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HomeMy WebLinkAboutContract 2012 2461 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT ("Agreement") is made as of this 2. day of , 2012 ("Effective Date") between the CITY OF COLUMBIA HEIGHTS HOUSING AND REDEVELOPMENT AUTHORITY, a Minnesota political subdivision, ("Seller"), and AEON, a Minnesota non-profit corporation, ("Buyer"). In consideration of this Agreement, Seller and Buyer agree as follows: 1. Sale of Property. Subject to compliance with the teitus of this Agreement, Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller, the following property (collectively, "Property"): a) Real Property. The project commonly known as Parkview Villa North and Parkview Villa South located at 965 40th Avenue Northeast in Columbia Heights, Anoka County, Minnesota, including the land legally described on Exhibit A attached hereto ("Land") together with (i) all buildings and improvements constructed or located on the Land ("Improvements") and (ii) all easements and rights benefiting or appurtenant to the Land, including Seller's rights in any vacated or existing public rights of way abutting the property ("Appurtenances") (the Land, Improvements, and Appurtenances are collectively the "Real Property"), subject only to Permitted Encumbrances (defined below). b) Personal Property. All of the equipment, furnishings, furniture, and other personal property owned by Seller and situated in or about the Real Property including, without limitation, those items described on the inventory attached to this Agreement as Exhibit B ("Personal Property"). c) Leases. Seller's interests as lessor in all of the leases affecting any Real Property or Personal Property ("Leases"), including without limitation, those described on the rent roll attached hereto as Exhibit D ("Rent Roll"), with the exception of the Cellular Antenna Lease, as defined in Section 17 of this Agreement. d) Contracts. Seller's interests in the service and maintenance contracts, equipment leases, and other contracts regarding the Real Property and Personal Property that Buyer agrees to assume in writing, along with any deposits related thereto ("Contracts"). e) Permits. Seller's interests in the permits and licenses relating to the Real Property and the activities conducted thereon("Permits"). f) Warranties. Seller's interests in all assignable warranties and guaranties given to, assigned to or benefiting Seller or the Real Property or the Personal Property regarding the acquisition, construction, design, use, operation, management, or maintenance of the Real Property and the Personal Property("Warranties"). fb.us.8843595.08 g) Plans. All originals and copies of the as-built blueprints, plans, specifications, soil tests, and structural tests regarding the Real Property and the Personal Property, in possession of Seller, if any("Plans"). h) Records. Copies of the records of Seller regarding the Property, including the records and materials regarding management and leasing, utilities, real estate taxes and assessments, certificate of occupancy, inventory of equipment and personal property, insurance, tenants, marketing, advertising and promotions, maintenance, repairs, capital improvements and services, and tax returns and audits filed with respect to the Property for the three calendar years preceding the Effective Date and for the calendar year of the Effective Date through the Closing Date (as necessary for purposes of obtaining low income tax credits), but excluding such records that are not permitted by law to be disclosed or disseminated to Buyer, unless redactions may be made to such records in a manner that will allow them to be lawfully disclosed ("Records"). i) Tenant Deposits. All unapplied security deposits, prepaid rents, and other tenant deposits and prepaid amounts under the Leases (including interest thereon at not less than the statutory rate), including valid transfers of any noncash security or documents held for such purposes ("Tenant Deposits"). j) Receivables. All accounts receivable and other receivables reflected on Seller's balance sheet on the Closing Date, whether payment on such receivables is due on or after the Closing Date ("Receivables"). k) Accounts. All cash and funds in residual receipts accounts and all funds in real estate tax escrow and insurance escrow accounts which amounts shall be adequate to pay real estate taxes and insurance premiums prorated as of the Closing Date ("Transferred Accounts"). 2. Purchase Price and Manner of Payment. Buyer shall pay to Seller as and for the purchase price for the Property the sum of Five Million Five Hundred Sixty Thousand and No/100 Dollars ($5,560,000.00) ("Purchase Price"), subject to Section 3(g) below, to be paid by Buyer to Seller as follows: a) Earnest Money. Concurrently with the execution of this Agreement, Buyer will pay to Seller cash in the amount of Ten Dollars ($10.00) ("Earnest Money"). b) Balance. Buyer will pay the balance of the Purchase Price by certified or cashier's check or wire transfer on the Closing Date. 3. Contingencies. The obligations of Buyer under this Agreement are contingent upon each of the following: a) Representations and Warranties. The representations and warranties of Seller contained in this Agreement must be accurate in all material respects now and on the Closing Date as if made on the Closing Date. Seller shall have delivered to 2 fb.us.8843595.08 Buyer at Closing a certificate dated as of the Closing Date certifying that such representations and warranties are true as of the Closing Date ("Update Certificate"). b) Title. On or before the Closing Date, title shall have been found acceptable, or been made acceptable, in accordance with the requirements and terms of Section 6 below. c) Performance of Seller's Obligations. On or before the Closing Date, Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement. d) Testing and Environmental Investigation. Within 30 days following the Effective Date, Seller shall provide copies of all soil tests, engineering inspections, structural and mechanical inspections, environmental inspection reports, and any and all other reviews, tests, or studies of the Property in Seller's possession. Buyer shall have determined, on or before the Contingency Date (as defined below in this Section 3), that it is satisfied with the results of all matters disclosed by soil tests, engineering inspections, structural and mechanical inspections, environmental inspections, and any and all other reviews, tests, or studies of the Property, all such tests, inspections, and reviews to be obtained at Buyer's sole cost and expense. Buyer shall provide Seller with a copy of any reports, test results, or studies obtained by Buyer. Seller shall allow Buyer, and Buyer's agents, access to the Real Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing the same. In performing such investigation and testing, Buyer shall attempt to minimize any interference with the operation of the Property or the Improvements. Buyer shall hold Seller and the Real Property harmless for all costs and liabilities relating to Buyer's activities on the Real Property except that Buyer shall not be responsible for any pre-existing contamination. This obligation will survive Closing or termination of this Agreement. Buyer shall further repair and restore any damage to the Real Property caused by or occurring during Buyer's activities and return the Real Property and Personal Property to substantially the same condition as existed prior to such entry. This obligation shall survive termination of this Agreement. Buyer shall consult with and obtain the consent of Seller, which consent shall not be unreasonably withheld or delayed, before commencing invasive testing of the Real Property. e) Document Review. Within 30 days following the Effective Date, Seller shall provide true and correct copies of all of the following documents and information: Leases, Contracts, Permits, Warranties, Plans, Records, updated Rent Roll, insurance policies currently in force for the Property, all reports described in Section 3(d) above, any as-built survey of the Property, current title insurance policy, any certificates of occupancy for the Property, an inventory of the Personal Property, audits and income and expense reports for 2009 through 2011 ("Operating Statements"), and the Cellular Antenna Lease (as defined in Section 17 below) for Buyer's review and analysis, and Buyer shall have determined, on or before the Contingency Date, that it is satisfied with its review and analysis of the Leases, 3 fb.us.8843595.08 Contracts, Penults, Warranties, Plans, Records, Rent Roll, and Operating Statements. From time to time, Buyer may request year-to-date financial data and updated Rent Rolls, which Seller shall provide. f) Appraisal. If deemed necessary by Buyer and at its own expense, Buyer shall have obtained an as-is property appraisal on or before the Contingency Date that supports the Purchase Price. g) Project Financing. On or before the Closing Date, Buyer shall have obtained financing necessary and sufficient in Buyer's sole and absolute discretion for the acquisition and rehabilitation of the Property and to make use of the Property as a residential apartment building ("Buyer's Intended Use"), at rates and on terms acceptable to Buyer, which financing shall include (but shall not be limited to) Seller financing of approximately $5,540,000 at a rate and on terms acceptable to Buyer (the "Seller Loan"). Seller and Buyer acknowledge and agree that if this contingency is not met because Buyer's project financing is not available in amounts and at rates and terms anticipated by and acceptable to Buyer, Buyer may request a renegotiation of the Purchase Price, to be accomplished by the parties cooperatively and in good faith in an amendment to this Agreement, or Buyer may terminate this Agreement pursuant to the last paragraph of this Section. Seller may also request a renegotiation of the Purchase Price in the event that it receives or does not receive additional financial resources that affect the amount of Seller financing that is available. h) Government Approvals. The obligations of Buyer and Seller to consummate the purchase transaction provided herein shall be subject to Buyer having obtained on or before the Closing Date, to Buyer's satisfaction and at Buyer's expense, (i) approval from HUD's Special Applications Center that allows Seller to dispose of the Property; (ii) an allocation of at least 100 tenant protection vouchers; (iii) conversion of all tenant protection vouchers to Project Based Section 8 Vouchers; and (iv) all other final governmental approvals necessary in Buyer's reasonable judgment in order to effectuate Buyer's Intended Use. Seller shall cooperate with Buyer in its efforts in obtaining the consents and approvals listed in this paragraph. i) Cellular Antenna Lease. On or before the Closing Date, Buyer shall be satisfied with the Cellular Antenna Lease, as defined in Section 17 below, including as renegotiated or re-executed, if applicable, and any and all amendments. j) Easement Agreement. On or before the Closing Date, Buyer and Seller (or the EDA, as defined in Section 17 below) shall have agreed upon the form of and entered into the Easement Agreement, as defined in Section 17 below. k) Material Changes. There shall have been no material adverse changes in the operation or physical condition of the Property in the period between the Contingency Date and the Closing Date. 4 fb.us.8843595.08 The "Contingency Date" shall be December 31, 2013 (or such later date pursuant to Buyer's extension, if exercised, in accordance with Section 4 below). If any contingency set forth in this Section 3 has not been satisfied on or before the date set forth in such contingency, then this Agreement may be terminated, at Buyer's option, by written notice from Buyer to Seller. Such notice of termination must be given at any time not later than the Contingency Date or Closing Date, as the case may be. Upon such termination, the Earnest Money and any interest accrued thereon shall be released to Buyer. Neither party will have any further rights or obligations regarding this Agreement or the Property. All the contingencies set forth in this Section 3 are specifically stated and agreed to be for the sole and exclusive benefit of Buyer and Buyer shall have the right to unilaterally waive any contingency by written notice to Seller. 4. Closing. The consummation of the purchase and sale transaction contemplated by this Agreement ("Closing") shall occur on a date selected by Buyer ("Closing Date"), upon no less than 10 days prior written notice to Seller, on or before December 31, 2013; provided, Buyer may extend the Closing Date and the Contingency Date for up to four months upon written notice to Seller. The Closing shall take place at 10:00 a.m. local time at the office of Commonwealth Land Title Insurance Company ("Title"), located at 7701 France Avenue South, Suite 120, Edina, Minnesota or at such other time and place as may be agreed to by the parties. Seller agrees to deliver possession of the Property to Buyer on the Closing Date subject to the Permitted Encumbrances (as defined below) and the rights of tenants under the Leases in their capacity as tenants. a) Seller's Closing Obligations. On the Closing Date, Seller shall execute and deliver to Buyer the following items which (in the case of documents) are referred to as "Seller's Closing Documents". Seller's Closing Documents shall be duly executed and, where appropriate, be in recordable form. i) Deed. A Limited Warranty Deed, in form reasonably satisfactory to Buyer, conveying the Real Property to Buyer, free and clear of all encumbrances, except the Permitted Encumbrances. ii) Bill of Sale. A Warranty Bill of Sale, in form reasonably satisfactory to Buyer, conveying the Personal Property to Buyer, free and clear of all encumbrances. iii) Assignment of Leases. An Assignment of Leases, in form reasonably satisfactory to Buyer, conveying the Leases and any existing security deposits, prepaid rents or collections and guarantees regarding the Leases to Buyer, free and clear of all encumbrances. iv) Assignment of Contracts, Permits, Warranties, Plans, and Records. An Assignment of Contracts, Permits, Warranties, Plans, and Records, in a form reasonably satisfactory to Buyer, assigning the Contracts, Permits, Warranties, Plans, and Records to Buyer, free and clear of all encumbrances 5 fb.us.8843595.08 arising by, through or under Seller, together with the consent of all parties having a required right to consent to such Assignment. v) Tenant Deposits, Receivables, and Transferred Accounts. Evidence that the balance in the Tenant Deposits, Receivables, and Transferred Accounts as of the Closing have been transferred to Buyer. vi) Revised and Certified Rent Roll. A revised Rent Roll, certified by Seller as accurate as of the Closing Date. vii) Notices to Tenants. Notices to the tenants under the Leases, dated and delivered as of the Closing Date, in form reasonably satisfactory to Buyer, advising them of the sale of the Real Property and directing them to make future lease payments to Buyer at the place designated by Buyer. viii) Title Policy. The Title Policy (defined below), or a suitably marked up Commitment for Title Insurance initialed by Title, in the form required by this Agreement. ix) Seller's Affidavit. A standard form Affidavit by Seller indicating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens, or bankruptcies against or involving Seller or the Real Property; that there has been no skill, labor, or material furnished to the Real Property for which payment has not been made or for which mechanics' liens could be filed; and that there are no unrecorded interests, other than as set forth in this Agreement, in the Real Property, together with whatever standard owner's affidavit or indemnity(ALTA form)that may be required by Title to issue an Owner's Policy of Title Insurance with the standard exceptions waived. x) Update Certificate. The Update Certificate, as defined in section 3.a) herein. xi) Certificate(s) of Occupancy. One or more final certificates of occupancy(to the extent the same were issued by the appropriate governmental body) authorizing the use of the Real Property for the Buyer's Intended Use. xii) Original Documents. Original copies of the Leases, the Contracts, the Permits, the Warranties, the Plans, and the Records. xiii) FIRPTA Affidavit. A nonforeign affidavit, properly executed and in recordable form, containing such information as is required by IRC § 1445(b)(2) and its regulations. xiv) Abstract of Title or Duplicate Certificates of Title. If in Seller's possession or reasonably available to Seller, the abstract(s) of title and duplicate certificates of title regarding the Real Property. 6 fb.us.8843595.08 xv) IRS Reporting Form. The appropriate federal income tax reporting form, if any is required. xvi) Other Documents. All other documents reasonably determined to be necessary to transfer the Property to Buyer free and clear of all encumbrances except for the Permitted Encumbrances or as requested by Title. xvii) Tenant Files. Copies of Seller's existing file with respect to each tenant with a lease at the Property in effect as of the Closing Date. xviii) Possession. Possession of the Property, free of possession by others except with respect to the interest of tenants under the Leases and as permitted in the Permitted Encumbrances. xix) Keys. All originals and copies of keys to the Property, possessed by Seller, its employees, agents or contractors. xx) Underground Tank Affidavit. A storage tank affidavit if required by Minn. Stat. § 116.48(6). xxi) Wells. A well disclosure if required by Minn. Stat. § 103I. xxii) Easement Agreement. The Easement Agreement, as defined in Section 17. b) Buyer's Closing Obligations. On the Closing Date, Buyer will execute and deliver to Seller the following, which(in the case of documents) are referred to as "Buyer's Closing Documents". Buyer's Closing Documents shall be duly executed and, where appropriate, be in recordable form. i) Title Documents. Such affidavits of Buyer, Certificates of Value, or other documents as may be reasonably required by Title in order to record the Seller's Closing Documents, where appropriate, and issue the Title Policy required by this Agreement. ii) Easement Agreement. The Easement Agreement, as defined in Section 17. iii) Purchase Price. The balance of the Purchase Price. 5. Costs and Prorations. Seller and Buyer agree to the following prorations and allocation of costs regarding this Agreement: a) Title Insurance, Closing Fee, Taxes and Recording Costs. Seller shall pay the cost of obtaining the title commitment. Buyer shall pay the cost of the premium for an owner's policy of title insurance (including any endorsements thereto) and any lender's policy of title insurance (including any endorsements thereto). Seller shall pay all State Deed Tax regarding the deed to be delivered by Seller to Buyer. Buyer shall pay all Mortgage Registry Tax payable in connection with Buyer's 7 fb.us.8843595.08 financing. Seller shall pay the cost of recording all documents necessary to place record title to the Property in Seller in the condition required pursuant to Section 6, with the exception that Buyer shall pay the cost of recording the deed to be delivered by Seller to Buyer,. Buyer and Seller shall each pay one half of any closing or escrow fee or charge imposed by any closing agent or by Title with respect to the transaction contemplated by this Agreement. b) Real Estate Taxes and Special Assessments. Real property taxes including without limitation any installments of special assessments (including interest) payable with general real estate taxes in the tax year in which the Closing Date occurs shall be adjusted and apportioned as of the Closing Date between Seller and Buyer based on the assumption that Seller has possession on the Closing Date. Seller shall pay in full all catch-up or other deferred taxes applicable to any of the Property and all special assessments levied and pending with respect to the Property as of the Closing Date. c) Basic Rents. All rent and other charges under the Leases will be prorated as of the Closing Date. If at the Closing Date a tenant under any of the Leases is delinquent in any rent payments or is in violation of any other term of the Lease, then Buyer shall be responsible for collecting the unpaid rent or enforcing the Lease violation. In that event, Buyer shall be entitled to retain any of the unpaid rent that it collects in order to compensate Buyer for its collection costs. Buyer shall not be entitled to any other compensation from Seller related to unpaid rent collection or enforcement of the Leases. d) Additional Tenant Amounts. Seller shall transfer to Buyer at the Closing Date and without additional charge all security deposits and interest thereon (including such interest is required by law or agreement to be paid to tenants) and prepaid rents. e) Other Costs. All other operating costs of the Property, including, but not limited to, utility charges shall be allocated between Seller and Buyer as of the Closing Date, so that Seller pays that part of such other operating costs payable on or before the Closing Date and Buyer is responsible for the payment of such operating costs payable from and after the Closing Date. f) Attorneys' Fees. Each of the parties will pay its own attorneys' fees, except that a party defaulting under this Agreement or any closing document will pay the reasonable attorneys' fees, court costs, and any and all other costs incurred by the nondefaulting party to enforce its rights regarding such default. 6. Title. a) Condition of Title. Seller shall be required to convey fee title to the Property to Buyer, subject to no liens, easements, encumbrances, conditions, reservations, or restrictions other than the Peiiiiitted Encumbrances (as defined below). 8 fb.us.8843595.08 b) Title Evidence. Buyer shall, within 60 days after the Effective Date, arrange for the following(collectively, "Title Evidence"): i) Title Insurance Commitment. Buyer shall, at Seller's cost and expense, obtain a commitment("Title Commitment") from Title for a current ALTA Owner's Policy of Title Insurance (2011) ("Title Policy") in the amount of the Purchase Price, including legible copies of any plats and all documents set out in the Title Commitment as exceptions to title, insuring title to the Real Property and otherwise in the form required by this Agreement. Title must agree to delete standard exceptions and provide affirmative insurance regarding zoning, contiguity, and any appurtenant easements. The Title Commitment will commit Title to insure title to the Property at regular and customary rates subject only to the Permitted Encumbrances. ii) Survey. Buyer shall, at Buyer's cost and expense, cause the Real Property to be surveyed by a registered land surveyor properly licensed to practice in Minnesota and reasonably acceptable to Buyer. Seller hereby grants Buyer and Buyer's representatives or consultants access to the Real Property. Buyer shall provide Seller with a copy of the survey. iii) UCC Searches. Buyer shall, at Buyer's cost and expense, obtain a report of UCC searches made of the Uniform Commercial Code records at the State of Minnesota Secretary of State and Anoka County, Minnesota done by a search firm acceptable to Buyer showing no UCC filings regarding any of the Property. c) Buyer's Objections. Within 30 days after receiving the last of the Title Evidence, Buyer will make written objections ("Objections") to the form and contents of the Title Evidence. Buyer's failure to make Objections within such time period will constitute waiver of Objections, except that Buyer shall not be deemed by virtue of failure to so object to have waived any proper objection relating to any consensual lien on the Property. Any matter set forth on Exhibit C or shown on such Title Evidence and not objected to by Buyer(other than such liens) shall be a"Permitted Encumbrance" hereunder. Seller shall have 30 days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed as necessary. Seller shall use its best efforts to correct any Objections. If the Objections are not cured within such 30 day period, Buyer's sole options will be to do the following: i) Terminate this Agreement and receive a refund of the Earnest Money and the interest accrued and unpaid on the Earnest Money, if any; or ii) Waive the Objections and proceed to close. 7. Operation Prior to Closing. During the period from Effective Date to the Closing Date ("Executory Period"), Seller shall operate and maintain the Property in the ordinary course 9 fb.us.8843595.08 of business in accordance with prudent, reasonable business standards, including the maintenance of liability insurance and insurance against loss by fire, windstorm, and other hazards, casualties, and contingencies, in the forms and amounts in place on the Effective Date including vandalism and malicious mischief and continuing normal repair and maintenance. During the Executory Period, Seller may use reserves to make ordinary and necessary repairs and replacements to the Property. Seller shall extend its reasonable efforts to maintain or increase occupancy at the Property. However, Seller shall execute no contracts, leases (other than to tenants in the ordinary course of business), or other agreements regarding the Property during the Executory Period that do not terminate on or before the Closing Date, without the written consent of Buyer, which consent may be withheld by Buyer in its sole discretion. 8. Representations and Warranties by Seller. Seller represents and warrants to Buyer as follows: a) Authority. Seller has the requisite power and authority to enter into and perform this Agreement and those Seller's Closing Documents signed by it; such documents have been duly authorized by all necessary action on the part of Seller and have been duly executed and delivered; such execution, delivery and performance by Seller of such documents does not conflict with or result in a violation of any judgment, order, or decree of any court or arbiter or any other agreements of any nature to which Seller is a party; such documents are valid and binding obligations of Seller, and are enforceable in accordance with their terms. b) Title to Real Property. Seller owns the Real Property, free and clear of all encumbrances, except the Permitted Encumbrances. c) Title to Personal Property. Seller owns the Personal Property, free and clear of all encumbrances arising by,through, or under Seller. d) Leases. Seller has made or will make available to Buyer a correct and complete copy of each Lease and all its amendments. The information regarding the Leases contained in the Rent Roll, including but not limited to, the number and types of rental units, is correct and complete in all material respects as of the Effective Date. The Leases are in full force and neither Seller nor any tenant is in monetary or material nonmonetary default under the Leases, except as disclosed on the Rent Roll. With the exception of the Cellular Antenna Lease, defined in Section 17 of this Agreement, there are no other leases or possessory rights of others regarding the Real Property. Seller will not amend, modify, or terminate the Leases without the prior written consent of Buyer, except in the ordinary course of business. All security deposits are fully funded as to the principal amount and any interest due on such deposits in accordance with applicable law. e) Contracts. Seller has made or will make available to Buyer a correct and complete copy of each service and maintenance contract, equipment lease, and other contract relating to the Property and its amendments. These contracts are in full force and 10 fb.us.8843595.08 neither Seller, nor to Seller's knowledge, any other party to those contracts, is in monetary or material nonmonetary default under the contracts. Seller will not amend, modify, or terminate those contracts without the prior written consent of Buyer. f) Permits. Seller has made or will make available to Buyer a correct and complete copy of each Permit and its amendments. The Permits are in full force, and Seller is not in default under the Permits. To the best of Seller's knowledge, no other permits are required from any governmental entity in order to operate the Property as it is now operated. g) Utilities. Seller has received no oral or written notice of actual or threatened reduction or curtailment of any utility service now supplied to the Real Property, which is serviced to the boundary line by public water and sewer and all necessary utilities in order to support Buyer's Intended Use. The utility services and HVAC systems serving the Real Property are contained entirely on the Real Property or by means of property owned or controlled by the utility provider. h) Roads. The Real Property has free, full, legal, valid, and perpetual access to and from all adjoining streets, roads, and highways, including specifically at the existing curb cuts or access points, and Seller has received no notice of, and has no knowledge of, any pending or threatened action which would impair such access. i) Certificates of Occupancy. Seller has been issued all certificates of occupancy required under applicable law with respect to the Improvements, and such certificates remain in full force and effect and are displayed at the Real Property in compliance with applicable law. Seller has received no oral or written notice of actual or threatened cancellation or suspension of any certificates of occupancy for any portion of the Real Property. j) Public Improvements. Seller has received no oral or written notice of plans to make public improvements which would be assessed against the Property. k) Environmental Laws. To the best of Seller's knowledge, Seller has operated the Real Property in compliance with all applicable federal, state, and local environmental laws, ordinances, rules and regulations, relating to the handling, storage and disposal of hazardous and toxic wastes and substances, petroleum products and other regulated substances. To the best of Seller's knowledge, no other party has engaged in any such use, storage, discharge, or release on the Real Property during the time that Seller has owned the Real Property. 1) Rights of Others to Purchase Property. Seller has not entered into any other contracts for the sale of the Property, nor are there any rights of first refusal or options to purchase the Property or any other rights of others that might prevent the consummation of this Agreement. 11 fb.us.8843595.08 m) Seller's Defaults. Seller is not in monetary or material nonmonetary default concerning any of its obligations or liabilities regarding the Property. n) Operating Statements. The Operating Statements are correct and complete in all material respects and have been prepared in accordance with generally accepted accounting standards. o) FIRPTA. Seller is not a "foreign person," "foreign partnership," "foreign trust," or "foreign state"as those terms are defined in § 1445 of the Internal Revenue Code. p) Proceedings. To the best of Seller's knowledge, there is no action, litigation, investigation, condemnation, or proceeding of any kind pending or threatened against Seller or any portion of the Property. To the best of Seller's knowledge, there are no applications, ordinances, petitions, resolutions, or other matters pending before any governmental agency which would adversely affect use of the Property as residential housing. To the best of Seller's knowledge, there are no environmental proceedings, applications, ordinances, petitions, court pleadings, resolutions, investigations by public or private agencies, or other matters pending which could prohibit, impede, delay, or adversely affect Buyer's Intended Use of the Property. To Seller's knowledge, there are no applications, ordinances, petitions, resolutions, or other matters pending before any governmental agency in regard to access routes, curb cuts, median strips, or other contemplated actions of public agencies which might tend to diminish or curtail the flow of traffic by the Property and access thereto. q) Agents and Employees. No management agents or other personnel employed in connection with the operation of the Property have the right to continue such employment after the Closing Date. Buyer shall not have any obligations with respect to such agents or employees. There are no claims for brokerage commission or other payments with respect to the existing Property, including lease commissions, that will survive and remain unpaid after the Closing Date. r) Separate Tax Parcel. The Land constitutes a separate parcel of record for real estate tax assessment and conveyancing purposes, and complies with applicable law governing the platting and subdivision of real property. s) Condition of Improvements and Personal Property. All parking and other Improvements required for or currently used in the operation of the Property are located on the Land. Buyer acknowledges that it has inspected or will have the opportunity to inspect the Improvements and the Personal Property and, subject to the terms and contingencies set forth in this Agreement, including but not limited to Sections 3, 4, 11 and 12, agrees to accept them "AS IS" with no right of set off or reduction in the Purchase Price. Such sale shall be without representation of warranties, express or implied, either oral or written, made by Seller or any official, employee or agent of Seller with respect to the physical condition of the 12 th us.8843595.08 Improvements and the Personal Property, except as set forth in this Agreement or required by this Agreement. t) Private Restrictions. There are no private restrictions affecting the uses that may be made of the Property that will not appear in the Title Commitment, including, but not limited to: size or cost of buildings or structures, limitations on use or restrictions in regard to fences, roofs, garages, and heights of buildings or structures; agreements to submit architectural plans to an association or other group;provisions requiring improvements; or provisions requiring the joining with others in group actions. u) Taxes. Seller shall not withdraw, settle, or otherwise compromise any tax protest or tax reduction proceeding affecting real estate taxes or special assessments against the Property for any fiscal period in which the Closing is to occur or any subsequent fiscal period without the prior written consent of Buyer. Real estate tax refunds and credits received after the date of Closing which are attributable to the fiscal tax year during which the Closing occurs shall be apportioned between Seller and Buyer on a daily basis as of the Closing Date, after deducting the expenses of collection thereof. v) Wells, Storage Tanks. There are no wells or storage tanks located on the Property. w) Legal Action. Seller shall deliver to Buyer a written notice of the commencement of any legal action by any governmental authority or third party affecting the Property and will make no concessions or settlements with respect to any such action which would have a future continuing impact on the Property without Buyer's prior written consent. x) Violations. Seller shall cure all violations of law or municipal ordinances, orders or requirements affecting the Property, notices of which may be issued prior to the Closing Date by any state or municipal agency or department having jurisdiction over all or any part of the Property. y) Disclosure of Individual On-Site Sewage Treatment System. [Check one of the following:] DI 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. z) Methamphetamine. To the best of Seller's knowledge, methamphetamine production has not occurred on the Property. Seller will indemnify Buyer, its successors and assigns against, and will hold Buyer, its successors and assigns harmless from, any expenses or damages, including reasonable attorneys' fees, that Buyer incurs because of the breach of any of the above representations 13 fb.us.8843595.08 and warranties, whether such breach is discovered before or after Closing. Each of the representations and warranties herein contained shall survive until 12 months after the Closing Date. Buyer must commence any action based on any breach of the representations or warranties on or before the first day of the eleventh month after the Closing Date. 9. Representations and Warranties by Buyer. Buyer represents and warrants to Seller that Buyer has the requisite power and authority to enter into this Agreement and Buyer's Closing Documents signed by it; that such documents have been duly authorized by all necessary action on the part of Buyer and have been duly executed and delivered; that the execution, delivery, and performance by Buyer of such documents do not conflict with or result in violation of any judgment, order, or decree of any court or arbiter to which Buyer is a party; and that such documents are valid and binding obligations of Buyer, and are enforceable in accordance with their terms. Buyer will indemnify Seller, its successors and assigns against, and will hold Seller, its successors and assigns haunless from, any expenses or damages, including reasonable attorneys' fees, that Seller incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Each of the representations and warranties herein contained shall survive until 12 months after the Closing Date and Seller must commence any action based on any breach of the representations or warranties on or before the first day of the eleventh month after the Closing Date. 10. Name of Building. Seller agrees that it will relinquish and transfer to Buyer on the Closing Date, all rights to designate the name of the buildings located on the Real Property and agrees that Buyer shall have the right to continue the use of the present name. 11. Damage. If, prior to the Closing Date, all or any part of the Property is "substantially damaged" by fire, casualty, the elements, or any other cause, Seller shall immediately give notice to Buyer of such fact and at Buyer's option (to be exercised within 30 days after Seller's notice), this Agreement shall terminate, in which event neither party will have any further obligations under this Agreement and the Earnest Money, together with any accrued interest, shall be refunded to Buyer. If Buyer fails to elect to terminate despite such damage, or if the Property is damaged but not "substantially damaged," Seller shall promptly commence to repair such damage or destruction and return the Property to its condition prior to such damage. If such damage is completely repaired prior to the Closing Date, then there shall be no reduction in the Purchase Price and Seller shall retain the proceeds of all insurance related to such damage. If such damage is not completely repaired prior to the Closing Date but Seller is diligently proceeding to repair, then Seller shall complete the repair after the Closing Date and shall be entitled to receive the proceeds of all insurance related to such damage after repair is completed; provided, however, Buyer shall have the right to delay the Closing Date until repair is completed. If Seller shall fail to diligently proceed to repair such damage, then Buyer shall have the right to require a closing to occur and the Purchase Price (and specifically the cash portion payable at the Closing Date) shall be reduced by the cost of such repair, or at Buyer's option, the Seller shall assign to Buyer all right to receive the proceeds of all insurance related to such damage plus the amount of any deductible which shall be paid by Seller and the Purchase Price shall remain the same. 14 fb.us.8843595.08 For purposes of this Section, the words "substantially damaged" mean damage that would cost $500,000.00 or more to repair. 12. Condemnation. If, prior to the Closing Date, eminent domain proceedings are commenced against all or any "substantial portion" of the Property, Seller shall immediately give notice to Buyer of such fact and at Buyer's option (to be exercised within 30 days after Seller's notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement and the Earnest Money, together with any accrued interest, shall be refunded to Buyer. If Buyer does not give such notice within 30 days, then there shall be no reduction in the Purchase Price, and Seller shall assign to Buyer at the Closing Date all of Seller's right, title, and interest in and to any award made or to be made in the condemnation proceedings. Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with respect to the condemnation proceedings without Buyer's prior written consent, which consent shall not be delayed or withheld unreasonably. If less than a "substantial portion" of the Property is condemned, the Closing shall proceed and the Seller shall assign to Buyer at the Closing Date all of Seller's right, title, and interest in and to any award made or to be made in the condemnation proceeding. For purposes of this Section, the term "substantial portion" means condemnation proceedings involving 10 percent of either the value or square footage of the Property. 13. Broker's Commission. Seller and Buyer represent and warrant to each other that they have dealt with no brokers, finders, or the like in connection with this Agreement. Seller and Buyer agree to indemnify each other and to hold each other harmless against all claims, damages, costs, or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorneys' fees. 14. Assignment. Buyer may at its sole discretion assign its rights under this Agreement to a limited partnership that has Buyer or an affiliate of Buyer as a general partner or to another entity managed by Buyer. 15. Survival. Except as otherwise set forth herein, all of the terms of this Agreement will survive and be enforceable after the Closing and delivery of the deed to be delivered by Seller to Buyer, provided that any action by either party for breach of this Agreement or for any other claim related to this Agreement must be commenced on or before 12 months after the Closing. 16. Notices. Any notice required or permitted to be given by any party to the other shall be given in writing, and shall be (i) delivered to the receiving party (or any officer of such party), or (ii) mailed in a sealed wrapper by United States registered or certified mail, return receipt requested, postage prepaid, or (iii) properly deposited with a nationally recognized, reputable overnight courier,properly addressed as follows: If to Seller: City of Columbia Heights Housing and Redevelopment Authority 15 fb.us.8843595.08 Attn: Scott Clark 590 40th Avenue Northeast Columba Heights, MN 55421 Phone: (763) 706-3600 Fax: (763) 706-3601 If to Buyer: Aeon Attn: James Lehnhoff 901 North 3`a Street; Suite 150 Minneapolis, MN 55401 Phone: (612) 746-0522 Fax: (612) 341-4208 Notices shall be deemed effective on the earlier of the date of receipt or in the case of such deposit in the mail or overnight courier, on the third business day following such deposit. Any party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, at least 10 days prior to the effective date of such change. 17. Cellular Antenna Lease. The Columbia Heights Economic Development Authority (the "EDA") has entered into a Site Lease Agreement with APT Minneapolis, Incorporated ("APT") dated December 4, 1996 (hereafter, the "Cellular Antenna Lease"). The Cellular Antenna Lease allows APT to place cell phone antennas and appurtenances on the roof of the Parkview Villa North building. At Closing, Seller or the EDA, as appropriate, and Buyer will enter into an Easement Agreement in a form mutually agreeable to the parties (the "Easement Agreement"), which grants, as appropriate, Seller or the EDA an easement over the premises leased to APT under the Cellular Antenna Lease, and pursuant to which Seller or the EDA will be permitted to continue to lease the roof space to APT for the placement of cell phone antennas and appurtenances in accordance with the Cellular Antenna Lease. The Cellular Antenna Lease is scheduled to expire on December 31, 2016, but may be extended by Seller or the EDA for a period of up to 7 additional years, provided any such extension agreement, amendment, assignment or other agreement affecting the Cellular Antenna Lease shall be subject to Buyer's approval, which shall not be unreasonable withheld. 18. Restrictions. The following restrictions shall apply to the Property and shall survive the Closing: a. Until satisfaction in full of the Seller Loan, all occupants of the Parkview Villa South building must be 55 years of age or older. b. For a period of one year after the Closing, the amount of rent charged to existing tenants of the Parkview Villa South building must remain at the same amount as it is as of the Closing Date. After the date that is one year after the Closing and until satisfaction in full of the Seller Loan, Buyer may increase rent to the extent necessary to ensure stable building operations, as determined by Buyer in its sole discretion. After the satisfaction in full of the Seller Loan, Buyer shall be subject to no limitation on its ability to increase rent hereunder. 16 fb.us.8843595 08 c. Until satisfaction in full of the Seller Loan, no unit may be rented to a person who is not a current resident of the City of Columbia Heights unless at the time of rental, there are no current City of Columbia Heights residents who are interested and eligible. The foregoing restriction shall not apply to the extent it does not conform to fair housing laws, regulations and other such restrictions, and shall not apply to the extent such restriction negatively interferes with Buyer's funding approvals, as determined by Buyer in its sole discretion. 19. Captions. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement and are not to be considered in interpreting this Agreement. 20. Entire Agreement. This written Agreement constitutes the complete agreement between the parties and supersedes any and all other oral or written agreements, negotiations, understandings, and representations between the parties regarding the Property. There are no verbal or written side agreements that change this Agreement. 21. Amendment; Waiver. No amendment of this Agreement, and no waiver of any provision of this Agreement, shall be effective unless set forth in a writing expressing the intent to so amend or waive, and the exact nature of such amendment or waiver, and signed by all parties (in the case of amendment) or the waiving party (in the case of waiver). No waiver of a right in any one instance shall operate as a waiver of any other right, nor as a waiver of such right in a later or separate instance. 22. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. 23. Controlling Law. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation and effect. 24. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer in the manner provided by law (except that the notice period shall in no event be less than 30 days). If Buyer fails to cure such default within 30 days of the date of such notice (or such longer period as is reasonable given the nature of the default, so long as Buyer is proceeding to cure the default diligently and in good faith), this Agreement will terminate and upon such termination, Seller will retain the Earnest Money as liquidated damages. The termination of this Agreement and retention of Earnest Money will be the sole remedy available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance. If Seller defaults under this Agreement, Buyer's sole options are to either bring an action for specific performance or to terminate this Agreement. 25. Counterparts. For the convenience of the parties, any number of counterparts hereof may be executed and each such executed counterpart shall be deemed an original, but all such counterparts together shall constitute one in the same Agreement. 17 fb.us.8843595.08 26. Exhibits. All Exhibits referred to in this Agreement are attached to and shall be considered a part of this Agreement. [Signature Page Follows] 18 Th us.8843595.08 SIGNATURE PAGE TO PURCHASE AGREEMENT Seller and Buyer have executed this Agreement as of the date first written above. SELLER Date of Signature: CITY OF COLUMBIA HEIGHTS HOUSING AND REDEVELOPMENT AUTHORITY 1-4 ,2012 By: deareir Name: ;$19V ArAMErliir Its: // Iq- Iec ev" By: /1,2,ti „„mi,iti i2 bdi Name: -,Firyvide,n Its: rho! BUYER Date of Signature: AEON 'efit. , 2012 : - --- Alan Art President and CEO 19 thus.8843595 08 EXHIBIT A Legal Description Tract A: That part of the South 1/2 of Lot 13,lying Northwesterly of the f• owing line: Beginning at the Northeast corner of the South 1/2 of Lot 13;thence Southwesterly to a point on the South pine of said Lot 13,said point being 2 feet Easterly of the Southwest corner of Lot 13;the South 241 feet of Lot 14; the South 1/2 of Lot 15;Lot 39 except the West 30 feet thereof;Lists 40,41,42 and 43 and the West 1/2 of Lot 44,ail in Block 5 Reservoir tfs,Columbia Heights,Anoka County,Minnesota (Abstract) Tract it The East 40 feet of the South 2/2 of Lot 16,Block 5,Reservoir If ,Columbia Neights,Anoka County, Minnesota. (Torrens) A-1 fb us.8843595.08 EXHIBIT B Personal Property All stoves, refrigerators, air conditioners, ovens, light fixtures, window treatments and all other items or fixtures owned by Seller and used in or about or in connection with the Real Property, including all tangible and intangible intellectual property rights associated with the Real Property such as websites, the name of the building located on the Real Property, and trademarks associated with the Real Property, with the exception of the photocopy machine located in the office of the Parkview Villa North building. B-1 fb.us.8843595.08 EXHIBIT C Permitted Encumbrances 1. Property taxes and special assessments to the extent required under the terms of the Purchase Agreement to be paid by Buyer. 2. Building codes and laws and ordinances relating to zoning, land use and environmental matters. 3. Any Leases to residential tenants of the Real Property which Buyer is required to assume or take subject to under the Purchase Agreement. 4. The lien of real estate taxes not yet due and payable. 5. Any exceptions to title listed in the Title Commitment issued to Buyer and accepted in writing by Buyer. 6. Site Lease Agreement (Cellular Antenna Lease) between the Columbia Heights Economic Development Authority and APT Minneapolis, Incorporated dated December 4, 1996. C-1 fb.us.8843595.08 EXHIBIT D Rent Roll D-1 fb.us.8843595.08