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HomeMy WebLinkAbout10C - Maui Wowi Lease Agreement MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: April 7 J 2008 10 C PAUL SNOOK, ECONOMIC DEVELOPMENT DIRECTOR CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE MAYOR AND CITY MANAGER TO ENTER INTO A LEASE AGREEMENT WITH FL YBIG, INC. (dba MAUl WOWI HAWAIIAN COFFEES AND SMOOTHIES) FOR THE COFFEE SHOP SPACE LOCATED WITHIN THE LIBRARY RESOURCE CENTER AT 16210 EAGLE CREEK AVENUE. Introduction City Council is asked to adopt a resolution authorizing the execution of a lease agreement with Mary Bigler, owner of FlyBig, Inc. for the operation of a Maui Wowi franchise in the commercial space at the library resource center. Ms. Bigler will be at the meeting to make a presentation about her business and answer any questions Council may have. Historv The 480 square foot commercial space located within the Library Resource Center was leased by Dean Reeve and Kelly Biese (dba City Perks) until February of 2008. Mr. Reeve and Ms. Biese opted to exit the coffee shop business and therefore did not renew the lease. Current Circumstances Staff has been working to draw a tenant to the space and has been successful in attracting a Maui Wowi Hawaiian Coffees and Smoothies franchise, owned by Mary Bigler. Ms. Bigler operates two other Maui Wowi outlets, at the Mall of America in Bloomington and at Burnsville Center, and has operated a kiosk I cart at Prior Lake Lakefront Days, and many other events at the Prior Lake-Savage High School. Her business has been a member of the Prior Lake Chamber of Commerce for 6 years, and Ms. Bigler has operated her business from her home in Credit River Township until she moved into an office I warehouse space located on Fish Point Road near the fire station in November of 2007. Founded in 1983, Maui Wowi Hawaiian has experienced tremendous growth to include nearly 500 franchised units. Maui Wowi Hawaiian offers authentic, natural Hawaiian products: . Exclusive all-natural, fat-free fresh fruit smoothies . Proprietary blend of Hawaiian coffees . Authentic Hawaiian products that include 100% Kona Coffee, other coffee blends, macadamia nuts, and various snacks A worldwide expansion is underway. With franchisees expanding into stores, office buildings, hospitals, health clubs, schools, universities, event venues, shopping www.cityofpriorlake.com \lC()I.~llL!\\JE'.jLl/\ IU:l'UI<'I S\2()UX.O'107UX .Vlalll \io\ll Lease If L'-'ALlUUC Phone 952.447.9800 / Fax 952.447.4245 malls, department stores, car washes and anywhere else people gather, Maui Wowi Hawaiian has grown into a very successful franchise system with over 400 franchisees operating nearly 500 units nationwide and another 800 units under development. Conclusion Assuming current plans and schedule for equipment installation and furnishing, Ms. Bigler plans opening the Prior Lake Maui Wowi in late April. ISSUES: Maui Wowi will be responsible for providing all of the equipment needed for the operation, as well as cabinets, counters and furnishings. All furnishings, equipment and signage will require city approval and must comply with Minnesota Health Department regulations. Maui Wowi is also required to be open for operation during regular Library Resource Center facility hours and use. These hours of operation correspond with those of Club Prior as well. The lease will be paid to the City on a monthly basis. Monthly rent for the first six months of the lease term will be $0 (in consideration of the substantial start-up costs incurred), and thereafter monthly rent will be paid as follows: INITIAL TERM: Year 1: April 1 , 2008 - September 30, 2008 = $0; October 1,2008 - March 31,2009 = $1,000 per month Year 2: April 1 ,2009 - March 31,2010 = $1,050 per month Year 3: April 1 ,2010 - March 31,2011 = $1,100 per month Year 4: April 1 , 2011 - March 31, 2012 = $1,155 per month RENEWAL TERM: Renewal Year 1: April 1, 2012 -March 31, 2013 = $1,213 per month Renewal Year 2: April 1, 2013 -March 31,2014 = $1,274 per month Renewal Year 3: April 1, 2014 -March 31, 2015 = $1,338 per month Renewal Year 4: April 1, 2015 -March 31, 2016 = $1,405 per month ALTERNATIVES: 1. Adopt a resolution authorizing the Mayor and City Manager to enter into the city's standardized lease agreement between the City of Prior Lake and FlyBig, Inc. for the lease of the 480 square foot commercial space within the Libraryl Resource Center in which to operate a Maui Wowi franchise 2. Take no action and direct staff to provide other information. RECOMMENDED MOTION: Alternative 1. ATTACHMENTSI 1. Lease Agreement. EXHIBITS: 2. Resolution authorizing the execution of a lease agreement with FlyBig, Inc. . fba Maul Wowl Hawaiian Coffees and Smoothles). ReVle~;;)kL Frank BOYlesV'" ager VI.O)LKCIL\:\GENn\ RFPORTS\2008,04(J7(J8 Vlaui \V<mi Ita,;.; (FINAL) DOC Motion By: Second By: WHEREAS, On February 25, 1997 the citizens of Prior Lake passed a referendum which included a Library / Resource Center; and WHEREAS, The plans and specifications for the Library/Resource Center approved by the City Council included commercial space for a coffee shop; and WHEREAS, A coffee shop has operated in the commercial space since October of 1999; and WHEREAS, The City Perks coffee shop ceased operations in February of 2008; and WHEREAS, Flybig, Inc. (dba Maui Wowi Hawaiian Coffees and Smoothies) has expressed interest in leasing the commercial space in the Library/Resource Center space to operate a Maui Wowi franchise outlet coffee shop; and WHEREAS, The existence of a Maui Wowi store in downtown Prior Lake is in keeping with the City of Prior Lake 2030 Vision and Strategic Plan in that it is a new business which contributes to the community's economic vitality, and helps make downtown a unique community focal point and destination attraction; and WHEREAS, City staff has negotiated and drafted a lease agreement which meets the needs of the City and Flybig, Inc. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The Mayor and City Manager are hereby authorized to enter into a four-year lease agreement with Flybig, Inc. (dba Maui Wowi Hawaiian Coffees and Smoothies) for the commercial space located within the Library Resource Center at 16210 Eagle Creek Avenue, Prior Lake, MN PASSED AND ADOPTED THIS 7th DAY OF APRIL, 2008. YES NO I Haugen I Erickson I Hedberg I LeMair j Millar Hau~en Erickson Hedber~ LeMair . Millar Frank Boyles, City Manager www.cityofpriorlake.com M:\CUUNCIL\KI::::;ULU 11\2001:$\040/08 MaUl VVCWI Lease (FINALldoc Phone 952.447.~800 / Fax 952.447.4245 City of Prior Lake, Minnesota LEASE AGREEMENT THIS LEASE AGREEMENT is made and entered into this 1 sl day of April, 2008, by and between the CITY OF PRIOR LAKE, MINNESOTA, a Minnesota municipal corporation (hereinafter referred to as "CITY", and FL YBIG, INC. (dba Maui Wowi), a Minnesota corporation (hereinafter referred to as the "LESSEE"). In consideration of the mutual covenants and promises hereinafter set forth, the sufficiency of which are not disputed, the CITY and LESSEE do hereby agree as follows: 1. DESCRIPTION OF THE PREMISES. CITY does hereby lease to LESSEE and LESSEE does hereby lease and take from CITY certain premises consisting of 480 square feet, the specific location of the premises is as outlined and delineated in Exhibit "A" attached hereto and incorporated herein as if fully set forth (hereinafter referred to as "Leased Premises"), and located in the Prior Lake Library building at 16210 Eagle Creek Avenue, Prior Lake, Minnesota 55372 (hereinafter "Building"). 2. TERM. This Lease Agreement shall be for a term of four (4) years commencing on the 1st day of ADril 2008, and terminating on the 31st day of March ,2012. 3. USE OF PREMISES. It is agreed that the Leased Premises may be used by the LESSEE for the retail sale of food and beverages, subject to all local, state and federal laws and regulations regarding the use of the Leased Premises. Food and beverages may not be sold from vending machines. Any use other than the sale of food and beverages shall require the written consent of the CITY, which consent shall not be unreasonably withheld. 4. RESPONSIBILITY REGARDING LEASED PREMISES. The CITY is responsible for and shall pay all utility charges, property insurance premiums on the Building (exclusive of furnishings for the Leased Premises) and all repairs, maintenance and services for the Building unless excepted therefrom in this Lease Agreement. The LESSEE shall be responsible for making nonstructural repairs to the Leased Premises (See Paragraph 8). The LESSEE shall be responsible for applicable taxes, insurance, all janitorial services and any additional maintenance required over and above the services provided by the CITY for the maintenance of the building. Janitorial services for the Leased Premises must be completed at a standard which is the same or better than provided for the remainder of the Building. Such determination shall be at the sole discretion of the CITY. CITY shall not be liable to LESSEE for any loss or damage of any kind whatsoever caused or sustained by reason of failure of any mechanical system within the Building including, but not limited to the heating or ventilating and air conditioning system servicing the Leased Premises or because of inability to obtain energy or utilities for any reason beyond CITY's control. 5. RENT AND SECURITY DEPOSIT. Monthly rent for the first six months of the lease term will be $0, and thereafter LESSEE shall pay the monthly rent set out below. Rental payments for any renewal term shall be in accordance with Section 23 herein. Rent payments shall be made on a monthly basis and paid by the 10th day of the given month in which payment is due. A late fee of $5.00 per day shall be assessed for payments received after the 10th day of the month. All rental payments required hereunder shall be paid to the CITY at 4646 Dakota St SE, Prior Lake, MN 55372, or such other place as determined by the CITY. Mau; Wow; Lease Library/Resource Center April 2008 INITIAL TERM: Year 1: April 1 , 2008 - September 30, 2008 = $0; October 1,2008 - March 31,2009 = $1,000 per month Year 2: April 1 ,2009 -March 31,2010 = $1,050 per month Year 3: April 1 ,2010 -March 31,2011 = $1,100 per month Year 4: April 1, 2011 -March 31,2012 = $1,155 per month LESSEE shall pay to CITY at the time the Lease Agreement is signed by both parties an amount equal to one and one-half times (1 %) the initial rent payment, $1,500, as security deposit for the Leased Premises. The security deposit may be used by the CITY to restore the Leased Premises to its original condition, normal wear and tear excepted, upon termination or expiration of the Lease Agreement. If the security deposit is insufficient to cover all costs of such repair, LESSEE (not business) shall be personally liable for the balance of the cost of repairs. 6. INSURANCE. The LESSEE shall maintain in full force and effect during the term hereof, a policy of public liability insurance in a form acceptable to the City Attorney. The minimum limits of liability of such insurance shall be $1,000,000 for injury or death to anyone person, $1,000,000 for injury or death to more than one person and $500,000.00 for property damage. LESSEE shall be responSible for the payment of any and all other insurance which it desires, and/or a public liability policy which insures LESSEE above the limits as required hereunder of the CITY. The CITY shall be named as an additional insured on the public liability policy. Said policy shall contain a provision that the insurance cannot be terminated without 30 days written notice by the insurance company to the CITY. LESSEE shall provide CITY with a Certificate of Insurance which conforms with the provisions herein, before LESSEE may operate at the Leased Premises. The CITY shall carry and cause to be in full force and effect a fire and extended coverage insurance policy on the Building containing the Leased Premises, but not the contents owned, leased to, or otherwise in possession of the LESSEE. Said fire and extended coverage insurance pOlicy on the Building covers, without any rating surcharge, a wide range of uses. In the event, however, the LESSEE changes the use of the Leased Premises or contents kept in the Leased Premises, or refuses to follow directions from the Fire Inspection Bureau, or general housekeeping causing CITY's fire and extended coverage insurance premiums for the Building to increase, then the LESSEE agrees to pay to CITY any increase in CITY'~ premium. 7. INDEMNITY. The LESSEE agrees that it will, at all times, indemnify and save, protect and keep harmless the CITY, including but not limited to its Council, staff and employees, agents and employees, attorneys, and the Leased Premises from every and all costs, loss, damage, liability, expense, penalty and fine whatsoever, which may arise from or be claimed against the CITY or the Leased Premises by any person or persons, for any injuries to person or property, or damage of whatever kind or character consequent upon or arising from the use or occupancy of said Leased Premises by the said LESSEE, or consequent upon or arising from any neglect or fault of the LESSEE or the agents and employees of LESSEE, in the use and occupancy of the Leased Premises, or consequent upon or arising from any failure by the LESSEE so to comply and conform with all laws, statutes, ordinances and regulations of the United States, the State of Minnesota and the CITY, now or hereafter in force; and if any suits or proceedings shall be brought against the CITY or the said Leased Premises, on account of any alleged violation thereof, or failure to comply and conform therewith or on account of any damage, omission, neglect or use of said premises by the LESSEE, or the agents and employees of the LESSEE, or any other person on said premises, the LESSEE agrees that the LESSEE will defend the same, and will pay whatever judgments may be recovered against the CITY or against said Leased M:\Agreements\Maui Wowi Lease - April 2008.doc 2 Maui Wowi Lease Library/Resource Cen~ April 2008 Premises on account thereof; provided however that the LESSEE shall not be required, and nothing in this paragraph shall be construed as requiring LESSEE to indemnify CITY against any costs, losses, damages, liabilities, expenses, penalties, fines or claims of any type arising from the acts, omissions or negligence of CITY, its agents or employees. 8. MAINTENANCE. The LESSEE shall be wholly responsible for the maintenance and repair of the interior of the Leased Premises including all interior walls, all door and electrical fixtures, and will keep the Leased Premises in as good a condition as when turned over to LESSEE, reasonable wear and tear excepted. The LESSEE agrees to keep the Leased Premises in a clean, orderly and sanitary condition and will neither do nor permit to be done therein anything which is in violation of insurance policies on the Building or that is contrary to any State or local law, ordinance or regulation thereof. The LESSEE will neither commit nor suffer waste to the Building or to the Leased Premises. The CITY shall, at its own expense, keep in good order, safe condition and repair, the structural parts of the Building (including, but not limited to, roof, exterior walls, foundation and concrete floor) in which the Leased Premises are located, except where repairs to the structural parts are required due to the fault or negligence of the LESSEE, its employees or invitees, in which case the LESSEE shall be responsible for reimbursing the CITY for the costs of such repairs. 9. APPEARANCE AND ACCESS. CITY, to the extent obligated herein, and LESSEE mutually agree to keep the grounds, Building, and the Leased Premises in a condition of good repair and appearance as their respective responsibilities and rights require. LESSEE agrees to keep all of its trash containers, refuse and waste within the Leased Premises and agrees not to litter any of the grounds or entries. LESSEE acknowledges that, upon occupancy of Leased Premises, LESSEE will cause the Leased Premises to be inspected in order to ascertain the condition thereof, that any objections thereto not delivered in writing to the CITY within ten (10) days after occupancy shall be deemed waived; and that no representations, either expressed or implied, have been made regarding the quality or condition of the Leased Premises. 10. CONDEMNATION. If substantially all of the Leased Premises shall be taken under the power of eminent domain, then the term of this Lease Agreement shall cease as of the day possession shall be taken and gross rent shall be paid up to that date with a proportionate refund by CITY of such rent as may have been paid in advance. If more than twenty percent (20%) of the floor space in the Building shall be taken under the power of eminent domain, LESSEE shall have the right to terminate this Lease Agreement as of the day possession shall be taken by notice to CITY given within ten (10) days after possession is taken. If more than one-third (1/3) of the parking area in the Building in which the Leased Premises is situated is taken under the power of eminent domain, LESSEE shall have the right to terminate this Lease Agreement as of the day possession shall be taken, unless a reasonably equivalent substitute parking area is provided. LESSEE shall be allowed a reasonable time not to exceed sixty (60) days after any such termination to vacate the remainder of the Leased Premises and rent shall be paid up to the day possession be taken or the LESSEE vacates the remainder of the Leased Premises, whichever is later. If this Lease Agreement is not canceled pursuant to this paragraph 11, the CITY shall at its expense make the necessary repairs to that part of the Leased Premises not affected by such condemnation as rapidly as reasonably possible to restore the Leased Premises to as near the M:\Agreements\Maui Wowi Lease - April 2008.doc 3 Maui Wowi Lease Library/Resource Center April 2008 condition which existed immediately prior to the taking as is reasonably possible. In the event that any portion of the Building in which the Leased Premises are located or the Leased Premises themselves are condemned, the CITY shall not be responsible to LESSEE for any costs or damages related to LESSEE's use of Leased Premises or LESSEE's business. 11. ASSIGNMENT. The LESSEE shall not have the right to assign its interest in this Lease Agreement or to sublet the Leased Premises, or any part thereof, except with CITY's written consent. Any approved assignment or sublet shall be subject at all times to the provisions of this Lease Agreement, provided, however, in such an instance, LESSEE shall at all times remain obligated hereunder, the same as though no assignment or sublease had occurred. LESSEE agrees that it will not permit any assignment hereof by operation of law without the consent in writing of the CITY, first hand and obtained. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the said assignee without the written consent of the CITY, first-hand and obtained. Notwithstanding the above, Tenant shall have the right to sublet the premises to its Franchisor or a duly approved franchisee or Franchisor. However, all of the duties and responsibilities under this Lease Agreement shall remain the responsibility of the LESSEE and not an Assignee 12. BREACH OF LESSEE. If the LESSEE shall default hereunder and such default shall continue for a period of fifteen (15) days after written notice from the CITY of such default, then it shall be lawful for the CITY to terminate this Lease Agreement and enter into and take possession of the Leased Premises and remove all persons and their property therefrom; provided that if the default be of such a nature that it may require more than fifteen (15) days to cure, the period to cure may be extended with the written permission of the CITY. Said time to cure default may be extended for such period of time as specified by CITY's written notice to LESSEE. The LESSEE shall cure any default with due diligence and within the time period provided herein. Contemporaneously with sending Notice of Default to Tenant Landlord shall also send any Notices of Default to Franchisor, Maui Wowi Coffees and Smoothies, Inc. 5446 DTC Parkway, Suite 200, Greenwood Village, CO 80111. 13. ALTERATIONS. The LESSEE shall not make any alterations to the Leased Premises without the prior written consent of the CITY. If the LESSEE shall desire to make any such alterations, an accurate description shall first be submitted to and approved by the CITY and shall be done by the LESSEE at its own expense. Approval shall not be unreasonably withheld. LESSEE agrees that all such work shall be done in a good, workmanship-like manner, and in conformance with applicable building codes, that the structural integrity of the Building shall not be impaired, and that no liens shall attach to the Leased Premises by reason thereof. The LESSEE shall and will in each instance save the CITY and said Leased Premises forever harmless and free of all costs, damages, losses and liabilities of every kind and character which may be claimed, asserted or charged, including liability to adjacent owners based upon the acts or negligence of said LESSEE or their agents, contractors or employees, and will preserve and hold the CITY and said Leased Premises forever free and clear from liens for labor and material furnished. Any such alterations shall become the property of the CITY as soon as they are affixed to the Leased Premises and all right, title and interest therein of the LESSEE shall immediately cease unless otherwise stated in writing. The LESSEE however, shall remain the owner of any installed trade fixture and shall have the right to remove such trade fixture at the expiration or termination of this Lease Agreement, so long as the Leased Premises is restored to its original condition. Any alterations to Leased Premises shall be restored to their original condition at the termination or expiration of this Lease Agreement and subject to the provisions provided in Paragraph 5 herein. M:\Agreements\Maui Wowi Lease - April 2008.doc 4 Maui Wowi Lease Library/Resource Center April 2008 14. MECHANIC'S LIEN: Should any mechanic's or other liens be filed against any portion of the Leased Premises by reason of LESSEE's acts or omissions or because of a claim against LESSEE, LESSEE shall cause the same to be canceled and discharged of record by bond or otherwise within ten (10) days after receipt of notice from the CITY. Failure to comply with the provisions of this paragraph shall be grounds for the CITY to immediately terminate this Lease Agreement. 15. SIGNS. The LESSEE shall have the right, at its own risk and expense, to place signs identifying LESSEE's business on the Building fayade and, within the Building in which the Leased Premises is located. CITY reserves the right to determine size, location and composition of all signs. Said signs shall not be erected without the written prior approval of the CITY, which approval the CITY will not unreasonably withhold. LESSEE agrees to maintain the sign(s) in good repair, to remove such sign(s) at the end of the term or any extended term of this Lease. The CITY reserves the right to remove all unapproved signs at the expense of LESSEE. 16. TERMINATION. Upon termination of this Lease Agreement, LESSEE shall deliver up the Leased Premises to the CITY in as good a condition as said Leased Premises shall be in as of the date'of tender of possession subject to ordinary wear, tear and decay, the LESSEE agreeing not to leave the Leased Premises in an irregular or unkempt manner. 17. RULES AND REGULATIONS. The LESSEE shall perform, observe and comply with all Building rules and regulations of the CITY with respect to the safety, care and cleanliness of the Leased Premises, and the preservation of good order thereon, and, upon written notice thereof to LESSEE, LESSEE shall perform, observe and comply with any changes, amendments or additions thereof as from time to time shall be established and deemed advisable by the CITY. Said rules and regulations shall be in writing. 18. ENTRY. During the ninety (90) days prior to the expiration of the term, the CITY or its agents may exhibit the Leased Premises to prospective Lessees. 19. NOTICES. All notices, consents, demands and requests which may be or are required to be given by either party of the other, shall be in writing and sent by United States registered or certified mail, with return receipt requested, addressed to the LESSEE at the Leased Premises and to the CITY at 4646 Dakota St. S.E., Prior Lake, MN 55372, or to such other address as CITY may direct, in writing, in the future, with a copy to Suesan Lea Pace, City Attorney, 600 Pillsbury Center South, 220 South Sixth Street, Minneapolis, MN 55402-4501. The date which said registered or certified mail is mailed by the CITY shall be conclusively deemed to be the date on which a notice, consent, demand or request is given or made. The above address of a party may be changed at any time, or from time to time, by written notice given by said party to the other party in the manner herein above provided. 20. CLAIMS. The LESSEE will make no claim against the CITY for any loss of or damage to property and/or the Leased Premises caused by theft, burglary, water, gas, electricity or other means. LESSEE further agrees it will not make any claim against the CITY regardless of cause for loss of profits. 21. FIRE REPAIR. In the event of damage to the Leased Premises by fire, the elements or other casualty of whatever kind or nature, the CITY shall repair the damage with reasonable dispatch. If the damage renders the Leased Premises untenantable in whole or in such part that it is impractical to conduct business therein, the rent shall wholly abate until the damage has been M:\Agreements\Maui Wowi Lease - April 2008,doc 5 Mau; Wow; Lease Library/Resource Center April 2008 repaired. If the damage renders the Leased Premises untenantable in part but LESSEE continues to occupy them in part, the rent shall be reduced in the proportion that the unoccupied portion of the Leased Premises bears to the occupied portion of the Leased Premises, until the damage has been repaired. The CITY shall not be responsible for any loss of LESSEE's fixtures, property or for any lost profit. If the damage is not repaired by CITY within a reasonable time, or in any event, within one hundred twenty (120) days, LESSEE shall thereupon have the right to terminate the Lease Agreement by giving the CITY written notice of such termination. 22. QUIET ENJOYMENT. LESSEE, upon payment of the rent herein reserved and upon performance of all of the terms, covenants and conditions of this Lease Agreement by it to be kept and performed, shall at all times during the term hereof or during any extension or renewal hereof, peaceably and quietly enjoy the Leased Premises without any disturbance from CITY except that LESSEE understands and agrees the use of the Building for the public purpose for which it was constructed shall not constitute a bteach of quiet peace and enjoyment of Leased Premises. Upon expiration of the Lease term or earlier termination of the Lease, LESSEE shall surrender the Leased Premises in good condition and repair, except for reasonable wear and tear. 23. RENEWAL TERM. Provided that LESSEE is not in default under the terms and conditions of this Lease Agreement, the Lease term may be renewed at the completion of the initial lease term, at the sole discretion of the CITY, for an additional four-year term. The rental payments for the renewal term shall be as follows: Renewal Year 1: April 1, 2012 - March 31, 2013 = $1,213 per month Renewal Year 2: April 1, 2013 - March 31,2014 = $1,274 per month Renewal Year 3: April 1 ,2014 - March 31,2015 = $1,338 per month Renewal Year 4: April 1 ,2015 - March 31,2016 = $1,405 per month 24. HOLDING OVER. If LESSEE shall hold over the Leased Premises or any part thereof after the expiration of the term hereof, such holding over shall be construed only to be a tenancy from month to month subject to all of the covenants, conditions and obligations hereof except that the rent shall be two hundred (200%) percent of the amount identified in Paragraph 5 herein plus the increase in operating expenses. Nothing herein shall be construed to give LESSEE any rights to hold over or to continue in possession of the Leased Premises. 25. HOURS OF OPERATION OF LEASED PREMISES. LESSEE may only operate or have open for business the Leased Premises at minimum from 6am. to 8pm, Monday-Friday; 7:30am to 5pm on Saturdays; and Sundays; or such times and dates that the Library and Resource Center is open to the public, including times during which the City is sponsoring or has approved the use of the Building for a private event. Amendments to operating hours may be authorized by the CITY by prior written notice. Hours of operation shall be posted prominently. 26. NO VENDING MACHINES. LESSEE shall not install vending machines without the prior written consent of the CITY. The CITY will not place, nor approve any party other than the LESSEE from installing food or beverage vending machines in the lobby of the Building. 27. INDEPENDENT CONTRACTOR. It is agreed that nothing herein contained is intended or should be construed in any manner as creating or establishing the relationship of co-partners between the parties hereto or as constituting the LESSEE as an agent, representative or employee of the M:\Agreements\Maui Wowi Lease - April 2008.doc 6 Maui Wow; Lease Library/Resource Center. April 2008 CITY for any purpose or in any manner whatsoever. LESSEE is to be and shall remain an independent contractor with respect to all services performed under this Lease Agreement. LESSEE represents that it has, or will secure at its own expense, all personnel required in performing services under this Lease Agreement. Any and all personnel of LESSEE or other persons while engaged in the performance of any work or services required by LESSEE under this Lease Agreement shall have no contractual relationship with the CITY and shall not be considered employees of the CITY and any and all claims that mayor might arise under the Workers' Compensation Act of the State of Minnesota on behalf of said personnel or other persons while so engaged, and any and all claims whatsoever on behalf of any such person or personnel arising out of employment or alleged employment including without limitation claims of discrimination against the LESSEE, its officers, agents or employees shall in no way be the responsibility of the CITY; and LESSEE shall defend, indemnify and hold the CITY, its officers, agents and employees harmless from any and all such claims regardless of any determination of any pertinent tribunal, agency, board, commission or court. Such personnel or other persons shall not acquire nor be entitled to any compensation, rights or benefits of any kind whatsoever from the CITY, including without limitation, tenure rights, medical and hospital care, sick and vacation leave, Workers' Compensation, Unemployment Compensation, disability, severance pay and PERA. The CITY shall not be bound by and the LESSEE's performance hereunder shall not be conditioned upon any contract between the LESSEE and any other entity or party. 28. NONDISCRIMINATION. In connection with the execution of this Lease Agreement, the LESSEE agrees that it and any of its subcontractors, material suppliers and vendors shall not discriminate against any employee or applicant for employment because of race, creed, age, sex, religion, national origin, affectional preference or any other characteristic protected by local, state or federal statutes, regulation or ordinance. The LESSEE will take affirmative actions to insure that applicants are employed, and that employees are treated during employment without regard to race, color, sex, national origin, affectional preference or any other characteristic protected by local, state or federal statutes, regulation or ordinance. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination, rates of payor other forms of compensation, and selections for training, including apprenticeship. 29. CERTIFICATE OF COMPLIANCE FOR PUBLIC CONTRACT: If LESSEE has employed more than twenty (20) full-time employees in Minnesota at any time during the previous twelve (12) months, it shall have an affirmative action plan for the employment of minority persons, women, and the disabled that has been approved by the Commissioner of Human Rights. The LESSEE shall submit receipt of a Certificate of Compliance issued by the Commissioner signifying that the LESSEE has an approved Affirmation Action Plan by the State Human Rights Department. 30. COMPLIANCE WITH STATE AND FEDERAL LAWS. LESSEE, in connection with the execution of this Lease Agreement, assumes compliance with the statements and conditions in the Equal Employment Opportunity Assurance included in Exhibit "B". 31. ENTIRE AGREEMENT. This Lease Agreement represents the entire and integrated agreement between the parties hereto and supersedes all prior negotiations, representations or agreements, either written or oral. 32. COUNTERPARTS AND SIGNATORIES. This document may be signed in one or more counterparts which, when taken together, shall be one and the same agreement. The persons signing this Lease Agreement have been duly authorized by their respective entities to enter into this Lease Agreement._ 7 M:\Agreements\Maui Wowi Lease - April 2008.doc Maui Wowi Lease Library/Resource Center - - April 2008 33. HEADINGS. The headings herein are inserted only for convenience and reference and shall in no way define, limit or describe the intent of this Lease Agreement. 34. GOVERNING LAW / JURISDICTION. State of Minnesota (State) laws govern all questions and interpretations concerning the validity and construction of this Lease Agreement. 35. SEVERABILITY. If any provision of this Lease Agreement is held invalid, illegal or unenforceable by a Court of competent jurisdiction, the remaining provisions will not be affected. 36. EXHIBITS. This instrument contains all of the agreements made between the parties and may not be modified orally or in any manner other than by agreement, in writing, signed by all parties to this Lease Agreement. The following Exhibits listed below are made part of this Lease Agreement as if fully set forth herein: Exhibit A - Location map of Leased Premises Exhibit B - Equal Employment Opportunity Assurance 37. WAIVER. One or more waivers of any covenant, term or condition of this Lease Agreement by the CITY shall not be construed by the LESSEE as a waiver of a subsequent breach of same covenant, term or condition. The failure or delay on the part of the CITY to enforce or exercise at any time any of the provisions, rights or remedies of this Lease Agreement shall in no way be construed to be a waiver thereof nor in any way effect the validity of this Lease Agreement or any part thereof or the right of the CITY to thereafter enforce each and every such provision, right or remedy. 38. BINDING EFFECT. This Lease Agreement and the covenants and conditions herein contained, shall inure to the benefit of and be binding upon the CITY, its successors and assigns, shall be binding upon LESSEE, their heirs, successors and assigns, and shall inure to the benefit of LESSEE and only such assigns of LESSEE to whom the assignment by LESSEE has been consented to by CITY. IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed the day and year first above written. LESSOR: City of Prior Lake LESSEE: FL YBIG, INC. BY: By: Jack G. Haugen, Mayor Mary Bigler, BY: Frank Boyles, City Manager 8 M:\Agreements\Maui Wowi Lease - April 2008.doc EXHIBIT "A" (Location Map of Leased Premises) Mau; Wow; Lease Library/Resource Center April 2008 9 M:\Agreements\Maui Wowi Lease - April 2008.doc Mau; Wow; Lease Library/Resource Center April 2008 EXHIBIT "B" (Equal Employment Opportunity Assurance) FL YBIG, INC. hereby agrees that it shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, marital status, status with regard to public assistance, disability, political affiliation, affectional preference or any other characteristic protected by local, state or federal statutes, regulation or ordinance. LESSEE: FL YBIG, INC. By: Mary Bigler Dated: M:\Agreements\Maui Wowi Lease - April 2008.doc 10