Lessee shall promptly notify the City of any conditions that might cause damage to the Premises. The notice may be oral or in writing. 14. ASSIGNMENT AND SUBLETTING. Lessees may not assign or sublet the Premises. 15. TERM; TERMINATION; NOTICE TO TERMINATE LEASE. A. Lessee may terminate this Lease by giving five (5) days written notice to the City. B. Upon termination, Lessee must remove all personal property from the Premises and return all keys to all buildings located on the Premises to the City. Lessee may also remove fixtures and buildings located on the Premises at Lessee's sole cost and expense, upon written approval from the City. Any possessions or property remaining on the Premises upon termination of the Lease may be considered by the City to have been abandoned. City may dispose of the possessions and personal property in the manner that City deems appropriate. City shall not be liable to Lessee, its representatives, heirs or assigns for disposing of the possessions or property. 16. PREMISES DESTROYED, UNINHABITABLE OR UNFIT FOR OCCUPANCY. If the Premises is destroyed or becomes totally uninhabitable or completely unfit for occupancy for whatever reason, either the City or Lessee may end this Lease. To end the Lease, the City or Lessee 176470v2 27 shall give prompt written notice to the other. Utilities shall be prorated as of the date the Premises became unfit for occupancy. 17. BREACH OF LEASE [RE-ENTRY CLAUSE]. If Lessee materially breaches this Lease, the City may: A. Demand in writing that Lessee immediately gives up possession of the Premises. If Lessee does not give up possession, the City may bring an eviction (unlawful detainer) action. B. Demand in writing that Lessee give up possession of the Premises to the City at a certain date in the future. If Lessee does not give up possession on that date, the City may bring an eviction (unlawful detainer) action. The City may accept rent for the period up to the date possession is to be transferred without giving up the City's right to evict. C. Bring an eviction (unlawful detainer) action immediately. 18. SUBROGATION. If requested, the City and Lessee give up all rights of subrogation against the other for loss or damage covered by insurance. 19. NOTICES. Any notice or document required or permitted to be delivered under the terms of this Lease shall be deemed to be delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, certified or registered mail, addressed to the parties hereto at the addresses set forth below, or at such other address as they have previously designated in written notice delivered in accordance with this Section: If to the City: City of Lakeville If to Lessees: Attn: City Administrator 9635202 nd St. W. 20195 Holyoke Avenue Lakeville, Minnesota, 55044 Lakeville, MN 55044 20. NOTICE OF PROHIBITION AGAINST UNLAWFUL ACTIVITIES. A. City and Lessee shall not unlawfully allow controlled substances in or on the Premises. The Premises will not be used by Lessee or persons under Lessee's control to manufacture, sell, give away, barter, deliver, exchange, distribute or possess with the intent to sell, give, away, barter, deliver, exchange, or distribute a controlled substance in violation of any local, state, or federal law. B. City and Lessee shall not allow prostitution or prostitution -related activity as defined in Minn. Stat. § 617.80, subdivision 4, to occur on the Premises. C. The City and Lessee shall not allow the unlawful use or possession of a firearm in 176470v2 2 8 violation of Minn. Stat. § 609.66, subdivision la, § 609.67, or §624.713 on the property, its lands, or common area. The following notice is required by Minn. Stat. § 504B.305. A seizure under §609.5317, subd. 1, for which there is not a defense under § 609.5317, subd. 3, constitutes unlawful detention by Lessee. 21. AMENDMENTS. The City and Lessee may amend the terms of this Lease in writing. 22. UTILITY SERVICE AND APPLIANCES INCLUDED. Lessee shall pay all charges for gas, electricity and other utilities, including sewer and water charges, telephone, cable and trash removal, used in or furnished to the Premises during the term of this Lease. The City shall not be liable in damages or otherwise for failure to furnish such services where failure or interruption is due to causes beyond the City's reasonable control. 23. INDEMNIFICATION. Lessee shall indemnify and save harmless the City against all liabilities, damages, claims, fines, penalties, costs and other expenses, including all attorneys' fees, which may be imposed upon, incurred by or asserted against the City by reason of the following, excepi for any of the following that result from the grossly negligent or intentionally malicious act or omission of the City or its agents: (a) any use or condition of the Premises or any part thereof; (b) any personal injury or property damage occurring on the Premises; (c) any negligence on the part of Lessee, its agents, contractors, licensees or invitees; (d) any failure by Lessee, any agent or invitee of Lessee to comply with any requirement of any governmental authority; (e) any prosecution or defense of any suit or other proceeding in discharging the Premises or any part thereof from any liens, judgments or encumbrances created upon or against the same by Lessee, any agent or invitee of Lessee or against Lessee's interest in the Premises; (f) any proceedings in obtaining possession of the Premises after the termination of this Lease by forfeiture or otherwise; (g) any litigation commenced by or against Lessee to which the City is made a party without any fault on the part of the City; (h) any response costs, other damages and expenses (including attorneys' fees) which maybe imposed upon, incurred by or asserted against the City by reason of the use, release, threatened release or disposal of Hazardous Wastes at the Premises by Lessee, any agent or invitee of Lessee; and (i) any failure on the part of Lessee to perform or comply with any covenant or agreement required to be performed or complied with by Lessee hereunder. 24. ABANDONED PERSONAL PROPERTY. When the City recovers possession of the Premises, any personal property not removed by Lessee within five (5) days, may be considered by the City to have been abandoned. The City may then dispose of the personal property in the manner that the City believes is necessary. The City shall not be liable to Lessee for disposing of the personal property. 35. ALTERATIONS AND IMPROVEMENTS. Lessee shall make no alterations to the buildings or improvements on the Premises or construct any building or make any other improvements on the Premises without the prior written consent of the City. 26. ATTORNEYS' FEES. Should it become necessary for the City to employ an attorney to enforce any of the conditions or covenants hereof, including the collection of rentals or gaining 176470v2 2 9 possession of the Premises, Lessee agrees to pay all expenses so incurred, including a reasonable attorneys' fee. 27. RECORDING OF AGREEMENT. Lessee shall not record this Agreement on the Public Records of any public office. In the event that Lessees shall record this Agreement, this Agreement shall, at City's option, terminate immediately and City shall be entitled to all rights and remedies that it has at law or in equity. 28. GOVERNING LAW. This Agreement shall be governed, construed and interpreted by, through and under the Laws of the State of Minnesota. 29. SEVERABILITY. If any provision of this Agreement or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Agreement nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. 30. BINDING EFFECT. The covenants, obligations and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the parties hereto. 31. NON -WAIVER. No indulgence, waiver, election or non -election by City under this Agreement shall affect Tenant's duties and liabilities hereunder. CITY OF LAKEVILLE Matt Little, Mayor Charlene Friedges, City Clerk LESSEE: THIS INSTRUMENT WAS DRAFTED BY: CAMPBELL KNUTSON, P.A. 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 Telephone: 651-452-5000 AMP 176470v2 3 0 EXHIBIT A TO LEASE Legal Description of Premises The West 83 feet of the South 136 feet of Lot 7, Bock 29, Lenihan's Lots, Antlers Park, Dakota County, Minnesota, according to the recorded plat thereof. 176470v2 3 1 EXHIBIT E TO PURCHASE AGREEMENT DEPICTION OF ALLEYS AND STREETS TO BE VACATED 176470v2 32 EXHIBIT F TO PURCHASE AGREEMENT LEGAL DESCRIPTION OF OPTION PROPERTY 176470v2 33