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09-08-14 EDA Mtg Agenda CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, SEPTEMBER 8, 2014 7:30 pm, or immediately following Regular City Council Meeting AGENDA 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING A. Roll Call President Zerby _____ Hotvet _____ Siakel _____ Sundberg _____ Woodruff _____ B. Review Agenda 2. APPROVAL OF MINUTES A. EDA Minutes of August 25, 2014 (Att.- Minutes) 3. NEW BUSINESS A. Option to Purchase Agreement with Real Estate Holdings JD LLC (Att. - Attorney Keane’s memorandum) 4. ADJOURN #2A CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, AUGUST 25, 2015 Immediately following Regular City Council Meeting MINUTES 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING President Zerby called the meeting to order at 8:00 P.M. A. Roll Call Present. President Zerby; Boardmembers Hotvet and Siakel; Executive Director/Secretary Joynes; Attorney Keane; and Assistant Executive Director Nielsen Absent: Boardmembers Sundberg and Woodruff B. Review Agenda Hotvet moved, Zerby seconded, approving the agenda as amended. Motion passed 3/0. 2. APPROVAL OF MINUTES A. EDA Minutes of July 28, 2014 Siakel moved, Zerby seconded, approving the EDA Meeting Minutes of July 28, 2014, as presented. Motion passed 3/0. 3. NEW BUSINESS A. Option to Purchase Agreement with MGM Liquors Administrator Joynes stated Council and staff have discussed an Option to Purchase Agreement with Mr. Steve Sloan, the person who holds the MGM liquor franchise in the City of Tonka Bay, for a number of months. He noted the meeting packet contains a copy of a draft Letter of Intent to proposed Option Agreement that he, Attorney Keane and Mr. Sloan have negotiated. The Letter outlines what an Agreement would look like. Staff is recommending that the Shorewood Economic Development Authority (EDA) direct staff to prepare the Agreement and bring it back to the Board for consideration during its September 8, 2014, meeting. Once the Agreement is approved by the Board and signed by Mr. Sloan, the off-sale intoxicating liquor license for Wine & Spirits by JD, Inc. dba MGM Wine and Spirits, that the Shorewood Council discussed during its meeting immediately preceding this meeting, will be signed and submitted to the State of Minnesota. He noted that Attorney Keane has been involved in all negotiation meetings except for the last one. Attorney Keane explained that the concept is that the City has a one-way right to purchase the property located at 5660 County Road 19 with proper and extended notice to the store operator at a fixed price. The circumstance that would give rise to that is if the City receives a development proposal that anticipates CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING August 25, 2014 Page 2 of 2 putting together an assemblage of land that would include the 5660 parcel. The Option to Purchase Agreement will establish a price for the exercise amount so the City has some surety that the property can be incorporated into the development project without paying an exorbitant price for the property. The value of the real estate is established by the market price Mr. Sloan is paying for the property so the liquor license would not create an extraordinary gap of value in the future. What has been negotiated seems to be fair for both parties. Mr. Sloan would like to be a store incorporated into a development project should a project come to fruition. President Zerby noted that the Board is aware that discussions and negotiations have been going on for quite some time. Boardmember Hotvet asked Attorney Keane to clarify what Property in the Letter covers. Keane explained that it is the building and the land under and around it. In response to another question from Hotvet, Keane explained the City has the right to exercise the option if the right deal comes along and the developer wants to incorporate the 5660 property into a future project. The City can tender to a developer that the developer can include the parcel in the proposed project and that the property will be available on a specific date for a specific price. That will create certainty for a future developer. Attorney Keane noted that Mr. Sloan did not want permanent encumbrance on his property and that seemed reasonable. Mr. Sloan wanted a shorter time and the City wanted as much time as reasonably possible. Siakel moved, Hotvet seconded, approving the Letter of Intent to Option Agreement with Real Estate Holdings by JD, LLC and directing Attorney Keane to prepare the Option Agreement for execution. Motion passed 3/0. 4. ADJOURN Siakel moved, Hotvet seconded, Adjourning the Shorewood Economic Development Authority Meeting of August 25, 2014, at 8:09 P.M. Motion passed 3/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Scott Zerby, President ATTEST: William S. Joynes, Executive Director MEMORANDUM TO:MAYOR AND CITY COUNCIL FROM:TIM KEANE, CITY ATTORNEY DATE:SEPTEMBER 4, 2014 RE:OPTION AGREEMENT -5660 COUNTY ROAD 19 Mayor and Council Please find attached the Option Agreement relating to the property located at 5660 County Road 19. The Option Agreement is in a form that will also serve as the purchase agreement at the time of exercise, intending to address all relevant terms customarily found in a purchase agreement relating to title, environmental, survey, etc. Should you have any questions you aycontactmeatyourconvenienceat(612)334- 5015. OPTION AGREEMENT by and between REAL ESTATE HOLDINGS JD LLC and THE SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY This Option Agreement (“Agreement”), made and entered into as of September ___, 2014, by and between Real Estate Holdings JD LLC, a [Minnesota] limited liability company, including any successor or assign ("Optionor"), and the City of Shorewood Economic Development Authority, a municipal corporation ("Optionee"). RECITALS A.Optionor desires to purchase certain real property (“Property”) described in Section 1.11 below, and obtain from Optionee a liquor license to operate the Property for Optionor’s intended use (“Permitted Use”) as defined in Section 1.10 below; B.Optionee desires to secure the exclusive option to purchase the Property pursuant to the terms and conditions contained in this Agreement. AGREEMENT NOW, THEREFORE, for valuable consideration, the receipt and sufficiency which are hereby acknowledged, Optionor and Optionee agree as follows: 1. Definitions. The following terms shall have meanings set forth below: 1.1 Agreement. This Agreement, including the following exhibits attached hereto and made a part hereof: Exhibit A: Permitted Exceptions Exhibit B: Form of Survey Certification Exhibit C: Form of Memorandum of Option 1.2 Earnest Money. Means Fifty Thousand and no/100 Dollars ($50,000.00), payable by Optionee in the manner described in Section 4.3 below. 1.3 Escrow Agent. An agent of the “Title Company” as defined below. 1.4 Hazardous Material. As defined in Section 10.5 below. 1.5 Net Area of Property. 32,662 a square feet, which is the number of square feet contained in the Property exclusive of the area covered by or subject to existing or presently proposed rights-of-way for streets, sidewalks, alleys, highways or other areas dedicated for public use (including any which may be required as a condition to or in connection with any platting or subdivision of the Property required to convey the Property to Optionee) and 4824-4969-1422.2 existing easements which prohibit or restrict the use of the surface of the easement area for the location of buildings and/or use for parking purposes. 1.6 Option. The option to purchase the Property granted in Section 2. 1.7 Option Term. One Hundred and Twenty (120) full months from the date of the execution of this Agreement. 1.8 Option Consideration. Upon Optionor’s purchase of the Property, in consideration of Optionee granting to Optionor a liquor license to operate the Property, and in consideration of the Purchase Price as defined below, Optionor hereby grants Optionee the option to purchase the Property pursuant to the terms of this Agreement. 1.9 Permitted Exceptions. The easements, restrictions, reservations and other matters affecting title to the Property, if any, identified on Exhibit A. 1.10 Permitted Use. A liquor store, or such other use as permitted by code, subject to Optionee’s approval pursuant to its municipal authority. 1.11 Property. The real property, together with all improvements located thereon, if any, located at 5660 Manitou Road, City of Shorewood, County of Hennepin, State of Minnesota, and legally described as Lot 25, Auditors Subdivision No. 133, and as Tax ID No. 31-177-23-13-0007. 1.12 Purchase Price. The sum of Four Hundred Ninety One Thousand and no/100 Dollars ($491,000.00), which Purchase Price includes the Earnest Money, to be adjusted as described in Section 5.3 below. 1.13 Title Company. To be selected by Optionee upon Optionee’s exercise of its Option. 2. Grant of Option. Upon and subject to the terms and conditions hereinafter set forth, Optionor hereby grants to Optionee, and Optionee hereby accepts, the exclusive option to purchase the Property during the Term. This Option shall run with the title of the Property throughout the Term of this Agreement. 3. Consideration for Option. In consideration of the Option, upon the purchase of the property by Optionor, Optionee hereby agrees to grant Optionor a liquor license for the purpose of operating the Property pursuant to its Permitted Use. Notwithstanding anything contained in this Paragraph to the contrary, Optionee’s grant of a liquor license shall not diminish Optionee’s regulatory authority to enforce any laws, ordinances, rules or regulations as it relates to the liquor license or any violation by Optionor of such license. 4. Exercise of Option. The Option may be exercised by Optionee, in Optionee’s sole discretion, upon satisfaction of the following terms and conditions: -2- 4824-4969-1422.2 4.1 Giving Optionor at least 12 months prior written notice of Optionee’s exercise of the Option at any time prior to the end of the Term. If Optionee fails to give such notice prior to the end of the Term, the Option shall lapse, and Optionee shall have no further right or interest in the Property under this Agreement; but nothing shall diminish Optionee’s rights to the property pursuant to any right or authority provided by statute. 4.2 Upon Optionee’s exercise of the Option, Optionee shall pay to the Escrow Agent the Earnest Money. 5. Closing. Subject to the Permitted Exceptions, the closing on the Property shall occur within ninety (90) days from the date Optionee exercises the Option. 5.1 Closing Date. The closing of the purchase shall occur on such business day as Optionee may elect within ninety (90) days after the date of exercise of the Option. The closing shall be held on or before at 1:00 p.m. on such day at the offices of the Title Company, or at such other place, date, and time as Optionor and Optionee may agree. 5.2 Closing Deliveries by Optionor. At the closing, Optionor shall execute and, where appropriate, acknowledge, and/or deliver to Optionee the following: 5.2.1 A general warranty deed to the Property, subject only to Permitted Exceptions. 5.2.2 Legal and actual possession of the Property and every part thereof. 5.2.3 Such affidavit of Optionor regarding liens, judgments, residence, and other matters which may affect title to the Property as may be customary in the jurisdiction in which the Property is located. 5.2.4 A transferor's certification, in form and substance reasonably satisfactory to Optionee, stating that Optionor is not a foreign person, corporation, partnership, trust or estate as those terms are defined in the Internal Revenue Code and Income Tax Regulations. 5.2.5 Payment of the state deed tax, transfer and other tax on the conveyance of the Property. 5.2.6 If title to the Property or any part thereof is registered, the owner’s duplicate certificate of title. 5.2.7 Such other instruments and matters as the Title Company may require as a condition to issuing its policy of title insurance in accordance with the requirements of Section 7. -3- 4824-4969-1422.2 5.3 Adjustment to the Purchase Price. The initial Purchase Price shall be deemed the “Base Amount” for the property. Upon Optionee’s exercise of the Option, the Purchase Price of $491,000.00 shall be adjusted by a fraction with the denominator being the assessed value of the property on January 2, 2015 (for taxes payable in 2016), and the numerator nd being the assessed value of the property on January 2 of the year of closing (for taxes payable in the following calendar year). For example: If the assessed value for tax purposes on January 2, 2015, is $500,000.00 (for the 2016 calendar year); and the assessed value for nd tax purposes on January 2 in the year of closing is $625,000.00 (for taxes payable in the following calendar year), then the Purchase Price shall be adjusted multiplying the Base Amount by 1.25% (based upon $625,000.00/$500,000.00), which by way of this example equals $613,750.00. 5.4 Payment of Purchase Price. At the closing, Optionee shall pay the Purchase Price to Optionor, less the amount of the Earnest Money. The Purchase Price may be paid by certified or bank cashier’s check or by wire transfer of immediately available funds, and may be deposited with the Escrow Agent for disbursement to Optionor by Escrow Agent’s trust account check. The Earnest Money shall be applied to and credited against the Purchase Price and shall be disbursed to Optionor by the Escrow Agent upon closing. 5.5 Closing Adjustments. The following adjustments shall be made at the closing: 5.5.1 General real estate taxes in respect of the Property due and payable in the year of closing shall be prorated on a daily basis as of the day of closing, with Optionor responsible for those allocable to the period prior to the day of closing and Optionee responsible for those allocable subsequent thereto. 5.5.2 Optionor shall pay in full at the closing all special and area assessments (and charges in the nature of or in lieu of such assessments) levied or pending as of the closing date in respect of the Property. 5.5.3 All utility expenses, including, but not limited to, water, fuel, gas, electricity, telephone, sewer, trash removal, heat and other services furnished to or provided for the Property shall be prorated on a daily basis as of the closing date. Optionor agrees to have all meters on the Property, if any, read within two days prior to the closing date. 5.5.4 Optionor shall pay all title charges for abstracting and the issuance of the title commitment and Optionee shall pay the premium for Optionee's title insurance policy. 5.5.5 Any closing fee payable to the Title Company shall be borne equally by Optionor and Optionee. If any of the amounts to be apportioned under this Section cannot be calculated with complete precision because the amount or amounts of one or more items included in such calculation are not then known, such calculation shall be made on the basis of reasonable -4- 4824-4969-1422.2 estimates of Optionor and Optionee, subject to prompt adjustment (by additional payment by Optionee to Optionor or by refund from Optionor to Optionee) when the amount of any such item become known. The obligations under this Section shall survive the closing. 5.6 Relocation Benefits. At the time of closing, Optionor shall be paid all business relocation benefits to which it is entitled as provided in 42 U.S. Code Ch. 61. 6. Title. Within fifteen days (15) days after Optionor enters into a purchase agreement for Optionor’s purchase of the Property with the current owner, Optionor shall deliver to Optionee Schedule B of the current ALTA Owner’s Policy, with the Permitted Exceptions from coverage to include as Exhibit A of this Agreement. Within fifteen (15) days of Optionee’s exercise of the Option, Optionor shall furnish to Optionee a commitment to insure title to the Property on the then current ALTA Form B in an amount equal to the purchase price hereunder, with provision to increase the policy amount to cover the cost of improvements to be constructed by Optionee, issued by the Title Company, showing Optionor as owner of the Property, subject only to Permitted Exceptions, deleting all standard exceptions to coverage, containing such affirmative insurance as Optionee may reasonably require (including zoning, access, contiguity, and survey accuracy), and otherwise satisfactory to Optionee and its legal counsel. Although the warranty deed may be delivered subject to Permitted Exceptions, Optionee may object to marketability and/or terminate this Agreement pursuant to Section 8.2 based upon a review thereof and the survey. Unless written objections are made to title or such commitment within twenty (20) days after Optionee's receipt the original Permitted Exceptions included on Exhibit A, or such commitment and the survey to be delivered pursuant to Section 7 after Optionee’s exercise of the Option, they shall be deemed waived. If any objections are so made, Optionor shall be allowed such period as Optionee specifies in its objection notice (but which period shall not be less than thirty (30) nor more than one hundred twenty (120) days thereafter) to make such title marketable or modify the commitment as required by such objection notice and shall use best efforts to do so. Pending such efforts, the Closing Date and the expiration of the then Term shall be postponed if the same would occur prior to expiration of such time period, but no such objection or cure period shall affect Optionee’s right to exercise the Option at any time during the Term. Optionee shall also have the right to object to title or the commitment from time to time after said twenty (20) day period if, by subsequent endorsement, the commitment is amended. If the objections are cured within the time permitted, the closing shall occur as otherwise provided in this Agreement. If the objections are not cured within the time permitted or Optionee does not receive the closing endorsement described below, then Optionee may either: (a) terminate this Agreement (including, if applicable, the agreement formed by exercise of the Option) by giving written notice thereof to Optionor and thereupon the Option Consideration shall be returned to Optionee; or (b) close the purchase contemplated hereby if, as and when otherwise required pursuant to the terms hereof. In addition, Optionee's obligation to purchase the Property shall be contingent upon receipt of an endorsement to the title commitment at the closing changing the effective date thereof to the date of the closing and showing Optionee as the fee owner of the Property and without any other change. Notwithstanding the foregoing, Optionor shall not, except with the agreement of Optionee, be allowed any additional time beyond the otherwise -5- 4824-4969-1422.2 scheduled closing date to cure any mortgage or other lien securing the payment of money, but shall pay and discharge the same of record at the closing. 7. Survey. Within thirty (30) days after Optionee’s exercise of the Option, Optionor shall, at its expense, furnish to Optionee a current survey of the Property, prepared and certified by a registered land surveyor. The survey shall: (a) conform to the "Minimum Standard Detail Requirements for Land Title Surveys" as then adopted by the American Land Title Association and the American Congress on Surveying & Mapping; (b) contain the certification in the form of Exhibit B; and (c) show and certify to the Net Area of the Property and such other matters as Optionee or its legal counsel may reasonably require, including after review of the initial survey if the same reflects any state of facts reasonably warranting additional investigation or certification by the surveyor. The survey shall be deemed received by Optionee for purposes of Section 6 only when a survey conforming to the foregoing requirements has been received by Optionee. All certifications shall run in favor of Optionee, the Title Company and any other party designated by Optionee. 8. Conditions Precedent. If any of the conditions set forth in this Section 8 are not fulfilled within the time specified below, Optionee may, in its absolute discretion, terminate this Agreement by giving written notice thereof to Optionor and thereupon the Option Consideration shall be returned to Optionee. The conditions set forth in this Section 8 are for the sole benefit of Optionee and Optionee may waive the fulfillment of any one or more of the conditions, or any part thereof, by giving written notice thereof to Optionor: 8.1 Approval. Optionee, through the City Council of Optionee, shall have approved this Agreement, and the transactions contemplated by this Agreement, within thirty (30) days after the date hereof. 8.2 Physical Condition. On or before the end of the Term, Optionee shall have determined that the soil conditions of the Property and other physical aspects of the Property (including the presence or risk of the presence of any environmental contamination on or about the Property) shall be satisfactory to Optionee in its sole good faith judgment as evidenced by soil tests and other information obtained by Optionee at its expense. 8.3 Permitted Exceptions. Within sixty (60) days after receipt of the title insurance commitment and survey, Optionee shall have determined that the Permitted Exceptions will not interfere with or restrict the development of the Property. 9. Right of Entry. Upon Optionee’s exercise of the Option, Optionee, its agents and independent contractors shall have the right to enter the Property to inspect the same, perform environmental assessments, soil and other tests and for other investigations and activities consistent with the purposes of this Agreement. Optionee shall indemnify, defend and hold Optionor harmless from all claims and damages asserted against Optionor arising out of any such entry on the Property, except that Optionee shall not have any obligation in respect of any Hazardous Materials in, on, under or about the Property. -6- 4824-4969-1422.2 10. Optionor's Representations and Warranties. Upon Optionor’s purchase of the Property, Optionor hereby represents and warrants to Optionee as follows: 10.1 Title. Optionor holds good and marketable title to the Property in fee simple absolute, subject to no liens, easements, restrictions or other encumbrances other than the Permitted Exceptions. 10.2 Reports. Within five (5) business days of Optionee’s exercise of the Option, Optionor shall deliver to Optionee true and complete copies of all soils, environmental and other reports and studies in respect of the physical condition of the Property, including all drafts and letters and other documents which order, or describe or limit the scope of, such reports and studies which are within the possession or control of Optionor or its affiliates (collectively, the “Reports”). Unless Optionor or any affiliate has actual knowledge that the same are inaccurate, incomplete or misleading in any material respect, Optionor does not warrant and shall not be responsible for the accuracy or completeness of Reports or their conclusions or recommendations. 10.3 Hazardous Materials; Storage Tanks. Optionor has not stored, released, disposed of, nor permitted any other party to store, release or dispose of, and to the best of Optionor's knowledge there has not been any storage, release or disposal of, any Hazardous Material in, on, about or from the Property, and Optionor has no knowledge of the existence in, on or about the Property of any Hazardous Material. There are not any underground or above ground storage tanks in, on or about the Property. The term “Hazardous Materials” means asbestos, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, radioactive materials, explosives, known carcinogens, petroleum products and by-products, and any pollutant, contaminant, chemical, material or substance defined as hazardous or as a pollutant or a contaminant in, or the release or disposal of which is regulated by, any federal, state, county, municipal, local or other statute, ordinance or regulation which relates to or deals with human health or the environment, including, without limitation, all regulations promulgated by a regulatory body pursuant to any such statute, ordinance, or regulation, including, but not limited to, the Comprehensive Environmental Response and Liability Act . of 1980 (“CERCLA”), 42 U.S.C. § 9601, as amended 10.4 Condition of Property. Except as contained in this Section 10, Option accepts the Property in its “as-is, where-as” condition; provided on or before the Closing Date, Optionor shall be responsible for removing all Optionor’s personal. The foregoing representations and warranties shall be deemed remade by Optionor as of the closing and, as so remade, shall survive the closing. The foregoing representations and warranties shall apply and be effective, and shall be deemed to have been relied upon by Optionee, notwithstanding any knowledge, determination, investigation or inquiry (or failure to investigate or inquire) of Optionee or any of its agents. 11. Brokers. Each of the parties represents that such party has not incurred any brokerage commission or finder's fee as a result of the transactions described herein and each party agrees to hold the other harmless from any claim for such brokerage commission or -7- 4824-4969-1422.2 finder's fee incurred as a result of the actions of such party. The provisions of this section shall survive termination of this Agreement and the closing. 12. Memorandum of Option. Neither party shall record this Agreement. Concurrent herewith, Optionor and Optionee have executed a Memorandum of Option in the form of Exhibit D in recordable form. Optionee may, at its expense, record the Memorandum of Option. 13. Default; Termination. If either party shall default in any of their respective obligations under this Agreement (which term includes for purposes of this Section 13 the agreement formed by exercise of the Option), the other party may, by written notice to such defaulting party specifying the nature of the default and the date on which this Agreement may terminate (which date shall be not less than thirty (30) days after the giving of such notice), this Agreement and upon such date. In the case of any default by Optionee, Optionor's sole and exclusive remedy shall be termination of this Agreement as provided above and, upon any such termination, the Earnest Money shall be forfeited to and retained by Optionor as agreed and final liquidated damages. If this Agreement is terminated by Optionee for Optionor's default, the Earnest Money shall thereupon be returned to Optionee, and Optionee shall have the right to specifically enforce this Agreement, provided that an action therefor is commenced within six (6) months after such right arises. In any action or proceeding to enforce this Agreement or any provision hereof, the prevailing party shall be entitled to recover its costs and reasonable attorney fees. 14. Confirmation of Termination. If Optionee fails to exercise the Option as herein provided, the Option shall automatically terminate without notice to Optionee and all rights of Optionee arising out of this Agreement shall immediately cease. Optionee agrees to execute, acknowledge, and deliver to Optionor within ten (10) days after written request, a quit claim deed and/or a termination of the Memorandum of Option in recordable form in order to remove the cloud of the Option from the Property, but failure to give such deed or other instrument shall not affect the automatic termination provided for above. 15. Assignability. The rights of the Optionee and Optionor under this Option Agreement may be assigned without the consent of the other party. 16. Notices. Any notice, request or other communication required or provided to be given under this Agreement shall be in writing and shall be sufficiently given and shall be deemed given when delivered personally by messenger or by overnight delivery to: Optionor: Steve Sloan Real Estate Holdings JD LLC -8- 4824-4969-1422.2 Optionee: City of Shorewood Economic Development Authority Attn: City Administrator 5755 Country Club Road Shorewood, MN 55331 or to such party at such other address as such party, by ten (10) days prior written notice given as herein provided, shall designate, provided that no party may require notice to be sent to more than two (2) addresses. Any notice given in any other manner shall be effective only upon receipt by the addressee. 17. Miscellaneous. This Agreement constitutes the entire agreement of the parties hereto and may be modified only in writing. If any term or provision of this Agreement or any application thereof shall be invalid and unenforceable, the remainder of this Agreement and any other application of such term or provision shall not be affected thereby. This Agreement shall be construed under and governed by the laws of the State in which the Property is located. This Agreement shall inure to the benefit of and shall bind the respective heirs, executors, administrators, successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written. OPTIONOR: REAL ESTATE HOLDINGS JD, LLC BY: ITS: ________ OPTIONEE: CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY BY: ITS: ___ -9- 4824-4969-1422.2 STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of September 2014, by ____________________, the President of the Shorewood Economic Development Authority on behalf of the Optionee. Notary Public STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of September 2014, by _______________________, the ______________________ of Real Estate Holdings JD LLC, a Minnesota limited liability company, on behalf of the Optionor. Notary Public This instrument was drafted by: Kutak Rock LLP 220 South Sixth Street, Suite 1700 Minneapolis, MN 55402 -10- 4824-4969-1422.2 EXHIBIT A List of Permitted Exceptions 4824-4969-1422.2 EXHIBIT B Surveyor’s Certificate The undersigned has been furnished with [Commitment for Title Insurance] [Preliminary Title Report No. ______________], by ___________________ Title Insurance Company, with an Effective Date of _______________, 20___ ("Title Report"), issued for certain real property located in the City of _______________, County of _______________, State of _______________, more particularly described as follows (the "Property"): [Add Legal Description Here] The undersigned has made or caused to be made a physical inspection of the Property by its representatives. The undersigned has prepared or caused to be prepared under its supervision a survey of the Property dated _______________________, and bearing Job No. ___________ (the "Survey"). The undersigned hereby certifies to __________________________________ and ________________ Title Insurance Company as follows: The Survey, and the survey on which it is based, were made (a) in accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys" jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 1992, and includes Items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13 of Table A thereof, and (b) pursuant to the Accuracy Standards (as adopted by ALTA/ACSM and in effect on the date of this Certification) of an Urban Survey. Without limiting the foregoing: (1) The Survey correctly shows (i) the boundary lines of the Property, which "close by engineering calculation" and (ii) the location of all easements, encroachments, rights of way and uses disclosed by the Title Report and the physical inspection of the Property made by the undersigned. (2) The attached print of the Survey prepared by me was actually made upon the ground. (3) The Survey and the information, courses and distances shown thereon are correct. (4) The Survey correctly shows a fixed and determinable position and location of the Property (including the position of the point of beginning if the Property is described by metes and bounds). 4824-4969-1422.2 (5) If the Property consists of two or more parcels, each of such parcels is fully contiguous along the common boundary line with adjoining parcels as depicted on the Survey and there are no strips, gaps, gores or overlaps between or among such parcels. (6) The improvements shown on the Survey constitute all of the improvements on the Property. (7) The Survey shows all parking and paved areas, the number of parking spaces striped, a typical and handicapped parking space, and the number and location of all handicapped parking spaces. (8) The Property abuts on and has direct access to the following dedicated public ways: ____________________________________________. (9) All driveways or other cuts in the curb, if any, along any street upon which the land abuts are correctly shown. (10) There are no building restrictions or set-back lines, party walls, or any encroachments or overhangs of any improvements from or onto the Property or onto any easements or rights-of-way, except as shown and depicted on the Survey. (11) All utility services required for the operation of the improvements on the Property either enter through adjoining public streets or pass through or are located on adjoining private land. The Survey shows the location of all utilities and the point of entry of any utilities which pass through or are located on adjoining private land. (12) The Survey shows all wetlands, if any, and the classification thereof under applicable federal and state law. (13) The Survey shows all observable evidence, if any, of cemeteries and burial mounds. (14) The survey shows with respect to any lake bordering the Property (1) the ordinary high water mark of such lake as established by the Department of Natural Resources for the State of ____________ and (2) the number of lineal feet of shoreline included in the Property based on such ordinary high water mark. (15) The Survey shows the location and direction of all storm drainage systems, if any, for the collection and disposal of all roof and surface drainage. (16) The Survey shows all discharges, if any, into streams, rivers or other conveyance systems. -2- 4824-4969-1422.2 (17) If the Property appears on a Flood Insurance Boundary Map, it is so indicated, and if it is within the "Flood Hazard Area" shown thereon, the classification and boundaries thereof are also so indicated. (18) The Property contains a gross area of ____________ acres (to the nearest 1/100th of an acre) and an area, net of highways and other public rights-of- way of _______________ acres (to the nearest 1/100th of an acre). IN WITNESS WHEREOF, the undersigned has executed this Surveyor's Certificate this ______ day of _______________, 20___. By: Signature Registered Land Surveyor Registration No. _________________ M1:tempmail -3- 4824-4969-1422.2