Loading...
HomeMy WebLinkAboutItem 10 Date: Item No. LAND EXCHANGE AGREEMENT WITH BKI HAMBURG PARTNERS, LLC Proposed Action Staff recommends approval of the following motion: Approve a Land Exchange Agreement with BKI Hamburg Partners LLC. Overview Buddy’s Kitchen was founded in 1974 and for the first 33 years has operated in Burnsville, focused primarily on producing frozen food items for the airline industry. In late 2016, BKI Hamburg Partners LLC (dba Buddy’s Kitchen) purchased the former Arden Kitchens building on Hamburg Avenue in Airlake Industrial Park. Soon after this acquisition, Dave Smith, CEO of Buddy’s Kitchen contacted the City and inquired about possibly purchasing a small adjacent vacant parcel owned by the City to facilitate future expansion of the existing building and adjacent employee parking lot. During these discussions with Buddy’s Kitchen, City and Vermillion River Watershed staff expressed interest in the acquisition of the portions of their current property that is adjacent to the creek. Since the plant was acquired in late 2016, approximately $3,000,000 in improvements have been made in the interior of the building. Currently Buddy’s Kitchen has approximately 150 full-time employees. In November of 2017, the Buddy’s Kitchen business was purchased by Premium Brands Holdings Corporation which is a Vancouver, B.C. company that is a leading producer, marketer, and distributor of specialty food products. The family and management group (BKI Hamburg Partners LLC) that previously owned Buddy’s Kitchen retained ownership of the Lakeville plant and real estate. The City recently contracted for the completion of an independent appraisal of the City owned 1.15 acres and the BKI owned 6.45 acres. Both parcels were valued at approximately $225,000. The proposed Land Exchange Agreement will result in the even exchange of the two parcels between the City and BKI with closing and legal costs to be split evenly. The EDC reviewed this proposed land exchange at their May 29th Meeting and unanimously recommended approval. Staff recommends approval of this agreement. Primary Issues to Consider • See Attachment Supporting Information • Land Exchange Agreement Financial Impact: $0 Budgeted: Y☐ N☐ Source: Related Documents: (CIP, ERP, etc.): Envision Lakeville Community Values: Diversified Economic Development Report Completed by: David L. Olson, Community and Economic Development Director June 18, 2018 Attachment For the past six months, City Engineering and Environmental Resources staff, along with staff from the Vermillion River Watershed Joint Powers Organization, have been in discussions with Dave Smith (who controls BKI Hamburg Partners LLC site) regarding a possible land swap. The City proposes to convey the 1.15 acres of developable land adjacent to Hamburg Avenue in exchange for 6.54 acres of BKI owned land adjacent to South Creek. The majority of this land is currently in a drainage and utility easement and is also considered floodplain or wetlands and is not developable. The proposed land exchange would allow Buddy’s Kitchen to complete additional plant expansions (currently estimated at $12-15 Million), which has the possibility of adding approximately 300 new jobs to the company over the next two years after the expansion/renovation is complete. The City would obtain ownership of an environmentally sensitive area adjacent to South Creek, a DNR designated Trout Stream and in partnership with Vermillion River Watershed, could pursue grant funds from the State of Minnesota to complete stream restoration and improve water quality. This proposed d land exchange will benefit Buddy’s Kitchen, the City and the Vermillion River Watershed. 1 LAND EXCHANGE AGREEMENT This Land Exchange Agreement (“Agreement”) is made this 18th day of June 2018 by and between the CITY OF LAKEVILLE, a Minnesota municipal corporation (“City”) and BKI HAMBURG PARTNERS, LLC, a Minnesota limited liability company (“BKI Hamburg”). RECITALS A. BKI Hamburg is the fee owner of the real property legally described in Exhibit A attached hereto (“BKI Hamburg Property”). B. The City desires to acquire a portion of the BKI Hamburg Property legally described in Exhibit B attached hereto (“BKI Hamburg Exchange Parcel”); C. The City is the fee owner of the real property legally described in Exhibit C attached hereto (“City Property”). D. BKI Hamburg desires to acquire a portion of the City Property legally described in Exhibit D attached hereto (“City Exchange Parcel”); E. An Appraisal Report issued by Nagell Appraisal Incorporated, dated May 31, 2018, concluded that the BKI Hamburg Exchange Parcel and the City Exchange Parcel have a fair market value of $225,000.00 each; F. BKI Hamburg agrees to convey the BKI Hamburg Exchange Parcel to the City in exchange for the City Exchange Parcel, and the City agrees to convey the City Exchange Parcel to BKI Hamburg in exchange for the BKI Hamburg Exchange Parcel; NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: 1. SALE AND PURCHASE OF PROPERTIES. In consideration of the agreements herein contained, BKI Hamburg agrees that it will convey to the City the BKI Hamburg Exchange Parcel and the City agrees that it will concurrently convey to BKI Hamburg the City Exchange Parcel, in accordance with the terms of this Agreement. 2. PURCHASE PRICE. The parties agree that this is a land exchange only and no monetary consideration, other than the lands to be exchanged and the performance of the obligations under this Agreement, shall be due to either party. If environmental investigation of the Properties pursuant to Section 3 indicates contamination of a property that necessitates remediation of a property, the valuation of the contaminated property may be affected and further negotiations may require an amendment of this Agreement related to the purchase price or remediation of a property to be conveyed hereunder. 2 3. ENVIRONMENTAL ASSESSMENT. As soon as possible after the execution hereof, the City and BKI Hamburg shall have the right, if they desire, at their own expense to inspect the respective properties of the other party being exchanged or conveyed for the purpose of determining whether or not there are any environmental conditions that affect the parcel to be acquired. If the environmental inspection reveals any environmental conditions that are unsatisfactory to the respective party, said party may elect either of the following options: (a) Terminate this Agreement as provided by statute; or (b) Proceed with the terms of this Agreement by waiving the contingency relating to the environmental condition. 4. PHYSICAL INSPECTION. The City and BKI Hamburg shall each have the right from time to time prior to the Closing (as hereafter defined), to enter upon the respective property being exchanged or conveyed, to examine the same and the condition thereof and to conduct such surveys and to make such engineering and other inspections, tests and studies as they determine to be reasonably necessary for their use of the property. All physical inspections shall be at the sole cost and expense of the party making the same. The City and BKI Hamburg will conduct all examinations and surveys of the respective properties in a manner that will not harm or damage the respective properties so that it cannot be restored to its prior condition or cause any claim adverse to either party, and will restore the respective properties to the condition they were in prior to any such examination, immediately after conducting said examination. BKI Hamburg and the City shall indemnify, defend, and hold harmless each other from any and all claims for injury or death to persons, damage to property or other losses or damages or claims, including, in each instance, reasonable attorneys’ fees and litigation costs, arising out of the action of any person or firm entering upon the respective properties, which indemnity will survive the Closing and the termination of this Agreement for a period of one year. 5. TITLE EXAMINATION. Title Examination will be conducted as follows: (a) Title Evidence. The City and BKI Hamburg will, as soon as possible after the date of this Agreement, furnish the following (collectively, “Title Evidence”) to the other party for the property being transferred by them under this Agreement: (i) Title Commitment. Prior to the execution of this Agreement, each party has been provided with the Commitment for Title Insurance (“Commitment”) for the properties prepared by Old Republic National Title Insurance Company, dated May 23, 2018, which includes proper searches covering bankruptcies and state and federal judgments, federal court judgment liens in favor of the U.S., liens, and levied and pending special assessments. (ii) Title Objections. The City and BKI Hamburg shall have seven (7) business days after execution of this Agreement to provide the other party with written objections to the Commitment. The City and BKI Hamburg shall be deemed to have waived any title objections not made within the seven-day period above, except that this shall not operate as a waiver of either party’s covenant to deliver a limited warranty deed under this Agreement. 3 (iii) Title Corrections and Title Remedies. The City and BKI Hamburg shall have 60 days from receipt of written title objections by the other party to make title marketable for their respective property. Upon receipt of title objections, each party shall, within ten (10) business days, notify the other of their intention to make title marketable within the 60-day period. Liens or encumbrances for liquidated amounts that can be released by payment or escrow from proceeds of closing shall not delay the closing. Cure of the defects by either party shall be reasonable, diligent and prompt. Pending correction of title, all payments required herein and the Closing shall be postponed. (b) If notice is given and either party makes title marketable, then upon presentation to the other party of documentation establishing that title has been made marketable, and if not objected to in the same time and manner as the original title objections, the closing shall take place within ten (10) business days or on the scheduled Closing Date, whichever is later. (c) If notice is given and either party proceeds in good faith to make title marketable but the 60 day period expires without title being made marketable, the other party may declare this Agreement void by notice, neither party shall be liable for damages hereunder to the other. (d) If either party does not give notice of intention to make title marketable, or if notice is given but the 60 day period expires without title being made marketable due to the other party's failure to proceed in good faith, the exclusive remedy is rescission of this Agreement by notice as provided herein. (e) If title is marketable, or is made marketable as provided herein, and either party defaults in any of the agreements herein, the other party’s exclusive remedy is to cancel this Agreement as provided by statute and retain all payments made hereunder as liquidated damages. 6. CLOSING. Each transaction is contingent upon the successful closing of the other transaction. Unless terminated earlier or extended as provided herein, the date for closing the sale and purchase of the properties (“Closing”) shall be on a date mutually agreed to by the parties but not later than June 29, 2018 (“Closing Date”). The Closing shall take place at the offices of DCA Title (“Title Company”), or such other location as mutually agreed upon by the parties and may be completed through escrow of closing documents with the Title Company. 7. BKI HAMBURG’S CLOSING OBLIGATIONS. On the Closing Date, BKI Hamburg shall execute and deliver to City: (a) The duly executed limited warranty deed to the BKI Hamburg Exchange Parcel conveying title to the City free and clear of all liens and encumbrances except the following items (allowable encumbrances): (i) Building and zoning laws, ordinances, state and federal statutes or other governmental regulations; 4 (ii) Real estate taxes for which the City is responsible; (iii) Those items approved by the City pursuant to Section 5; and (iv) Reservation of any minerals or mineral rights in the State of Minnesota. (b) A customary affidavit that there are no unsatisfied judgments of record, no actions pending in any state or federal courts, no tax liens, and no bankruptcy proceeding filed against BKI Hamburg, and no labor or materials have been furnished to the BKI Hamburg Exchange Parcel for which payment has not been made, and that to the best of BKI Hamburg’s knowledge there are no unrecorded interests relating to the BKI Hamburg Exchange Parcel. (c) Such other documents required under Section 13 of this Agreement. (d) Such other documents as may be reasonably required by the Title Company. 8. CITY’S CLOSING OBLIGATIONS. On the Closing Date, the City shall execute and deliver to BKI Hamburg: (a) The duly executed limited warranty deed to the City Exchange Parcel conveying title to BKI Hamburg free and clear of all liens and encumbrances except the following items (allowable encumbrances): (i) Building and zoning laws, ordinances, state and federal statutes or other governmental regulations; (ii) Real estate taxes for which BKI Hamburg is responsible; (iii) Those items approved by BKI Hamburg pursuant to Section 5; and (iv) Reservation of any minerals or mineral rights in the State of Minnesota. (b) A customary affidavit that there are no unsatisfied judgments of record, no actions pending in any state or federal courts, no tax liens, and no bankruptcy proceeding filed against City, and no labor or materials have been furnished to the City Exchange Parcel for which payment has not been made, and that to the best of City's knowledge there are no unrecorded interests relating to the City Exchange Parcel. (c) Such other documents required under Section 13 of this Agreement. (d) Such other documents as may be reasonably required by the Title Company. 5 9. PRORATIONS. The City and BKI Hamburg agree to the following prorations and allocation of costs regarding this Agreement: (a) Real Estate Taxes and Special Assessments. (i) BKI Hamburg Exchange Parcel. General real estate taxes payable in the years prior to the year of closing and installments of special assessments will be paid by BKI Hamburg. Real estate taxes payable in the year of Closing shall be paid by BKI Hamburg. BKI Hamburg shall pay on or before the Closing Date all pending special assessments that are due prior to the Closing. BKI Hamburg shall pay at Closing any deferred real estate taxes or special assessments payment of which is required as a result of the closing of this Agreement. The City shall pay real estate taxes due and payable in the year following closing and thereafter. (ii) City Exchange Parcel. General real estate taxes payable in the years prior to the year of closing and installments of special assessments will be paid by the City. Real estate taxes payable in the year of Closing shall be paid by the City. The City shall pay on or before the Closing Date all pending special assessments that are due prior to the Closing. The City shall pay at Closing any deferred real estate taxes or special assessments payment of which is required as a result of the closing of this Agreement. BKI Hamburg shall pay real estate taxes due and payable in the year following closing and thereafter. (b) City Closing Costs. (i) Recording fee for the BKI Hamburg Exchange Parcel Limited Warranty Deed; (ii) State deed tax for the BKI Hamburg Exchange Parcel; (iii) Conservation fee attributable to the BKI Hamburg Exchange Parcel Limited Warranty Deed; (iv) Taxes for the City Exchange Parcel; (v) One-half of the closing fee charged by the Title Company; (vi) One-half of the cost of obtaining the Commitment; (vii) All costs of the premium for owner’s title insurance, if purchased for the BKI Hamburg Exchange Parcel; (viii) One-half of the City Attorney fees for preparation of this Agreement. (c) BKI Hamburg Closing Costs. (i) Recording fee for the City Exchange Parcel Limited Warranty Deed; 6 (ii) State deed tax for the City Exchange Parcel; (iii) Conservation fee attributable to the City Exchange Parcel Limited Warranty Deed; (iv) Taxes for the BKI Hamburg Exchange Parcel; (v) One-half of the closing fee charged by the Title Company; (vi) One-half of the cost of obtaining the Commitment; (vii) All costs of the premium for owner’s title insurance, if purchased for the City Exchange Parcel; (viii) One-half of the City Attorney fees for preparation of this Agreement. 10. CITY’S REPRESENTATIONS. On information and belief, the City hereby represents to BKI Hamburg, as of the date of this Agreement and as of the Closing Date, as follows: (a) The consummation of the transactions contemplated by this Agreement will not constitute a default or result in the breach of any term or provision of any contract or agreement to which the City is a party so as to adversely affect the consummation of such transactions. (b) The execution, delivery and performance of this Agreement by the City has been authorized and approved by the City, and the person executing this Agreement on behalf of the City has full authority to bind the City to the terms hereof. (c) On the Date of Closing there will be no (i) outstanding leases or occupancy agreements, or (ii) outstanding contracts made by City for any improvements to the City Exchange Parcel which have not been fully paid for or for which City shall not have made arrangements to pay off at Closing, or that will affect the City Exchange Parcel or be binding upon BKI Hamburg or upon the City Exchange Parcel subsequent to Closing without BKI Hamburg’s written consent; and the City shall cause to be discharged all mechanic’s or materialmen’s liens arising from any labor or materials furnished to the City Exchange Parcel that were made at the request of the City, its agents, or contractors, prior to the Date of Closing and any mortgages or other such similar encumbrances. (d) The City is not a foreign person; as such term is defined in Section 1445(f) (3) of the Internal Revenue Code of 1986, as amended, and shall deliver an affidavit to that effect at closing, which shall be in form and substance reasonably acceptable to BKI Hamburg. (e) The City certifies that the City does not know of any “Wells” on the described City Exchange Parcel within the meaning of Minn. Stat. Chapter 103I, except as disclosed herein. This representation is intended to satisfy the requirements of that statute. 7 (f) To the best of the City’s knowledge, no toxic or hazardous substances or wastes, pollutants or contaminants (as defined in applicable federal or state laws or local ordinances) have been generated, treated, stored, released or disposed of, or otherwise placed, deposited in or located on the City Exchange Parcel, nor has any activity been undertaken on the City Exchange Parcel that would cause or contribute to (i) the City Exchange Parcel to become a treatment, storage or disposal facility as defined in any federal or state law or local ordinance, (ii) a release or threatened release of toxic or hazardous substances or wastes, pollutants or contaminants, from the City Exchange Parcel as prohibited by any federal or state law or local ordinance, or (iii) the discharge of pollutants or effluents into any water source or system, the dredging or filling of any waters or the discharge into the air of any emissions, that would require a permit under any federal or state law or local ordinance. To the best of the City’s knowledge, there are no toxic or hazardous substances or wastes, pollutants or contaminants or other environmental conditions in or on the City Exchange Parcel that may support a claim or cause of action under federal or state law or local ordinances or other environmental regulatory requirements. The City will disclose BKI Hamburg all environmental reports and studies with respect to the City Exchange Parcel which are in the City's possession or control. (g) To the best of the City’s knowledge, there are no above-ground or underground tanks in or about the City Exchange Parcel. To the extent such storage tanks exist, each will be duly registered with all appropriate regulatory and governmental bodies and will be removed or brought into compliance with applicable federal, state and local statutes, regulations, ordinances and other regulatory requirements at the City's expense prior to Closing. (h) Solely for purposes of satisfying the requirements of Minn. Stat. § 115.55, the City certifies that, to the City’s knowledge, there is no “individual sewage treatment system” (within the meaning of that statute) on or serving the City Exchange Parcel. The City certifies that sewage generated on the City Exchange Parcel goes to a facility permitted by the Minnesota Pollution Control Agency. Except as specifically set forth in this Agreement or any document contemplated hereby, (i) the City Exchange Parcel is being sold, conveyed, assigned, transferred and delivered “as is, where is” on the date hereof and in its condition on the date hereof, “with all faults,” and the City is not making, and expressly disclaims, any other representation or warranties written or oral, statutory, express or implied, concerning the City Exchange Parcel, including but not limited to, representations or warranties relating to value or quality of the City Exchange Parcel or the prospects, financial or otherwise, risks or other incidents of the City Exchange Parcel or with respect to this Agreement or the transactions contemplated hereby or thereby, and (ii) the City specifically disclaims any representation or warranty of merchantability, usage, suitability or fitness for any particular purpose with respect to the City Exchange Parcel or any part thereof, or as to the workmanship thereof, or the absence of any defects therein, whether latent or patent. 11. BKI HAMBURG’S REPRESENTATIONS. On information and belief, BKI Hamburg hereby represents to the City, as of the date of this Agreement and as of the Closing Date, as follows: (a) The consummation of the transactions contemplated by this Agreement will not 8 constitute a default or result in the breach of any term or provision of any contract or agreement to which BKI Hamburg are a party so as to adversely affect the consummation of such transactions. (b) On the Date of Closing there will be no (i) outstanding leases or occupancy agreements, or (ii) outstanding contracts made by BKI Hamburg for any improvements to the BKI Hamburg Exchange Parcel which have not been fully paid for or for which BKI Hamburg shall not have made arrangements to pay off, at Closing, or that will affect the BKI Hamburg Exchange Parcel or be binding upon the City or upon the BKI Hamburg Exchange Parcel subsequent to Closing without the City’s written consent; and BKI Hamburg shall cause to be discharged all mechanic’s or materialmen’s liens arising from any labor or materials furnished to the BKI Hamburg Exchange Parcel that were made at the request of BKI Hamburg, its agents, or contractors, prior to the Date of Closing and any mortgages or other such similar encumbrances. (c) BKI Hamburg is not a foreign person; as such term is defined in Section 1445(f) (3) of the Internal Revenue Code of 1986, as amended, and shall deliver an affidavit to that effect at closing, which shall be in form and substance reasonably acceptable to BKI Hamburg. (d) BKI Hamburg certifies that it does not know of any “Wells” on the described BKI Hamburg Exchange Parcel within the meaning of Minn. Stat. Chapter 103I, except as disclosed herein. This representation is intended to satisfy the requirements of that statute. (e) To the best of BKI Hamburg’s knowledge, no toxic or hazardous substances or wastes, pollutants or contaminants (as defined in applicable federal or state laws or local ordinances) have been generated, treated, stored, released or disposed of, or otherwise placed, deposited in or located on the BKI Hamburg Exchange Parcel, nor has any activity been undertaken on the BKI Hamburg Exchange Parcel that would cause or contribute to (i) the BKI Hamburg Exchange Parcel to become a treatment, storage or disposal facility as defined in any federal or state law or local ordinance, (ii) a release or threatened release of toxic or hazardous substances or wastes, pollutants or contaminants, from the BKI Hamburg Exchange Parcel as prohibited by any federal or state law or local ordinance, or (iii) the discharge of pollutants or effluents into any water source or system, the dredging or filling of any waters or the discharge into the air of any emissions, that would require a permit under any federal or state law or local ordinance. To the best of the BKI Hamburg’s knowledge, there are no toxic or hazardous substances or wastes, pollutants or contaminants or other environmental conditions in or on the BKI Hamburg Exchange Parcel that may support a claim or cause of action under federal or state law or local ordinances or other environmental regulatory requirements. BKI Hamburg will disclose to the City all environmental reports and studies with respect to the BKI Hamburg Exchange Parcel which are in BKI Hamburg’s possession or control. (f) To the best of BKI Hamburg’s knowledge, there are no above- ground or underground tanks in or about the BKI Hamburg Exchange Parcel. To the extent such storage tanks exist, each will be duly registered with all appropriate regulatory and governmental bodies and will be removed or brought into compliance with applicable federal, state and local statutes, 9 regulations, ordinances and other regulatory requirements at BKI Hamburg’s expense prior to Closing. (g) Solely for purposes of satisfying the requirements of Minn. Stat. § 115.55, BKI Hamburg certifies that, to BKI Hamburg’s knowledge, there is no “individual sewage treatment system” (within the meaning of that statute) on or serving the BKI Hamburg Exchange Parcel. BKI Hamburg certifies that sewage generated on the BKI Hamburg Exchange Parcel goes to a facility permitted by the Minnesota Pollution Control Agency. Except as specifically set forth in this Agreement or any document contemplated hereby, (i) the BKI Hamburg Exchange Parcel is being sold, conveyed, assigned, transferred and delivered “as is, where is” on the date hereof and in its condition on the date hereof, “with all faults,” and BKI Hamburg is not making, and expressly disclaims, any other representation or warranties written or oral, statutory, express or implied, concerning the BKI Hamburg Exchange Parcel, including but not limited to, representations or warranties relating to value or quality of the BKI Hamburg Exchange Parcel or the prospects, financial or otherwise, risks or other incidents of the BKI Hamburg Exchange Parcel or with respect to this Agreement or the transactions contemplated hereby or thereby, and (ii) BKI Hamburg specifically disclaims any representation or warranty of merchantability, usage, suitability or fitness for any particular purpose with respect to the BKI Hamburg Exchange Parcel or any part thereof, or as to the workmanship thereof, or the absence of any defects therein, whether latent or patent. 12. POSSESSION. Each party shall deliver possession of the property being conveyed by them no later than the Closing Date. 13. CONTINGENCIES. (a) City’s Contingencies. The obligations of the City under this Agreement are expressly contingent upon each of the following (“City’s Contingencies”): (i) The City shall have determined on or before the Closing Date, that it is satisfied, in its sole discretion, with the results of any environmental/soil investigations and tests of the BKI Hamburg Exchange Parcel conducted by the City, the costs of which shall be the responsibility of the City. By executing this Agreement, BKI Hamburg hereby authorizes the City, its contractors, and agents to enter upon the BKI Hamburg Exchange Parcel for purposes of conducting environmental, engineering and soil tests. (ii) The City shall have determined on or before the Closing Date, that it is satisfied, in its sole discretion, with the title to the BKI Hamburg Exchange Parcel. (iii) All of the representations made by BKI Hamburg shall be true and correct as of the Closing Date. (iv) BKI Hamburg submitting, on a form provided by the City, the necessary document for request of a lot combination and single tax identification number combining the City Exchange Parcel with the remainder of the BKI Hamburg 10 Property, to be filed at closing. The City shall execute said form to the extent required by the County. If the City’s Contingencies have not been satisfied on or before the Closing Date, then the City may, at the City’s option, terminate this Agreement by giving notice to BKI Hamburg on or before the Closing Date. The contingencies set forth in this section are for the sole and exclusive benefit of the City, and the City shall have the right to waive the contingencies by giving written notice to BKI Hamburg. (b) BKI Hamburg’s Contingencies. The obligations of BKI Hamburg under this Agreement are expressly contingent upon each of the following (“BKI Hamburg Contingencies”): (i) BKI Hamburg shall have determined on or before the Closing Date, that it is satisfied, in its sole discretion, with the results of any environmental/soil investigations and tests of the City Exchange Parcel conducted by BKI Hamburg, the costs of which shall be the responsibility of BKI Hamburg. By executing this Agreement, the City hereby authorizes BKI Hamburg, its contractors, and agents to enter upon the City Exchange Parcel for purposes of conducting environmental, engineering and soil tests. (ii) BKI Hamburg shall have determined on or before the Closing Date, that it is satisfied, in its sole discretion, with the title to the City Exchange Parcel. (iii) All of the representations made by the City shall be true and correct as of the Closing Date. (iv) The City approving the necessary document for an administrative subdivision of the BKI Hamburg Property, creating the BKI Hamburg Exchange Parcel, to be filed at closing. BKI Hamburg shall execute said form to the extent required by the County. If the BKI Hamburg Contingencies have not been satisfied on or before the Closing Date, then BKI Hamburg may, at BKI Hamburg’s option, terminate this Agreement by giving notice to the City on or before the Closing Date. The contingencies set forth in this section are for the sole and exclusive benefit of BKI Hamburg, and BKI Hamburg shall have the right to waive the contingencies by giving written notice to the City. (c) Condition Subsequent. The conveyance of both parcels shall be made upon a condition subsequent to the effect that the City Exchange Parcel be rezoned by the City to I- 2 General Industrial District within one year of the Closing Date. In the event that rezoning is denied by the City, BKI Hamburg, at its option, may declare a termination, and all of the rights and interests in and to the properties conveyed pursuant to this Agreement shall revert. The parties agree to execute the necessary deeds and administrative subdivision and lot combination documents to return the properties to their original ownership. The parties will split the associated costs in the same manner as the costs are split under this agreement. BKI 11 Hamburg shall be responsible for clearing all encumbrances that were placed on the City Exchange Parcel after Closing. This subsection shall survive the Closing. 14. MISCELLANEOUS. (a) No Partnership or Joint Venture. Nothing in this Agreement shall be interpreted as creating a partnership or joint venture among the parties. (b) No Broker Commissions. Each party represents and warrants to the other party that there is no broker involved in this transaction with whom the warranting party has negotiated or to whom the warranting party has agreed to pay a broker commission. Each party agrees to indemnify the other party for any and all claims for brokerage commissions or finders’ fees in connection with negotiations for the purchase and sale of the properties arising out of any alleged agreement or commitment or negotiation by the indemnifying party. (c) No Merger. The provisions of this Agreement shall not be merged into any instruments or conveyance delivered at Closing, and the parties shall be bound accordingly. (d) Entire Agreement; Amendments. This Agreement constitutes the entire agreement among the parties and no other agreement prior to this Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment shall not be effective unless it shall be set forth in writing and executed by the parties or their respective successors or assigns. (e) Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors and assigns. (f) Notice. Any notice, demand, request or other communication which may or shall be given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or certified, postage prepaid; delivered by a nationally recognized overnight delivery company, or actually received by the recipient and addressed as follows: (i) If to City: City of Lakeville Attn: City Administrator 20195 Holyoke Avenue Lakeville, MN 55044 (ii) If to BKI Hamburg: BKI Hamburg Partners, LLC 12105 Nicollet Ave S Burnsville, MN 55337 (g) Headings. The headings of the sections and subsections of this Agreement are for convenience of reference only and does not form a part hereof, and in no way interpret or construe such sections and subsections. 12 (h) Survival of Covenants, Representations, Warranties and Agreements. All covenants, representations, warranties and agreements contained herein shall survive the closing. Nevertheless, any claim that either party has breached a representation or warranty must be in writing and must be given by the non-breaching party within two years of the Initial Closing Date or be deemed waived. (i) Governing Law. This Agreement shall be governed by the laws of the State of Minnesota. (j) Counterpart signatures. The parties agree that this Agreement may be executed in two or more counterparts, all of which when taken together shall comprise one and the same instrument. Each party agrees that the other party may rely upon facsimile copies of the signatures of such party. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above. [Signature page to follow] 13 CITY OF LAKEVILLE By: _____________________________________ Douglas P. Anderson, Mayor By: _____________________________________ Charlene Friedges, City Clerk BKI HAMBURG PARTNERS, LLC By: _____________________________________ Its: _____________________________________ 14 EXHIBIT A Lot 1, Block 1, Arden Kitchens Addition, Dakota County, Minnesota. PID 22-11750-01-010 15 EXHIBIT B That part of Lot 1, Block 1, Arden Kitchens Addition, according to the recorded plat thereof, Dakota County, Minnesota which lies easterly and southerly of the following described line: Commencing at the northwest corner of said Lot 1; thence on an assumed bearing of South 89 degrees 28 minutes 13 seconds East, along the north line of said Lot 1 a distance of 338.55 feet to the point of beginning of the line to be described; thence South 45 degrees 20 minutes 02 seconds East, a distance of 392.05 feet; thence South 17 degrees 09 minutes 25 seconds East a distance of 157.43 feet; thence South 21 degrees 04 minutes 29 seconds East a distance of 282.61 feet; thence South 39 degrees 41 minutes 42 seconds East a distance of 190.70 feet; thence South 78 degrees 27 minutes 59 seconds West a distance of 220.99 feet; thence North 61 degrees 47 minutes 13 seconds West a distance of 152.06 feet; thence North 62 degrees 51 minutes 32 seconds West a distance of 131.04 feet; thence North 68 degrees 02 minutes 38 seconds West a distance of 182.58 feet to the east line of Lot 2, said Block 1, Arden Kitchens Addition and said line there terminating. 16 EXHIBIT C Lot 2, Block 1, Arden Kitchens Addition, Dakota County, Minnesota. PID 22 -11750-01-020 17 EXHIBIT D That part of Lot 2, Block 1, Arden Kitchens Addition, according to the recorded plat thereof, Dakota County, Minnesota which lies northerly of the following described line: Commencing at the northeast corner of said Lot 2; thence on an assumed bearing of South 00 degrees 31 minutes 47 seconds West, along the east line of said Lot 2 a distance of 237.87 feet to the point of beginning of the line to be described; thence North 68 degrees 02 minutes 38 seconds West a distance of 168.13 feet; thence West a distance of 100.50 feet to the west line of said Lot 2 and said line there terminating.