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HomeMy WebLinkAbout2003-158 CCRMember Kathleen Carmody introduced the following resolution and moved its adoption: RESOLUTION NO. 2003-158 RESOLUTION AUTHORIZING LEASE FOR LIQUOR STORE AT 69TH AND BROOKLYN BOULEVARD SHOPPING CENTER 1 WHEREAS, attached to and incorporated herein by reference is Exhibit A as a proposed shopping center lease between Johnco L.L.C. and the City of Brooklyn Center for the operation of an approximately 6,879 square foot liquor store; and WHEREAS, the terms and conditions set forth in the shopping center lease attached hereto as Exhibit A appears to be reasonable and proper. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the Mayor and City Manger be and hereby are authorized to execute the shopping center lease attached hereto as Exhibit A on behalf of the City of Brooklyn Center with such finalization of the exact language to be set forth in the Exhibits as are deemed acceptable by the City Manager to finalize the exact descriptions set forth in the Exhibits. October 13, 2003 s Date Mayor 1 ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member Kay Tasman and upon vote being taken thereon, the following voted in favor thereof: Myrna Kragness, Kathleen Carmody, Kay lasman, Diane Niesen, and Bob Peppe; an the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. a RESOLUTION NO. 2003-158 BOULEVARD MARKET SHOPPING CENTER LEASE Spaces No. 2, 3, 4, 5, & 6 Address: 69th & BROOKLYN BOULEVARD This Lease is made and entered into as of this 19th day of September, 2003, by and between Johnco, L.L.C., a Minnesota limited liability company (herein called "Landlord") and The Citv of Brooklvn Center (herein called 'Tenant"). 1. FUNDAMENTAL LEASE TERMS. A. Parties. Landlord: Johnco, L.L.C. Tenant: City of Brooklyn Center B. Premises (Section 1). Soaces 2. 3.4. 5. & 6 located at 69th and Brooklyn Center Boulevard in the Boulevard Market Shoopinq Center. Brooklvn Center, Minnesota. C. Term (Section 4). Three ( 10 ) Lease Years commencing 30 days after Landlord turnover of space. Landlord turnover date, 12/15//03. D. Minimum Rent (Section 3). Minimum Rent shall be as follows: Lease Yr. Per So Ft Annual Monthly 1 13.57 93,360 7,780.00 2 13.57 93,360 7,780.00 3 13.57 93,360 7,780.00 4- 13.57 93,360 7,780.00 5. 13.57 93,360 7,780.00 6 13.57 93,360 7,780.00 7 13.57 93,360 7,780.00 8 .13.57 93,360 7,780.00 9 13.57 93,360 7,780.00 10 13.57 93,360 7,780.00 E. Addresses (Section 30(xviii)). (i) If to Landlord: Johnco, L.L.C. 3040 Woodbury Drive Woodbury, MN 55125 Attention: Greg Watson W'WeN 0*k Put*c inlonnakmnEMKOYEE FOWERS ift"rooMyn CoMeMkONC 0 UMMA106407 Lease Wi"00 Liquor Revision 1.0ot Revision No.1 10.9-0.1 RESOLUTION NO. 2003-158 (ii) If to Tenant: City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430-2199 Attention Of: City Manager F. Permitted Use (Section 2). The Premises shall be used only for "Municipal Liouor" and operated under the trade name of "Brookivn Center Municipal Liouor Store #2. 1. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord that certain space (herein called "Premises"), having dimensions of approximately 98.27 feet in frontage by 70 feet in depth and containing approximately 6.879 square feet of floor area. Square feet is measured from the outside walls to the center point of the interior partition walls. The location and dimensions of said Premises are delineated on the site plan attached hereto as Exhibit "A"' attached hereto and incorporated by reference herein. Said Premises are located in the City of Brooklyn Center, County of Hennepin, State of Minnesota. The Premises are located in the Boulevard Market "Shopping Center." As used herein, the term "Shopping Center" shall mean the property legally described on Exhibit "A-1" attached hereto and made a part hereof, together with any and all buildings and other improvements now or hereafter located thereon. 2. USE PROHIBITED USES. Tenant shall not use or permit the Premises to be used for any purpose, or operated under any tradename, other than as set forth in Article I(F). Tenant shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or cause a cancellation of any insurance policy covering said Building or any part thereof or any of its contents. If an increase in any insurance premium paid by Landlord for the Shopping Center is caused by Tenant's use of the Premises or if Tenant vacates the Premises and causes an increase in such premiums, then Tenant shall pay as additional rent the amount of such increase to Landlord. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or injure or annoy them or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose; nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or allow to be committed any waste in or upon the Premises. 2 RESOLUTION NO. 2003-158 3. RENT. 3.A. Tenant agrees to pay to Landlord as Minimum Rent, without notice, demand, set-off or counterclaim the sum set forth in Article I(D), payable in advance, on or before the first day of each and every successive calendar month during the term hereof, except the first month's rent shall be paid upon the execution hereof. The rent shall commence 30 days after substantial completion of Landlord's Work as set forth in Exhibit B attached hereto and incorporated herein by reference, or when the Tenant opens for business, whichever is sooner. Landlord agrees that it will, at its sole cost and expense as soon as is reasonably possible after the execution of this Lease, commence and pursue to completion the improvements to be erected by Landlord to the extent shown on the attached Exhibit B labeled " Landlord's Work." The term "substantial completion of the Premises" is defined as the date on which Landlord or its Architect notifies Tenant in writing that the Premises are substantially complete to the extent of Landlord's Work specified in Exhibit B hereof. Rent for any period which is for less than one (1) month shall be a prorated portion of the monthly installment herein based upon a thirty (30) day month. All rental payable hereunder shall be paid to Landlord, without deduction or offset, in lawful money of the United States of America and at such place as Landlord may from time to time designate in writing. 3.13. Percentage rent shall be owed for lease years 1-10. Percentage rent for lease years 1-10 shall be an amount calculated by taking four and one-quarter (4.25) percent of gross sales and subtracting minimum rent. In the event that four and one- quarter (4.25) percent of gross sales is less than the minimum rent, percentage rent shall be zero. Percentage rent for lease years 1-10 shall be payable in monthly installments, in arrears on the tenth (10) day of the month immediately following the month for which percentage rent is owed, based on the minimum rent owed and the gross sales of the month for which percentage rent is owed. 4. TERM. The lease term shall be 10 years, commencing on the date Tenant is obligated to commence rental payments hereunder. The parties hereto acknowledge that certain obligations under various articles hereof may commence prior to the lease term, i.e., construction, hold harmless, liability insurance, etc.; and the parties agree to be bound by these articles prior to commencement of the lease term. Option to Extend. Tenant at its option, may extend the term for the entire Premises for an additional ten (10) years by giving written notice to Landlord ('Tenant Extension Notice') at least twelve (12) months but not more than fifteen (15) months before the expiration of the initial Term, provided that: (a) at the time of Tenant's Extension Notice and at the commencement of the Extended term, there shall . be no default by Tenant under this Lease and (b) no material, adverse change in the financial condition of Tenant has 3 RESOLUTION NO. 2003-158 occurred. Upon the service of the Tenant's Extension Notice and subject to the preceding conditions, this Lease shall be extended without the necessity of the execution of any further instrument or document. The extended Term shall commence upon the expiration date of the initial Term, expire upon the annual anniversary of such date ten (10) years thereafter, and be upon the same terms, covenants, and conditions as provided in this Lease, except that Tenant shall not have any additional rights to extend the Term, the Rent Payable during the extended Term shall be at the rates and amounts set forth in Section 3. Rent. Payment of all additional charges required to be made by Tenant as provided in this Lease during the initial Term shall continue to be made during the extended Term. Any unauthorized assignment or subletting by Tenant of this Lease terminates this option of Tenant to extend the Term. 5. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease, Tenant has deposited with Landlord a sum of $7,780.00. Said sum shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of this Lease, including, but not limited to the provisions relating to the payment of rent. Landlord may (but shall not be required to) use, apply, or retain all or any part of this security deposit for the payment of any rent or any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant's default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of said deposit is so used or applied Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the security deposit to its original amount and Tenant's failure to do so shall be a default under this Lease. Landlord shall not be required to keep this security deposit separate from its general funds, and Tenant shall not be entitled to interest on such deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the security deposit or any balance thereof shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) within ten (10) days following expiration of the Lease term. In the event of termination of Landlord's interest in this Lease, Landlord shall transfer said deposit to Landlord's successor in interest. 6. COMPLIANCE WITH LAW, RULES AND REGULATIONS. Tenant shall not use the Premises, or permit anything to be done in or about the Premises, which will in any way conflict with any law, restrictive covenant affecting the Shopping Center or any statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant's improvements or 4 RESOLUTION NO. 2003-158 acts. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between the Landlord and Tenant. Tenant shall faithfully observe and comply with the rules and regulations that Landlord shall from time to time promulgate and/or modify. The rules and regulations shall be binding upon the Tenant upon delivery of a copy of them to Tenant. Landlord shall not be responsible to Tenant for the nonperformance of any said rules and regulations by any other tenants or occupants. 7. ALTERATIONS AND ADDITIONS. Tenant shall not make or allow to be made any alterations, additions or improvements to or of the Premises or any part thereof without first obtaining the written consent of Landlord and any alterations, additions or improvements to or of said Premises, including, but not limited to, wall covering, paneling and built-in cabinet work, but excepting movable furniture and trade fixtures, shall at once become a part of the realty and belong to the Landlord and shall be surrendered with the Premises. In the event Landlord consents to the making of any alterations, additions or improvements to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense. Upon the expiration or sooner termination of the term hereof, Tenant shall, upon written demand by Landlord, given at least thirty (30) days prior to the end of the term, at Tenant's sole cost and expense, forthwith and with all due diligence, remove any alterations, additions, or improvements made by Tenant, designated by Landlord to be removed, and Tenant shall, forthwith and with all due diligence, at its sole cost and expense, repair any damage to the Premises caused by such removal, or reimburse Landlord for repairs made as a result of such damages. 8. REPAIRS. 8.A. By entry hereunder, Tenant shall be deemed to have accepted the Premises as being in good, sanitary order, condition and repair. Tenant shall, at Tenant's sole cost and expense, keep the Premises and every part thereof in good condition and repair (except as hereinafter provided with respect to Landlord's obligations) including without limitation, the maintenance, replacement and repair of any storefront, doors, window casements, glazing, plumbing, pipes, electrical wiring and conduits, heating and air-conditioning systems (when there is an air-conditioning system). Tenant shall obtain a service contract for repairs and maintenance of said system, said maintenance contract to conform to the requirements under the warranty, if any, on said system. Tenant shall, upon the expiration or sooner termination of this Lease hereof, surrender the Premises to the Landlord in good condition, broom clean, ordinary wear excepted. Any damage to adjacent premises caused by Tenant's use of the Premises shall be repaired at the sole cost and- expense of Tenant. 5 RESOLUTION NO. 2003-158 8.B. Notwithstanding the provisions of Section 8.A. hereinabove, Landlord shall repair and maintain the structural portions of the Building, including the exterior walls, unless such maintenance and repairs are caused in part or in whole by the act, neglect, fault or omission of any duty by the Tenant, its agents, servants, employees, invitees, or any damage caused by breaking and entering, in which case Tenant shall pay to Landlord the actual cost of such maintenance and repairs. Tenant shall pay for any painting and tuckpointing as part of the common area expenses. Landlord shall not be liable for any failure to make such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant. Except as provided in Section 20 hereof, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein. Tenant waives the right to make repairs at Landlord's expense under any law, statute or ordinance now or hereafter in effect. 9. LIENS. Tenant shall keep the Premises and the property in which the Premises are situated free from any liens arising out of any work performed, materials furnished or obligations incurred by or on behalf of Tenant. Landlord may require, at Landlord's sole option, that Tenant shall provide to Landlord, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half (1 1/2) times the estimated cost of any improvements, additions, or alterations in the Premises which the Tenant desires to make, to insure Landlord against any liability for mechanics' and materialmen's liens and to insure completion of the work. 10. ASSIGNMENT AND SUBLETTING. Tenant shall not either voluntarily, or by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber this lease or any interest therein, and shall not sublet the Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees, agents, servants, and invitees of Tenant excepted) to occupy or use the Premises, or any portion thereof, without first obtaining the written consent of Landlord, which consent shall not be unreasonably withheld subject to the criteria hereinafter set forth. Except that if the City is no longer in the municipal liquor business the Tenant may assign this Lease upon prior written consent of the Landlord, which consent shall not be unreasonable withheld subject to the criteria hereinafter set forth. In evaluating and determining whether or not to consent to a requested assignment or sublease of the Premises by Tenant, Landlord must receive adequate assurance that: the net worth, financial condition and stability of the proposed assignee or subtenant is at least equal to or greater than that of Tenant immediately preceding such assignment or subletting; the reputation, management experience and expertise of the assignee or subtenant is at least equal to or greater than that of Tenant immediately preceding such assignment or subletting; the ability and likelihood of payment of all rents and other amounts due hereunder, shall not diminish by reason of such assignment or subletting; and such 6 RESOLUTION NO. 2003-158 other assurances as Landlord requires. A consent to one assignment, subletting, occupation or use by any other person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by any other person. Consent to any such assignment or subletting shall in no way relieve Tenant of any liability under this lease and Tenant shall acknowledge same in a written instrument satisfactory to Landlord at the time of such assignment or subletting. Each permitted sublease shall expressly be made subject to the provisions of this lease. Each permitted assignee and sublessee shall expressly assume all of the obligations of Tenant hereunder in a written instrument satisfactory to Landlord at the time of such assignment or subletting. In the event Tenant shall assign this lease or sublease the Premises for rent or other consideration in excess of the rent payable hereunder, Landlord shall receive all such excess rent or other consideration as additional rent hereunder. The assignee or sublessee shall be required to pay directly to Landlord all payments due by such assignee or sublessee. A change in the beneficial or record ownership of any class of capital stock of Tenant, a transfer of partnership interests or of the beneficial interest in Tenant, and a sale of substantially all of the merchandise on the Premises to one purchaser shall be treated as and deemed to be an event of assignment of this lease within the forgoing provisions of this paragraph. Any assignment or subletting without Landlord's consent as provided herein shall be void and shall, at the option of Landlord, constitute a default under the terms of this lease. Landlord may charge an administrative fee to process any request for consent to a sublease or assignment hereunder; provided such administrative fee charged by Landlord shall not exceed $500. 11. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against and from any and all claims arising from Tenant's use of the Premises or from the conduct of its business or from any activity, work, or other things done, permitted or suffered by the Tenant in or about the Premises, and shall further indemnify and hold harmless Landlord against and from any and all claims arising from any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any act or negligence of the Tenant, or any officer, agent, employee, guest, or invitee of Tenant, and from all costs, attorney's fees, and liabilities incurred in or about the defense of any such claim or any action or proceeding brought thereon and in case any action or proceeding be brought against Landlord by reason of such claim, Tenant upon notice from Landlord shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes ail risk of damage to property or injury to persons in, upon or about the Premises, from any cause other than Landlord's negligence; and Tenant hereby waives all claims in respect thereof against Landlord. Tenant shall give prompt notice to Landlord in case of casualty or accidents in the Premises. "Nothing herein shall be deemed a waiver by the tenant of the limitations on liability set forth in Minnesota Statutes, Chapter 466" 7 RESOLUTION NO. 2003-158 Landlord or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Building or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the negligence of Landlord, its agents, servants or employees. Landlord or its agents shall not be liable for interference with the light, air, or for any latent defect in the Premises. 12. SUBROGATION. As long as their respective insurers so permit, Landlord and Tenant hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties. Each party shall apply to their insurers to obtain said waivers. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. 13. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in force during the term of this Lease a policy of commercial general public liability insurance insuring Landlord and Tenant against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be combined single limit liability insurance in the amount of not less than $1,000,000.00, or such greater coverage as Landlord may reasonably require. The limit of any such insurance shall not, however, limit the liability of the Tenant hereunder. Tenant may provide this insurance under 'a blanket policy, provided that said insurance shall have a Landlord's protective liability endorsement attached thereto. If Tenant shall fail to procure and maintain said insurance, Landlord may, but shall not be required to, procure and maintain same, but at the expense of Tenant. Insurance required hereunder shall be in companies rates A:XII or better in "Best's Key Rating Guide." Tenant shall deliver to Landlord, prior to right of entry, copies of policies of liability insurance required herein or certificates evidencing the existence and amounts of such insurance with loss payable clauses satisfactory to Landlord. No policy shall be cancelable or subject to reduction of coverage without 30 days prior written notice to Landlord. All such policies shall be written as primary policies not contributing with and not in excess of coverage which Landlord may carry. 14. UTILITIES. Tenant shall pay for all water, gas, heat, light, power, sewer charges, telephone service and all other services and utilities supplied to the Premises, together with any taxes thereon. If any such services are not separately metered to Tenant, Tenant shall pay a reasonable proportion to be determined by Landlord of all charges jointly metered with other premises. 15. PERSONAL PROPERTY TAXES. Tenant shall pay, or cause to be paid, before delinquency any and all taxes levied or assessed and which become payable during the term hereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures, and any other personal property located in the Premises. In the event any or all of the 8 RESOLUTION NO. 2003-158 Tenant's leasehold improvements, equipment, furniture, fixtures and other personal property shall be assessed and taxed with. the real property, Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant's property. 16. HOLDING OVER. If Tenant remains in possession of the Premises or any part thereof after the expiration of the term hereof with the express written consent of Landlord, such occupancy shall be a tenancy from month to month at a rental in an amount equal to 2 times the last Monthly Minimum Rent, plus all other charges payable hereunder, and upon all the terms hereof applicable to a month to month tenancy. 17. ENTRY BY LANDLORD. Landlord reserves, and shall at any and all times have, the right to enter the Premises to inspect the same, to submit said Premises to prospective purchasers or tenants, to post notices of non-responsibility, to repair the Premises and any portion of the Building of which the Premises are a part that Landlord may deem necessary or desirable, without abatement of rent, and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be unreasonably blocked thereby, and further providing that the business of the Tenant shall not be interfered with unreasonably. Tenant hereby waives any claim for damages or for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant's vaults, safes and files, and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in an emergency in order to obtain entry to the Premises without liability to Tenant except for any failure to exercise due care for Tenant property, and any entry to the Premises obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof. Tenant shall permit Landlord to erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and wires in, to and through the Premises as often and to the extent that Landlord may now or hereafter deem to be necessary or appropriate for the proper operation and maintenance of the Shopping Center. 18. TENANT'S DEFAULT. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant. 18.A. The vacating or abandonment of the Premises by Tenant. 9 RESOLUTION NO. 2003-158 18.B. The failure by Tenant to make any payment of rent or any other payment required to be made by Tenant hereunder when due. 18.C. The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this lease to be observed or performed by the Tenant, other than described in Section 18.1 above, where such failure shall continue for a period of ten (10) days after written notice thereof by Landlord to Tenant. 18.D. The making by Tenant of any general assignment or general arrangement for the benefit of creditors; or the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days); or the appointment of a trustee or a receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged within thirty (30) days. 18.E. Tenant shall do or permit to be done any act which results in a lien being filed against the Premises or the Shopping Center and/or the project of which the Premises are a part. 181. In the event that an order for relief is entered in any case under Title 11, U.S.C. (the "Bankruptcy Code") in which Tenant is the debtor and: (A) Tenant as debtor-in-possession, or any trustee who may be appointed in the case (the "Trustee") seeks to assume the lease, then Tenant, or Trustee if applicable, in addition to providing adequate assurance described in applicable provisions of the Bankruptcy Code, shall provide adequate assurance to Landlord of Tenant's future performance under the Lease by depositing with Landlord a sum equal to the lesser of twenty-five percent (25%) of the rental and other charges due for the balance of the Lease term or six (6) months' rent ("Security"), to be held (without any allowance for interest thereon) to secure Tenant's obligation under the Lease, and (B) Tenant, or Trustee if applicable, seeks to assign the Lease after assumption of the same, then Tenant, in addition to providing adequate assurance described in applicable provisions of the Bankruptcy Code, shall provide adequate assurance to Landlord of the proposed assignee's future performance under the Lease by depositing with Landlord a sum equal to the Security to be held (without any allowance or interest thereon) to secure performance under the Lease. Nothing contained herein expresses or implies, or shall be construed to express or imply, that Landlord is consenting to assumption and/or assignment of the Lease by Tenant, and Landlord expressly reserves all of its rights to object to any assumption and/or assignment of the Lease. Neither Tenant nor any Trustee shall conduct or permit the conduct of any "fire", "bankruptcy", "going out of business" or auction sale in or from the Premises. 10 RESOLUTION NO. 2003-158 19. REMEDIES IN DEFAULT. 19.A. REMEDIES FOR TENANT'S DEFAULT. Upon the occurrence of a Default as defined above, Landlord may elect either (i) to cancel and terminate this Lease and this Lease shall not be treated as an asset of Tenant's. bankruptcy estate, or (ii) to terminate Tenant's right to possession only without canceling and terminating Tenant's continued liability under this Lease. Notwithstanding the fact that initially Landlord elects under (ii) to terminate Tenant's right to possession only, Landlord shall have the continuing right to cancel and terminate this Lease by giving three (3) days' written notice to Tenant of such further election, and shall have the right to pursue any remedy at law or in equity that may be available to Landlord. In the event of election under (ii) to terminate Tenant's right to possession only, Landlord may, at Landlord's option, enter the Premises and take and hold possession thereof, without such entry into possession terminating this Lease or releasing Tenant in whole or in part from Tenant's obligation to pay all amounts hereunder for the full stated term. Upon such reentry, Landlord may remove all persons and property from the Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, without becoming liable for any loss or damage which may be occasioned thereby. Such reentry shall be conducted in the following manner: without resort to judicial process or notice of any kind if Tenant has abandoned or voluntarily surrendered possession of the Premises; and, otherwise, by resort to judicial process. Upon and after entry into possession without termination of the Lease, Landlord may, but is not obligated to, relet the Premises, or any part thereof, to any one other than the Tenant, for such time and upon such terms as Landlord, in Landlord's sole discretion, shall determine. Landlord may make alterations and repairs to the Premises to the extent deemed by Landlord necessary or desirable to relet the Premises. ' Upon such reentry, Tenant shall be liable to Landlord as follows: (1) For all attorneys' fees incurred by Landlord in connection with exercising any remedy thereof; (2) For the unpaid installments of base rent, additional rent or other unpaid sums which were due prior to such reentry, including interest and late payment fees, which sums shall be payable immediately. (3) For the installments of base rent, additional rent, and other sums falling due pursuant to the provisions of this Lease for the period after reentry 11 RESOLUTION NO. 2003-158 during which the Premises remain vacant, including late payment charges and interest, which sums shall be payable as they become due hereunder. (4) For all expenses incurred in releasing the Premises, including leasing commissions, attorneys' fees, and costs of alteration or repairs, which shall be payable by Tenant as they are incurred by Landlord; and (5) While the Premises are subject to any new lease or leases made pursuant to this Section, for the amount by which the monthly installments payable under such new lease or leases is less than the monthly installment for all charges payable pursuant to this Lease, which deficiencies shall be payable monthly. Notwithstanding Landlord's election to terminate Tenant's right to possession only, and notwithstanding any reletting without termination, Landlord, at any time thereafter, may elect to terminate this Lease, and to recover (in lieu of the amounts which would thereafter be payable pursuant to the foregoing, but not in diminution of the amounts payable as provided above before termination), as damages for loss of bargain and not as a penalty, an aggregate sum equal to the unpaid base rent, percentage rent, and additional rent and all other charges which would have been payable to Tenant for the unexpired portion of the term of this Lease, which deficiency and all expenses incident thereto, including commissions, attorneys' fees, expenses of alterations and repairs, shall be due to Landlord as of the time Landlord exercises said election, notwithstanding that the term had not expired. If Landlord, after such reentry, leases the Premises, then the rent payable under such new lease shall be conclusive evidence of the rental value of the unexpired portion of the term of this Lease. If this Lease shall be terminated by reason of bankruptcy or insolvency of Tenant, Landlord shall be entitled to recover from Tenant or Tenant's estate, as liquidated damages for loss of bargain and not as a penalty, the amount determined by the immediately preceding paragraph. 19.B. LANDLORD'S- RIGHT TO PERFORM FOR ACCOUNT OF TENANT. If Tenant shall be in Default under this Lease, Landlord may cure the Default at any time for the account and at the expense of Tenant. If Landlord cures a Default on the part of Tenant, Tenant shall reimburse Landlord upon demand for any amount expended by Landlord in connection with the cure, including, without limitation, attorneys' fees and interest. 19.C. INTEREST AND ATTORNEY'S FEES. If Landlord places in the hands of an attorney (or collection company) the enforcement of all or any part of this Lease, the collection of any rent due or to become due or recovery of the possession of the Premises, Tenant agrees to pay Landlord's costs of collection, including reasonable attorney's fees for the services of the attorney, whether suit is actually filed or not. 12 RESOLUTION NO. 2003-158 19.D. ADDITIONAL REMEDIES. WAIVERS ETC. (1) The rights and remedies of Landlord set forth herein shall be in addition to any other right and remedy now and hereafter provided by law. All rights and remedies shall be cumulative and not exclusive of each other. Landlord may exercise its rights and remedies at any times, in any order, to any extent, and as often as Landlord deems advisable without regard to whether the exercise of one right or remedy precedes, concurs with or succeeds the exercise of another. (2) A single or partial exercise of a right or remedy shall not preclude a further exercise thereof, or the exercise of another right or remedy from time to time. (3) No delay or omission by Landlord in exercising a right or remedy shall exhaust or impair the same or constitute a waiver of, or acquiesce to, a Default. (4) No waiver of Default shall extend to or affect any other Default or impair any right or remedy with respect thereto. (5) No action or inaction by Landlord shall constitute a waiver of Default. (6) No waiver of a Default shall be effective unless it is in writing and signed by Landlord. 20. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate this Lease as a result of Landlord's default and Tenant's remedies shall be limited to actual and not consequential damages and/or to seek an injunction. 21. RECONSTRUCTION. In the event the Premises are damaged by fire or other perils covered by extended coverage insurance, Landlord agrees to forthwith repair same, and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate reduction of the Minimum Rent from the date of damage and 13 RESOLUTION NO. 2003-158 while such repairs are being made, such proportionate reduction to be based upon the extent to which the damage and making of such repairs shall reasonably interfere with the business carried on by the Tenant in the Premises. If the damage is due to the fault or neglect of Tenant or its employees, there shall be no abatement of rent. In the event the Premises are damaged as a result of any cause other than the perils covered by fire and extended coverage insurance, then Landlord shall forthwith repair the same, provided the extent of the destruction be less than ten (10%0) percent of the then full replacement cost of the Premises. In the event the destruction of the Premises is to an extent of ten (10%) percent or more of the full replacement cost then Landlord shall have the option; (1) to repair or restore such damage, this Lease continuing in full force and effect, but the Minimum Rent to be proportionately reduced as hereinabove in this Section provided; or (2) give notice to Tenant at any time within ninety (90) days after such damage, terminating this Lease as of the date specified in such notice, which date shall be no more than thirty (30) days after the giving of such notice. In the, event of giving such notice, this Lease shall expire and all interest of the Tenant in the Premises shall terminate on the date so specified in such notice and the Minimum Rent, reduced by a proportionate reduction, based upon the extent, if any, to which such damage interfered with the business carried on by the Tenant in the Premises shall be paid up to date of said such termination. Notwithstanding anything to the contrary contained in this Section, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when either: (1) the damage resulting from any casualty covered under this Section occurs during the last twenty-four months of the term of this Lease or any extension thereof; or (2) if Landlord's mortgagee does not release all of the insurance proceeds to Landlord. Landlord shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold improvements, fixtures, or other personal property of Tenant. 22. EMINENT DOMAIN. If more than twenty-five (25%) percent of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain or is sold in lieu of condemnation, either party hereto shall have the right, at its option, within sixty (60) days after said taking, to terminate this Lease upon thirty (30) days written notice. If either less than or more than 25% of the Premises are taken (and neither party elects to terminate as herein provided), the Minimum Rent thereafter to be paid shall be equitably reduced. If any part of the Shopping Center other than the Premises may be so taken or appropriated or sold, Landlord shall within sixty (60) days of said taking have the right at its option to terminate this Lease upon written notice to Tenant. In the event of any taking or appropriation or sale in lieu thereof whatsoever, Landlord shall be entitled to any and all awards and/or settlements which may be given and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. 14 RESOLUTION N0. 2003-158 23. PARKING AND COMMON AREAS. Landlord covenants that upon completion of the Shopping Center an area approximately equal to the area shown as common and parking areas on the attached Exhibit "A" shall be available for the non-exclusive use of Tenant during the full term of this lease or any extension of the term hereof, provided that such areas at all times shall be subject to the exclusive control and management of Landlord or its designees, and Landlord shall have the right from time to time: to construct, maintain and operate lighting and parking facilities on all common areas; to police the same; to change or reduce the area, level, location, size and arrangement of parking areas and other facilities hereinafter referred to; to restrict parking by Tenants and their officers, agents and employees to employee parking areas; to close all or any portion of said areas or facilities to such extent as may, in the opinion of Landlord's counsel, be legally sufficient to prevent a dedication thereof or the accrual of any rights to any person or the public therein; to close temporarily all or any portion of the parking areas or facilities; to erect improvements or buildings on such parking areas for lease or sale purposes; to discourage non-customer parking; and to change the entrances, exits, traffic lanes and boundaries and locations of the parking areas. 23.A. Landlord shall cause said common and parking areas to be graded, surfaced, marked and landscaped at no expense to Tenant either prior to the date of Tenant's opening for business in the Premises or as promptly thereafter as is reasonably possible. 23.13. The Landlord shall keep said automobile parking and common areas in a neat, clean and orderly condition and shall repair any damage to the facilities thereof, but all expenses in connection with said automobile parking and common areas shall be charged and prorated in the manner as set forth in Section 3.C. hereof. 23.C. Tenant, for the use and benefit of Tenant, its subtenants, employees. customers, licensees and subtenants, shall have the non-exclusive right in common with Landlord, and other present and future owners, tenants and their agents, employees, customers, licensees and subtenants, to use said common and parking areas during the entire term of this Lease, or any extension thereof, for ingress and egress, and automobile parking, subject to the provisions of Section 23 above. 23.D. The Tenant, in the use of said common and parking areas, agrees to comply with such reasonable rules, regulations and charges for parking as the Landlord may adopt from time to time for the orderly and proper operation of said common and parking areas. Such rules may include but shall not be limited to the following: (1) The restricting of employee parking to a limited, designated area or areas; and (2) The regulation of the removal, storage and disposal of Tenant's refuse and other rubbish at the sole cost and expense of Tenant; and (3) The restricting of parking to certain time limits. 15 RESOLUTION NO. 2003-158 24. SIGNS. Tenant shall erect one sign on the front of the Premises not later than the date Tenant opens for business, in accordance with a design to be prepared by Tenant and approved in writing by Landlord, in accordance with Landlord's sign criteria as delineated on Exhibit "D" attached hereto and incorporated by reference herein. Notwithstanding anything contained to the contrary in the Lease, any sign affixed to any building in the Shopping Center by Tenant, at the expiration or earlier termination of the Lease such sign shall automatically, without any further act or documentation become the property of Landlord, and Tenant shall have no right to remove same. After Tenant initially affixes said sign Tenant shall have no right to remove same without Landlord's written consent. Anything to the contrary in this Lease notwithstanding, Tenant shall not affix any sign to the roof. 25. DISPLAYS. The Tenant may not display or sell merchandise or allow grocery carts or other similar devices within the control of Tenant to be stored or to remain outside the defined exterior walls and permanent doorways of the Premises. Tenant further agrees not to install any exterior lighting, amplifiers or similar devices or use in or about the Premises any advertising medium which may be heard or seen outside the Premises, such as flashing lights, searchlights, loudspeakers, phonographs or radio broadcasts. 26. AUCTIONS. Tenant shall not conduct or permit to be conducted any sale by auction in, upon or from the Premises whether said auction be voluntary, involuntary, pursuant to any assignment for the payment of creditors or pursuant to any bankruptcy or other insolvency proceeding, or any going out of business, liquidation or fire sale. 27. HOURS OF BUSINESS. Subject to the provisions of Section 21 hereof, Tenant shall continuously during the entire term hereof conduct and carry on Tenant's business in the Premises and shall keep the Premises open for business and cause Tenant's business to be conducted therein during the usual business hours of each and every business day as is customary for businesses of like character in the city in which the Premises are located to be open for business. Tenant shall keep the Premises adequately stocked with merchandise, and with sufficient sales personnel to care for the patronage, and to conduct said business in accordance with sound business practice to maximize Tenant's Net Sales. 28. LANDLORD'S LIEN AND SECURITY'AGREEMENT. 28.A. LANDLORD'S LIEN. As security for payment of rent, damages and all other payment required to be made by this Lease, Tenant hereby grants to Landlord a lien upon all property of Tenant now or subsequently located upon the Premises. If Tenant abandons or vacates any substantial portion of the Premises or is in default in the payment of any rentals, damages or other payments required to be made by this Lease or is in default of any other provision of this Lease, Landlord may enter upon the Premises, by picking or changing locks if necessary, and take possession of all or part 16 RESOLUTION NO. 2003-158 of the personal property, and may sell all or any part of the personal property at a public or private sale, in one or successive sales, with or without notice, to the highest bidder for cash, and, on behalf of Tenant, sell and convey all or part of the personal property to the highest bidder, delivering to the highest bidder all of Tenant's title and interest in the personal property sold. The proceeds of the sale of the personal property shall be applied by Landlord toward the reasonable costs and expenses of the sale, including attorney's fees, and then toward the payment of all sums then due by Tenant to Landlord under the terms of this Lease. Any excess remaining shall be paid to Tenant or any other person entitled thereto by law. 28.B. SECURITY AGREEMENT. This Lease is intended as and constitutes a security agreement within the meaning of the Uniform Commercial Code of the state in which the Premises are situated. Landlord, in addition to the rights prescribed in this Lease, shall have all the rights, titles, liens and interests in and to Tenant's property, now or hereafter located upon the Premises, which may be granted a secured party, as. that term is defined under the Uniform Commercial Code, to secure to Landlord payment of all sums due and the full performance of all Tenant's covenants under this Lease. Landlord may file a financing statement to perfect its lien. Unless otherwise provided by law and for the purpose of exercising any right pursuant to this Section, Landlord and Tenant agree that reasonable notice shall be met if such notice is given by ten (10) days written notice, certified mail, return receipt requested, to Landlord or Tenant at the address specified herein. 29. GENERAL PROVISIONS. (i) Plats and Riders. Clauses, plats, riders and addendums, if any, affixed to this Lease are a part hereof. (ii) Waiver. The waiver by Landlord of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding default by Tenant of any term, covenant or condition of this. Lease, other than the failure of the Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge of such preceding default at the time of the acceptance of such rent. (iii) Joint Obligation. If there be more than one Tenant the obligations hereunder imposed shall be joint and several. (iv) Marqinal Headinas. The marginal headings and section titles to the sections of this Lease are not a part of the Lease and shall have no effect upon the construction or interpretation of any part hereof. 17 RESOLUTION NO. 2003-158 (v) Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. (vi) Successors and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto. (vii) Recordation. Neither Landlord nor Tenant shall record this Lease, but a short form memorandum hereof may be recorded at the request of Landlord. (viii) Quiet Possession. Upon Tenant paying the rent reserved hereunder and observing and performing all of the covenants, conditions, and provisions on Tenant's part to be observed and performed hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for the -term provided- for - herein without hindrance or interruption by Landlord or any other person or persons lawfully or equitably claiming by, through or under Landlord, subject nevertheless to the terms and conditions of this lease and the mortgages and other matters to which this is subordinate. (ix) Late Charaes and Interest. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Landlord by terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any sum due from Tenant shall not be received by Landlord or Landlord's designee within five (5) days after that said amount is past due, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the amount due, plus any attorneys' fees incurred by Landlord by reason of Tenant's failure to pay rent and/or other charges when due hereunder. The parties hereby agree that such late charges represent a fair and reasonable estimate of the cost that Landlord will incur by reason of the late payment` by Tenant, and the parties agree that even if Landlord accepts a payment over five days past due without a late change, Landlord shall still have the right to collect the late charge that was due at any time upon request. Acceptance of such late charges by the Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. In addition Tenant shall pay Landlord interest on all late payments by Tenant at the rate of the lesser of eighteen percent (18%) per annum or the highest rate permitted by law. (x) Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in 18 RESOLUTION NO. 2003-158 interest. This Lease shall not be effective or binding on any party until fully executed by both parties hereto. (xi) Inability to Perform. This lease and the obligations of the Tenant hereunder shall not be affected or impaired because the Landlord is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause beyond the reasonable control of the Landlord. (xii) Partial Invaliditv. Any provision of this Lease which shall prove to be invalid, void, or illegal shall in no way affect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect. (xiii) Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, whenever possible, be cumulative with all other remedies at law or in equity. (xiv) Choice of Law. This Lease shall all be governed by the laws of the State of Minnesota. (xv) Attornevs' Fees. Should it be necessary for Landlord to employ legal counsel (or a collection company) to enforce any of the provisions herein contained, Tenant agrees to pay all costs of collection, including attorneys' fees and court costs reasonably incurred whether suit is actually filed or not. (xvi) Sale of Premises by Landlord. In the event of any sale of the Premises by Landlord, Landlord shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the Premises shall be deemed, without, any further agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the Landlord under this Lease. (xvii) Subordination. Attornment. Tenant hereby agrees that this Lease is, and shall be, subordinate or superior, at the option of Landlord, to any ground lease, and to any mortgage, deed of trust or any other hypothecation for security which has been or which hereafter may be placed by Landlord upon the Premises, or the land or building of which they are a part, and that such subordination or superiority, depending on Landlord's election from time to time, shall be effective without any further act by Tenant. Landlord is hereby irrevocably vested with full power and authority to subordinate Tenant's interest under this Lease to any first mortgage lien hereafter placed on the Premises. Tenant agrees hereby to execute upon demand any and all 19 RESOLUTION NO. 2003-158 further documents or instruments in addition to the Lease which may be deemed necessary or requisite or desired to effectuate such subordination or superiority; provided, such subordination shall be upon the express condition that this Lease be recognized by any lessor, lessee, mortgagee, trustee and/or their successors or assigns, and that the rights of Tenant shall remain in full force and effect during the term of this Lease, or renewal or extension thereof, provided, Tenant shall continue to perform all of the covenants and conditions of this Lease and shall not be in default hereunder. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Landlord covering the Premises, the Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease. (xviii) Notices. All notices and demands which may or are to be required or permitted to be given by either party on the other hereunder shall be in writing. All notices and demands shall be sent by United States Mail, postage prepaid, addressed to the Landlord and Tenant at the addresses listed in I(E). (xix) Tenant's Statement. Tenant agrees to furnish, from time to time, within five (5) days after receipt of a request from Landlord or Landlord's mortgagee, a statement certifying, if applicable, the following: Tenant is in possession of the Premises; the Premises are acceptable; the Lease is in full force and effect; the Lease is unmodified (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect); Tenant claims no present charge, lien, or claim or offset against rent; the rent is paid for the current month, but is not prepaid for more than one month and will not be prepaid for more than one month in advance; there is no existing default by reason of some act or omission by Landlord; and such other matters as may be reasonably required by Landlord or Landlord's mortgagee. Tenant's failure to deliver such statement, in addition to being a default under this Lease, shall be deemed to establish conclusively that this Lease is in full force and effect except as declared by Landlord, that Landlord is not in default of any of its obligations under this Lease, and that Landlord has not received more than one month's rent in advance. Tenant agrees to furnish, from time to time, within five (5) days after receipt of a request from Landlord, a current financial statement of Tenant, certified as true and correct by Tenant. (xx) Authority of Tenant. If Tenant is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, in accordance with the bylaws of said corporation, and that this Lease is binding upon said corporation. In the event any representation or warranty is false, all persons who execute this Lease shall be liable, individually, as Tenant. 20 RESOLUTION NO. 2003-158 (xxi) Liabilitv of Landlord. Notwithstanding anything to the contrary provided in this Lease, it is specifically agreed and understood, such agreement being a primary consideration for the execution of this Lease by Landlord, that there shall be no personal liability of any individual in any capacity whatsoever with respect to any of the terms, covenants and/or conditions of this Lease, and that Tenant shall look solely to Johnco, L.L.C. for the satisfaction of the remedies of Tenant in the event of any breach of this Lease by Landlord, such exculpation of liability to be absolute and without any exception whatsoever. (xxii) Government Requirements. Wherever in this Lease any terms, covenants or conditions are required to be kept or performed by Landlord, Landlord shall be deemed to have kept and performed such terms, covenants and conditions notwithstanding any action taken by Landlord, if such action is pursuant to any governmental regulations, requirements, directives or requests. (xxiii) Consult Your Attornev. Tenant acknowledges that it has reviewed this Lease and consulted with its attorney concerning this lease; that it has negotiated any and all provisions of this lease which it has deemed necessary; that it is not relying on any representations, warranties or statements of any kind whatsoever made by Landlord or any other person or entity in connection with this Lease other than are expressly set forth herein, and that the general rule of construction that a document will be construed against its draftsman shall not apply with respect to this lease. (xxiv) Financial Statements. Within five (5) days after request thereof by Landlord or any prospective purchaser of mortgagee or other lender, Tenant hereby agrees to deliver to the requesting party Tenant's most recent financial statements and the most recent annual report, if any, all prepared in accordance with generally accepted accounting standards consistently applied. Such statements shall be signed by its president, if a corporation, or a general partner, if a partnership, who shall certify that the statement fairly presents the financial condition of Tenant as of the date stated. 30. RELOCATION. In the event Landlord determines to utilize the Premises for other purposes during the term of this Lease, Tenant agrees to relocate to another space in the Shopping Center designated by Landlord, provided such other space is of equal or larger size than the Premises. Landlord shall pay all out-of-pocket expenses of any such relocation, including the expenses of moving and reconstruction of all Tenant furnished and Landlord furnished improvements. In the event of such relocation, this Lease shall continue in full force and effect without any change in the terms and conditions of this Lease, but with the new location substituted for the old location. 31. HAZARDOUS SUBSTANCES. Tenant, its agents or employees, shall not bring or permit to remain on Premises or Shopping Center any asbestos, petroleum or petroleum products, explosives, toxic materials, or substances defined as hazardous wastes, hazardous materials or hazardous substances under any federal, state or local 21 RESOLUTION NO. 2003-158 law or regulation ("Hazardous Materials"). Tenant's violation of the foregoing prohibition shall constitute a material breach and default hereunder and Tenant shall indemnify, hold harmless and defend Landlord from and against any claims, damages, penalties, liabilities, and costs (including reasonable attorney fees and court costs) caused by or arising out of (i) a violation of the foregoing prohibition by Tenant or (ii) the presence of any Hazardous Materials on, under, or about the Premises or the Shopping Center during the term of the Lease. Tenant shall clean up, remove, remediate and repair any soil or ground water contamination and damage caused by the presence or any release of any Hazardous materials in, on, under or about the Premises or the Shopping Center during the term of the Lease caused by or arising, in whole or in part, out of the actions of Tenant, its agents or employees, in conformance with the requirements of applicable law. Tenant shall immediately give Landlord written notice of any suspected breach of this paragraph; upon learning of the presence of any release of any Hazardous Materials, and upon receiving any notices from governmental agencies pertaining to Hazardous Materials which may affect the Premises or the Shopping Center. The obligations of Tenant hereunder shall survive the expiration of earlier termination, for any reason, of this Lease. 32. BROKERS. Tenant and Landlord mutually warrant that it has had no dealings with any real estate broker or agents in connection with the negotiation of this lease. 33. NEW CONSTRUCTION. 33.A. If at any time prior to the commencement of rental under this Lease, Landlord notifies Tenant that a lender lending funds or committed to lend funds to Landlord in connection with the Shopping Center requires a change or changes in this Lease as a condition of such financing, Tenant agrees, at the request of Landlord, to promptly execute and deliver to Landlord an amendment to this Lease incorporating such changes, unless Tenant declines to do so, by written notice to Landlord, given within ten (10) days after Landlord requests such an amendment, in which event Landlord shall have the right and option to terminate this Lease by written notice to Tenant, in which event Landlord and Tenant shall have no further liability or obligation to the other under this Lease. 33. SUBORDINATION. The rights of Tenant under this Lease shall be and are subject and subordinate at all times to the lien of any mortgage or mortgages now or hereafter in force against such leases or the Shopping Center, and to all advances made or hereafter to be made upon the security thereof, and to all renewals, modifications, consolidations, replacements and extensions thereof. Tenant also acknowledges that any financing put in place by the Tenant for Tenant improvements, operating expenses or any other financing secured in any way by this Lease or the contents of the leased Premises shall be subordinate to the mortgages and advances described in the preceding sentence. This Article 34 is self-operative and no further instrument of subordination shall be required, provided that in confirmation of such 22 RESOLUTION NO. 2003-158 subordination Tenant shall promptly execute such further instrument as may be requested by Landlord. Tenant, at the option of any mortgagee or the Landlord under any underlying lease, agrees to attorn to such mortgagee or Landlord in the event of a foreclosure sale or deed in lieu thereof or termination by the Landlord of any such lease. Failure of Tenant to execute any of the above instruments within fifteen (15) days after written request to do so by Landlord shall constitute an event of default by Tenant under this Lease. IN WITNESS WHEREOF. Landlord and Tenant have executed this Lease effective the day and year first above written. LANDLORD: JOHNCO, L.L.C. TENANT: THE CITY OF BROOKLYN CENTER B y Its: J~" l ~ 0-5 Date: 23 RESOLUTION NO. 2003-158 EXHIBIT A-1 TO SHOPPING CENTER LEASE Legal Description of the Shopping Center to • „t.x •.41t••t•• 3•f 3•'ttf S•1 9d. (VAN tJ 4%7 I,- 1 ••r'~t.41~Mi• f•.«w..r ~wf ••w ,f„ •wct•P'ntr rnt•~.~ 3~ ry4^~`'TPO. .R wW!".•.•u wrP r•r••• 3•S•ttl r t^ ~ ~~r•.n' ~.Ilq Nrt •M••\ fr~ C)'` . SOO 1 M•ft t t r•q c~ ,l ~ , o r ,l~rrl ° MSP' .~f✓. If rr' . • P t•.»,N.•r( Il"•f~rM l •t 11\S •,1 MN11 D11'•••*••p!•t of t3 YP\ ~••1l n.r.•T/•>•r••~0 ~m• tn. • .ISrerr+~° t ,wrylltrry t.q Y • Lett r• R -cam ~~cxe~1T N ° a Mf+ e,PPPhtrr t r~ O f lI, 00 sft T; ASS _.f--11 S 1 - „-r! ti1n 1~•. ttr4t•q•.Stn'~StKtf•t3•R.• RESOLUTION NO. 2003-158 EXHIBIT A TO SHOPPING CENTER LEASE Site Plan of the Shopping Center 1 RESOLUT I _ - t klwe'• t . O - y 1 1 i I ~ 1 . ~ (fl 1 L 5 q 1 EVj 1 iw S 1{ N ~ i l_ ~ _ 1 ~.J ~.~e spy 1 -.-•i. ~ I w, ~ `J 1J ~ ! ~ ~ -1 , Icy : Z • ~ r ! ~ I i ..1 i ^ I • jj~ ~ r ~ ' I~ . j. - • l r = ' .......'-.....I..-.-.-.-.. 1-•_•_•_.-.....r.-._ ~I • IGGG~ ~ I. 1 jI ~ • r. 1 ~~'1 I I ~~i'1 r _ - - - - - _ . ' a Sv1 11 T - - - - - - - - - - ~ _ \ \ t 1 I i 1 1 ' ~ 1 p Z i f talt t`+ tI 11`if tIF44 §3arl m RESOLUTION NO. 2003-158 EXHIBIT B TO SHOPPING CENTER LEASE Description of Landlord's Work and Tenant's Work Construction Exhibit 1. LANDLORD'S WORK DONE AT LANDLORD'S EXPENSE All work shall be done at Landlord's expense per Exhibit B1 attached to include the following: A. SPECIAL ELECTRIC FIXTURES AND EQUIPMENT: All extra electric fixtures and equipment for Tenant's special needs, including, but not limited to, all floor outlets including conduit and wiring to panels. B. TELEPHONE: All conduits for telephone wires. Tenant shall make all arrangements with telephone company for service. C. WALLS: All interior partitions and curtain walls within the Premises and in accordance with governing codes. Tenant shall arrange and pay for the addition or relocation of any heads required by Landlord's insurance company or the fire inspector as a result of Tenant's interior partitions. D. COVES AND CEILINGS: All special coves, drops, ceilings. E. FLOOR COVERING: Allfloor covering. F. SPECIAL PLUMBING: All extra plumbing, either roughing in or fixtures required for Tenant's special needs. G. PAINTING: All painting or covering of interior wall surfaces. H. SIGNS: All signs shall be in accordance with the sign restrictions set up by Landlord for the project. Tenant shall submit to Landlord for approval drawings showing all proposed sign work to be erected in connection with Tenant's Premises. Drawings submitted for approval shall clearly show graphic as well as construction and attachment details of all signs including electrical load requirements and brightness and foot-lamberts. RESOLUTION NO. 2003-158 Erection of any sign shall be prohibited unless approved by Landlord. All exterior signs shall conform to City sign ordinances. Tenant shall procure necessary approval and permits. 1. Fire Sprinkling System: All changes, additions, or modifications to the sprinkler system requested or required by Tenant. J. SPECIAL EQUIPMENT: Cooler Refrigeration System Per Exhibit B1 II. TENANT'S WORK AT TENANTS EXPENSE At tenant's request Landlord may perform the following work. Upon satisfactory completion of the work the Tenant will make a lump sum payment to Landlord in an amount equal to the actual verified cost of providing this work. In no case will this requested work exceed $75,000.00. A. Store Fixtures, Shelving, Check Out Stands 1 B. Cash Register System C. Security Camera System D. Show Window Background Floors E. Alarm and Buzzer System F. Special Equipment G. Telephone System 2 RESOLUTION NO. 2003-158 EXHIBIT B1 TO SHOPPING CENTER LEASE Floor Plan of Municipal Liquor Store 1 I u ~~P 1 a x ' 'OVERxE aD , 1 DOOR i ~ WALK IN COOLER I STOCK ROOM ~ n al I i I OFFICE M,UVAGER l VESTIBULE z NNN/ BROOKLYN CENTER E-~ MUNICIPAL LIQUOR STORE 92 RESOLUTION NO. 2003-158 EXHIBIT C TO AGREEMENT OF LEASE, DATED SEPTEMBER 19, 2003 BETWEEN JOHNCO. LLC , AS LANDLORD, AND THE CITY OF BROOKLYN CENTER AS TENANT, COVERING LEASED PREMISES SITUATED IN SPACES 2, 3, 4. 5, & 6. 69TH AND BROOKLYN BOULEVARD, BOULEVARD MARKET SHOPPING CENTER. MINNESOTA. RULES AND REGULATIONS TENANT AGREES THAT IT WILL: 1. Keep the leased premises in a clean, safe and healthy condition, and clean the snow and ice from any sidewalks contiguous to the leased premises; 2. Not permit the leased promises to be used in any way which will injure the reputation of the business being conducted therein, or injure the reputation of the Center, or may be a nuisance, annoyance, inconvenience, or damage to the tenants of the Center or of the neighborhood, including, but not limited to, noise by the playing of any musical instrument or radio or television, or the use of a microphone, loud speaker, electrical equipment, or utilizing flashing lights or search lights, or any other equipment which, in the judgment of Landlord, might cause disturbance, impairment, or interference with the use or enjoyment by any other tenant in the Center. 3. Not display any merchandise outside the leased premises or in any way obstruct the sidewalks or common areas adjacent thereto, and will not place garbage, rubbish, trash, merchandise containers, or other incidentals to the business outside the leased premises;. 4. Keep all trash, refuse, garbage and waste materials in the type of container specified by Landlord, and such trash, refuse, garbage and waste material will be placed outside of the leased premises prepared for collection in the manner and at the times and places specified by Landlord; 5. Not bum trash, refuse, garbage or waste materials on the leased premises; 6. Not permit deliveries of any kind through the front entrance of the leased premises, except where no other entrance to the leased premises is available, and if such be the case, at the times designated by Landlord; 7. Use its best efforts to cause all trucks servicing the leased premises to load and unload prior to the hours of opening for business to the general public of the stores of other tenants in the Center; 8. Observe the following rules and regulations relating to parking: In the event particular areas are designated by Landlord as employee parking areas, all RESOLUTION NO. 20031-158 automobiles, trucks and other vehicles of Tenant, its officers, employees, agents, sublessees, licensees, concessionaires and contractors (hereinafter "Tenant, et al") shall be parked only in such designated areas. Tenant shall furnish Landlord with automobile license numbers of Tenant, et al, within five (5) days after taking possession of the leased premises, and shall thereafter notify Landlord of any changes within five (5) days after such changes occur. In the event Tenant, et al, fail to park their vehicles in designated parking areas as aforesaid, then Landlord, at its option, may charge Tenant, and Tenant shall pay to Landlord, as additional rent, Twenty-five Dollars ($25.00) per day per car parked in any area other than those designated, or such vehicles may be removed therefrom by Landlord or its agents and stored elsewhere at Tenant's expense and without liability of Landlord for such removal; 9. Not solicit business in the parking or other common areas, and will not distribute any handbills or other advertising matter on automobiles parked in the parking area or in other common areas without written consent of Landlord; 10. Not use the plumbing facilities for any other purpose than that for which they are constructed, and no foreign substance of any kind will be thrown therein, and will pay the expense of any breakage, stoppage, or damage resulting from the violation of this provision by Tenant, its employees, agents, invitees, sublessees, licensees, concessionaires or contractors; 11. Not keep any flammable or combustible material in, on or about the leased premises except as may be permitted to be kept in such locations and containers as specified by Landlord from time to time in accordance with the recommendations or regulations of Landlord's insurance carrier, underwriter or appropriate governmental authority; 12. Not permit the leased premises to be used for lodging purposes; 13. Not permit any auction sale, fire sale, bankruptcy sale and/or going-out-of- business sale, or similar types of sensational sales promotions to be conducted in the leased premise or from the leased premises; 14. Not operate or conduct in or from the leased premises a so called "discount store", "Cut-rate store", army, navy store or government "surplus" store; and 15. Not conduct catalog sales in or from the leased premises except of merchandise which Tenant is permitted to sell "over the counter "in or at the leased premises pursuant to the provisions of the lease. Delivery by Landlord and receipt by Tenant of the foregoing Rules and Regulations, numbers 1 through 15, inclusive, are acknowledged hereby. 2 RESOLUTION NO. 200-3-158 LANDLORD: JOHNCO, L.L.C. TENANT: THE CITY OF BROOKLYN CENTER 1 , By: By: Its: Its: v Date: ` 14 - o-3 Date: 3 RESOLUTION NO. 2003-158 EXHIBIT D TO SHOPPING CENTER LEASE Sign Criteria RESOLUTION NO. 2003-158 EXHIBIT D SIGN CRITERIA I. GENERAL A. Only the area above the storefront of the Premises shall be identified by a sign. The furnishing and installation of a sign and the cost incurred shall be the responsibility of the Tenant. B. It is intended that the signing of the retail stores on the center shall be developed in a imaginative and varied manner, and although previous and current signing practices of the Tenant will be considered, they will not govern signs to be installed on the retail stores. C. Each tenant will be required to identify its premises by a sign. D. Service doors, if any will be provided with uniform signs identifying stores by the respective Tenant. Tenant shall not post any other additional signs on or around service doors. E. All signs are required to conform to City Ordinances. It is the responsibility of the Tenant to obtain approvals and permits as required by the City. H. SIGN CRITERIA A. The wording of the signs shall be limited to the store name only, and such name shall not include any items sold therein. B. The use of corporate shields, crests, logos, or insignias will be permitted (subject to Landlord's approval), provided such corporate shields, crests, logos, or insignias shall not exceed the average height for sign letters. C. Multiple or repetitive signing will be allowed only with the approval of the Landlord, provided the area of such signing conforms to the limitations set forth herein. D. The average height of sign letters or components shall not exceed 30". Capital letters shall not exceed 36". E. Sign length shall be determined by centering in lease frontage area, holding back a minimum of 2' from lease line on each and for 20' fronts, 3' for 30' fronts, and 4' for 40' fronts and larger. Example: 40' wide space could have a 32' maximum length 20' wide space could have a 16' maximum length F. Sign letters to be constructed with internal illuminated letters. G. Letter shall not project beyond the brick face more than five (5) inches, except if constructed on a raceway. RESOLUTION NO. 2003-158 III. PROHIBITED TYPES OF SIGNS OR SIGN COMPONENTS A. Moving or rotating signs. B. Back illuminated signs. C. Signs employing moving or flashing lights. D. Signs employing exposed ballast's boxes or transformers. E. Signs employing painted and/or non-illuminated letters. F. Signs of box or cabinet type employing transparent, translucent or luminous plastic background panels. G. Cloth, wood, paper, or cardboard signs, stickers, decals, or painted signs around or on exterior surfaces (except interior surfaces of doors and/or windows) of the Premises. 1 H. Signs employing noise making devices and components. I. Signs, letters, symbols or identification of any nature painted directly on surfaces exterior to the Premises. J. Freestanding signs. K. Rooftop or exterior signs. IV. PROCEDURES FOR SIGN DRAWINGS A. Tenant shall submit three (3) sets of blueline prints of the drawings and specifications, including samples of materials and color, for all its proposed sign work. The drawings shall clearly show location of sign on storefront elevation drawings, graphics, color, and construction and attachment details. Full information regarding electrical load requirements and brightness in footlambers is to also be included. B. As soon as possible after receipt of the sign drawings, Landlord shall return to Tenant one (1) set of such drawings with its suggested modification and/or approval. All sign plans must have written Landlord approval.