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HomeMy WebLinkAbout3C - Priordale Mall Lease -' i AGENDA NUMBER: PREPARED BY: SUBJECT: DATE: INTRODUCTION: BACKGROUND: HERITAGE 1891 COMMUNITY 1991 qgJ$% 2CZ!Jl 3 (C) BILL MANGAN, PARKS AND RECREATION DIRECTOR CONSIDER APPROVAL OF LEASE WITH PRIORDALE MALL FOR THE DANCE PROGRAM AUGUST 5, 1991 This item was intended to be on the consent agenda, however, staff feels it should be pulled off for discussion purposes. The Dance Program offered through the Recreation Department has outgrown its' facilities at the Library. with over 200 participants in the program, we can no longer operate out of the basement of the Library. At the City Council meeting of July 15, staff was directed to continue discussion with Priordale Mall representatives and research two items: 1) the use of Assembly of God Church, and 2) separate restroom facilities for the program in the mall. Staff has looked at the availability of Assembly of God Church by talking to Pastor Dan Turner. The dance program would require too large of space for too much time during the week to be feasibile. This time block would conflict with their space needs in addition to sharing of room and equipment. This would not be an option for the program. While looking into separate restroom facilities, staff negotiated with Neil Boderman to determine if they could be put in and who would pay for the improvements. Staff was denied the request of the improvement being made by Mr. Boderman due to the rental rate that is being proposed. Mr. Boderman was pretty direct about that improvement being at our expense because there are restrooms right across the hall. In checking with City Building Officials, staff would have to put in separate men's and women's handicapped restroom facilities. Cost estimates for this would be $7,500 which Staff would recommend come from the 1991 Contingency Fund. There is currently a balance of $74,742.14 in the Contingency Fund. Taking the $7500 estimated cost of the restrooms out of Contingency would leave a balance of $67,242.14 in the 1991 contingency Fund. 4629 Dakota 51. 5.E.. Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245 DISCUSSION: BUDGET IMPACT: ALTERNATIVES: At this point, Attorney Kessel has drawn up the lease and it is attached for your review. Mr. Boderman has received a copy of the lease and staff intends to have a signed copy returned by Monday, August 5th. There were two points of contention in the lease, 1) that a J?roportionate share of operating costs dur1ng the lease period of four years be capped at $2.75 per square foot and 2) improvements to the rental space would be the City's cost. other than these two items, all the essential points originally highlighted by Attorney Kessel have been cleared up. Any questions concerning the lease should be directed to Attorney Kessel. This proposal would certainly have an impact on the budget. The preliminary discussions with Mr. Boderman of the Priordale Mall have resulted in estimated annual lease costs of $16,000 rising to $22,000 during the fourth year of the lease. While staff feels that this rate is favorable, it is a cost that has not been incurred in the past. There are certain risks involved in leasing of space over the four years. Continuation of the program, increased program expense, decreased participation, and an unknown economic future are all part of the risk involved in this decision. However, staff feels that the program is solid and that the J?rogram will pay its' way, that the actual 11ability and financial exposure is small, even with these new costs. For budgetary reasons, it is important to point out that no property tax dollars are used to support this program. All lease expenses would come from program participant tuition. In addition, there would be the estimated costs of $7,500 from the 1991 contingency Fund to fund the restrooms. This is a necessary expense as the restrooms are required as part of the lease space. The alternatives are as follows: 1. Approve the lease as prepared by the City Attorney; 2. Drop the dance program due to a lack of affordable space for the program; 3. Table this item until there are adequate facilities available in the community; RECOMMENDATION: ACTION REQUIRED: staff would recommend Alternative #1, approve the lease and enter into a four year lease agreement at the priordale Mall. Staff feels that this would be the best solution for all parties. Priordale Mall has space available to lease; the Cit~ of Prior Lake will be bringing 200+ partic1pants weekly into the mall; these participants are all too young to drive which means that J?arents will have to come to the mall. Wh1le staff believes that the Priordale Mall has adequate space to offer, the City of Prior Lake can offer something to the mall as well. A motion is in order to approve the lease at the priordale Mall for the dance program. Another motion would a $7,500 expenditure Fund to construct studio. be in order to authorize from the 1991 Contingency restrooms in the dance :..-.-----":: .iUL-~--l'j':!l 1~:48 FI':UM LCJMME~~-NELSON,MPLS f<S TO :J44'7'4.;4S P.lj,:: LEASE THIS LEASE, entered 1nto as of the day of 1991, by and between Priordale Mall Investors Limited Partnersh~p, a Minnesota limited partnership, by Blue Star Associates, a Minnesota general partnership, General Partner, 7301 Ohms Lane, Edina, Minnesota 55435, hereinafter called ~Landlord", and the City of Prior Lake, a Minnesota municipal corporation, 4629 Dakota Street S.E., Prior Lake, Minnesota 55372, hereinafter called "Tenant". ARTICLE I PREMISES AND TERM Section 1. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the dance studio shown outlined in red on Exhibit A attached hereto and made a part hereof. (The premises outlined in red are hereafter called the "leased premises" and contain approximately 2,694 square feet.) Said dance studio is situatea at _. , . .____.____ ___, City.of Prl.or-1:ake, Coun-~-y 01 Scott, ~tate 01 Ml.nnesota,~ocated in Priordale Mall Shopp1ng Center, which shop~ing center is located on land legally described in Exhibl.t B attached hereto and made a part hereof. The shopping center name is subject to change by Landlord. Section 2. To have and to hold the leased premises unto Tenant for a term of four years commencing on the 1st day of September, 1991, and ending on the 31st day of August, 1995, unless sooner terminated as hereinafter provided. ARTICLE II MINIMUM RENT Section 1. The fixed annual minimum rent shall be payable by Tenant in equal monthly installments, on or before the first day of each month in advance, at the office of Landlord or at such other place designated by Landlord withoyt ~rior de~and therefore. Said fixed annual minimum rent during the term of this Lease shall be as set forth on Exhibit C attached hereto and made a part hereof. The first full month's rent shall be paid at the time of execution of this Lease. Minimum rent fOT any par~ial month at the beginning of the Lease term shall be e~~itably prcraLed, and is payable on the coWa~nCeffient date of the Lease term. Section 2. Tenant shall have the right of setoff against any present or future rent payment obligati~~~ in th~ event of Q material breach of Landlord's covenants contained in this agreement. Section 3. All rental and other sums payable hereunder by Tenant which are not paid within 30 days after the due date shall bear interest from the date due to the date paid at the rate of 10% per annum or the highest rate permitted by law, whichever is less. _;l-,L -':'3l<.1-1'j'::11 :10: ....j ;=1":1:11 LLM1EN-NELSGN, MPLS RS 11':" :j~~7424S F'.li:l':: ARTICLE III COMMON AREAS SecL.lon 1. The term "conunon areas" shall mean all that portion of shoppinq center improvements excepting only that area which is constructed for lease to tenants or hereafter leased to t:enan~s. Landlord has made no representation as to identity, type, size or number of other stores or tenancies in the 6hopping center, and Landlord reserves the unrestricted right to change the building perimeters, driveways, parking areas, store sizes And identity and type of other stores or tenancies and add buildings and other structures, provided only that the size of the leased premises, reasonable access to the leased premises and minimum parking facilities as required by governmental authorities having jurisdiction shall not be substantially or materially impaired subject to the provisions of Article XI hereof. Section 2. Landlord grants to Tenant, its employees, cu~tomers and in~...itees, the nontxclusive right d\.i.ring the tern, of this Lease to use the common areas from time 'to time constructed, such use to be common with Landlord and all t~n~nts of Landlord, its and their em~loyees, customers and invitees. Tenant shall not at any time ~nterfere with the rights of Landlord and other tenants, it~ and their employees, customers and invi~ees, to use any part of the common areas. It is understood and agreed t.hat Landlord may contract fer rnutu.::l.l easement rights with adjoining landowners who shall th~r~after, along with their employees, customers and invitees, use the ~.:>nunon areae i n ~onl1licn with Landlord, Tenant and all te.,Qnts vf Landlord, and their employees, customers and invit~~e, to the extent of the adjoining landowners' contract rights. Sec~ion 3. Landlord agrees to manage, operate and maintain all common areas and common facilities within the common area~ of the shoppin~ center. The manner in which such areas and facilities sha~l be maintained and the expenditurec therefor shall be at the sole discretion of Landlord, who shall have the right to adopt and promulgate reasonable nondiscriminatory rulee and regulations, from time to time, including the right to designate parking areas for the use of employees of tenants of the shopping center and to restrict such ernplvy€e~ from parking areas de~ignated exclusively for customers. Upon roaeonablc requesL by Landlord, Tenant shall furnish a complete list of the names of Tenant's employees at the leased premlse~ who have aU1..cmobilC$ and of the license numbers of their autOI'ncbiles and the license number of all motor vehicles operated by T~nant. Landlord shall have the right to use portions of the common areas for the purpose of di~plays, promot.ion:;;, pr()~ramr., garnc:"~ or oth~r us~s which may be of intere5t to all or ~ar~ of the general public. Landlord shall have the right to close portions of the common areas from time 1..0 time for repa~rs, to prevent accruing of public rights therein and for any cth~r legitimate purpose. Section 4. Tenant agrees to pay as additional rent Tenant's proportionate share of all common area expenditures calculated by Landlord including, but not limited to, the cost vf managing -2- ~ jiJL-A:1-1'3'31 n;:S"-1 Ff<CJf1 LOMr1ErH~EL';Ot.j,MPLS RS Tei :;JJ7~~4:. P,.2l~ the property At a management fee at competitive rates (not to exceed 5% of gross rents excluding common area, real estate taxe6 and insurance expense), repairing, in6uring (both the common areas and common area maintenance employees), operatin9, ~ecur~n9, traffic regulating, lighting, cleaning, snow removal, line painting and maintenance, ineluding such replacemp-nt of pav~n9, curbs, sidewalks, landscaping, drainage and lighting of the shopping center constituting exterior common areas, in monthly payments with the monthly rent payments. Tenant's proportionate share of such costs shall at all times be computed as the percentage which the net rentable area ot the leased premises bears to the net rentable area of the entire pr~mises. Tenant's proportionate share of total operating COSts is ,. The net rentable area of the leased premises is square feet, and the net rentable area of the entire leased premises is square feet. The rentable area of the leased space and the shopping center shall be calculated in accordance with the standard methods of floor measurement adopted by the Building Owners and Managers Association. There shall be excluded from operating costs: interest and principal payment on mortgages, depreciation on real property and other cOSts required to be capitalized for federal income tax purposes. Section 5. Tenant agrees to pay as additional rent Tenant's proportionate share of the cost of heating, air conditioning, lighting, insuring and maintaining the shopping center enclosed mall and/or walkway areas (both the common areas and common area ma1ntenance employees), in monthly payments with the monthly rent payments. Tenant'S proportionate share of such costs shall be __% (which costs are again determined based on the net rentable area of the leased premises to the net rentable area of the entire premises in the shopping center.) Section 6. For the purpose of this Lease, the costs set forth in Sections 4 and 5 above shall be deemed to include costs of capital improvements made to the shopping center subsequent to the commencement date of this Lease which will improve the operating efficiency of the shopping center, or reduce its operating expenses, which costs will be amortized to the extent that operating costs are thereby reduced. Section 7. The monthly payments described in Sections 4 and 5 above may be based on Landlord's reasonable estimate of the costs subject hereto made at the beginning of each Lease year. At the end of each Lease year, Landlord shall, within a reasonable ~riod of time at the end of each Lease year, give written not~ce to Tenant, which notice shall contain or be accompanied by a statement of the actual operating costs of Landlord's operation of the premises during such calendar year, compared to estimated operating costs, certified to be correct by an officer or partner of Landlord. If the aggregate of monthly installments of operating costs actually paid by Tenant to Lanalord during such Lease year differs from the amount of operating costs payable for such Lease year, Tenant shall payor Landlord shall refund the difference, as the case may be, without interest, within 30 days after the date of delivery of the statement. Tenant, upon Tenant's written request, shall be allowed to examine the books and records of Landlord used by it -3- . -~i..IL--~-lj'jl :~:::~ F~UM ~OMMEN-NEL30N,MF-L~, R':: T,J j~474;;;~5 F-,0~ to de~ermine the annual operating costs of the shopping center and Tenan~'5 propor~ionate share of such costs. If Landlord and Tenant disagree on the accuracy of such coe~s as set forth in the statement, Tenant shall nevertheless make payment in accorddnce with any notice given by Landlord, but the disAgreement shall immediately be referred by Landlord for prompt decision by a mutually acceptable publLc accountant, architect, insurance broker or oth~r professional consultant who Shall be deemed 'too be acting as experr.{s) and not arbl~rator(s), and a determination signed by the selected expert(s) shall be final and binding on both Landlord and Tenant. Any adju6tment required to any previous payment made by Tenant or Landlord by reason of any such decision shall be made within 14 days thereof, and the party required to make payment under such adjustment shall bear all COSts of the expert(s) making such decision, except where that payment represents S% or less of the operating costs that were the subject of the disagreement, in which case Tenant shall bear all such costs. ARTICLE IV USE Section 1. The leased premises may be used only for a dance studio (subjec~ always to the provisions of Section 2 of this article) and for no o~her purpose without the written consent of Landlord. Tenant agrees to conduct its business at all times in good faith and in a reputable manner. Section 2. Tenant shall not, without Landlord's prior written consent, conduct any auction, fire, closing-out or bankruptcy sales in or about the leased ~remises nor obstruct the common areas or use the same for bus~ness or display purposes, nor abuse walls, ceilings, partitions, floors, wood, stone, iron work; nor use plumbing for any purpose other than that for which constructed; nor make or permit any noise or odor objectionable to the public, to other occupants of the building or the Landlord to emit from the leased premises; nor create, maintain or permit a nuisance thereon; nor do any act tending to injure the reputation of the shopping center; nor use or permit to be used other entrances for delive~ of pickup of merchandise or supplies to or from the leased prem1ses, or permit trucks or other delivery vehicles while being used for any such purpose to be parked at any place within the shopping center except such facilities as are specifically provided for such purpose. Tenant shall not permit any blinking or flashing light to emit from Tenant's leased premises. Tenant shall keep the leased premises and loading platform areas allowed for the use of Tenant clean and free from rubbish and dirt at all times, and shall store all trash and garbage within the leased premises and will make the same available for the regular pickup which Tenant will arrange at the Tenant's expense if not supplied by the center. Tenant shall not burn any trash or garbage at any time in or about the shopping center. Section 3. Tenant shall conduct its business in the leased premises during the regular customary days and hours for such type of business in the city or trade area in which the shopping center is located. -4- _~,_L- :1..' - 1':1'31 1~: 51 F1<(IM LCJMMEN-t~ELSCIN, MPLS 1<S ,~ ';,~":-~2J5 P.i2lc Sec~1on 4. Landlord reserves the right, without liability to Tenant, ~o refuse admission to the shopping center and the leased prem~ses outside ordinary business hours to any person n~t known to any watchman in charge, or properly identified, to eJect any person from the shopping center whose conduct may tend to be harmful to the safety and interest of shopping center tenants or to close any parL of the shopping center during any ~iot ?r o~her commotion where persons or property may be 4mper.1.lec1. Section S. Tenant shall use the shopping center name as its advertised address when referrinq to its business in the leased premises in newspaper and other advertising. The right to use such name for such purpose for the term of this Lease is hereby licensed by Landlord to Tenant. Landlord retains all property rights in such name and Tenant shall not acquire or have any rights in or to such name other than as are expressly granted by Landlord in this section or otherwise in writing. ARTICLE V UTILITIES Section 1. The leased premises are constructed to utilize individual heating and air conditioning systems. Tenant agrees to keep the air conditioning and heating systems operating during business hours at levels sufficient to satisfy the requirements of the leased premises. Tenant shall pay for all heating, air conditioning, electricity, gas, vater and sewer charges used in the leased premises. If Landlord elects to supply said utilities to the leased premises, Tenant shall use only utilities supplied by Landlord in the leased premises and shall pay for all utilities so supplied by Landlord at rates no greater than if supplied by the public utilities which would otherwise serve the leased premises. Tenant shall pay for utility charges by paying its share of such charges as determined by Landlord unless Tenant's premises are separately metered. Tenant's such share shall be payable with its monthly minimum rent payment based on actual billings and Tenant's said share thereof. Section 2. Landlord shall not be liable in damages or otherwise if the furnishing by Landlord or by any other supplier of any utility or other service to the leased premises shall be interrupted or impaired by fire, repairs, accident, or by any causes beyond Landlord's reasonable control. Section 3. Landlord shall provide in the leased premises heat, ventilation and cooling equipment as required for the comfortable use and occupancy of the premises during normal operating hours; janitor services as reasonably required to keep the premises in a clean wholesome condition, provided that Tenant shall leave the premises in a reasonably tidy condition at the end of each business day; electric power for normal lighting and operating of office eguipment and other equipment needed for the dance studio oJ?erat1on; replacement of building standard fluorescent tubes, l~9ht bulbs and ballasts as required from time to time as a result of normal usage; and maintenance, repair and replacements as set forth in Art1cle VI. -5- J UL - ::;~,- ~ ';,=,~ 1"': ::;::: FRUM LlJ1t'1EN-NEL':;ON, MPLS RS Tl' ~J4(J2.J5 F-'.12:( ARTICLE VI REPAIRS Section 1. Landlord shall keep the foundations, exterior walls (except pla~e qlass or 91ase or o~her special breakable materials used in 5tructural portions) and roof in good repair, and if necessary or required by proper governmental authoritr' make modifications or replacements thereof, except that Land ord shall not be required to make any such repairs, modifications or replacemen~s whIch become necessary or desirable by reason of ~he negligence of Tenant, its agents, servants or em~loyees, or by reason of anyone illeqally entering upon the prern1&e&. Section 2. Landlord shall operate, maintain, repair and replace the srstems, facilities and equipment necessarr for the proper operat10n of the shopping center and for provis~on of Landlord's services required in this Lease. If all or part of such systems, facilities and equipment are destroyed, damaged or impaired, Landlord shall have a reasonable time in which to complete the necessary repair or replacement, and during that time shall be required only to maintain such services as are reasonably possible in the circumstances. Section 3. Tenant shall be obligated for the repair, replacement or improvement of any kind within its leased space of any equi~ment, facilities or fixtures contained therein, including a~r conditioning equipment or other equi~ment serving the leased premises located within the leased prem1ses and shall keep the leased premises in a clean, sanitary and safe condition and in accordance with all applicable lays, ordinances and regulations of an~ governmental authorit~ having jurisdiction. Tenant shall perm~t no waste, damage or 1njury to the leased premises. Section 4. Tenant shall forthwith at its own cost and expense, replace with glass of the same quality any cracKed or broken glass, including plate 91ass or glass or other special breakable materials used in structural portions, and any interior and exterior windows and doors in the leased premises. If specifically required by Landlord, Tenant shall maintain a policy or policies of insurance in acce~table Bureau companies insuring Landlord and Tenant, as their 1nterests may appear, against breakage of all such glass in the leased premises and shall deposit copies of such policy or policies 01 insurance or certificates evidencing their existence, together with evidence of the payment of the premiums thereof, with Landlord at the commencement of the term of this Lease and at least 30 days prior to the expiration of each such policy. Section 5. It is hereby agreed that the Landlord shall have the right to periodically inspect the heating and air conditioning equipment which services the leased premises to ensure that Tenant is maintaining the equipment as required in Section 3 of this article. If it is the Landlord's determination after these inspections that the Tenant has been negligent in servicing and maintaining said equipment, then Landlord shall notifr Tenant of its findings, and Tenant shall have ten days to admin1ster corrective action. If corrective measures are -6- J'_L - ~~1--19':,: 10: S~ F;;'.;.if1 L(l1r~EN- t ~ELSCJN t MPLS ~.~ H) ::~47~~~5 F>.i2l8 required and any costs incurred by Landlord in so doing shall be re1mbursed to Landlord by Tenant upon demand. ARTICLE VII INSTALLATIONS, ALTERATIONS AND SIGNS Section 1. As soon as reasonably possible, Tenant shall have the privilege, minimum rent free, of entering the leaDed ~remises lor the purpose of performing Tenant's lea.ehold ~mprovements, setting Tenant's fixtures and storing Tenant's merchand~se, all to be done without interference with the work of Landlord. Such entry of the leased premises by Tenant for this purpose shall not be construed as acceptance of the leased premises or as a waiver of any of the provisions hereof. Tenant shall, as soon as possible after notice from Landlord, proceed to get the leased premises ready for occu~ancy so that the leased premises are ready to open for bus~ness at or substantially at the same time as a majority of stores in the shopping center. When, prior to the commencement of the term, Tenant shall enter the leased premises, it is agreed that such entry shall be at the Tenant's sole risk. Without limiting the foregoing, Tenant hereby agrees, and it is made the strictest requirement of any such entry, that before entering the leased premises, Tenant will cause Landlord to be insured with liability insurance according to coverage elsewhere provided in this Lease, to be maintained by Tenant during the term; and in addition will deliver to Landlord satisfactory proof that all workmen of Tenant or any of Tenant.s contractors or subcontractors entering upon the leased premises are properly covered by workmen's compensation insurance, and if required by Landlord, satisfactory proof that all such workmen are union workmen. Section 2. Tenant, at its own expense, shall maintain its store fixtures, floor covering, interior painting and decorating as required by it. Section 3. Tenant shall not erect or install any signs, advertising media or make changes to the leased premises which ma~ be seen from outside the leased premises without Landlord's pr~or written consent. Use of the roof is reserved for Landlord. Tenant shall keep all exterior signs, exterior improvements made by Tenant with Landlord's consent, and its store front in good condition and repair. Section 4. Tenant shall not make any repairs, alterations or additions to the leased premises or make any contract therefor without first procuring Landlord's written consent. Tenant shall furnish such indemnification against liens and other claims as Landlord may require. Landlord may condition its consent on such indemnification being furnished by Tenant. All alterations, additions, improvements and fixtures, other than ~rade fixtures, which mar be made or installed by either of the parties hereto upon the eased premises and which in any manner are attached to the floors, walls or ceilings, at the termination of this Lease, shall become the property of Landlord, and shall remain upon and be surrendered with the leased premises as a part thereof, without damage or injury; any -7- , .:i..;L -]0-: -:;:;: iO: 5: ;:-~;jM i...(IMME"i-NELSIJt~. MF'LS ;;,;.~. T,., "..; :,~~7~2~5 F'. IC."j floor covering affixed to the floor shall likewise become the property of Landlord, all without compensation or credit to Tenant. All fixtures installed by Tenant shall be new or completely reconditioned. Section S. Tenant shall promptly pay all contractors and ma~erlalmen so as to minimi2e the possibility of a lien a~tachin9 to the leased premises, and should any lien be made or fLIed, Tenant shall bond against or discharge the same within ten days after written request by Landlord. Nothing in this Lease contained shall be construed a9 a consent on the part of ~he Landlord to subject the Landlord's estate 1n the leased premises to any lien or liability under the Lien Laws of the state in which the leased premises are located. Tenant shall install and maintain a siqn(s), all in accordance with Landlord's Sign Approval, a copy of which is attached hereto as Exhibit D and made a part hereof. ARTICLE VIII INDEMNITY Section 1. Tenant agrees to indemnify and save Landlord harmless a9ainst any and all claims, demands, damages, costs and expenses, 1ncluding reasonable attorneys' fees for the defense thereof, arising from the conduct or management of the business conducted by Tenant in the leased premises or from any breach or default on the part of Tenan~ in the performance of any covenant or agreement on the part of Tenant to be performed pursuant to the terms of this Lease, or from any act or negligence of Tenant, its agents, contractors, servants, employees, sublessees, concessionaires or licensees, in or about the leased premises. Section 2. Landlord agrees to indemnify and save Tenant harmless against any and all claims, demands, damages, costs and expenses, including reasonable attorneys' fees for the defense thereof, arising from the conduct or management of the business conducted by Landlord in the shopping center or from any breach or default on the part of Landlord in the performance of any covenant or agreement on the part of Landlord to be performed pursuant to the terms of this Lease, or from any act or negligence of Landlord, its agents, contractors, servants, employees, sublessees, concessionaires or licensees, in or about the shoppinq center. Section 3. The provisions of this article are subject to the waiver of any right of subrogation against Tenant in Landlord's insurance under Article IX and to the waiver of any right of subrogation against Landlord in Tenant's insurance under Article IX. ARTICLE IX INSURANCE Section 1. Tenant shall not carry any stock of goods or do anything in or about said leased premises which shall in any way tend to increase insurance rates on said leased premises or the building in which the same are located. If Landlord shall -8- 'JUL-:;'l2l-1'jj: l~::A r:~I-"'I L(mD..-"IELSCIN,MPLS R':.. T,:, ':;~~7424:.. ~. 1121 consent to such U9~, Tenant agrees to pay a9 additional rental any increase in premiums for insurance agains~ loss by fire or eXLended coverage risks resulting from the business carried on in the leased ~remise6 by Tenant. If Tenant installs any electrical equ~pment that overload& the power lin~& to the building, Tenant shall, at its own expense, make whatever changes are necessary to comply with the requirements of insurance underwriters and insurance rating bureaus and governmental authorities having jurisdiction. Section 2. Tenant agrees to procure and maintain a policy or policies of liability insurance at its own cost and expense insuring Landlord and Tenant from all claims, demands or actions for injury or death sustained by one or more persons as a result of anyone occurrence in the amount of $300,000 and for damage to property in an amount of not less than $100,000, made by or on behalf of any person or persons, firm or corporation arising from, related to or connected with, the conduct and operation of Tenant's business in the leased premises. Tenant shall carry like covecage against loss or damage by boiler or internal explosion by boilers, if there is a bo~ler in the leased premises. Said ~nsurance shall not be subject to cancellation except after at least ten days' prior written notice to Landlord, and the policy or policies, or duly executed certificate or certificates for the same, to~ether with satisfactory evidence of the payment of prem1um thereon, shall be deposited with Landlord at the commencement of the term and upon any renewal of said insurance not less than 30 days prior to the expiration of the term of such coverage. If Tenant fails to comply with such requirement, Landlord may obtain such insurance and kee~ the same in effect, and Tenant shall pay Landlord the premium cost thereof upon demand. Section 3. Landlord shall procure, at its initial expense, fire and extended coverage (including coverage tor rental loss in connection with damage and destruction covered by the said fire and extended coverage insurance) and other reasonably necessary insurance on the shopping center. Tenant shall reimburse Landlord monthly with its rental payments for its share of the actual net cost and expense to Landlord of such insurance. Tenant's share of such costs shall be that fractional part of the total of such costs as the total area of the leased premises bears to the total rentable area of all buildings and structures constituting part of this shopping center. One-twelfth of the amount due shall be payable on the first day of each month and added to the monthly rental. This amount may be based on an estimate until the actual premiums are available and, when available, an adjustment shall be made and any difference shall be payable based on Tenant's actual share as determined. Section 4. Tenant shall maintain, at its own cost and expense, fire and extended coverage, vandalism, malicious mischief and special extended coverage insurance in an amount adequate to cover the cost of replacement of all alterations, changes, decorations, additions, fixtures and improvements in the leased premises in the event of a loss, in companies and in form acceptable to Landlord. The insurance which the Tenant -9- ':;IJ... - :l('-l':1'jl 1 ~: S5 FROM UJMMEN-NELSCJt~. MPl':; RS 7C, 'j~~7 .J~.~C: P. : 1 agrees to carry in this section shall insure ~he full insurable value of the improvemants and betterments installed by the Tenant in the leased premises, ~hether the same have been paid for en~irely or partially by Tenant. Tenant will further deposit the policy or policies of such insurance or certifica~e thereof with Landlord. Section S. Landlord and Tenant each hereby ~aive any and all ri9h~s of recovery against the other, or against the officers, employees, agents and representatives of the other, for loss of or damage ~o such waiving party or its property or the property of others under its control to the extent that such loss or damage is insured against under any insurance policy in force at the time of such loss or damages. The insuring party shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or carriers that the foregoing mutual waiver of suhrogation is contained in this Lease. ARTICLE X FIRE OR OTHER CASUALTY Section 1. In case the shopping center shall be partially or totally destroyed by f~re or other casualty insurable under standard fire and extended coverage insurance so as to beco~e partially or totally untenan~able, the same shall be repaired as speedilI as possihle at the expense of Landlord, unless Landlord shall e ect no~ to rebuild, as hereinafter provided, and an equitable part of the rent shall be abated until so repaired based upon the time and to the ex~ent the leased premises are untenantable. Section 2. In case the shopping center buildings, including common areas, shall be destroyed or so damaged by fire or other casualty as to render more than 50% thereof untenantable, or in the event of any substantial uninsured loss or if the unexpired term of this Lease is tvo years or less on the date of anr substantial destruction or damage, then Landlord may, if It so elects, rebuild or restore said buildings pursuan~ to Section 1 above, or may, at its election by notice in writing within 60 days after such destruction or damage, terminate th.is Lease. The above shall apply whether or not any part of the leased premises is damaged or destroyed. Landlord's obligation to repair or rebuild pursuan~ to this article shall be limited to a basic building and the replacement of any 1ntericr \Jork -..hich may have originally been installed at Landlord's cost. In no event In the case of any such destruction shall Landlord be required to repair or replace Tenant's stock in trade, leasehold improvements, fixtures, furniture, furnishings or floor coverings and equipment. Tenant covenan~s to mak~ such repaixs and replacements and to furnish Landlord, on demand, evidence of insurance assuring its ability to do so. ARTICLE XI EMINENT DOMAIN Section 1. If the whole of the leased premises shall be taken under the power of eminent domain, then the term of this -10- JIJL-~-1'3S1 1~:S5 FRIJM L'JMMEN-NELSU~~,MPLS RC TI~I ;;44'74245 p. 1~ Lease shall cease as of the day possession shall be taken and the ren~ shall be paid up to that date. Section 2. In the event more than 10\ of the land area in the 6hopping center be 60 taken, the Landlord shall have the ~i~ht to terminate this Lease at the time and with the rent AdJustment as provided in Section 1 by giving Tenant written notice of termination within 60 days after the taking of possession by such public authority. Section 3. If any of the floor area of the leased premises or 40\ or more of the parking area shall be so taken, then Tenant shall have the right either to term~nate this Lease or, subject to Landlord's riqht of termination as set forth in Section 2 of this article, to continue in possession of the remainder of the leased premises upon notice in writinq to Landlord of Tenant'S intention within 30 days after such taking of possession. In the event Tenant elects to remain in possession, and Landlord does not so terminate, all of the terms herein provided shall continue in effect except that the rent shall be equitably abated as to any portion of the leased premises so taken and Landlord shall make all necessary repairs or alterations to the extent prOvided in Article X, Section 2, of this Lease. Section 4. All damages awarded for such taking under the power of eminent domain, whether for the whole or a part of the leased premises, shall be the property of Landlord, whether such damages shall be awarded as compensation for diminution in value of the leasehold or to the fee of the leased premises; provided, however, that Landlord shall not be entitled to any separate avard made to Tenant for loss of business, depreciation to and cost of removal of stock and fixtures or to other separate awards payable to Tenant. ARTICLE XII ASSIGNMENT AND SUBLETTING Section 1. Tenant shall not assign or in any manner transfer this Lease or any interest therein, nor sublet said leased premises or anr part or parts thereof, nor permit occupancy by anyone w1thout the prior written consent of Landlord, which consent shall not be unreasonably withheld. Consent by Landlord to one or more assignments of this Lease or to one or more sublettings of the leased premises shall not operate as a waiver of Landlord's rights under this article. No assignment shall release Tenant of any of its obligations under this Lease or be construed or taken as a waiver of any of Landlord's riqhts hereunder. For purposes hereof, if Tenant is a corporation or partnership or other entity, any change in the control of Tenant shall be deemed to be an assignment which shall require Landlord's consent as above set forth. The acceptance of rent from someone other than Tenant shall not be deemed to be a waiver of any of the provisions of this Lease or consent to any assignment or subletting of the leased premises. Section 2. Tenant aqrees not to change the advertised name of the place of business operated in the leased premises, which -11- J ;..iL - 3"'-1 ':;'31 lei: 5t, Ff<C1'1 LOMMEt.J-NEL'~IJN. MPLS ~~, T ~:l :,.J4':4245 i:;.1: name shall be wi t.hout. the prior written consent' of Landlord :------------- Section 3. Neither this Lease nor any interest therein ~hall pa~s to any trustees or receiver in bankruptcy, or nny assignee for ~he benefit of creditor~ or by operation of law. ARTICLE XIII ACCESS TO PREMISES Landlord shall have the reasonable r19h~ to ~nt0r upon th~ leaced ~.cemiseG during ull business hours for t.ha purpoSE: of inspect~n9 the same or of making re~airs, additions or alterations thereto or ~o ~he bulldlna in ~hich the cama ar~ located, or for the purpose of exhibiting the same to prospective tenants, purchasers or others. ARTICLE XIV REMEDIES Section 1. Landlord may terminate this Lease and the term demised or Tenant's right to possession hereunder U~C~ the failure of Tenant to ~ay any installment of r~nt wh~~ du~ or to perfonn any other of 1. ts mater 1al covenants under H, I 5 r.~a~e and the same are not r0medied within 30 days Qft~r written notice to Tanant or ~ithin ten d~ys after ~ritten noti~~ to To~a~~ jn regard to the payment. eI rent or other mon~trtry obligations of Tenant hereunder. Section 2. If, at any time during the term of this Lease (a) the Tenant who then is the holder of this Lease shall file in any court a petition in bankruptcy or insolvency or for reorganization within the meaning of Cha~ter X of ~h0 Bankruptcy Act of 1898, or for arrangement within the meaning of Chapter XI of said Bankruptcy Act (or for reorganization or arrang~ment under any futur~ Bankruptcy Act for the same or sim~la~ r~llef), or for t.he appointment of a receiver or trustee of all or a portion of the Tenant's ~rc?erty, or (b) an involuntary petition of any kind referred to ~n Subdivision (a) of this section shall be filed against the Tenant, and such petition shall not be vacated or withdrawn within 30 days after the date of filing thereof, or (C) if the Tenant shall make an assignment for the benefit of creditors, or {d) if the Tenant shall be adjudicated a bankrupt, or (e) a rece1ver shall be appointed for the pro~erty of the Tenant by order of a court of competent jur~sdiction (except where such receiver shal) be appointed in an involuntary proceeding, if he shall no~ be withdrawn within 30 days from the date of appointment~, this Lease shall terminate ipso facto upon the happen~nq of anyone of such events, and the Tenant shall then quit and surrender the leased premises to the Landlord, but the Tenant shall remain liable as hereinafter provided. Section 3. Upon the termination of the estate as aforesaid, the Landlord may reenter the leased premises by any lawful means, and remove all .persons and chattels therefrom and Landlord shall not be liable for damages or otherwise by reason of reentry or termination. Notwithstanding such termination, the -12- JUL - 3l2'-19Si! llC.': 57 ~I<I~IM LC'Ml"'EN-~~LSIJN. MI='L~, I<S T I~J :'44':'4245 1=',14 liability of Tenant for ~he rent provided for hereinabove shall not be extinguished for the balance of the term remaining after 94~d termination. Should Landlord elect to reenter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, it may either terminate this Lease or it may, from time to time without term1nating this Lease, make such alterations and repairs as may be necessary in order to relet the premises, and relet said premises or any part thereof for such term or terms (which may be for a ~erm extending beyond the term of this LeaSe) and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable~ upon each such reletting all rentals recei~ed by the Landlord from such reletting shall be applied first, to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord: second, to the payment of any costs and expenses of such reletting, including brokerage fees and reasonable attorneys' fees and of costs of such alterations and repairs; third, to the payment of rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If such rentals received from such reletting during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiencr shall be calculated and paid monthly. No such reentry or tax1ng possession of said premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Landlord shall use its best efforts to relet the premises upon taking possession of the premises pursuant to legal proceedings or pursuant to any notice provided for by law. Notwithstanding any such reletting without termination, Landlord may at anr time thereafter elect to terminate this Lease on such prev10us breach. Should Landlord at any time terminate this Lease for any breach, in addition to any other remedies it may have, it may recover from Tenant all damages it may incur by reason of such breach, including the cost of recovering the leased premises, reasonable attorneys' fees and includin~ the worth at the time of such termination of the excess, ~f any, of the amount of rent and charges equivalent to rent reserved in this Lease for the remainder of the stated term, all of which amounts shall be immediately due and payable from Tenant to Landlord. In determining the rent which would be payable by Tenant hereunder, subsequent to default, the annual rent for each year of the unexpired term shall be equal to the average annual minimum and percentage rent paid by Tenant from the commencement of the term to the time of default, or during the preceding three full calendar years, whichever period is shorter. -13- . T-'L-~-19Sil 10:S:~: l=!:(ljM :"Cit"!MEt~-NEL~,I:"..MPLS ~~ TC :,44~424'::. t:J ,::: . ....1 Section 4. In the event of any material breach hereunder by Tenant, Landlord may immediately or at any time thereafter, wl~hout no~lce, cure such breach for ~he account and at the expanse of Tenant. If Landlord at any time by reason of such breach is compelled to pay, or elects to pay, any sum of money or do any act which will require the paym~nt of Any sum of money, or is compelled to incur any expense, including reasonable attorneys' fee6, the sum or sums so paid by Landlord, with interest thereon at the rate of 10% per annum or the highest rate permitted by law, whichever is less, from the date of payment thereof, shall be deemed to be due from Tenant to Landlord on the first day of the month following the payment of such respectivQ sums or expenses. Section S. In the event of any material breach hereunder by Landlord, Tenant may immediately or at any time thereafter, without notice, cure such breach for the account and at the expense of Landlord. If Tenant at any time by reason of such breach is compelled to pay, or elects to pay, any sum of money or do any act which will require the payment of any sum of money, or is compelled to incur any expense, including reasonable attorneys' fees, the sum or sums so paid by Tenant, with interest thereon at the rate of 10\ ~er annum or the highest rate permitted by law, whichever 1S less, from the date of payment thereof, shall be deemed to be due from Landlord to Tenant on the first day of the month following the payment of such respective sums or expenses, and Tenant shall have the riqht to offset any present or future rents due Landlord for such payments. Section 6. Should Landlord be in default under the terms of this Lease, Landlord shall have reasonable and adequate time in which to cure the same after written notice to Landlord by Tenant. Section 7. Tenant hereby expressly waives, to the full exten~ waivab1e, any and all righ~s or redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the leased premises, by reason of the violation by Tenant of any of the material covenants or roaterial conditions of this Lease, or otherwise. ARTICLE XV SURRENDER OF POSSESSION Section 1. At the expiration of the Lease term, whether by lapse of time or otherwise, Tenant shall surrender the leased premises broom clean and in good condition and repair, reasonable wear and tear and loss by fire or unavoidable casualty excepted. If the leased premises be not surrendered at the end of the term or the sooner termination thereof, Tenant shall indemnify Landlord against loss or liabil~ty resul~ing from delay by Tenant in so surrendering the premises. Tenant shall promptly surrender all keys for the leased premises to Landlord at the place then fixed for payment of rent. -14- ']lIl- 3eI--1 'j'3i H~: s';j FRlj1" LOMMEN-NELSON, MPLS f<~. T!] S447J245 P.16 Section 2. In the event Tenant remains in possession of the leased premi5es after the expiration of the tenancy created hereunder with the consent of Landlord and without execution of a ne~ Lease, it shall be deemed ~o be occupying the leased premise6 a6 a tenant from month to month, a~ 125\ the minimum ren~, subject to all the other conditions, provisions and obli9a~ion~ of thi~ Lease insofar as the game are applicable to a month-to-month tenancy. Section 3. Upon the expiration of the tenancy hereby created, if Landlord eo requires in writing, Tenant shall ~romptly remove anr additions, fixtures and installations placed ~n the leased prem1ses by Tenant and designated in said request, and repair any damage occasioned by such removals at Tenant's expense, and in default thereof, Landlord may effect such removals and repairs and Tenant shall pay Landlord the cost thereof, with interest at the rate of 10\ per annum, or the highest rate permitted by law, whichever is less, from the date of payment by Landlord. ARTICLE XVI SUBORDINATION Tenant agrees that this LeAse shall be subordinate to any mortgages or tru5t deeds that may hereafter be placed upon said leased pre~ises and to any and all advances to be made thereunder, and to the interest thereon, and all renewals, replacements and extensions thereof provided that the mortgagee or trustee thereunder shall agree to recognize Tenant's rights hereunder as long as Tenant is not in default hereunder, and Tenant shall attorn to such mortgagee or trustee. Tenant further agrees that upon notification by Landlord to Tenant, this Lease shall be or become prior to any mortgages or trust deeds that may heretofore or hereafter be placed on the said leased premises. Tenant shall execute and deliver whatever instruments may be required for the above purposes, and failing to do 80 within ten days after required demand in writing, does hereby make, constitu~e and irrevocably appoint Landlord as its attorney-in-fact and in its name, place and stead so to do. Tenant shall in the event of the sale or assignment of Landlord's interest in the building of which the leased premises form a part, or in the event of any proceedings brought for the foreclosure of, or in the event of exercise of the power of sale under any mortgage Blade by Landlord covering the leased premises, attorn to the purchaser and recognize such purchaser as Landlord under this Lease. ARTICLE XVII NOTICES Whenever under this Lease provision is made for notice of any kind, such notice shall be in writing and shall be deemed sufficient notice and service thereof if such notice is to Tenant if actually delivered to Tenant or sent by registered or certified mail, return receipt requested, postage prepaid, to the last post office address of Tenant furnished to Landlord for such purpose, or to the leased premises; and if to Landlord if actually delivered to Landlord or sent by registered or -15- 'J'-iL-~-1'3'jl 1\2l:~= FI(1)M LCM"1Er~-NELSON.MP\...S RS TO ':,~47424::' P.P certified mail, return receipt requested, postage prepaid, to the Landlord at the address furnished for 6uch purpose, or to the place then fixed for the payment of rent. If lhe holder of record of any mortgaqe or ground lessors interest covering the leased premises shall have given prior wri~~en no~ice ~o Tenan~ ehat it is the holder of saId mortgage or lessor's interest and &uch notice includes the address at which notices to such mortgagee or ground lessor are to be sent, then Tenant agrees to give to such party or parties notice simultaneously with any notice given to Landlord to correct any default of Landlord as hereinabove provided and agrees that such party or parties shall have the riqh~, within 30 days after receip~ of said notice, ~o correct or remedy 6uch default before Tenant may take any aceion under thi6 Lease by reason of such default. ARTICLE XVIII CONSENTS The parties a9ree that whenever under this Lease provision is made for secur~ng the written consent, permission or approval of either that such written consent, permission or approval shall not be unreasonably withheld or delayed. ARTICLE XIX TAXES Landlord shall pay all real property taxes and installments of special assessments payable therewith on the shopping center land and improvements payable during the Lease term and rental taxes on rentals levied during the term hereof upon the rentals from the leased premises. Tenant shall reimburse Landlord for Tenant's share of such payments of real property taxes and installments of special assessments. Tenant's share of such costs shall be based on the ratio the net rentable area of the leased premises bears to the net rentable area in the shopping center except buildings separately taxed or assessed for which such taxes and assessments are directly allocated to their tenants. Tenant shall also reimburse Landlord for rental taxes and gross receipts taxes, if any, paid by Landlord on rentals from the leased premises. One-twelfth of a full year's taxes, installments of which are next payable, shall be payable on the first day of each month and added to the monthly rental. This amount may be based on Landlord's reasonable estimate until the actual tax amounts are available and, when available, an adjustment shall be made and any difference shall be payable based on Tenant's actual share as determined. Tenant's share of such taxes payable in the first and last calendar year of the Lease term shall be equitably prorated based on the portion of the year included in the Lease term. Tenant shall par all personal property and similar taxes on its property ~n the leased premises. ARTICLE XX MERCHANTS' ASSOCIATION Section 1. Tenant shall, throughout the term or any extension or renewal of ~he term of this Lease, become a member of, participate fully in and remain in good standing in the -16- KL - :.~- 1'::1':' 1 : : : 00 t:~OM LOMMEN-NLSIjN, I"1PL S R'=-, T,-, , , 94474245 F-. 1:.: Merchants' Association ("ASSociation") formed or to be formed by the Landlord, at its sole discretion, and comply with the bylaws, rules and regulations of such Assoc~ation. The objectives of such Association shall be to assist the business of the shopping center tenants by sales promotions and advertising for the shopping center as a whole. Section 2. Tenant aqree9 to pay promptly when due its share of such dues and assessments as may be fixed from time to time by the Association for the purposes of creating a fund for the general promotion and welfare of the shopping center as a whole. The Board of Directors can, by majority vote, increase the assessment in any year an amount that is not greater than the increase in the consumer ~rice index. The increase, in addition to the base assessment, w~ll then become the base assessment for future year adjustments. Adjustments will be made to coincide with the beginning of the Merchants' Association's fiscal year. Such sums shall be paid monthly in advance, the first such payment being paid to the Association on or before the date of the commencement of the term hereof. ARTICLE XXI GENERAL Section 1. Nothing contained herein shall be deemed or con6trued by anyone as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto. Section 2. The various rights and remedies contained in this Lease shall not be considered as exclusive of any other right or remedy, but shall be construed as cumulative and shall be in addition ~o every other remedy now or hereafter existing at law, in equity or by statute. No delay or omission of the riqht to exercise any power by either party shall impair any such right or power, or shall be construed as a waiver of any default or as acquiescence therein. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed by the other party as a waiver of a subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by the other party of a nature requiring consent or approval shall not be deemed to vaive or render unnecessary consent to approval of any subsequent similar act. Section 3. The headings of the several articles contained herein are for convenience only and do not define, limit or construe the contents of such articles. All ne9otiations, considerations, representations and understand~ngs between the parties are incorporated herein, and may be modified or altered only by agreement in writing between the parties. Section 4. The covenants, agreements and obligations herein contained shall extend to, bind and inure to the benefit not only of the parties hereto but their respective personal representatives, heirs, successors and assigns. -17- _T,_iL-~-1':191 1~:\2I0 ~RI~IM LCIMMEN-"'ELSi)N.MPL~, R~. TIJ ':;'4474245 P, 1:' Section 5. whenever a period of ~ime is herein provided for ei~her party to do or perform any act or thing, that party shall not be liable or responsible for any delays and applicable periods for performance shall be ex~ended accordingly, due to 8tr~kes, lockouts, riots, acts of God, shortages of labor or ma~erials, national emergency, acts of a public enemy, governmental restrictions, laws or re9ulations, or any o~her cause or cau&es, whether similar or d1s&imilar to those enumerated, beyond its reasonable control. The provisions of this Section 5 shall not operate to exCuse Tenant from prompt payment of rent, percentage rent, additional rent or other monetary payment. required by the terms of ths Lea&e. Section 6. No payment by Tenant or receipt by Landlord of a lesser amount than the amount then due under this Lease shall be deemed to be other than on account of the earliest portion thereof due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right ~o recover ~he balance due or pursue any other remedy in this Lease provided. Section 7. Each of the parties re~regents and warrants that there are no claims for brokerage comm~s5ions or finder'S fees in connection with the execution of this Lease, except as lis~ed below, and each of the parties agrees to indemnify the other against, hold it harmless from, all liabilities arising from any such claim for vhich such party is responsible (including, without limitation, the cost of counsel fees in connection therewith), excepL as follows: Section 8. Unenforceability of any provision contained in this Lease shall not affect or impair the validity of any other provision of this Lease. Section 9. The laws of the State of Minnesota shall govern the validity, performance and enforcement of this Lease. Section 10. Additional provisions, if any, are set forth in Exhibit E attached hereto and made a part hereof. Section 11. The following exhibits are part of this Lease Agreement: Exhibit A, Shopping Center Site Plan; Exhibit B, Sho~ping Center Legal Description; Exhibit C, Fixed Annual Kin~um Rent; Exhibit 0, Sign Approval; Exhibit E, Additional Provisions; and Exhibit F, Plans and Specifications. All said exhibits are hereby incor~orated herein by reference and are construed as a part of th~s Lease. Section 12. In the event that two or more individuals, corporations, partnerships or other entities (or any combination of two or more thereof) shall sign this Lease as Tenant, the liability of each such individual, corporation, partnership or other entity to perform all obligations hereunder shall be deemed to be joint and several. In like manner, in the event -18- 1 , :'_;L - :'..- : 'j:;: 11 : ,-'~ ~"'(tM lI~Mr~EN-"lEL'~CJN. MF'L~, J;!,~, T,=1 '34~74:::'4::: p, :;'0 that ~he Tenant named in ~hls Lease shall be a par~nership or other business association, the members of which are, by virtue 01 6tatute, or general law, subject to personal liabilitI' then and in that event, the liability of each such member sha 1 be deemed to be joint and several. Section 13. Anything to the contrary herein notvithstandin~, if Landlord, its successors and assi9ns, is a mortgagee, an ~ndividual, a joint venture, a tenancy ~n common, a firm or partnership, general or limited, it is specifically understood and agreed that there shall be absolutely no personal liability on the part of such Landlord or the members of ~uch Landlord wl~h respec~ ~o any of the terms, covenants, conditions and provisions of this Lease, and Tenant shall look solely ~o ~he equity of Landlord, its successors and assigns in the property of which the leased premises are a part for the satisfaction of each and every remedy of Tenant in the event of any breach of Landlord, its successors and assigns of any of the ternls, covenants , conditions and provisions of this Lease to be performed by Landlord, such exculpation of personal liability is ~o be absolute and withou~ any exception whatsoever. Section 14. Landlord shall have the right to install, maintain, use, repair and replace pipes, ducts, conduits and wires leading through the leased premises and serving other ~arts of the building in locations which will not materially ~nterfere with Tenant's use thereof. Section lS. In the event that the Landlord and/or the Merchants' Association deems it necessary to employ 8ecuri~y guards and/or security patrols on either a full time or part time basis to maintain security for persons and property within the shopping center, including common areas, then Tenant agrees to pay as additional rent a sum equal to Tenant's proportionate share of the cost of all expenditures made for security of the shopping center, including common areas, in monthly payments with the monthly rent payments. The monthly payments shall be based on Landlord's reasonable estimate of the costs subject hereto made at the beginning of such Lease year. At the end of each Lease year, Landlord shall furnish a statement of all costs subject hereto and Tenant's share thereof certified to by Landlord. If, at the end of any Lease year, ~he amount paid by Tenant is less than its share as shown on said statement, the balance as shown on said statement shall be paid with the next monthly rental payment due pursuant to the term of this Lease. If, at the end of any such Lease year, the amount paid by Tenant is greater than its share as shown on said statement, the excess as shown on said statement shall be credited against the next payments (whether of rent or otherwise) due hereunder. Tenant's proportionate share of such costs shall be based on the proportions set forth in Section 4 of Article III. Section 16. Tenant shall be required to pay all rental obligations and be open for business on Provided, however, if Tenant actually opens for business prior to this date, all rental obligations and terms of this Lease will be in full force and effect upon such date. -19- _1.JL..-~0-1;jSl1 11:0~ r:r.'I.,M li:,Mr1E"J-NEL~,;:'~J,MPLS Rc.- T;:; ~~.:74~'.a:. 1=-'. .:: 1 ARTICLE XXII OFFSET STATEM.ENT Within ten days after request therefor by Landlord, Tenant shall provide an offset statement in recordable form to any proposed mortgagee or purchaser, or to Landlord, cer~ifying (if such be the Ca5e) that this Lease is in full force and effect and there are no defenses or offsets thereto, or stating those claimed by Tenant and certifying to such other matters as such par~y shall reasonably re9Uire. In Lhe event Tenant should refuse to execute and del~ver said statement and/or cer~ificate, Landlord shall have the riqht, as attorney-in-fact for Tenant, to make such a statement, Tenant hereby constituting and irrevocably appointing Landlord its attorney-in-fact for such purpose. Landlord's mortgage lenders and/or purchasers shall be entitled to rely upon any statement so executed pursuant to this article. ARTICLE XXIII TITLE Landlord covenants that it has full right and authority to enter into this Lease for the full term hereof. Landlord further covenants that Tenant, upon performing the covenants and agreements of this Lease to be performed by said Tenant, will have, hold and enjoy quiet possession of the leased premises. ARTICLE XXIV PREPARATION OF LEASED PREMISES Section l. Any plans which shall require Tenant's approval shall be submitted to Tenant. In ~he event Tenant has not indicated its disapproval of any such plans and s~ecifications within five days after submission of the same to ~t, such approval shall be deemed to have been given and Landlord may proceed with the work contemplated by such plans and specifications. To the extent the plans and specifications conform to Exhibit F hereof, no approval by Tenant shall be required. Section 2. The proposed location of the leased premises in the building of which the leased premises form a part is designated on the site plan attached as Exhibit A. The location of the leased premises in the building, the location of the building in the shopping center, shall be subject to such changes as Landlord's architect finds to be desirable in the work to be done by the Landlord. U~n request by either part~, both parties agree to modify the s~te ~lan as shown on Exhib~t A to the extent that the Landlord's arch1tect certifies to be desirable, and no changes in the "Landlord's Work" so certified to be desirable shall invalidate or affect this Lease. No such changes in the plans that may be appropriate during the preparation of the leased premises for the Tenant, or during construction, shall affect, change or invalidate this Lease. However, any such changes shall not alter the general appearance, relative location or aggregate amount of floor space of the leased premises. -20- ) ML - ~-l'::-jl 11: tJ: F"f<L,M LCiMMEN-NELSCI~~. MPL-:, ~'~. 71: :,.JJ7J2J~ ~.22 Sec~ion 3. Landlord con~empla~es completiOn of ~he leased premises on or before . In the ~vQnt the Landlord ~s unable to complQte construct~on and deliver posses~ion of the leased premi~es ~o the Tenant on the contemplated commencement date, for any reason whatsoever, the Landlord &hall not be liable to the Tenan~ for any damage5 whatsoever and this Lease shall remain in full force and effect and the Landlord shall continue ~o use its best efforts to complete construc~ion of the same as soon as reasonably possible. Section 4. Tenant accept.s the premises in "as is" condition and Landlord shall have no cons~ruct.ion, reconstruction or modification obliqations whatsoever. "As is to condition is interpreted to mean in workinq or operating condition. Thus the lights, front and rear doors, locks, utilities, HVAC, plumbing, water heater, exhaust fans and roll gates are in operating condition. This is without warranty. Also, the ceiling tile, walls, floors and window glass are complete. Landlord makes absolutely no warranties and/or representations about or concerning the condition of the premises. Tenant. shall submit its plans to Landlord for written approval prior to any remodeling, renovating, construction or installation of trade fixtures. Tenant shall, as expeditiously as possible, ~repare ~he premises, at its own cost and/or expense, for open~ng for business. IN WITNESS WHEREOF, Landlord and Tenant have s~qned this Lease as of the day and year first above written. PRIORDALE MALL INVESTORS LIMITED PARTNERSHIP By ITs And Its CITY OF PRIOR LAKE By Its Mayor And Its C~ty Manager sally/pl/lease -21- J , JUL - 30-1 'j';:l1 11 : 0~ ~~':'M LI~JMMEN-NEi....~.cN. ~FLS ~'':: T,:, -=':':-J~~S F -,~ - '-' EXHIBrr A SHOPPING CENTER SrTE PLAN To be attadlcd to and ~-<:Ur.H~ Ii I'ltrt of that certaIn le[15(" agr(,E'mcnt C'ovf'rlng !!pact' In the _ _____ Shopping Center. t..... .....,. 1 : I- " li!r: . e..., - . . . .. _. - . . . t1 ~ j~ .... o . . . .. . . .. ... . ... ., ,~.J , po . I I~ I ... _.1 I 1I 1 : I . I . u. - JII: J II :1 i . :, I l:i ; s . # J! J ~ [~h . .. "C , . .:. , , .1:_iL-:::.....-l'3;;: 11 :it.14 Fr.,:I:IM UJMMEN-tj!:L.SI=IN,I"'P:...~ R~, 7,=1 :;44?.124S ~. -,~ ..::~ EXHIBIT B SHOPPING CENTER LEGAL DESCRlmON To be aUacht.."<Ilu MIld WC\Jmt: a po.11 of that certain hl~f" 8g~mf"nt r.ovpring tJl8('"f" in fhe Shopping Center. That part of Lot 1. Block 1, plat 01 BROOKSVILLE CENTER 1ST ADDITION. Scott County. Minne~ota. togt"ther with that part of the East one-hall of the Southwest Quarter and that part of the West on~haU of the Southeast Quarter of Section 2. Township 114. Range 22. &ott County, Minnesota. described as follows: Commencing at the most Northerly Westerly corner of said Lot 1, said corner being on the Southerly right of way line of Trunk Highway No. 13; thence North 65 degrees 43 feel 28 Inches East along the Northerly line of said Lot 1. a distance of 198.32 feet to the actual point of beginning of the land to be described; thence South 28 degrees 40 feet 18 inches East a distance of 104.76 feet; thence North 61 degrees 16 feet 31 inches East a distance of 136.6i feet to its inter~ec.tjon with the Easterly line of said Lot 1: thence South 12 degrees 8 fe~t 8 inches East along said Easterly line a distance of 419.;4 feet; thence south 89 degrees .15 feet S5 inches East a di!:~:lnc(> of 460.00 f~Pt al.,ng thp Nor1hf>rly line 01 said Lot 1. to a point distant 850.00 feet West (as measured at right angles) of the East line of said West one-- half of lh~ Svutheast Qu~ter; thence North 00 degrees 14 fe~t 5 inches f.a'it pArallel with said FAst line a distance vf 430.00 feet. thenc.e South S9 d~grees 45 !eet S5 in("he~ E,act a rli'it~nce of l~O.OO feet: thence North 00 degrees 14 feet 5 inches East a distance of 497.9 feet, more or less. to its intersection with the Southeasterly right of way line of State Trunk Highway No. 13; thence Southwesterly along said South- easterly right of way line to the point of beginning. , Together with an easement for roadway purposes over and across a strip of land 25 feet in width, the Easterly line of said strip is described as follows: Commencing at the most Northerly. Westerly corner of said Lot 1. Block 1: tbence North 65 degrees 43 feet 28 inches East along the Northerly line of said Lot 1. a dista.nce of 198.32 feet to the actuaJ point of beginning of the line to be described; thence South 28 degrees 40 feet 18 inches East a distance of 104.76 feet and there terminating. AND Beginning at the southeast corner 01 Lot 1. Block 1. BROOKSVILLE CENTER 2ND ADDITION. Scott County Minnesota; th~ncE: North 12 degrees 08 minutes 08 second~ V\'~~t :slone th~ ~asterly line of said Lot 1. a distance of 419.14 feet to the northeast corner of said Lot 1; thence North 61 degrees 16 minutes 31 $ecvnds East a distan'~ of 25.00 feet; thence South 24 degrc\".s 23 minutes 40 5~l)nd~ u.st a dist~nce of 463.22 feet to the northeast corner of Lot 2. Block 1. of said plat thence westerly along the north line of said lot 2. a distance 01 125.00 leet to the point of beginning. C j L . .TlIL - ::"1-1 SlSll 11 : L_'':- ;: R. _,I'"", L 1~ll":t'E. ",-I\.E ~ :.,,~It.. , r1PL:: "' :,~~:4~.a5 r:: -Ie ."'-- EXHIBIT C FIXED ANNUAL KIll IJrol! RENT E5timat.ed Net: Per Taxes, Ins. Total Sq. Ft. Common Area Yearly Rent Operations Total Cost 9/1/91-8/31/92 $3.94 $2.00 S5.94 $16,000 9/1/.92-8/31/93 4.68 2.00 6.68 18,000 9/1/93-8/31/94 5.42 2.00 7.42 20,000 9/1/94-8/31/95 6.17 2.00 8.17 22,000 , . :_.'---:':~'-:;,'jj 11:",,'':' r~I_:M ,. _ LI.IMMEN-NEL':,UN. Mf='L:. ;:, - =..:;~~ ..:t.::":~ EXHIBIT D SIGN APPROVAL ~.2t To be attached 10 and become 8 parl of that certain 1eose agreemenl con~rlng epftc -= In the Pr i.q.ui~Mall Shopping Center. Installation of signs must be done by a licensed sign company. We have arranged with Valley Sign Co. fer discounted pricing and installatio of letters. They are familiar with our style and cclor. The following procedures must be followed in order t~ place a sign on the mall sign band. 1. Color is restricted to dark blue. Size of letters can be 14" or 10" high and 1/8" in thickness. Valley Sign Co. will have these letters in stock. 2. Each tenant space is assigned a location en the sign band, approximately 12.5 ft. in length, 31"' high. All signs must fit within this space. 3. ~ scale drawing showing the size and distribution of letters within the assigned space must be submitted to the mall mana;er for approval. 4. A sign permit must be purchased from the city of Prior Lake. 5. New signs must be installed by a licensee sign contractor. .; ,_Il.. - :0-1 :f::': :: : \."_ ~~..of1 '-.1)-:"';:', -'..EL:,I~N. I"F<.. S ~. T 3J47.J2J~ F -- . -' EXHIBIT E ADDITIONAL PROVISIONS Notwithstanding any other provi9ions in this Lease, the partie~ agree that during the term of the Lease the annual operating cost adjus~rnent on a per square foot basis shall not exceed S2.75 per square foot. .~ i JL ~- :l.-..' - 1 'J~.l 1 : : ~In ~ ~. - '1 ~I:~;~E',,-~~E_'~ ::N. MkL:." KDJIBIT F t:r".- 'j..:..:......J~~~ ~ . .",- PLANS AND SPEClflCATlONS TO BE ATTACHED TO AND BECOME ^ PART Of THAT CERTAIN LEASE AGREEMENT (,"'QVERING SPACE IN THE SHOPPING CENTER.