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Home My WebLink About4.2b LOI Cottage Grove 97th and Hemmingway Bryan Van Hoof Senior Vice President CBRE, Inc. Brokerage Services Industrial Specialty COMMERCIAL REAL ESTATE SERVICES 800 LaSalle Ave Suite 1900 Minneapolis, MN 55402 952 924 4624 Tel 952 831 8023 Fax Bryan.vanhoof@cbre.com www.cbre.com October 12, 2021 Jennifer Levitt City Administrator City of Cottage Grove Direct: 651-458-2890 | jlevitt@cottagegrovemn.gov General: 651-458-2800 | www.cottagegrovemn.gov 12800 Ravine Parkway South, Cottage Grove, MN 55016 RE: Letter of Terms to Purchase +/- 22.40 Acres of the property located in Cottage Grove, MN. Dear Jennifer: The purpose of this letter is to describe general terms and conditions under which Interstate Development, LLC, or its nominee (the “Buyer”), would have an interest in purchasing certain property and any improvements thereon consisting of approximately 22.40 acres of the site known as Cottage Grove Industrial Park PIN 2002721420009 (the “Property”) located in Cottage Grove, MN, from Wag Farms Inc. (the “Seller”). This letter is intended to provide a general description of a proposed transaction to facilitate further negotiations and the preparation of a definitive agreement for the purchase and sale of the Property (herein referred to as the “Purchase Agreement”). This letter is not intended to fully describe (i) all of the terms and conditions upon which Buyer is willing to purchase the Property, or (ii) all of the terms and conditions upon which Seller is willing to sell the Property. In this regard, and as the sellers agent, please have the Seller acknowledge by signing this letter in the space provided below their agreement to negotiate in good faith with Buyer with respect to the purchase and sale of the Property on the following terms: 1. Purchase Price: Three Million One Hundred Seventy-One Thousand One Hundred and Sixty- Eight Dollars ($3,171,168.00) or $3.25 per net useable acres determined by a final ALTA-ASCM survey of the Property. “Usable” shall mean total square footage of the Property, net of public rights-of-way, any easements that cannot be developed (over, through or under) and any designated wetland areas or their buffers. Page 2 of 5 2. Earnest Money: $50,000.00 to be deposited in escrow with First American Title Insurance Company within three (3) business days after execution of a mutually acceptable Purchase Agreement. Such deposit shall remain fully refundable throughout the Inspection Period and any such Extensions (as those terms are defined below). 3. Purchase Agreement: Buyer shall cause a draft of the Purchase Agreement to be prepared and delivered to Seller within ten (10) business days after the execution of this letter. Buyer and Seller shall work in good faith to negotiate and execute the final Purchase Agreement based upon the terms of this letter within twenty (20) days after the execution of this letter. 4. Inspection Period: Buyer will have a one hundred eighty (180) day inspection period following the execution by both Buyer and Seller of the Purchase Agreement (the “Inspection Period”) to satisfy the Conditions (as listed below). If the Buyer determines, prior to the expiration of the Inspection Period, that the Conditions have not been satisfied, in its sole discretion, then the Buyer will have the right to terminate the Purchase Agreement without liability and receive a full refund of the Earnest Money. 5. Conditions to Closing: Buyer’s obligations to proceed to closing under the Purchase Agreement shall be subject to satisfaction, in Buyer’s sole discretion and at Buyer’s sole cost, of certain conditions (the “Conditions”), including the following, which Conditions will be described in greater detail in the Purchase Agreement: (i) Title; (ii) ALTA Survey; (iii) Geotechnical and/or hydrological inspections; (iv) Environmental inspections, including wetlands, habitats of native species, and archaeological inspections; (v) Economic feasibility; (vi) Availability of utilities to Buyer’s specifications; and (vii) Adequate access and curb cuts. 6. Property Information: Seller will provide Buyer with copies of all information in its possession or under its control concerning the Property, including, without limitation, copies of any existing title policies, surveys, recorded or unrecorded declarations of covenants, etc., environmental studies and/or reports, real estate tax bills, geotechnical reports, plans, specifications and/or “as-built” drawings for any improvements on the Property, copies of any permits or approvals pertaining to the Property, copies of any warranties pertaining to any improvements and any legal notices received by Seller from any governmental authority or private authority under covenants. Seller will execute an environmental site assessment form. 7. Representations and Warranties: Page 3 of 5 Seller will agree to make standard representations and warranties concerning: (i) Rights to possession; (ii) Pending or, to Seller’s knowledge, threatened condemnation; (iii) Pending or, to Seller’s knowledge, threatened assessments; (iv) Seller’s knowledge as to compliance with any applicable legal requirements; (v) Access and availability of utilities; (vi) Authority to sell the Property free and clear of all third-party rights; and (vi) Seller’s knowledge as to environmental compliance. 8. Closing: The Closing will occur no later March 1, 2022 or thirty (30) days after satisfaction or written waiver of all of the Conditions, whichever is earlier. Closing costs and prorations will be allocated in accordance with local custom. Buyer will work with Seller to move the closing date as needed for tax planning purposes. 9. Brokers: The Buyer is represented by Bryan Van Hoof with CBRE International. Should Closing occur, Seller will NOT be responsible for the commission to the Broker. 10. Exchange: Buyer and Seller may each want to structure this proposed transaction as a like- kind exchange under Section 1031 of the Internal Revenue Code and the parties agree to cooperate with one another to conform the terms of any Purchase Agreement to permit each party to achieve this objective. 11. Confidentiality: The terms of this letter and Buyer’s interest in purchasing the Property shall be kept and maintained confidential and shall not be disclosed by Seller to any third party without Buyer’s prior written consent. This provision shall not prohibit disclosures on a “need to know” basis to employees, agents, attorneys, brokers, surveyors, title companies, engineers, contractors, lenders, etc., as necessary to obtain governmental permits and approvals, or as compelled by legal process or required by law. This letter will not be construed as an obligation by Seller to transfer the Property or by Buyer to purchase the Property. The parties acknowledge and agree that the terms described herein will be incorporated into a definitive Purchase Agreement and that until such a definitive Purchase Agreement is executed and delivered by both Buyer and Seller, neither party shall have any rights or obligations with respect to the purchase and sale of the Property except as provided herein. Buyer and Seller each agree to pursue the execution of a definitive Purchase Agreement in good faith, based upon the terms and conditions outlined in this letter. Either party may terminate negotiations on this transaction without liability or obligation to the other party hereunder until such time as a definitive Purchase Agreement is executed as contemplated herein. Notwithstanding the foregoing, Seller covenants and agrees that, during the period following the date of execution of this letter, that it will not market, offer for sale or attempt to sell the Property to any other prospective buyer, so long as the Buyer is negotiating the terms of Page 4 of 5 the definitive Purchase Agreement in good faith and is otherwise in compliance with the terms of this letter. Sincerely, Bryan Van Hoof CBRE AGREED TO AND ACCEPTED this ___________ day of October, 2021. Page 5 of 5 Buyer: By: _________________________ Printed: Lonnie Provencher Phone: 612-327-1697 E-mail: lp@interstatedevelopment.com Seller: By: ________________________ Printed: _______________________ Phone: _________________________ E-mail: _________________________