AGREEMENT REGARDING
LAND TRUST LEASE
THIS AGREEMENT made this ____ day of ________________, 200___ by and
between TWIN CITIES HABITAT FOR HUMANITY, INC., a Minnesota non-profit
corporation (“Habitat”) and CITY OF LAKES COMMUNITY LAND TRUST
(“CLCLT”).
RECITALS
A.
CLCLT owns the land legally described on Exhibit A (the “Land”).
B.
CLCLT has leased the Land to ______________________ (“Land Tenant”)
pursuant to a Ground Lease dated _____________________ (the “Ground Lease”).
C.
Land Tenant owns the improvements located on the Land (the
“Improvements”).
D.
Land Tenant has obtained a first mortgage loan in the amount of
$____________ (the “First Mortgage Loan”) from Habitat and Land Tenant has granted
Habitat a purchase option in connection with the First Mortgage Loan.
E.
Land Tenant has obtained a second mortgage loan in the amount of
$__________ from Habitat (the “Second Mortgage Loan”) [and Land Tenant has granted
Habitat a purchase option in connection with the Second Mortgage Loan]. [The purchase
options granted in connection with the First Mortgage Loan and the Second Mortgage Loan
are referred to as the “Option”.]
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F.
CLCLT has agreed to suspend its rights under the Ground Lease as long as the
First Mortgage Loan and Second Mortgage Loan are outstanding and Habitat has the rights
to exercise the Option.
NOW, THEREFORE, Habitat and CLCLT agree as follows:
1.
Suspension of Lease. CLCLT agrees that it will not enforce the terms of the
Ground Lease so long as the First Mortgage Loan or Second Mortgage Loan in favor of
Habitat is outstanding. CLCLT agrees that it will enter into the Addendum to Land Trust
Ground Lease in the form attached hereto as Exhibit B and will not amend the Addendum
without the prior written consent of Habitat.
2.
Enforcement of Ground Lease. The Ground Lease shall become enforceable
by the CLCLT if (a) the First Mortgage Loan is paid off or foreclosed and the Second
Morgage is paid off or foreclosed or (b) Habitat fails to exercise its Option under Section 12
of the First Mortgage, then the Ground Lease shall be fully enforceable.
3.
Amendment of Ground Lease. If Habitat acquires the Improvements by
foreclosure or exercise of its Option, then Habitat and CLCLT agree to amend the Ground
Lease to reflect the sales price at which Habitat sells the Improvement to a new Land Tenant.
Habitat agrees to sell the Improvements to an Income-Qualified Person, as defined in the
Ground Lease. Habitat shall require its purchaser to assume the Tenant’s obligations under
the Ground Lease.
4.
Payment of Land Indebtedness. The CLCLT at anytime can exercise its right
to purchase the entire (“Land Price”) of the five units for $100,000 or individual lots (“Unit
Land Price”) for $20,000 each plus 1% annual simple interest. In the event of an early
payoff, Habitat will continue to select income-qualified buyers until time their purchase
option is not exercised.
If Habitat fails to exercise its Option under the First Mortgage and its rights under the First
Mortgage terminate, CLCLT agrees to pay Habitat $100,000 total (“Land Price”) or $20,000
per unit (“Unit Land Price”) plus 1% annual simple interest for the Land which shall be paid
in three equal installments commencing sixty (60) days after the Habitat Option expires and
on each anniversary thereafter until paid in full. Habitat shall send written notice to CLCLT
when its Option expires. If Habitat reacquires its Option for the Improvements, it shall
immediately refund all money paid by CLCLT. In addition, if the First Mortgage and
Second Mortgage are repaid in full upon maturity, CLCLT shall pay the Land Price or Unit
Land Price (depending on number of units) plus 1% annual simple interest to Habitat in three
(3) equal installments commencing sixty (60) days after the loans maturity date and on each
annual anniversary thereafter until paid in full.
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5.
Assignment. Neither of the parties hereto shall assign, transfer or otherwise
convey this Agreement or its/his rights, obligations or duties hereunder, whether in whole or in
part, to any other person or entity, without the prior written consent of each other party hereto.
6.
Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of Minnesota.
7.
Waiver, Modification or Amendment. This Agreement may not be waived,
modified or amended unless pursuant to a signed writing executed by each of the parties hereto.
Failure of either party hereto to enforce any provision of this Agreement shall not be construed
to be a waiver of such provision or its right thereafter to enforce such provision or any other
provision contained herein.
8.
Severability. If any one or more of the provisions of this Agreement shall for
any reason be held invalid, illegal or unenforceable, the remaining provisions of this Agreement
shall remain unimpaired and shall continue in full force and effect.
9.
Headings. Headings used in this Agreement are for purposes of convenience of
reference only and shall in no way limit or affect the meaning or interpretation of any of the
terms hereof.
10.
Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter as of the date hereof and supersedes all prior
understandings, representations, proposals, discussions, and negotiations whatsoever, whether
oral or written, between the parties hereto.
11.
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall constitute one
and the same instrument.
M1:1146428.01
TWIN CITIES HABITAT FOR HUMANITY,
INC.
By:
Its:
CITY OF LAKES COMMUNITY LAND
TRUST
By:
Its:
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
) SS.
)
The foregoing instrument was acknowledged before me this ____ day of ____________,
200__, by ________________________________, the ________________ of City of Lakes
Community Land Trust, a Minnesota non-profit corporation on behalf of the corporation.
________________________________
Notary Public
STATE OF MINNESOTA
COUNTY OF HENNEPIN
)
) SS.
)
The foregoing instrument was acknowledged before me this ____ day of ____________,
200__, by ________________________________, the ________________ of Twin Cities
Habitat for Humanity, Inc., a Minnesota non-profit corporation on behalf of the corporation.
________________________________
Notary Public
EXHIBITS A (LEGAL DESCRIPTION) and B (CLCLT GROUND LEASE ADDENDUM) follow
M1:1146428.01