HomeMy WebLinkAbout08.02.10 EDA Packet
AGENDA
ECONOMIC DEVELOPMENT AUTHORITY
SPECIAL MEETING
August 2, 2010 - 6:30 pm
City Council Chambers, City Hall
Authorify Members
1. Call Meeting to Order
Chair, Christy Jo Fogarty
2. Pledge of Allegiance
Vice-Chair, Steve Wilson
3. Approve Agenda
Terry Donnelly
4. Citizens Comments/Presentations
Mayor Todd Larson
Julie May 5. Consent Agenda
Cify Staff Reoresentatives
6. Public Hearings (None)
a. Approve Lease Agreement and Purchase Agreement 305 3rd Street
7. Continued Business
Executive Director,
Peter Herlofsky
City Administrator
8. New Business
9. City Staff Reports/Open Forum/Discussion
Lee Smick
City Planner
10. Adjourn
Cynthia Muller
Executive Assistant
430 Third Street
Farmington, MN 55024
Phone: 651.280.6800
http://www.ciJarminoton.mn.us
The Farmington EDA's mission is to improve the economic vitality of the city of Farmington and to enhance the overall quality of life
by creating partnerships, fostering employment opportunities, promoting workforce housing and by expanding the tax base through
development and redevelopment.
J:'.HRA.EDA\BOARD AGEJ\OA:';'20 I Ii rJu:.lrcl Ai;'cndas\08U21 (I,OgU21 0 ..>,gcnda.doc
City of Farmington
430 Third Street
Farmington, Minnesota
651.280.6800 . Fax 651.280.6899
www.ci.farrnington.mn.us
TO:
EDA Members
FROM:
Lee Smick, City Planner
AICP, CNU
SUBJECT:
Purchase Agreement and Lease of 305 Third Street
DATE:
August 2, 2010
INTRODUCTION
The EDA authorized staff to sell the building at 305 Third Street at its meeting on March 22, 2010. A
purchase agreement has been prepared to sell the property to Elevation Nine Eighteen, Inc. for
$123,000.
DISCUSSION
Per the Purchase Agreement, Elevation Nine Eighteen, Inc. will purchase the property located at 305
Third Street (Old Liquor Store) for $123,000 payable by $5,000 earnest money, and the balance of the
purchase price shall be paid to the City by Elevation Nine Eighteen, Inc. by wire transfer or cashier's
check, on or before August 30, 2010. During the period between August 2, 2010 and August 30, 2010
(or the actual date of closing), Elevation Nine Eighteen, Inc. will lease the property at a rate of
$ 1,146.75 per month. The lease will allow Elevation Nine Eighteen, Inc. to occupy the building sooner
than the closing date for purchase of the building.
ACTION REQUESTED
Approve the Purchase Agreement and Lease Agreement to Elevation Nine Eighteen, Inc. for the
building at 305 Third Street.
Respe~~ull~:ubma
#it: ~j
Lee Smick, City Planner
AICP, CNU
LEASE AGREEMENT
TIDS LEASE AGREEMENT ("Lease") is entered into and made as of this _day of
2010 by and between the FARMINGTON ECONOMIC DEVELOPMENT
AUTHORITY, a Minnesota public body corporate and politic, ("Landlord"), and ELEVATION
NINE EIGHTEEN, INC., a Minnesota corporation ("Tenant").
The parties mutually agree as follows:
1. LEASED PREMISES
Subject to the terms and conditions of this Lease, Landlord leases to Tenant and Tenant rents
from Landlord, a portion of the premises formerly known as the Farmington Liquor Store, comprising
approximately 1,529 square fcet of net rentable space (the "Rentable Area") iR theincludinl! the land
and building ("Building") located at 305 Third Street, Farmington, Minnesota, 55024, hereinafter
referred to as the "Leased Premises." In addition to the Rentable Area, Tenants ....ill ha~le the use of
the Building's lower le~/el, v.bich square footage is not included in the Base Rent calculatioR, as
hereinaft-er described, but v.mcb. for all other terms of this Lease is included in the Leased Premises.
Descriptions of the Rentable Area andLel!al descrintion of the Leased Premises are attached hereto as
ExhibitsExhibit "A" and "B", respeethc1y.
2. TERM
The term of this Lease (the "Term") shall be a month to month lease, commencing upon
execution of this Agreement (the "Commencement Date") and shall thereafter continue from month to
month until either party terminates this Lease by giving the other party thirty days' advance written
notice or Tenant acquires fee title interest in the Premises.
3. RENT
(a) For purposes of this Lease, the following definitions shall apply:
(i) "Taxes" shall mean all real estate taxes, installments of special assessments,
sewer charges, taxes based upon receipt of rent and any other federal, state or local
governmental charge, general, special, ordinary or extraordinary (excluding income, franchise,
or other taxes based upon Landlord's income or profit, unless imposed in lieu of real estate
taxes) which shall now or hereafter be levied, assessed or imposed against the Leased Premises
and/or the Tenant and shall apply to said obligations at such time in which said obligation are
accrued or levied.
(ii) "Operating Expenses" shall mean all of Tenant's direct costs and expenses of
operation and maintenance of the Leased Premises and the surrounding walks, driveways,
parking lots and landscaped areas (within the area described in Exhibit "B") as determined by
Landlord in accordance with generally accepted accounting principles or other recognized
accounting practices, consistently applied, including by way of illustration and not limitation:
insurance premiums; personal property taxes on personal property used on the Leased
Premises; water, electrical and other utility charges including (but not limited to) the separately
billed electrical and other charges described in Paragraph 8 hereof; the charges of any
independent contractor who, under a contract with Tenant, or its representatives, does any of
the work of operating, maintaining or repairing of the Leased Premises, service and other
charges incurred in the operation and maintenance of the heating, ventilation and air
conditioning system; cleaning services; tools and supplies; landscape maintenance costs;
building security services; license and permit fees; building management fees; and in general
all other costs and expenses which would, under generally accepted accounting principles, be
regarded as operating and maintenance costs and expenses.
(b) Base Rent. Tenant shall pay to Landlord rent at the monthly rate of Eleven Hundred
Forty-Six Dollars and 75/100 Dollars ($1,146.75) (based on an annual rate of $9.00 per rentable square
foot for 1.529 SQuare feet of net rentable snace per annum), hereinafter referred to as the "Base Rent."
The Base Rent is payable in equal monthly installments in advance, on or before the fIrst day of each
and every month throughout the Term; provided, however, that if the Commencement Date shall be a
day other than the first day of a calendar month or the termination of the Lease shall be a day other
than the last day of a calendar month, the Base Rent installment for such fIrst or last fractional month
shall be pro-rated accordingly.
(c) Tenant's obligation to pay the Base Rent is a separate and independent covenant and
obligation. Tenant shall pay all Base Rent and other sums of money as shall become due from and
payable by Tenant to Landlord under this Lease at the times and in the manner provided herein,
without abatement and without notice, demand, set-off or counterclaim.
Throughout the term of this Lease Tenant shall pay the following:
(c) Operating Expenses. Tenant shall pay all Operating Expenses when due.
(d) Service Charge. Tenant's failure to make any monetary payment required of Tenant
hereunder within fIve (5) days of the due date therefore shall result in the imposition of a service
charge for such late payment in the amount often percent (10%) of the amount due. In addition, any
sum not paid within thirty (30) days of the due date therefore shall bear interest at a rate equal to the
greater of eighteen percent (18%) or the prime rate plus two percent (2%) per annum (or such lesser
percentage as may be the maximum amount permitted by law) from the date due until paid.
4. SECURITY DEPOSIT
(a) Tenant has deposited with Landlord the sum of One Thousand and No/100 Dollars
($ 1000.00) as security ("Security Deposit") for the full and faithful performance of every provision of
this Lease to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease,
including, without limitation, the provisions relating to the payment of Base Rent, Operating Expenses,
repair of damage to the Leased Premises and/or cleaning or restoring the Leased Premises upon
termination of this Lease, Landlord may use, apply or retain all or any part of this security deposit for
the payment of any Base Rent, Operating Expenses, or other sum in default and any amounts which
Landlord may spend or become obligated to spend by reason of Tenant's default to the full extent
permitted by law. If any portion of said deposit is so used, applied or retained, Tenant shall, within ten
(10) days after written demand therefore, deposit cash with Landlord in an amount sufficient to restore
security deposit to an amount equal to the then applicable Base Rent, plus the monthly amount of
estimated Operating Expenses and other charges payable hereunder by Tenant multiplied by the
number of months worth of Base Rent represented by the initial security deposit and Tenant's failure to
do so shall be a material default and breach of this Lease. Landlord shall not be required to keep any
security deposit separate from its general funds, and Tenant shall not be entitled to interest on any such
deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by
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it, the security deposit or any balance thereof shall be returned to Tenant or to the last assignee of
Tenant's interest hereunder at the expiration of the Term.
(b) In the event of a sale or any other transfer of the Leased Premises, Landlord shall have
the right to transfer the Security Deposit to its purchaser and Landlord shall thereupon be released by
Tenant from all responsibility for the return of such deposit; and Tenant agrees to look solely to such
purchaser for the return of such deposit. In the event of an assignment of this Lease, the Security
Deposit shall be deemed to be held by Landlord as a deposit made by the assignee, and Landlord shall
have no further responsibility for the return of such deposit to the assignor.
5. LEASEHOLD IMPROVEMENTS
Tenant shall be solely and exclusively responsible for the cost of any leasehold improvements
that Tenant may choose to make. No improvements shall be made by Tenant or Tenant's agents or
contractors without Landlord's written consent. Tenant shall have no right of reimbursement from
Landlord for any improvements constructed by or caused to be constructed by Tenant. Tenant, or its
contractors or agents, shall complete construction of any and all improvements in a good and
workmanlike manner, utilizing new and fIrst grade material, in conformity with all applicable federal,
state, and local laws, ordinances, rules, regulations, building codes, fire regulations, and applicable
insurance requirements.
6. DELIVERY OF POSSESSION; ADJUSTMENT OF TERM
(a) Late Delivery of Possession. If Landlord determines that it will be unable to have the
Leased Premises ready for occupancy by the Commencement Date for delays caused by Landlord,
Landlord shall give Tenant written notice to that effect, and thereafter the Commencement Date shall
be postponed to the date upon which Landlord tenders possession of the Leased Premises. Tenant's
obligation to pay rent shall be postponed for a like number of days, and Landlord shall not be liable to
Tenant for any loss or damage resulting from Landlord's delay in delivering possession of the Leased
Premises to Tenant.
(b) Tenant's Acceptance of the Leased Premises. Upon delivery of possession of the
Leased Premises to Tenant as hereinbefore provided, Tenant shall (but only upon Landlord's request)
provide Landlord with an Estoppel Letter, in the form attached to this Lease, made a part hereof and
marked Exhibit "C", signed by an officer or principal of Tenant acknowledging (i) the original or
revised Commencement Date of this Lease, and (ii) that Tenant has accepted the Leased Premises for
occupancy and that the condition of the Leased Premises and that the Building was at the time
satisfactory and in conformity with the provisions of this Lease in all respects, except for any defects
as to which Tenant shall give written notice to Landlord within thirty (30) days after Landlord has
delivered possession of the Leased Premises. Landlord shall as promptly thereafter as is reasonably
possible correct all such defects. Tenant's Estoppel Letter, fully executed, shall be attached to and
made a part of this executed Lease.
7. USE OF THE LEASED PREMISES
(a) SpecifIc Use / "As is" Basis. The Leased Premises shall be occupied and used
exclusively for storage purposes, and shall not be used for any other purpose. Tenant hereby accepts
the Leased Premises on an "as is" ''where is" basis without any representations or warranties as to its
fItness for a particular purpose.
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(b) Existing Shelving. Tenant shall ha.ve use of the shelving currently in place within the
Leased Premises. Hmvever Tenant and-bandlord agree tha~theconveyo~u~t1.U1it c~~!1!!y_~xi~t!!!g
in the Leased Premises, arc not included in this Lease and may at any time be removed by Landlord~
Landlord reserves the right, at any time during regular business ho~t iDcCjlrrigKi:l!l}J
liability to Tenant therefore, to enter the Leased Premises and relTIovesl1~l1cQnye},Qrt!(J;c:19.
(c) Covenants Regarding Use. In connection with its use of the Leased Premises, Tenant
agrees to do the following:
(i) Tenant shall use the Leased Premises and conduct its business thereon in a safe,
careful, reputable and lawful manner; shall keep and maintain the Leased Premises in as good a
condition as they were when Tenant first took possession thereof and shall make all necessary
repairs to the Leased Premises other than those which Landlord is obligated to make as
provided elsewhere herein.
(ii) Tenant shall not commit, nor allow to be committed, in, on or about the Leased
Premises any act of waste, including any act which might deface, damage or destroy the Leased
Premises, Building, or any part thereof; use or permit to be used on the Leased Premises any
hazardous substance, equipment or other thing which might cause injury to person or property
or increase the danger of fIre or other casualty in, on or about the Leased Premises; permit any
objectionable or offensive noise or odors to be emitted from the Leased Premises; or do
anything, or permit anything to be done, which would, in Landlord's opinion, disturb or tend to
disturb the owners or tenants of any adjacent buildings.
(iii) Tenant shall not overload the floors, ceilings, or walls of the Leased Premises
beyond their designed weight-bearing capacity. Landlord reserves the right to direct the
positioning of all heavy equipment, furniture and fixtures which Tenant desires to place in the
Leased Premises so as to distribute properly the weight thereof, and to require the removal of
any equipment or furniture which exceeds the weight limit specifIed herein.
(iv) Tenant shall not use the Leased Premises, nor allow the Leased Premises to be
used, for any purpose or in any manner which would, in Landlord's opinion, invalidate any
policy of insurance now or hereafter carried on the Leased Premises or increase the rate of
premiums payable on any such insurance policy. Should Tenant fail to comply with this
covenant, Landlord may, at its option, require Tenant to stop engaging in such activity or to
reimburse Landlord for any increase in premiums charged during the term of this Lease on the
insurance carried by Landlord on the Leased Premises and attributable to the use being made of
the Leased Premises by Tenant.
(c) Compliance with Laws. Tenant shall not use or permit the use of any part of the Leased
Premises for any purpose prohibited by law. Tenant shall, at Tenant's sole expense, comply with all
laws, statutes, ordinances, rules, regulations and orders of any federal, state, municipal or other
government or agency thereof having jurisdiction over and relating to the use, condition and
occupancy of the Leased Premises, except that Tenant shall not be responsible for or required to make
structural repairs to the Building or the Leased Premises unless, in the case of the latter, they are
occasioned by its own use of the Leased Premises or negligence.
(d) Compliance with Zoning. Tenant hereby acknowledges that Tenant is aware of the
character of its operation in the Leased Premises and that applicable zoning ordinances and regulations
are of public record. Tenant shall have sole responsibility for its compliance therewith.
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8. UTILITIES AND OTHER BUILDING SERVICES
(a) Tenant shall be solely and exclusively responsible for making arrangements for, and
solely and exclusively responsible for, the cost of the following utilities and any other building services
necessary for Tenant's comfortable use and occupancy of the Leased Premises for general office and/or
retail use or as may be required by law or directed by governmental authority:
(i) Heating, ventilation and air conditioning;
(ii) Electricity for lighting and operating business machines and equipment in the
Leased Premises and the common areas and facilities of the Building;
(iii) Gas service(s);
(iv) Water for lavatory and drinking purposes;
(v) Cleaning andjanitorial service;
(vi) Replacement of all lamps, bulbs, starters and ballasts used on the Leased
Premises;
(vii) Cleaning, care and maintenance of the Leased Premises and the walks,
driveways, parking lots and landscaped areas adjacent to the Leased Premises, including the
removal of rubbish and snow; and
(viii) Repair and maintenance of the Leased Premises and certain systems within the
Leased Premises to the extent specified in Paragraph 10(a) hereof.
(b) Additional Services. If Tenant requests any other utilities or building services in
addition to those identified above or any of the above utilities or building services in frequency, scope,
quality or quantities greater than that which Landlord determines is normally required, then Landlord
shall use reasonable efforts to assist Tenant in obtaining such additional utilities or building services.
In the event Landlord is able to and does furnish such additional utilities or building services, the cost
thereof shall be borne by Tenant, who shall reimburse Landlord monthly for the same as provided in
Paragraph 8( d) hereof.
Tenant shall not install nor connect any electrical machinery or equipment other than
the business machines and equipment typically used for the use authorized under this Lease by tenants
in buildings comparable to the Leased Premises (a personal computer being an example of such typical
electrical equipment) nor any water-cooled machinery or equipment without Landlord's prior written
consent. If Landlord determines that the machinery or equipment to be so installed or connected
exceeds the designed load capacity of the Leased Premises' electrical system or is in any way
incompatible therewith, then Landlord shall have the right, as a condition to granting its consent, to
make such modifications to any utility system or other parts of the Leased Premises, or to require
Tenant to make such modifications to the equipment to be installed or connected, as Landlord
considers to be reasonably necessary before such equipment may be so installed or connected. The
cost of any such modifications shall be borne by Tenant, who shall reimburse Landlord for the same
(or any portion thereof paid by Landlord) as provided in Paragraph 8( d) hereof.
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(c) Interruption of Services. Tenant understands, acknowledges and agrees that anyone or
more of the utilities or other building services identified above may be interrupted by reason of
accident, emergency or other causes beyond Landlord's control, or may be discontinued or diminished
temporarily by Landlord or other persons until certain repairs, alterations or improvements can be
made; that Landlord does not represent or warrant the uninterrupted availability of such utilities or
building services; and that any such interruption shall not be deemed an eviction or disturbance of
Tenant's right to possession, occupancy and use of the Leased Premises or any part thereof, or render
Landlord liable to Tenant in damages by abatement of rent or otherwise, or relieve Tenant from the
obligation to perform its covenants under this Lease.
(d) Payment for Utilities and Building Services. The cost of additional utilities and other
building services furnished by Landlord at the request of Tenant or as a result of Tenant's activities as
provided in Paragraph 8(b) hereof shall be borne by Tenant, who shall be separately and/or
additionally billed therefore and who shall reimburse and pay Landlord monthly for the same, at the
same time the next monthly installment of Base Rent is due. Tenant agrees to give reasonable advance
notice, in writing, to Landlord of its request for additional services.
(e) Energy Conservation. Notwithstanding anything to contrary in this Paragraph 8 or
elsewhere in this Lease, Landlord shall have the right to institute such policies, programs and measures
as may be necessary or desirable, in Landlord's discretion, for the conservation and/or preservation of
energy related services, or as may be required to comply with any applicable codes, rules and
regulations, whether mandatory or voluntary.
9. SIGNS
Tenant shall not inscribe, paint, affix or display any signs, advertisements or notices on the
Leased Premises or in the Leased Premises and visible from outside the Leased Premises, except for
such signage, advertisements or notices as Landlord at Landlord's discretion specifically permits.
10. REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES.
(a) Repairs and Maintenance. Tenant acknowledges that, except as explicitly provided
under this Lease, Landlord makes no representations as to any current or future repairs of the Leased
Premises, that no promises to alter, remodel or improve the Leased Premises have been made by
Landlord, and that Tenant agrees to make any repairs necessary for Tenant's use of the Leased
Premises. Tenant further acknowledges that Tenant has had ample opportunity to inspect the Leased
Premises and accepts the Leased Premises "as is." Landlord shall at its expense keep in good order,
safe condition and repair, heating, ventilation and air condition systems, the exterior walls (including
painting), roof, floors (other than surface materials), foundation, pavement and interior support
columns of the Leased Premises. Except as otherwise provided herein, Tenant shall be solely
responsible for the maintenance and repair and good working order and condition of the Leased
Premises. Tenant shall maintain, at its own expense, the Leased Premises and the equipment and
fixtures on the Leased Premises in good working order and condition during the term of this Lease.
Tenant shall, at Tenant's expense, keep and maintain the Leased Premises in good
order, condition and repair at all times during the Term, and Tenant shall promptly repair all damage to
the Leased Premises and replace or repair all damaged or broken fixtures, equipment and
appurtenances with materials equal in quality and class to the original materials, under the supervision
and subject to the approval of Landlord, and within any reasonable period of time specified by
Landlord. If Tenant fails to do so, Landlord may, but need not make such repairs and replacements,
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and Tenant shall pay Landlord the cost thereof, including Landlord's Costs, forthwith upon being billed
for same. As used in this Lease, the term "Landlord's Costs" shall mean fifteen percent (15%) of any
costs or expenses paid by Landlord, in order to reimburse Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord's actions or involvement.
(b) Alteration or Improvements. Tenant shall not make, nor permit to be made, alterations
or improvements to the Leased Premises unless Tenant obtains the prior written consent of Landlord
thereto. If Landlord permits Tenant to make any such alterations or improvements, Tenant shall make
the same in accordance with all applicable laws and building codes, in a good and workmanlike
manner and in quality equal to or better than the original construction of the Leased Premises and shall
comply with such requirements as Landlord considers necessary or desirable, including without
limitation the provision by Tenant to Landlord with security for the payment of all costs to be incurred
in connection with such work, requirements as to the manner in which and the times at which such
work shall be done and the contractor or subcontractors to be selected to perform such work and the
posting and re-posting of notices of Landlord's non-responsibility for mechanics' liens. Tenant shall
promptly pay all costs attributable to such alterations and improvements and shall indemnify, defend
and hold harmless Landlord from and against any mechanic's liens or other liens or claims filed or
asserted as a result thereof and against any costs or expenses which may be incurred as a result of
building code violations attributable to such work. Tenant shall promptly repair any damage to the
Leased Premises caused by any such alterations or improvements. Any alterations or improvements to
the Leased Premises, except movable office furniture and equipment and trade fixtures, shall at
Landlord's election, either (i) become a part of the realty and the property of Landlord, and shall not be
removed by Tenant or (ii) be removed by Tenant upon the expiration or sooner termination hereof and
any damage caused thereby repaired at Tenant's cost and expense. In the event Tenant so fails to
remove same, Landlord may have same removed and the Leased Premises so repaired at Tenant's
expense. At Landlord's election, Landlord and Landlord's architect, engineers or contractors shall have
the right to supervise all construction operations within the Leased Premises, and Tenant shall
promptly pay Landlord the cost of such supervision.
(c) Trade Fixtures. Any trade fixtures installed on the Leased Premises by Tenant at its
own expense, including but not limited to movable partitions, counters, shelving, showcases, mirrors
and the like may, and at the request of Landlord, shall be removed upon termination of this Lease
provided that Tenant is not then in default. Tenant agrees that Tenant will bear the cost of such
removal, and further that Tenant will repair at its own expense any and all damage to the Leased
Premises resulting from the original installation of and subsequent removal of such trade fixtures. If
Tenant fails so to remove any and all such trade fixtures from the Leased Premises on the termination
of this Lease, all such trade fixtures shall become the property of Landlord unless Landlord elects to
require their removal, in which case Tenant shall promptly remove same and restore the Leased
Premises to their prior condition. In the event Tenant so fails to remove same, Landlord may have
same removed and the Leased Premises repaired to their prior condition, all at Tenant's expense.
(d) Wiring and Cabling. Any wiring or cabling installed by Tenant in the Leased Premises
or in shafts or ducts shall, at Landlord's request, be removed by Tenant at Tenant's expense on or
before the termination of this Lease. If Tenant fails to remove any such wiring or cabling, Landlord
may have the same removed at Tenant's expense.
(e) Storefront. If the Leased Premises includes storefront glass entrances or walls at or
near public spaces, Tenant must have specific approval by Landlord of all colors and materials for
floor covering, wall covering, furniture, and artwork prior to installation.
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(f) Reserved Rights. Landlord reserves the right to decorate and to make, at any time or
times, at its own expense, repairs, alterations, additions and improvements, structural or otherwise, in
or to the Leased Premises and the Building, and to perform any acts related to the safety, protection or
preservation thereof, and during such operations to take into and through the Leased Premises or any
part of the Building all material and equipment required and to close or temporarily suspend operation
of entrances, doors, corridors, or other facilities, provided that Landlord shall cause as little
inconvenience or annoyance to Tenant as is reasonably necessary in the circumstances, and shall not
do any act which permanently reduces the size of the Leased Premises. Landlord may do any such
work during ordinary business hours and Tenant shall pay Landlord for overtime and for any other
expenses incurred if Landlord agrees to conduct such work during other hours as requested by Tenant.
11. FIRE OR OTHER CASUALTY; CASUALTY INSURANCE
(a) Substantial Destruction of the Building. If the Building should be substantially
destroyed (which, as used herein, means destruction or damage to at least seventy-five percent (75%)
of the Building) by fire or other casualty, either party hereto may, at its option, terminate this Lease by
giving written notice thereof to the other party within thirty (30) days of such casualty. In such event,
the rent shall be apportioned to and shall cease as of the date of such casualty.
(b) Partial Destruction of the Leased Premises. If the Leased Premises should be rendered
partially un-tenantable for the purpose for which they were leased (which, as used herein, means such
destruction or damage as would prevent Tenant from carrying on its business on the Leased Premises
to an extent not exceeding forty percent (40%) of its normal business activity) by fire or other casualty,
Tenant may, at its option, elect to fix such damage at its own expense, with no reimbursement by
Landlord, or terminate this Lease. Should Tenant elect to fix or otherwise repair the Leased Premises
under this Paragraph 11(b), Tenant warrants that all repairs will be done in a good workmanlike
manner with materials equal in quality and class to the original materials, and in compliance with any
and all laws, statutes, ordinances, regulations, fire codes, building codes and restrictions and
requirements. In the event Tenant elects to terminate under this paragraph, Tenant agrees to provide
Landlord with 30 days written notice to that effect, whereupon both parties shall be released from all
further obligations and liability hereunder.
(c) Casualty Insurance. Without limiting Tenant's liability under this Lease, Landlord shall
procure and maintain a policy or policies of public liability insurance, insuring against injury or death
to persons and loss or damage to property; provided, however, that Landlord shall not be responsible
for, and shall not be obligated to insure against, any loss or damage to personal property (including, but
not limited to, any furniture, machinery, equipment, goods or supplies) of Tenant or which Tenant may
have on the Leased Premises or any trade fixtures installed by or paid for by Tenant on the Leased
Premises or any additional improvements which Tenant may construct on the Leased Premises. If
Tenant's operation or any alterations or improvements made by Tenant pursuant to the provisions of
Paragraph 10( c) hereof result in an increase in the premiums charged during the Term on the casualty
insurance carried by Landlord on the Leased Premises, then the cost of such increase in insurance
premiums shall be borne by Tenant, who shall reimburse Landlord for the same after being billed
therefor.
Tenant shall at all times during the term, carry, at its own expense, property insurance
with an insurance company licensed to do business in the State of Minnesota, covering its personal
property, trade fixtures installed by or paid for by Tenant or any additional improvements which
Tenant may construct on the Leased Premises which coverage shall be no less than eighty percent
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(80%) of replacement value. Tenant shall also carry business interruption insut'aflee on such terms as
shaH be reasonably satisfaetory t-o Landlord. Tenant shall furnish Landlord with a certificate
evidencing that such coverages are in full force and effect.
(d) Waiver of Subrogation. Landlord and Tenant hereby release each other and each other's
employees, agents, customers and invitees from any and all liability for any loss, damage or injury to
property occurring in, on or about or to the Leased Premises, improvements to the Leased Premises or
personal property within the Leased Premises, by reason of fire or other casualty which are covered by
applicable standard fire and extended coverage insurance policies. Because the provisions of this
paragraph will preclude the assignment of any claim mentioned herein by way of subrogation or
otherwise to an insurance company or any other person, each party to this Lease shall give to each
insurance company which has issued to it one or more policies of fire and extended coverage insurance
notice of the terms of the mutual releases contained in this paragraph, and have such insurance policies
properly endorsed, if necessary, to prevent the invalidation of insurance coverages by reason of the
mutual releases contained in this paragraph.
12. GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE
(a) Except for the negligence or intentional misconduct of Landlord, Landlord's agents,
servants or employees, Tenant shall be responsible for, shall at all times during the Term of this lease
and with an insurance company licensed to do business in the State of Minnesota, insure against, and
shall indemnify Landlord and hold it harmless from, any and all liability for any loss, damage or injury
to person or property, arising out of use, occupancy or operations of Tenant and occurring in, on or
about the Leased Premises and Tenant hereby releases Landlord from any and all liability for the same.
Tenant's obligation to indemnify Landlord hereunder shall include the duty to defend against any
claims asserted by reason of such loss, damage or injury and to pay any judgments, settlements, costs,
fees and expenses, including attorney's fees, incurred in connection therewith.
(b) Tenant shall at all times during the Term carry, at its own expense, for the protection of
Tenant, Landlord and Landlord's management agent (if any), as their interests may appear, one or more
policies of general public liability and property damage insurance, issued by one or more insurance
companies licensed to do business in the State of Minnesota and acceptable to Landlord, covering
Tenant's use, occupancy and operations providing minimum coverages of $1,000,000 combined single
limit for bodily injury and property damage per occurrence with $2,000,000 aggregate coverage. Such
insurance policy or policies shall name Landlord, its agents and employees, as additional insureds and
shall provide that they may not be canceled or materially changed on less than thirty (30) days prior
written notice to Landlord. Tenant shall furnish Landlord with certificates evidencing such insurance.
Should Tenant fail to carry such insurance and furnish Landlord with copies of all such policies after a
request to do so, Landlord shall have the right to obtain such insurance and collect the cost thereof
from Tenant. Landlord shall have the right during the term of this Lease to adjust the minimum
coverage levels stipulated above upon written notice to Tenant. Within thirty (30) days of such written
notice, Tenant shall provide Landlord with evidence of such adjustment. Tenant shall also provide
Landlord with certificates evidencing workers' compensation insurance coverages. Tenant's insurance
coverages required hereby shall be deemed to be additional obligations of Tenant and shall not be a
discharge or limitation of Tenant's indemnity obligations contained in Paragraph 12(a) hereof.
( c) Landlord and its partners, shareholders, affiliates, officers, agents, servants and
employees shall not be liable for any damage to person, property or business or resulting from the loss
of use thereof sustained by Tenant or by any other persons due to the Building or any part thereof or
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any appurtenances thereof becoming out of repair, or due to the happening of any accident or event in
or about the Building, including the Leased Premises, or due to any act or neglect of any tenant or
occupant of the Building or of any other person. This provision shall apply particularly, but not
exclusively, to damage caused by gas, electricity, snow, ice, frost, steam, sewage, sewer gas or odors,
fIre, water or by the bursting or leaking of pipes, faucets, sprinklers, plumbing fixtures and windows
and shall apply without distinction as to the person whose act or neglect was responsible for the
damage and whether the damage was due to any of the causes specifIcally enumerated above or to
some other cause. Tenant agrees that all personal property located in the Leased Premises shall be at
the risk of Tenant only, and that Landlord shall not be liable for any loss or damage thereto or theft
thereof.
13. EMINENT DOMAIN
If the whole or any part of the Leased Premises shall be taken for public or quasi-public use by
a governmental authority under the power of eminent domain or shall be conveyed to a governmental
authority in lieu of such taking, and if such taking or conveyance shall cause the remaining part of the
Leased Premises to be un-tenantable and inadequate for use by Tenant for the purpose for which they
were leased, then Tenant may, at its option, terminate this Lease as of the date Tenant is required to
surrender possession of the Leased Premises. If a part of the Leased Premises shall be taken or
conveyed but the remaining part is tenantable and adequate for Tenant's use, then this Lease shall be
terminated as to the part taken or conveyed as of the date Tenant surrenders possession; Landlord shall
make such repairs, alterations and improvements as may be necessary to render the part not taken or
conveyed tenantable; and the rent shall be reduced in proportion to the part of the Leased Premises so
taken or conveyed. All compensation awarded for such taking or conveyance shall be the property of
Landlord without any deduction therefrom for any present or future estate of Tenant, and Tenant
hereby assigns to Landlord all its right, title and interest in and to any such award.
14. LIENS
If because of any act or omission of Tenant or anyone claiming by, through, or under Tenant,
any mechanic's lien or other lien shall be fIled against the Leased Premises or against other property of
Landlord (whether or not such lien is valid or enforceable as such), Tenant shall, at its own expense,
cause the same to be discharged of record within a reasonable time, not to exceed thirty (30) days after
the date of fIling thereof, and shall also defend and indemnify Landlord and hold it harmless from any
and all claims, losses, damages, judgments, settlements, cost and expenses, including attorneys' fees,
resulting therefrom or by reason thereof. If such lien is not discharged of record within thirty (30) days
after the date of fIling thereof, Landlord, at its sole option, may take all action necessary to release and
remove such lien (without any duty to investigate the validity thereof) and Tenant shall promptly upon
notice reimburse Landlord for all sums, costs and expenses including reasonable attorneys' fees and
Landlord's Costs incurred by Landlord in connection with such lien.
15. RENTAL, PERSONAL PROPERTY AND OTHER TAXES
(a) Landlord shall pay before delinquency any and all taxes, assessments, fees or charges
(hereinafter referred to as "taxes"), related to the Leased Premises, except any sales, gross income,
rental, business occupation or other taxes, levied or imposed upon Tenant's business operation in the
Leased Premises and any personal property or similar taxes levied or imposed upon Tenant's trade
fIxtures, leasehold improvements or personal property located within the Leased Premises, which will
be Tenant's responsibility. In the event any such taxes are charged to the account of, or are levied or
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imposed upon the property of Landlord, Tenant shall reimburse Landlord for the same.
Notwithstanding the foregoing, Tenant shall have the right to contest in good faith any such tax and to
defer payment, if required, until after Tenant's liability therefore is :finally determined.
(b) If any leasehold improvements, trade fixtures, alterations or improvements or business
machines and equipment located in, on or about the Leased Premises, regardless of whether they are
installed or paid for by Landlord or Tenant and whether or not they are affixed to and become a part of
the realty and the property of Landlord, are assessed for real property tax purposes at a valuation
higher than that at which other such property in other leased space in the Building is assessed, then
Tenant shall reimburse Landlord for the amount of real property taxes shown on the appropriate county
official's records as having been levied upon the Leased Premises or other property of Landlord by
reason of such excess assessed valuation.
16. ASSIGNMENT AND SUBLETTING
Tenant may not assign or otherwise transfer its interest in this Lease or sublet the Leased
Premises or any part thereof without the express, prior written consent of Landlord. Tenant shall
notify Landlord sixty (60) days in advance of its intent to transfer, assign, or sublet all or any portion
of the Leased Premises. In the event of any such assignment or subletting, Tenant shall nevertheless at
all times remain fully responsible and liable for the payment of rent and the performance and
observance of all of Tenant's other obligations under the terms, conditions and covenants of this Lease.
No assignment or subletting of the Leased Premises or any part thereof shall be binding upon Landlord
unless such assignee or subtenant shall deliver to Landlord an instrument (in recordable form, if
requested) containing an agreement of assumption of all of Tenant's obligations under this Lease and
Landlord shall execute a consent form. The parties agree that Landlord may at its sole discretion
withhold its consent to any assignment or sublease. Upon the occurrence of an event of default, if all
or any part of the Leased Premises are then assigned or sublet, Landlord, in addition to any other
remedies provided by this Lease or by law, may at its option, collect directly from the assignee or
subtenant all rent becoming due to Landlord by reason of the assignment or subletting, and Landlord
shall have a security interest in all property on the Leased Premises to secure payment of such sums.
Landlord, at its option, may also recapture any sublet space in the event of default. Any collection by
Landlord from the assignee or subtenant shall not be construed to constitute a novation or release of
Tenant from the further performance of its obligations under this Lease. Any rents received by Tenant
from the assignment or subletting of the Leased Premises which exceed rents payable by Tenant
hereunder shall be immediately paid to Landlord as additional compensation. Landlord shall, at its
option, have the right to recapture all or any part of the Leased Premises Tenant proposes to assign or
sublet upon notice from Tenant of its intent to assign or such sublet part of the Leased Premises.
Landlord shall have the right to transfer and assign, in whole or in part, all its rights and obligations
hereunder in the Leased Premises, the Building and all other property referred to herein, and upon such
transfer, the transferor shall have no further liability hereunder and Tenant shall attorn to any such
transferee.
17. SUBORDINATION OF LEASE TO MORTGAGES
This Lease is subject and subordinate to any mortgage, deed of trust or similar encumbrance,
including ground or underlying leases presently existing or hereafter voluntarily placed upon the
Leased Premises, including any renewals, extensions or modifications thereof; and the recording of
any such mortgage, deed of trust or similar encumbrance shall make it prior and superior to this Lease
regardless of the date of execution or recording of either document. Tenant shall, at Landlord's
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request, execute and deliver within five (5) days to Landlord, without cost, any instrument which may
be deemed necessary or desirable by Landlord to confirm the subordination of this Lease; and if
Tenant fails or refuses to do so, Landlord may execute such instrument in the name and as the act of
Tenant. Tenant shall attorn to any subsequent owner or transferee of the Leased Premises regardless of
whether or not a subordination agreement has been executed by Tenant.
18. DEFAULTS AND REMEDIES
(a) Default by Tenant. The occurrence of anyone or more of the following events shall be
a default and breach of this Lease by Tenant:
(i) Tenant shall fail to pay any monthly installment of Base Rent or additional
expenses or charges within five (5) days after the same shall be due and payable.
(ii) Tenant shall fail to perform or observe any term, condition, covenant or
obligation required to be performed or observed by it under this Lease for a period of thirty
(30) days after notice thereof from Landlord;
(iii) Tenant shall vacate or abandon or fail to occupy for a period of thirty (30) days,
the Leased Premises or any substantial portion thereof;
(iv) Tenant makes or attempts to make an assignment for the benefit of creditors; or
substantially all of Tenant's assets in, on or about the Leased Premises or Tenant's interest in
this Lease are attached or levied upon under execution (and Tenant does not discharge the same
within thirty (30) days thereafter); or
(v) Tenant causes or permits a hazardous condition to exist on the Leased Premises
and fails to cure such condition immediately after notice thereof from Landlord.
(b) Remedies of Landlord. Upon the occurrence of any event of default set forth in
Paragraph 18(a) hereof, Landlord shall have the following rights and remedies, in addition to those
allowed by law, anyone or more of which may be exercised without further notice to or demand upon
Tenant:
(i) Landlord may apply the security deposit or re-enter the Leased Premises and
cure any default of Tenant, in which event Tenant shall reimburse Landlord for any costs and
expenses which Landlord may incur to cure such default; and Landlord shall not be liable to
Tenant for any loss or damage which Tenant may sustain by reason of Landlord's action,
regardless of whether caused by Landlord's negligence or otherwise.
(ii) Landlord may terminate this Lease as of the date of such default, in which event:
(A) Neither Tenant nor any person claiming under or through Tenant shall thereafter be
entitled to possession of the Leased Premises, and Tenant shall immediately thereafter
surrender the Leased Premises to Landlord;
(B) Landlord may re-enter the Leased Premises and dispossess Tenant or any other
occupants of the Leased Premises by summary proceedings, ejectment or otherwise, and may
remove their effects, without prejudice to any other remedy which Landlord may have for
possession or arrearages in rent; and
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(C) Notwithstanding the termination of this Lease Landlord may either declare all rent
which would have been due under this Lease for the balance of the Term or exercised renewal
period to be immediately due and payable, whereupon Tenant shall be obligated to pay the
same to Landlord, together with all loss or damage which Landlord may sustain by reason of
such termination and reentry, or relet all or any part of the Leased Premises for a term different
from that which would otherwise have constituted the balance of the Term and for rent and on
terms and conditions different from those contained herein, whereupon Tenant shall be
obligated to pay to Landlord as liquidated damages the difference between the rent provided
herein and that provided for in any lease covering a subsequent reletting of the Leased
Premises, for the period which would otherwise have constituted the balance of the Term,
together with all of Landlord's costs and expenses for preparing the Leased Premises, for
reletting, including all repairs, leasehold improvements, marketing costs, broker's and attorney's
fees, and all loss or damage which Landlord may sustain by reason of such termination, re-
entry and reletting, it being expressly understood and agreed that the liabilities and remedies
specified above shall survive the termination of this Lease.
(iii) Landlord may terminate Tenant's right of possession of the Leased Premises and
may repossess the Leased Premises by unlawful detainer or eviction action, by taking peaceful
possession or otherwise, without terminating this Lease, in which event Landlord may, but shall
be under no obligation to, relet the same for the account of Tenant, for such rent and upon such
terms as shall be satisfactory to Landlord. For the purpose of such reletting, Landlord is
authorized to decorate, repair, remodel or alter the Leased Premises. If Landlord fails to so
relet the Leased Premises, Tenant shall pay to Landlord as damages a sum equal to the rent
which would have been due under this Lease for the balance of the Term or exercised renewal
period as such rent shall become due and payable hereunder from time to time during the Term.
If the Leased Premises are relet and a sufficient sum shall not be realized from such reletting
after paying all of the costs and expenses of all decoration, repairs, remodeling, alterations and
additions and the expenses of such reletting and of the collection of the rent accruing therefrom
to satisfy the rent provided for in this Lease, Tenant shall satisfy and pay the same upon
demand therefor from time to time. Tenant shall not be entitled to any rents received by
Landlord in excess of the rent provided for in this Lease.
(iv) Landlord may sue for injunctive relief or to recover damages for any loss
resulting from the breach.
Any agreement for an extension of the Term or any additional period thereafter shall not
thereby prevent Landlord from terminating this Lease for any reason specified in this Lease. If any
such right of termination is exercised by Landlord during the Term or any extension thereof, Tenant's
right to any further extension shall thereby be automatically canceled. Any such right of termination
of Landlord contained herein shall continue during the Term and any subsequent extension hereof.
(c) Landlord's Security Interest. Landlord reserves, and is hereby granted, a security
interest on all fixtures, equipment and personal property (tangible and intangible) now or hereafter
located in or on the Leased Premises to secure all sums due from and all obligations to be performed
by Tenant hereunder, which lien and security interest may be enforced by Landlord in any manner
provided by law, including, without limitation, under and in accordance with the Uniform Commercial
Code as adopted in Minnesota. At Landlord's request, Tenant shall execute and file, where
appropriate, all documents required to perfect the security interest herein granted.
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(d) Default by Landlord and Remedies of Tenant. Landlord shall not be deemed to be in
default under this Lease until Tenant has given Landlord written notice specifying the nature of the
default and Landlord does not cure such default within thirty (30) days after receipt of such notice or
within such reasonable time thereafter as may be necessary to cure such default where such default is
of such a character as to reasonably require more than thirty (30) days to cure.
(e) Waiver of Covenants. Failure of Landlord to insist, in anyone or more instances, upon
strict performance of any term, covenant, condition, or option of this Lease, or to exercise any option
herein contained, shall not be construed as a waiver, or a relinquishment for the future, of such term,
covenant, condition, or option, but the same shall continue and remain in full force and effect. The
receipt by Landlord of rents with knowledge of breach in any of the terms, covenants, conditions, or
options, of any of this Lease to be kept or performed by Tenant shall not be deemed a waiver of such
breach, and Landlord, shall not be deemed to have waived any provision of this Lease unless expressed
in writing and signed by Landlord.
(f) Attorney Fees. If Tenant defaults in the performance or observance of any of the terms,
conditions, covenants or obligations contained in this Lease and Landlord placed the enforcement of
all or any part of this Lease, the collection of any rent due or to become due or the recovery of
possession of the Leased Premises in the hands of an attorney, or if Landlord incurs any fees or out-of-
pocket costs in any litigation, negotiation or transaction in which Tenant causes Landlord (without
Landlord's fault) to be involved or concerned, Tenant agrees to reimburse Landlord for the attorney's
fees and costs incurred thereby, whether or not suit is actually filed.
19. BANKRUPTCY OR INSOL VENey
It is understood and agreed that the following shall apply in the event of the bankruptcy or
insolvency of Tenant:
(a) If a petition is filed by, or an order for relief is entered against Tenant under Chapter 7
of the Bankruptcy Code and the trustee of Tenant elects to assume this Lease for the purpose of
assigning it, such election or assignment, or both, may be made only if all of the terms and conditions
of subparagraphs (b) and (c) below are satisfied. To be effective, an election to assume this Lease
must be in writing and addressed to Landlord, and in Landlord's business judgment, all of the
conditions hereinafter stated, which Landlord and Tenant acknowledge to be commercially reasonable,
must have been satisfied. If the trustee fails so to elect to assume this Lease within sixty (60) days
after his appointment, this Lease will be deemed to have been rejected, and Landlord shall then
immediately be entitled to possession of the Leased Premises without further obligation to Tenant or
the trustee and this Lease shall be terminated. Landlord's right to be compensated for damages in the
bankruptcy proceeding, however, shall survive such termination.
(b) If Tenant files a petition for reorganization under Chapters 11 or 13 of the Bankruptcy
Code, or if a proceeding filed by or against Tenant under any other chapter of the Bankruptcy Code is
converted to a Chapter 11 or 13 proceeding and Tenant's trustee or Tenant as debtor-in-possession fails
to assume this Lease within sixty (60) days from the date of the filing of such petition or conversion,
then the trustee or the debtor-in-possession shall be deemed to have rejected this Lease. To be
effective any election to assume this Lease must be in writing addressed to Landlord and, in Landlord's
business judgment, all of the following conditions, which Landlord and Tenant acknowledge to be
commercially reasonable, must have been satisfied:
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14
(i) The trustee or the debtor-in-possession has cured or has provided to Landlord
adequate assurance, as defmed in this subparagraph (b), that:
(1) The trustee will cure all monetary defaults under this lease within ten
(10) days from the date of assumption and
(2) The trustee will cure all non-monetary defaults under this Lease within
thirty (30) days from the date of assumption.
(ii) The trustee or the debtor-in-possession has compensated Landlord, or has
provided Landlord with adequate assurance, as hereinafter defined, that within ten (10) days
from the date of assumption Landlord will be compensated for any pecuniary loss it has
incurred arising from the default of Tenant, the trustee, or the debtor-in-possession, as recited
in Landlord's written statement of pecuniary loss sent to the trustee or debtor-in-possession.
(iii) The trustee or the debtor-in-possession has provided Landlord with adequate
assurance of the future performance of each of Tenant's obligations under this Lease; provided
however, that:
(1) From and after the date of assumption of this Lease, the trustee or the
debtor-in-possession shall pay the Base Rent payable under this Lease in advance in
equal monthly installments on each date that such Rents are payable.
(2) The trustee or debtor-in-possession shall also deposit with Landlord, as
security for the timely payment of Rent, an amount equal to three (3) months' Base Rent
and other monetary charges accruing under this Lease;
(3) If not otherwise required by the terms of this Lease, the trustee or the
debtor-in-possession shall also pay in advance, on each day that any installment of Base
Rent is payable, one-twelfth (1/12) of Tenant's annual Operating Expenses, and other
obligations under this Lease; and
(4) The obligations imposed upon the trustee or the debtor-in-possession
will continue for Tenant after the completion of bankruptcy proceedings.
(iv) Landlord has determined that the assumption of this Lease will not:
(1) Breach any provision in any other lease, mortgage, financing agreement,
or other agreement by which Landlord is bound relating to the Property, Building or
Leased Premises; or
(2) If requested by Landlord, the assignee will obtain guarantees, in form
and substance satisfactory to Landlord (Le.letter(s) of credit), from one or more persons
who satisfy Landlord's standards of creditworthiness; and
(3) Landlord has obtained consents or waivers from any third parties which
may be required under any lease, mortgage, financing arrangement, or other agreement
by which Landlord is bound, to enable Landlord to permit such assignment.
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(c) When, pursuant to the Bankruptcy Code, the trustee or the debtor-in-possession is
obligated to pay reasonable use and occupancy charges for the use of all or part of the Leased
Premises, it is agreed that such charges will not be less than the Base Rent as defined in this Lease,
plus additional accrued charges and expenses and other monetary obligations of Tenant included
herein.
(d) Neither Tenant's interest in this Lease nor any estate of Tenant created in this Lease
shall pass to any trustee, receiver, assignee for the benefit of creditors, or any other person or entity,
nor otherwise by operation of law under the laws of any state having jurisdiction of the person or
property of Tenant, unless Landlord consents in writing to such transfer. Landlord's acceptance of rent
or any other payments from any trustee, receiver, assignee, person, or other entity will not be deemed
to have waived, or waive, either the requirement of Landlord's consent or Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without such consent.
20. ACCESS TO THE LEASED PREMISES
Landlord, its employees and agents and any mortgagee of the Leased Premises shall have the
right to enter any part of the Leased Premises at all reasonable times for the purposes of examining or
inspecting the same, showing the same to prospective purchasers, mortgagees or tenants and for
making such repairs, alteration or improvements to the Leased Premises as Landlord may deem
necessary or desirable. Ifrepresentatives of Tenant shall not be present to open and permit such entry
into the Leased Premises at any time when such entry is necessary or permitted hereunder, Landlord
and its employees and agents may enter the Leased Premises by means of a master key or otherwise,
Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an eviction of
Tenant or a termination of this Lease, nor entitle Tenant to any abatement of rent therefore.
21. TERMINATION. Either party may terminate this Lease without cause upon providing the
other party thirty days written notice of such termination.
22. SURRENDER OF LEASED PREMISES
Upon the expiration, or earlier termination, of this Lease Tenant shall surrender the Leased
Premises to Landlord, together with all keys, access cards, alterations, improvements, and other
property as provided elsewhere herein, in broom-clean condition and in good order, condition and
repair, except for ordinary wear and tear and damage which Tenant is not obligated to repair, failing
which Landlord may restore the Leased Premises to such condition at Tenant's expense, which shall be
payable upon demand. Upon such expiration or termination Tenant's trade fixtures, furniture and
equipment shall remain Tenant's property, and if Tenant shall not then be in default under this Lease,
Tenant shall have the right to remove the same prior to the expiration or earlier termination of this
Lease, Tenant shall promptly repair any damage caused by any such removal, and shall restore the
Leased Premises to the condition existing prior to the installation of the items so removed. Any of
Tenant's trade fixtures, furniture or equipment not so removed shall be considered abandoned and may
be retained by Landlord or be destroyed.
23. HOLDING OVER
If Tenant remains in possession of the Leased Premises without the consent of Landlord after
the expiration or earlier termination of this Lease, Tenant shall be deemed to hold the Leased Premises
as a tenant from month to month, terminable on thirty (30) days' notice given by one party to the other
and subject to all of the terms, conditions, covenants and provisions of this Lease (which shall be
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applicable during the holdover period), except that Tenant shall pay to Landlord twice the last current
Base Rent, and additional charges or expenses, which shall be payable to Landlord on demand. In
addition, Tenant shall be liable to Landlord for all damages occasioned by such holding over. Tenant
shall vacate and surrender the Leased Premises to Landlord upon Tenant's receipt of notice from
Landlord to vacate. No holding over by Tenant, whether with or without the consent of Landlord, shall
operate to extend this Lease except as otherwise expressly provided herein.
24. QillET ENJOYMENT
Except as provided in Paragraph 23 hereof to the extent that it may be applicable, if and so long
as Tenant pays the prescribed rent and performs or observes all of the terms, conditions, covenants and
obligations of this Lease required to be performed or observed by it hereunder, Tenant shall at all times
during the term hereof have the peaceable and quiet enjoyment, possession, occupancy and use of the
Leased Premises without any interference from Landlord or any person or persons claiming the Leased
Premises by, through or under Landlord, subject to any mortgages, underlying leases or other matters
of record to which this Lease is or may become subject.
25. FORCE MAJEURE
All of the obligations of Landlord and of Tenant under this Lease are subject to and shall be
postponed for a period equal to any delay or suspension resulting from fires, strikes, acts of God, and
other causes beyond the control of the party delayed in its performance hereunder, this Lease
remaining in all other respects in full force and effect and the Term not thereby extended.
Notwithstanding the foregoing, the unavailability of funds for payment or performance of Tenant's
obligations hereunder shall not give rise to any postponement or delay in such payment or performance
of Tenant's obligations hereunder.
26. NOTICE AND PLACE OF PAYMENT
(a) All rent and other payments required to be made by Tenant to landlord shall be
delivered or mailed to Landlord at the address set forth below or any other address Landlord may
specify from time to time by written notice given to Tenant.
(b) All payments required to be made by Landlord to Tenant shall be delivered or mailed to
Tenant at the address set forth in Paragraph 26( c) hereof or at any other address within the United
States as Tenant may specify from time to time by written notice given to Landlord.
(c) Any notice, demand or request required or permitted to be given under this Lease or by
law shall be deemed to have been given if reduced to writing and mailed by Registered or Certified
mail, postage prepaid, to the party who is to receive such notice, demand or request at the address set
forth below or at such other address as Landlord or Tenant may specify from time to time by written
notice. When delivering such notice, demand or request shall be deemed to have been given as of the
date it was so delivered or mailed.
Landlord:
Tenant:
Farmington EDA
325 Oak Street
Farmington MN 55024
Elevation Nine Eighteen, Inc.
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22104 Blaine Ave.
Farminlrton. MN. 55024.
17
Attn: Tina Hansmeier
Attn: SherrY Wamer. President
27. MISCELLANEOUS GENERAL PROVISIONS
(a) Payments Deemed Rent. Any amounts of money to be paid by Tenant to Landlord
pursuant to the provisions of this Lease, whether or not such payments are denominated "Base Rent" or
and whether or not they are to be periodic or recurring, shall be deemed Base Rent or additional Rents
owing for purposes of this Lease; and any failure to pay any of same as provided in Paragraph 18(a)
hereof shall entitle Landlord to exercise all of the rights and remedies afforded hereby or by law for the
collection and enforcement of Tenant's obligation to pay rent. Tenant's obligation to pay any such
Base Rent or additional Rent pursuant to the provisions of this Lease shall survive the expiration or
other termination of this Lease and the surrender of possession of the after any holdover period.
(b) Estoppel Letters. Tenant shall, within ten (10) days following written request from
Landlord, execute, acknowledge and deliver to Landlord or to any lender, purchaser or prospective
lender or purchaser designated by Landlord a written statement certifying (i) that this Lease is in full
force and effect and unmodified (or, if modified, stating the nature of such modification), (ii) the date
to which rent has been paid, (iii) that there are not, to Tenant's knowledge, any uncured defaults (or
specifying such defaults if any are claimed); and (iv) such further matters as may be requested by
Landlord. Any such statement may be relied upon by any prospective purchaser or mortgagee of all or
any part of the Leased Premises. Tenant's failure to deliver such statement within such period shall be
conclusive upon Tenant that this Lease is in full force and unmodified, and that there are no uncured
defaults in Landlord's performance hereunder.
( c) Memorandum of Lease. If requested by either party, a Memorandum of Lease,
containing the information required by law concerning this Lease shall be prepared, executed by both
parties and filed for record in the office of the county recorder in Dakota County, Minnesota.
(d) Applicable Law. This Lease and all matters pertinent thereto shall be construed and
enforced in accordance with the laws of the State of Minnesota.
( e) Entire Agreement. This Lease, including all Exhibits, Riders and Addenda, constitutes
the entire agreement between the parties hereto and may not be modified except by an instrument in
writing executed by the parties hereto.
(f) Binding Effect. This Lease and the respective rights and obligations of the parties
hereto shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto
as well as the parties themselves; provided, however, that Landlord, its successors and assigns shall be
obligated to perform Landlord's covenants under this Lease only during and in respect of their
successive periods as Landlord during the term of this Lease.
(g) Severability. If any provision of this Lease shall be held to be invalid, void or
unenforceable, the remaining provisions hereof shall not be effected or impaired, and such remaining
provisions shall remain in full force and effect.
(h) No Partnership. Landlord shall not, by virtue of the execution of this Lease or the
leasing of the Leased Premises to Tenant, become or be deemed a partner of Tenant in the conduct of
Tenant's business on the Leased Premises or otherwise.
151642-/1
I 52944v2
18
(i) Headings. Gender. etc. As used in this Lease, the word "person" shall mean and
include, where appropriate, an individual, corporation, partnership or other entity, the plural shall be
substituted for the singular, and the singular for the plural, where appropriate; and other words of any
gender shall include any other gender. The topical headings of the several paragraphs of this Lease are
inserted only as a matter of convenience and reference, and do not affect, decline, limit or describe the
scope or intent of the Lease.
G) Waiver of Jury. To the extent permitted by Law, Tenant hereby waives any right it may
have to a jury trial in the event oflitigation between Tenant and Landlord pertaining to this Lease.
(k) Allocation of Rent. Landlord and Tenant agree that no portion of the Base Rent paid by
Tenant during the portion of the term of this Lease occurring after the expiration of any period during
which such rent was abated shall be allocated by landlord or Tenant to such rent abatement period, nor
is such rent intended by the parties to be allocable to. any abatement period.
(1) Right to Change Name and Building Address. Landlord reserves the right to change the
name or street address of the Building.
(m) Requirement of Identification. Landlord, or its contractor(s), may require all persons
entering or leaving the Building during such hours as Landlord may reasonably determine, to identify
themselves by registration or otherwise, and to establish their right to leave or enter, and to exclude or
expel any peddler, solicitor or beggar at any time from the Leased Premises or Building.
(n) Limitation of Landlord's Personal Liability. Tenant specifically agrees to look solely to
Landlord's interest in the Leased Premises for the recovery of any judgment against Landlord, it being
agreed that Landlord shall never be personally liable for any such judgment.
(0) Execution by Landlord. Submission of this instrument to Tenant, or Tenant's agents or
attorneys, for examination or signature does not constitute or imply an offer to lease, reservation of
space, or option to lease, and this Lease shall have no binding legal effect until execution hereof by
both Landlord and Tenant.
(P) Time of Essence. Time is of the essence of this Lease and each of its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year
first written above.
Landlord:
Tenant:
ELEVATION NINE EIGHTEEN, INC.
By:
Its:
FARNUNGTONECONONUC
DEVELOPMENT AUTHORITY
By:
Its: President
By:
Its:
By:
Its: Executive Director
151612..1
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19
EXIllBIT A
(Rentable ;\rea)
151612vl
152944v2
20
EXHIBIT B
(Legal Description of Leased Premises)
The south 52.5 feet of the North 103.5 feet of the West 110 f-cetfart; of Lots ~51 and 6;Six (6)
of Block ~Twentv-three (23) in the Town (now City) of Farmington, CO'lmty of Dakota, State of
Minnesota, aeeording to the reeordeddescribed as follows. to-wit: commencinQ: Fifty-one (51) feet
South of the Northwest comer of said Lot Six (6) in said Block Twentv-three (23), thence runninQ:
South Fifty-two and one-half (52.5) feet. thence East One Hundred Ten (11 Q) feet. thence running
North Fifty-two and one-half (52.5) feet. thence runninQ: West One Hundred Ten (110) feet to the
olace of beQ:inninQ:. accordinQ: to the plat thereof on file and of record in the office of the County
Recorder in and for Dakota County. Minnesota.
15Hi42vl
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21
EXIDBIT C
TENANT ESTOPPEL LETTER
Lease Dated:
Landlord:
Tenant:
Leased Premises:
.20_
Ladies and/or Gentlemen:
The undersigned ("Tenant") hereby confirms the following as of the date hereof:
Tenant is the tenant under the captioned lease (the "Lease"). All capitalized terms contained herein
have the meaning defmed in the Lease.
The term is a month to month lease with a Commencement Date of
,20_.
Tenant has accepted the Leased Premises for occupancy and the condition of the Leased Premises,
including the Leasehold Improvements constructed thereon and the Building is in conformity with the
provisions of this Lease in all respects, except for the following:
The rentable area of the Leased Premises is 1,529 square feet.
The lease is in full force and effect; there is not existing default on the part of Landlord under the
Lease; and the Lease has not been amended, modified, supplemented or superseded.
Dated:
.20_
By:
Its:
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22
PURCHASE AGREEMENT
TillS PURCHASE AGREEMENT (the "Agreement") is effective as of the day
of ,2010, by and between ECONOMIC DEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF FARMINGTON, a public body corporate and
politic under the laws of the State of Minnesota ("Seller") and ELEVATION NINE
EIGHTEEN, INC., a Minnesota corporation ("Purchaser").
RECITALS:
FIRST: Seller is the owner in fee simple of the parcel of land (the "EDA Property")
located at 305 3rd Street, in the City of Farmington, County of Dakota, State of Minnesota, all as
legally described in attached Exhibit A. The EDA Property, together with the building
constructed thereon (the "Building"), the improvements located within the Building and on or
upon the EDA Property (the "Improvements") and all rights, privileges, easements, tenements,
hereditaments, and appurtenances belonging thereto, shall hereinafter collectively be referred to
as the "Project."
SECOND: Seller desires to convey the EDA Property and the Building and
Improvements to Purchaser and Purchaser is desirous of purchasing the EDA Property and the
Building and Improvements.
THIRD: Seller is the owner of certain personal property and equipment located within
the Building and used in the operation of the Property and/or the Building, which Seller desires
to sell to Purchaser and Purchaser desires to purchase all as more fully described in attached
Exhibit B ("Personal Property").
AGREEMENT:
In consideration of the mutual covenants and agreements herein contained and other
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1.0 ProDertv To Be Purchased. Subject to compliance with the terms, covenants
and conditions of this Agreement, Seller shall convey to the Purchaser the EDA's Property.
2.0 Purchase Price. The purchase price ("Purchase Price") for the EDA Property
shall be the sum of One Hundred Twenty-Three Thousand and No/lOO Dollars ($123,000.00),
payable by Purchaser as follows:
2.1 Five Thousand and noll00 Dollars ($5,000.00) as earnest money (the "Earnest
Money"), to be deposited in an interest bearing account with Dakota County
Abstract and Title, Inc. located at 7373 - 14?ili Street West, Apple Valley,
Minnesota 55124, hereinafter referred to as ("Title Company") or (Escrow
Agent"), in accordance with the terms of this Agreement and the Escrow Receipt
Agreement attached hereto as Exhibit C. which Earnest Money shall be paid to
Seller by the Escrow Agent at the time of closing or returned to Purchaser
according to the Escrow Receipt Agreement.
2.2 The balance of the Purchase Price ($123,000.00) shall be paid to Seller by
Purchaser by wire transfer or cashier's check, on the Date of Closing (as hereafter
defined).
3.0 Title To Be Delivered. Seller agrees to convey to Purchaser marketable fee
simple title to the EDA Property and title to the Personal Property subject only to the permitted
encumbrances ("Permitted Encumbrances") set forth on attached Exhibit D and this
Agreement.
4.0 Evidence of Title. Within a reasonable time after execution of this Agreement by
Purchaser, Seller shall:
4.1 Cause to be issued and delivered to Purchaser an acceptable commitment for an
Owner's title insurance policy (the "Commitment") issued by the Title Company
pursuant to which the Title Company agrees to issue to the Purchaser upon the
recording of the documents of conveyance referred to herein an Owner's title
insurance policy insuring the EDA Property in an amount equal to the total
Purchase Price. The Commitment shall include proper searches covering
bankruptcies, state and federal judgments and liens and levied and pending
special assessments.
4.2 Cause to be issued Uniform Commercial Code searches on the name of Seller
with the offices of the Minnesota Secretary of State and the County Recorder of
Dakota County.
Purchaser shall have twenty (20) days after receipt of the Commitment and UCC searches to
deliver to Seller written objections to title based on marketability of EDA Property, except for
Permitted Exceptions, and Seller shall have one hundred twenty (120) days to have such
objections removed or satisfied. If Seller shall fail to have such objections removed within said
time, Purchaser may, at its sole election: (a) terminate this Agreement without any liability on its
part in which event the Earnest Money paid by Purchaser and accrued interest shall be promptly
refunded to Purchaser by Escrow Agent in exchange for a quit claim deed in favor of the EDA to
the EDA Property; or (b) waive such objections and take title to the EDA Property subject to
such objections.
5.0 Control of Prooertv. Prior to the Date of Closing, Seller shall have the full
responsibility and the entire liability for any and all damages or injuries of any kind whatsoever
to the EDA Property, to any and all persons, whether employees or otherwise, and to any other
property connected to the EDA Property, except liability arising directly from the negligence of
Purchaser, his agents or employees. If, prior to the Date of Closing, all or a portion of the EDA
Property shall be the subject of an action in eminent domain or a proposed taking by a
governmental authority, whether temporary or permanent, Purchaser, at its sole election, shall
152913v~
2
have the right to terminate this Agreement without liability on its part, by so notifying Seller and
the Earnest Money paid by Purchaser and accrued interest shall then be promptly refunded to
Purchaser by Escrow Agent in exchange for a quit claim deed in favor of the EDA to the EDA
Property. Seller agrees to keep the EDA Property continually insured during the term of this
Agreement under a policy of fire and extended coverage insurance for its full insurable value.
6.0 ReDresentations of Seller. As an essential part of this Agreement and in order to
induce Purchaser to enter into this Agreement and purchase the EDA Property and Personal
Property, Seller hereby represents and warrants to Purchaser:
6.1 Seller represents and warrants to Purchaser that Seller is duly organized under the
laws of the State of Minnesota; that Seller has the requisite power and authority to
entered into this Agreement and the closing documents relating thereto to be
signed by it; that this Agreement and such documents have been or will be duly
authorized by all necessary action by the Board of Directors on behalf of Seller;
that the execution, delivery and performance by Seller of such documents do not
conflict with or result in violation of Seller's powers and authority or any
judgment, order or decree of any court to which Seller is a party; such documents
are valid and binding obligations of Seller, and are enforceable in accordance with
their terms.
6.2 Seller does not have actual knowledge of any condemnation, environmental,
zoning, safety, fIre or health or other regulation proceedings which would affect
the use and operation of the EDA Property or the value of the EDA Property
(except as hereinafter disclosed), nor has Seller received actual notice of any
special assessment proceedings affecting the EDA Property.
6.3 On the Date of Closing there will be no (a) outstanding leases or occupancy
agreements, except for those Leases as hereinafter defined, or (b) outstanding
contracts made by Seller for any improvements to the EDA Property which have
not been fully paid for or for which Seller shall make arrangements to payoff
except such contracts as shall be agreed upon by Seller and Purchaser for
improvements to the EDA Property and Seller shall cause to be discharged all
mechanic's or materialmen's liens arising from any labor or materials furnished to
the EDA Property prior to the Date of Closing and after the Date of Closing for
the tenant improvements, if any.
6.4 Seller will not, without the prior written consent of Purchaser:
(a)
construct or enter into any agreement or commitment to construct any
improvement or alteration to the EDA Property except for the current
construction by the Seller; or
(b)
enter into or consent to any lease, easement, covenant or other obligation
affecting the EDA Property or alteration to the EDA Property except as
provided herein.
152913v~
3
6.5 Until the Date of Closing, Seller shall maintain, care for and operate the EDA
Property in substantially the same manner as the EDA Property has been
maintained, cared for and operated prior to the execution and delivery of this
Agreement in good order and repair (except for ordinary wear and tear and
insured casualty) and maintaining present insurance in full force and effect.
6.6 Seller shall deliver to Purchaser a written notice of the commencement of any
legal action by any governmental authority or third party affecting the EDA
Property and will make no concessions or settlements with respect to any such
action without Purchaser's prior written consent.
6.7 Seller is not a foreign person, as such term is defmed in Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended, and shall deliver an affidavit to that
effect at closing, which shall be in form and substance reasonably acceptable to
Purchaser.
6.8 Seller does not have actual knowledge of any material liability under any
environmental law (including without limitation any obligation to remediate any
environmental condition) applicable to the EDA Property and is not in violation
of any environmental law in any material respect with respect to the ownership or
operation of the EDA Property. As used in this Agreement, (i) the term
"Environmental" means soil, surface ground waters, ambient air or any other
environmental medium, (ii) the term "Environmental Condition" means a
condition with respect to the EDA Property that is reasonably likely to result in an
indemnifiable loss with respect to the ownership and operation of the EDA
Property, (Hi) the term "Environmental Law" mean any law pertaining to the
environment, occupational health and safety matters or conditions, hazardous
materials, pollution or protection of human health or the environment, including
without limitation, any law relating to on-site or off-site contamination, remedial
actions and notifications in connection with the foregoing, and (iv) the term
"Hazardous Materials" means any substance, whether waste, liquid, gaseous or
solid matter that is or is deemed to be hazardous, hazardous waste, toxic,
pollutant, a deleterious substance, a contaminant or a source of pollution or
contamination under any applicable environmental law.
6.9 Seller does not have actual knowledge of any wells, above ground or underground
tanks located on or about the EDA Property or that any such tanks have been
located on or about the EDA Property and subsequently been removed or filled.
The representations and warranties set forth in this section shall be continuing and shall be true
and correct as of the Date of Closing with the same force and effect as if made at that time.
7.0 Renresentations of Purchaser. As an essential part of this Agreement and in
order to induce Seller to enter into this Agreement and to sell the EDA Property to Purchaser,
Purchaser hereby represents and warrants to Seller:
152913v~
4
7.1 Purchaser has the requisite power and authority to enter into and perform this
Agreement and the closing documents relating thereto signed by it; such
documents have been duly authorized by all necessary action on the part of
Purchaser and have been duly executed and delivered; such execution, delivery
and performance by Purchaser of such documents does not conflict with or result
in a violation of any judgment, order, mortgage, contract, agreement, or decree of
any court or arbiter to which Purchaser is a party nor result in any lien, charge or
encumbrance of any nature whatsoever on the EDA Property; such documents are
valid and binding obligations of Purchaser, and are enforceable in accordance
with their terms.
7.2 Purchaser acknowledges and agrees that it is purchasing the EDA Property on an
"as is" basis "with all faults" and that Purchaser will be responsible for the
construction of all improvements to the EDA Property. Except that City agrees to
fIx damaged ceiling tiles and repair the cracked drain pipe on the back of the
Building.
7.3 Purchaser agrees that it shall further be responsible for obtaining any and all
permits necessary for the operation of the Purchaser's business to be located on
the EDA Property.
8.0 Review of Documents and Access to PrODertv. Before or concurrently with
execution of this Agreement, Seller shall deliver to Purchaser all environmental reports, if any,
pertaining to the EDA Property in Seller's possession, ("Documents").
Within 30 days of the date of this Agreement, Seller shall provide, at Seller's cost, a Phase 1-
Environmental Report for the EDA Property ("Phase I") and shall provide a survey of the EDA
Property ("Survey").
Purchaser acknowledges that Purchaser and Purchaser's agents shall have access to the EDA
Property without charge and at all reasonable times for the purpose of any additional
environmental investigation and testing of the EDA Property by Purchaser ("Environmental
Investigation"). Purchaser shall hold Seller and the EDA Property harmless from all costs and
liabilities, including but not limited to reasonable attorney's fees, relating to Purchaser's
activities pursuant to this paragraph. Purchaser shall repair and restore any damage to the EDA
Property caused by or occurring during Purchaser's access of the EDA Property and return the
EDA Property and Personal Property to substantially the same condition as existed prior to such
Environmental Investigation. Purchaser shall have the right in its sole discretion to contact
various public officials and administrators to verify information regarding the status of the EDA
Property and to determine that the EDA Property is suitable for Purchaser's intended use.
Purchaser's obligations set forth in this paragraph shall survive termination of this Agreement.
9.0 Conditions To Closine:. The closing of the transaction contemplated by this
Agreement and the obligation of the Seller to sell the EDA Property and of the Purchaser to
152913v~
5
purchase the EDA Property shall be subject to the following conditions being met within 45 days
of the execution of this Agreement by both parties:
9.1 Except as otherwise provided in this Agreement, the representations and
warranties heretofore made by the Seller shall be correct as of the Date of Closing
with the same force and effect as if such representations had been made at the
Date of Closing.
9.2 Title to the EDA Property shall have been owned by Seller and shall be free and
clear of all encumbrances except the Permitted Encumbrances and the Leases.
9.3 The EDA Property shall not have been adversely affected in any material or way
as a result of condemnation, fire, release of hazardous substances, accident or
other casualty or act of God, whether or not covered by insurance.
9.4 No suit, zoning change, governmental investigation or other proceeding
challenging the transactions contemplated hereby, shall have been threatened or
instituted.
9.5 Purchaser shall have thirty (30) days from the date of the execution of this
Agreement by the Seller to determine if it can obtain all necessary permits for the
construction of any improvements Purchaser may wish to make to the EDA
Property for the operation of his proposed business or other purposes.
9.6 Buyer obtaining financing required to purchase the property.
10.0 Leases. Purchaser acknowledges that the EDA may enter into a lease with
Purchaser for the temporary storage of Purchaser's goods within the Building on the EDA
Property, if the parties agree to the terms of a Lease Agreement ("Purchaser's Lease").
Purchaser hereby agrees that the Purchaser's Lease is acceptable and is a Permitted
Encumbrance.
11.0 Closine:. The closing hereof shall take place on or before August 30, 2010 (the
"Date of Closing") or such other date as Seller and Purchaser may mutually agree in writing.
Unless otherwise agreed by the parties in writing, in the event the Agreement has not closed for
any reason, other than a default by Seller under the terms of this Agreement, by November 30,
2010, this Agreement, and the parties obligations under this Agreement, shall be null and void
and of no further force and effect, and Purchaser shall execute and deliver to Seller a quit claim
deed relating to the City Property. The closing shall take place at the offices of the Title
Company, or such other place as the Seller and Purchaser may reasonably determine. Possession
of the EDA Property shall be delivered on the Date of Closing.
12.0
Seller's Oblie:ations At Closine:. On or prior to the Date of Closing, Seller shall:
152913v~
6
12.1 Execute, acknowledge and deliver to Purchaser a "Limited Warranty Deed" to the
EDA Property conveying to Purchaser marketable fee simple title to the EDA
Property subject only to the Permitted Encumbrances and Purchaser's Lease.
12.2 Execute, acknowledge and deliver to Purchaser a bill of sale to Personal Property,
if any, conveying to Purchaser all of Seller's right, title and interest in the
Personal Property.
12.3 Deliver to Purchaser an affidavit of the Seller identifying Seller as the owner of
the EDA Property free and clear of all encumbrances except the Permitted
Encumbrances, and stating that there are no unrecorded interests affecting the
EDA Property and that all work, labor, services and materials furnished to or in
connection with the EDA Property have been fully paid for so that no mechanic's,
materialmen's, or similar lien may be filed against the Property.
12.4 Deliver to Purchaser such other documents as may be required by this Agreement
or as may be reasonably required by Title Company.
12.5 Satisfy any existing mortgages.
12.6 Deliver to Purchaser a certified copy of Purchaser's Resolution authorizing the
sale of the EDA Property.
13.0 Purchaser's Oblie:ations At Closine:. At closing, and subject to the terms,
conditions, and provisions hereof and the performance by Seller of its obligations as set forth
above, the Purchaser shall:
13.1 Deliver to Seller any portion of the Purchase Price then due and payable by wire
transfer or cashier's check.
13.2 Instruct the Escrow Agent in writing to deliver the Earnest Money and accrued
interest to Seller at Closing.
13.3 Execute and/or deliver to Seller such other documents as may be required by this
Agreement or as may be reasonably required by the Title Company.
14.0 Closine: Costs. The following costs and expenses shall be paid as follows in
connection with the closing:
14.1 Seller shall pay:
(a)
The cost of preparing the Commitment.
(b)
The cost of preparation of the Limited Warranty Deed and other
documents of conveyance.
152913v~
7
(c) Seller's attorneys' fees.
(d) The cost of recording the satisfaction of any existing mortgage and any
other document necessary to make title marketable and any state deed tax.
(e) One-half of the closing fee charged by Title Insurer (if a closer from Title
Insurer is used).
(f) The cost for a Phase I and Survey of the EDA Property.
14.2 Purchaser shall pay the following costs in connection with the closing:
(a) The cost of the premium for any title insurance policy or endorsements
issued pursuant to the Commitment.
(b) Filing fee required to record the Limited Warranty Deed.
(c) Purchaser's attorneys' fees.
(d) One-half of the closing fee charged by Title Insurer (if a closing from Title
Insurer is used).
(e) The cost of engineers or other consultants, if any, engaged by Purchaser
regarding the EDA Property.
15.0 Prorations. The following prorations shall be made as of the Date of Closing:
15.1 All utilities furnished to the EDA Property.
15.2 Real estate taxes and special assessments as hereinafter provided.
15.3 Rent due under the Leases.
16.0 Taxes and SDecial Assessments. Seller shall pay the real estate taxes and
installments of special assessments relating to the EDA Property which are due and payable in
the years prior to the year in which closing takes place and its pro rata share of the real estate
taxes and installments of special assessments due and payable in the year of closing based on the
ratio that the number of days from January 1 to the Date of Closing bears to three hundred sixty-
five (365) days. The balance of the real estate taxes and installments of special assessments due
and payable in the year of closing and thereafter shall be paid by Purchaser.
17.0 Brokerae:e. Each party hereby agrees to indemnify and hold the other harmless
of any claim made by a broker or sales agent or similar party for a commission due or alleged to
be due on this transaction on the basis of an agreement with said broker made by the
indemnifying party. The parties' obligations set forth in this paragraph shall survive termination
of this Agreement.
152913v~
8
18.0 Default.
18.1 In the event that Seller should fail to consummate the transaction contemplated by
this Agreement for any reason except for Purchaser's default or the failure of
Purchaser to satisfy any conditions to Seller's obligation hereunder Purchaser
may, as their sole remedy, cancel and terminate this Agreement and be relieved of
its obligations hereunder. In any such event, (except as provided at Article 8.0)
Purchaser shall be immediately entitled to the full return of the Earnest Money
and accrued interest from Escrow Agent heretofore paid in exchange for a quit
claim deed for the EDA Property. No delay or omission in the exercise of any
right or remedy accruing to Purchaser upon any breach by Seller under this
Agreement shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by Purchaser of any
condition or the breach of any other term, covenant, or condition herein contained
shall not be deemed to be a waiver of any other condition or of any subsequent
breach of the same or of any other term, covenant or condition herein contained.
All rights, powers, options or remedies afforded to Purchaser, either hereunder or
by law or equity, shall be cumulative and not alternative, and the exercise of one
right, power, option, or remedy shall not bar any other rights, powers, options or
remedies allowed hereunder or by applicable law.
18.2 In the event that Purchaser shall fail to consummate the transaction contemplated
herein for any reason, except the default by Seller or the failure of Seller to satisfy
any of the conditions to the Purchaser's obligations set forth herein, the Seller
shall be entitled, as its sole remedies, (a) to cancel and terminate this Agreement
in the manner provided by applicable law, be relieved of its obligations hereunder
and retain the Earnest Money and accrued interest as liquidated damages, and
upon such cancellation and termination, Escrow Agent shall deliver the Earnest
Money to Seller; or (b) to enforce the specific performance of this Agreement,
which action must be commenced within ninety (90) days of the date of failure of
Purchaser to consummate the transactions contemplated herein. No delay or
omission in the exercise of any right or remedy accruing to Seller upon any
breach by Purchaser under this Agreement shall impair such right or remedy
accruing to Seller upon any breach by Purchaser under this Agreement or be
construed as a waiver of any such breach theretofore or thereafter occurring. The
waiver by Seller of any condition or the breach of any term, covenant or condition
herein contained shall not be deemed to be a waiver of any other condition or of
any subsequent breach of the same or of any other term, covenant or condition
herein contained.
19.0 "As is" Purchase. Except as set forth in this Agreement or any document
contemplated hereby, (i) the EDA Property and Personal Property are being sold, conveyed,
assigned, transferred and delivered "as is, where is" on the date hereof and in its condition on the
date hereof, "with all faults," and Seller is not making, and expressly disclaims, any other
representation or warranties written or oral, statutory, express or implied, concerning the EDA
152913v~
9
Property or any Personal Property, including but not limited to, representations or warranties
relating to value or quality of the EDA Property or Personal Property or the prospects, fmancial
or otherwise, risks or other incidents of the EDA Property or Personal Property or with respect to
this Agreement or the transactions contemplated hereby or thereby, (ii) Seller specifically
disclaims any representation or warranty of merchantability, usage, suitability or fitness for any
particular purpose with respect to the EDA Property or any part thereof, or as to the
workmanship thereof, or the absence of any defects therein, whether latent or patent, and (Hi)
Seller agree to remove the safe and all embroidery equipment and computers presently located
on the EDA Property.
20.0 Contine:encies. In addition to any other condition to Closing set forth in any
other provision of this Agreement, Purchaser's obligation to close on the purchase and sale of the
EDA Property shall be contingent on each of the following: (a) Title to the EDA Property being
in the condition required in Article 4.0 above; (b) Purchaser determining that Purchaser is
satisfied with the results of the Phase I, Environmental Investigation and a Survey as provided
under Article 8.0 above. In the event that any of the above contingencies is not satisfied, or
waived by the Purchaser prior to the Date of Closing this Agreement, and the parties obligations
under this Agreement, shall be null and void and of no further force and effect, and, except as
provided at Article 8.0, the Earnest Money and all interest accrued thereon, shall be refunded by
Escrow Agent to Purchaser in exchange for a quit claim deed executed by Purchaser and
delivered to Seller relating to the EDA Property. Purchaser and Seller agree to exercise their
best efforts to satisfy the above contingencies on or before the dates provided above.
. i
21.0 Miscellaneous. The following general provisions govern this Agreement:
21.1 Time is of the Essence. The Date of Closing is of the absolute essence.
21.2 Governing Law. This Agreement is made and executed under and in all respects
is to be governed and construed under the laws of the State of Minnesota.
21.3 Notices. Any notice required to be given to Seller or Purchaser pursuant to this
Agreement shall be in writing and shall be deemed duly given: (i) on the date of
personal delivery; (ii) one day following dispatch by Express Mail or equivalent
or (Hi) two (2) days following mailing certified or registered mail, postage
prepaid, return receipt requested, to the respective addresses of the parties set out
below:
Seller:
Economic Development Authority In and For the
City of Farmington
430 3rd Street
Farmington, MN 55024
Attention: City Administrator
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With a copy to:
Andrea McDowell Poehler, Esq.
Campbell Knutson, P .A.
317 Eagandale Office Center
1380 Corporate Center Curve
Eagan, MN 55121
Purchaser:
Sherri Wamer
Elevations Nine Eighteen, Inc.
With a copy to:
22104 Blaine Ave.
Farminm:on. MN 55024
.
Any party, by notice given as aforesaid, may change the address to which subsequent notices are
to be sent to such party.
21.4 Purchaser's Waiver Rights. Purchaser may, at Purchaser's option, waive any right
conferred upon the Purchaser by this Agreement. Except as otherwise provided
herein, such waiver may be made only by giving Seller written notice specifically
describing the right waived.
21.5 Amendment. This Agreement shall be amended only by a written instrument
signed by Seller and Purchaser.
21.6 Construction. The captions and headings of the various sections of this Agreement
are for convenience only and are not to be construed as defining or as limiting in
any way the scope or intent of the provisions hereof. Wherever the context
requires or permits, the singular shall include the plural, the plural shall include
singular, and the masculine, feminine and neuter shall be freely interchangeable.
21.7 Assignability. This Agreement and the rights set out herein may not be assigned
by Purchaser without written consent by the Seller.
21.8 Entire Agreement. This Agreement sets forth the entire understanding of the
parties and may be amended, modified or terminated only by an instrument signed
by the parties.
21.9 Counterparts. For the convenience of the parties, any number of counterparts
hereof may be executed and each such executed counterpart shall be deemed an
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original, but all such counterparts together shall constitute one in the same
Agreement.
21.10 Survival. The terms, covenants, conditions and obligations of the Seller and
Purchaser shall survive the Closing under this Agreement.
The parties have executed this Agreement as of the day and year set forth above.
SELLER:
ECONOMIC DEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF FARMINGTON
By:
Its Executive Director
By:
Its President
PURCHASER:
ELEVATION NINE EIGHTEEN, INC.
By:
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EXIllBIT A
Legal Description of EDA Property
Part of Lots Five (5) and Six (6) of Block Twenty-three (23) in the Town (now City) of
Farmington, described as follows, to-wit: commencing Fifty-one (51) feet South of the
Northwest comer of said Lot Six (6) in said Block Twenty-three (23), thence running South
Fifty-two and one-half (52.5) feet, thence East One Hundred Ten (110) feet, thence running
North Fifty-two and one-half (52.5) feet, thence running West One Hundred Ten (110) feet to
the place of beginning, according to the plat thereof on file and of record in the office of the
County Recorder in and for Dakota County, Minnesota.
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EXIllBIT B
Personal Property
~
Shelvinl!
Convevor track unit
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EXHIBIT C
Escrow Receipt
The undersigned, Land Title, Inc. ("Escrow Agent") acknowledges receipt of Five
Thousand and no/lOOths Dollars ($5,000.00) (the "Deposit") to be held by it pursuant to the
Purchase Agreement to which this Escrow Receipt is attached. Escrow Agent agrees to hold the
Deposit in accordance with the terms of the Purchase Agreement and disburse the same strictly
in accordance with such terms. Escrow Agent shall invest the Deposit in such interest-bearing
accounts or instruments as shall be approved by both Purchaser and Seller. Interest shall accrue
for the benefit of Purchaser and shall become part of the Earnest Money.
Seller represents that its Tax J.D. Number is as follows:
Purchaser represents that it Social Security Number is as follows:
The sole duties of Escrow Agent shall be those described herein, and Escrow Agent shall
be under no obligation to determine whether the other parties hereto are complying with any
requirements of law or the terms and conditions of any other agreements among said parties.
Escrow Agent may conclusively rely upon and shall be protected in acting upon any notice,
consent, order or other document believed by it to be genuine and to have been signed or
presented by the proper party or parties. Escrow Agent shall have no duty or liability to verify
any such notice, consent, order or other document, and its sole responsibility shall be to act as
expressly set forth in this Agreement. Escrow Agent shall be under no obligation to institute or
defend any action, suit or proceeding in connection with this Agreement unless first indemnified
to its satisfaction. Escrow Agent may consult with respect to any question arising under this
Agreement and shall not be liable for any action taken or omitted in good faith upon advice of
such counsel.
The fees and charges of the Escrow Agent shall be paid as follows: one-half of such fees
and charges shall be paid by Seller and one-half of such fees and charges shall be paid by
Purchaser.
ESCROW AGENT:
LAND TITLE, INC.
By:
Its:
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SELLER:
ECONOMIC DEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF FARMINGTON
By:
Its Executive Director
By:
Its President
PURCHASER:
ELEVATION NINE EIGHTEEN, INC.
By:
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EXHIBIT D
Permitted Encumbrances
1. Purchaser's pro rata portion of real estate taxes payable in 2010 (if any) and subsequent
years.
2. Purchaser's pro rata portion of special assessments payable in 2010 (if any) and
subsequent years.
3. Building and zoning laws, ordinances, state and federal regulations
4. Easements, covenants and restrictions of record that do not substantially affect the
Purchaser's contemplated use;
5. Reservation of minerals or mineral rights to the State of Minnesota;
6. Any encumbrances shown on the Title Commitment to which Buyer has not objected
prior the expiration of the 20-day period
7. Purchaser's Lease
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