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10.2. SR 08-04-2014 City of Elk Request for Action River To Item Number Mayor and City Council 10.2 Agenda Section Meeting Date Prepared by Work Session August 4, 2014 Cal Portner, City Administrator Item Description Reviewed by Chamber of Commerce Lease Renewal Reviewed by Action Requested Discuss and provide direction for Chamber of Commerce building lease. Background/Discussion The city and the Elk River Area Chamber of Commerce entered into a lease agreement for the city- owned property they use on September 1, 1994,with a termination date of September 1, 2009. The chamber exercised their option to extend the lease for one period of five years,which will terminate on September 1, 2014. The chamber pays base rent of$1.00 (one dollar) per year. The chamber is also responsible for the maintenance and repairs of the building inside and out and the property including mowing and landscaping, as well as utilities. The city maintains the sidewalks, the driveway, and parking areas including snow removal. The lease agreement has served both the chamber and city well. The chamber would like to renew the lease and has requested the following lease improvements: 1) The city provide snow removal from the deck. 2) The city maintain the lawn irrigation system. 3) The city provide lawn care and mowing services. Of the three requests, staff recommends consideration of maintaining the lawn irrigation system with the provision that the chamber pays the water costs and consents to maintaining the turf in an aesthetically pleasing (green) manner. The city maintains other irrigation systems,has staff expertise as well as a contractor to maintain systems operating efficiently. It is in the city's interest to have an aesthetically pleasing entrance to the city. The costs and efficiency of city maintenance and repair would be mutually beneficial. The city currently contracts privately for lawn care and mowing around city buildings. There is no advantage to adding an additional contract. We also utilize equipment for snow removal of lots and sidewalks. Our building maintenance staff clear snow from sidewalks,patios, etc. in conjunction with their existing workloads. The chamber would be better served from a customer service standpoint to remove the snow from the deck and walking areas. P a w E R E U 6 Y NaA f RE] Financial Impact The irrigation system is in need of some current repairs and upgrades. Parks Maintenance staff have inspected the system and have a number of recommendations for repair/improvements to ensure effective irrigation coverage. The irrigation connection to the building is in need of some plumbing repairs that need to be completed before the irrigation system can be used and the chamber is in the process of having them completed. Attachments ■ Building Lease - Chamber of Commerce CHAMBER OF COMMERCE - #2 LEASE 02 THIS LEASE is made this , ± day o 1994, by and r between the CITY OF ELK RIVER ("Landlo ") , and ELK RIVER AREA CHAMBER OF COMMERCE ("Tenant") . Landlord and Tenant, intending to be legally bound, hereby covenant and agree as follows: ARTICLE 1. PREMISES Landlord does hereby lease, demise, and let unto Tenant, and Tenant does hereby hire and take from Landlord, upon the terms and conditions set forth herein . (the Lease) , that certain parcel of real property situated in Sherburne County, Minnesota, legally described on Exhibit A attached hereto and incorporated herein by reference (the Land) , subject to all easements and rights-of-way of record, together with all structures thereon and all appurtenances thereto (the Improvements) , all of which Land and Improvements are hereinafter referred to as the Premises . Tenant hereby agrees to accept the Premises in its "AS IS" condition, Landlord makes no warranties or representations concerning the condition of the Premises or any equipment or fixtures located therein. ARTICLE 2 . TERM f 2 .1) The term of th Lease shall commence o / , 1994, and terminate o / , 2009 (the nitial Term) , unless sooner terminated as provided herein. 2 .2) Provided the Lease is in full force and effect and Tenant is not in default of any of the terms or conditions of the Lease, Tenant shall have an option to renew the Lease (the Renewal Option) upon the same terms and conditions contained rein, for one period of five (5) years commencing % , 2009, and terminating / M14. The Renewal Option shall be exerci ed, if at all, by Tenant giving Landlord written notice thereof at least sixty (60) days prior to expiration of the Initial Term. The "Initial Term" and the "Renewal Option" are collectively referred to herein as the "Term. " A "Lease Year" shall mean each calendar year, in whole or in part, during the term. 2 . 3) At the time of the execution of this Lease, Tenant desires to remain in the Premises for one (1) additional period of five (5) years commencing upon the expiration of the Renewal Option. Provided the Lease is in full force and effect, Tenant Y 1 is not in default of any of the terms or conditions of the Lease and Tenant has exercised the Renewal Option, Landlord may, but shall not be obligated to, grant Tenant one (1) additional period of five (5) years . ,ARTICLE 3 . RENT Tenant shall pay to Landlord as the "Base Rent" for the Term the sum of Fifteen and 00/100 Dollars ($15 . 00) . The Base Rent shall be payable in equal yearly installments of One and 00/100 Dollar ($1. 00) and s i1 be payable in advance, on or before the f rst (1st) day o commencing l 4, and continuing during the Term. ARTICLE 4 . NET LEASE 4 .1) It is the intention and purpose of the parties hereto that the Lease shall be a "Net Lease" to Landlord. All costs and expenses of whatever character or kind, general and special, ordinary and extraordinary, foreseeable or unforeseeable, and of every kind and nature whatsoever that may be necessary in or about the operation of the Premises, including all hazard and liability insurance, taxes, special assessments, utilities, maintenance, and repairs, except as otherwise expressly provided herein, shall be paid by Tenant as "Additional Rent" hereunder. 4.2) Except as otherwise expressly provided herein, Tenant covenants and agrees that if at any time it fails to pay any amount required by the Lease, or to obtain, pay for, maintain, or deliver any of the insurance policies herein provided for, or fails to make any other payment or perform any other act required to be made or performed by the Lease, then Landlord, without notice to or demand upon Tenant, without waiving or releasing Tenant from any obligation of Tenant contained in the Lease, and without any obligation to do so, may effect any such insurance coverage and pay premiums therefor and may make any other payment or perform any other act on the part of Tenant to be made and performed as provided in the Lease, in such manner and to such extent as Landlord may deem desirable, and in exercising such right to pay necessary and incidental costs and expenses. All sums so paid by Landlord and all necessary and incidental costs and expenses in connection with performance of any such act by Landlord, including attorney's fees, together with interest thereon at a rate of eighteen percent (18t) per annum from the date of making of such expenditure by Landlord, shall be payable to Landlord as Additional Rent, and except as otherwise provided for in the Lease, shall be payable on demand or at the option of Landlord may be added to any monthly rental then due or thereafter becoming due under the Lease. Tenant covenants to pay any such sum or sums with interest as aforesaid and Landlord 2 . •y t shall have (in addition to any right or remedy of Landlord) the same rights and remedies in the event of nonpayment by Tenant as in the case of default by Tenant in payment of rent . ARTICLE 5 . TAXES AND ASSESSMENTS 5 .1) Tenant shall pay, as Additional Rent hereunder, before any fine, penalty, interest, or costs may be added thereto for the nonpayment thereof, all real estate taxes and installments of special assessments payable during the Term of the Lease which shall during the Term be laid, assessed, levied, or imposed upon, or shall become payable and a lien upon, the Premises or any part thereof (Impositions) . 5.2) Tenant shall have the right to contest or appeal any Imposition in Tenant's or Landlord's name, at Tenant's sole cost and expense. If nonpayment of the Imposition creates a lien upon the Premises, Landlord may, at its option, request Tenant to deposit with it an amount equal to one hundred twenty-five percent (1251) of the contested and unpaid Imposition. Such amount shall be returned to Tenant upon the successful appeal of the Imposition or upon payment of it. Tenant shall give Landlord written notice of Tenant ' s intention to contest or appeal any Imposition at least twenty (20) days prior to the delinquency thereof. Tenant shall hold Landlord harmless against all loss, cost, expense, attorneys ' fees, or damages resulting from such contest or appeal . 5.3) Tenant shall pay directly to the appropriate governmental authorities, as Additional Rent hereunder, before any fine, penalty, interest, or costs may be added thereto for the nonpayment thereof, any tax or excise imposed or assessed on rent, on any leasehold interest, any right of occupancy, any investment of Tenant in the Premises, any personal property of any kind owned, installed, or used by Tenant, including Tenant' s leasehold improvements, any privilege tax, sales tax, gross proceeds tax, etc. , however described, by any federal, state, county, or municipal governmental authority or any subdivision thereof or other governmental authority. Tenant shall not be required to pay any federal or state or local income tax for which Landlord may become liable during the Initial Term or any Option Term of the Lease. ARTICLE 5. UTILITIES Tenant shall directly pay or cause to be paid, as Additional Rent hereunder, all charges for sewer and water services, gas, electricity, light, heat, air conditioning, power, telephone, or other services or utility used, rendered, or supplied upon or in connection with the Premises (the Utilities) during the Term 3 . i hereof. Tenant shall contract for the Utilities in Tenant's own name and shall hold Landlord harmless from any liability or expense for any such charge. Upon Landlord's request, Tenant shall furnish to Landlord paid statements, invoices, or cancelled checks evidencing the payment of all obligations undertaken by Tenant hereunder. ARTICLE 7. REPAIRS, MAINTENANCE, AND ALTERATIONS 7. 1) Tenant shall, during the Term of the Lease and at Tenant' s expense, keep the Premises and appurtenances and every part thereof in good order, condition, and repair, including, without limitation, entrances, passages, courts, vestibules, stairways, corridors, halls, elevators, air conditioning equipment, heating equipment, water system, toilet facilities, lighting, curbs, truck ways, loading docks, ramps, garages, drainage facilities, roofs, all other machinery and equipment in the Improvements, and any other cost of operation of the Premises. In addition, Tenant shall be responsible for the cost of cleaning, trash removal, line painting, seal coating, paving and security. Except as herein provided, Tenant shall make all repairs to the exterior of the Improvements, shall make all structural repairs, and shall keep and maintain all landscaped areas in a neat, orderly, and trim condition at its expense. If Tenant does not keep and maintain the Premises as herein provided, Landlord may, but .need not, make such repairs and replacements, and Tenant shall pay Landlord, as Additional Rent, the cost thereof forthwith upon being billed for the same. All damage or injury to the Premises and to its fixtures, appurtenances, and equipment caused by Tenant moving property in or out of the Premises or by installation, removal of furniture, fixtures, equipment, or other property by Tenant, its agents, contractors, servants, or employees, or resulting from any other cause of any other kind or nature whatsoever due to carelessness, omission, neglect, improper conduct, or other causes of Tenant, its servants, employees, agents, visitors, or licensees, shall be repaired, restored, or replaced promptly by Tenant at its sole cost and expense to the satisfaction of Landlord. If Tenant fails to make such repairs, restorations, or replacements, the same may be made by Landlord and the same shall be at the expense of Tenant and collectible as Additional Rent or otherwise, and shall be paid by Tenant to Landlord within five (5) days after rendition of a bill or statement therefor. I!, 7.2) The parties agree that Landlord shall maintain the sidewalks, driveway and parking areas for the Premises, including snow removal. The parties further agree that Tenant shall maintain the landscaping, including trimmin and mowing, for the property legally described as I�'r! , which includes the Premises. 7.3) Except as otherwise provided herein, no improvements, alterations, or replacements shall be made to the Premises or any portion thereof without the prior written consent of Landlord. 4 . 7.4) Tenant shall not suffer or permit any statements of mechanic's liens to be filed against the Premises or any part thereof by reason of work, labor, services, or materials supplied or claimed to have been supplied to Tenant or anyone holding the Premises or any part thereof through or under Tenant. It any such statement of mechanic's lien shall at any time be tiled against the Premises, Tenant shall cause the same to be discharged of record within thirty (30) days after the date of actual notice to Tenant of filing the same. If Tenant shall fail to discharge such mechanic's lien within such period or fail to deposit an amount equal to one hundred twenty-five percent (1251) of the amount claimed with the court within such period, then in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit in court or by giving security or in such other manner as is, or may be, prescribed by law. Any amount paid by Landlord for any of the aforesaid purposes,. and all reasonable other expenses of Landlord, including reasonable attorneys ' fees, in or about procuring the discharge of such lien, with all necessary disbursements in connection therewith, with interest thereon at the rate of ten percent (10t) per annum from the date of payment, shall be repaid by Tenant to Landlord on demand, and if unpaid may be treated as Additional Rent. Nothing herein contained shall imply any consent or agreement on the part of Landlord to subject Landlord' s estate to liability under any mechanic's lien law. ARTICLE 8 . INSURANCE 8 . 1) Tenant shall, as Additional Rent hereunder and at Tenant 's sole cost and expense, keep the Premises, including all buildings, improvements, furniture, and equipment on, in, or appurtenant thereto at the commencement of the Term and thereafter erected thereon or therein, including all alterations, rebuildings, replacements, changes, additions, and improvements, fully insured for the mutual benefit of Landlord and Tenant, as their interests may appear, as named insureds (a) against loss or damage by fire and (b) against those perils included from time to time in the standard form of extended coverage insurance endorsement, including but without limiting the generality of the foregoing, wind storm, hail, explosion, vandalism, riot and civil commotion, damage from vehicles, and smoke damage, and such other coverage as may be deemed necessary by Landlord, provided that such additional coverage is obtainable. 8.2) All policies of insurance relating to fire and extended coverage shall provide that the proceeds thereof shall be payable to Landlord, and if Landlord requires, shall also be payable to the holder of any mortgage now or hereafter becoming a lien on the fee of the Premises, or any part thereof, as the interest of 5. such holder appears, pursuant to a standard mortgagee clause. All such policies of insurance shall provide that any loss shall be payable to Landlord notwithstanding any act or omission of Tenant which might otherwise result in a forfeiture or reduction of said insurance. 8 .3) Tenant shall also, as Additional Rent hereunder and at Tenant's sole cost and expense, but for the mutual benefit of Landlord and Tenant, as named insureds, maintain during the Term of the Lease (a) general public liability insurance against claims for personal injury, death, or property damage occurring upon, in or about the Premises, and on, in, or about the adjoining lands, streets, and passageways, such insurance to afford protection to the limit of not less than Five Hundred Thousand and no/100 Dollars ($500, 000.00) in respect to injury or death to a single person, and to the limit of not less than One Million and no/100 Dollars ($1, 000, 000.00) in respect to any one (1) accident and to the limit of not less than Five Hundred Thousand and no/100 Dollars ($500, 000. 00) in respect to any property damage; (b) steam boiler insurance on all steam boilers, pressure boilers, or other such apparatus as Landlord may deem necessary to be covered by such insurance and in such amount or amounts as Landlord may from time to time reasonably require. 8.4) All policies of insurance shall be written in companies satisfactory to Landlord, and shall be written in such form and shall be distributed in such companies as shall be reasonably acceptable to Landlord. Such policies shall be delivered to Landlord endorsed "premium paid" by the company or agency issuing the same or accompanied by another evidence satisfactory to Landlord that the premiums thereon have been paid, not less than ten (10) days prior to the expiration of any then current policy. 8 .5) Landlord agrees that such policy or policies may contain a waiver of subrogation clause as to Tenant. Provided the aforesaid fire and extended coverage insurance is in full force and effect and remains so, Landlord waives, releases, and discharges Tenant from all claims or demands whatsoever which Landlord may have or acquire in the future arising out of damage to or destruction of the Premises by fire or extended coverage risk, whether such claim or demand may arise because of the negligence of Tenant, its agents, or employees or otherwise, and Landlord agrees to look only to the insurance coverage in the event of such loss. 8.6) Tenant shall insure the contents of the Improvements owned by Tenant, for the benefit of Tenant, against loss or damage by fire, windstorm, or other casualty for such amount as Tenant may desire, and Tenant agrees that such policies shall contain a waiver of subrogation clause as to Landlord. Tenant waives, releases, and discharges Landlord from all claims or demands whatsoever which Tenant may have or acquire by fire or extended coverage risk, whether such claim or demand may arise because of the negligence of Landlord, its agents or employees or 5 . L , 1 1 - otherwise, and Tenant agrees to look to insurance coverage only in the event of such loss. ARTICLE 9 . QUIET ENJOYMENT Landlord represents and warrants that: (a) it is the lawful owner of the Premises; (b) that it has the full right and power to make the Lease; (c) that if and so long as Tenant shall not be in default hereunder, Tenant shall quietly hold, occupy, and enjoy the Premises during all of the Term. ARTICLE 10. DESTRUCTION BY FIRE 10.1) Subject to the provisions of Article 10.4, if the Improvements, or. any portion thereof, are damaged or destroyed by fire or other casualty, however or by whomever caused, at the mutual agreement of the parties, Tenant shall repair, rebuild, and restore the same with due diligence and dispatch (subject to the approval of the holders of any mortgages on the Property) so that the Improvements will be restored to at least the same good order and condition as existed prior to damage or destruction. If more than twenty-five percent (25W) of the Premises is damaged or destroyed by tire or other casualty, Tenant shall have the option, in its sole discretion, to decline to rebuild the Premises. If Tenant so declines, this Lease shall terminate as of the date of such damage or destruction and Tenant shall remove the remaining Improvements and all debris thereon and sod the Premises, returning the Premises to the good and clean condition which existed prior to the construction of the Improvements on the Premises. If Tenant elects to repair the Premises, and if . such damage in the reasonable opinion of the Landlord renders the entire Premises unfit for Tenant 's normal business purposes, and Tenant by reason thereof discontinues business in the Premises, Base Rent shall be abated for a period during which no part of the Premises is fit for such business purposes and during which time Tenant discontinues business. If such damage renders only part of the Premises unfit for Tenant' s normal business purposes, Base Rent shall be apportioned on a square foot of Premises area basis and the proportion thereof applicable to each part of the Premises upon which Tenant discontinues its business operations shall be abated for the period during which such part is not fit for Tenant' s normal business purposes and during which Tenant discontinues such business operations. 10 .2) Tenant will repair and replace all improvements and betterments placed upon the Premises by it, and such repair and replacement shall be made at its own expense and not at the expense of Landlord. 10 .3) If Landlord and Tenant cannot mutually agree on whether the Premises is fit for Tenant ' s normal business purposes, such 7. t question shall be submitted to arbitration as provided in Article 12 hereof . 10.4) If the Premises, or any part thereof, is damaged or destroyed by the willful or negligent conduct of Tenant or its agents, employees, or independent contractors, Tenant shall promptly repair such damage or replace such improvement so destroyed; provided that if such damage or destruction is caused by negligence and is or would be covered by the insurance required to be procured and maintained by the terms of Article 8 then, to the extent that the cost of repairing or replacing such damage or destruction does not exceed the amounts of such insurance, Tenant shall be relieved from such obligation to repair or replace. Base Rent and Additional Rent shall not be abated as a result of willful conduct of Tenant or its agents, employees, or independent contractors which result in or cause such damage or destruction. ARTICLE 11. CONDEMNATION 11. 1) If during the Term of the Lease the entire Premises shall be taken as a result of the power of eminent domain, condemnation proceedings, or other like proceedings (the Proceedings) , the Lease and all right, title, and interest of Tenant hereunder shall cease and come to an end on the date of taking of possession pursuant to the Proceedings. During the first ten (10) years of the term of this Lease, Tenant shall be entitled to and shall receive the first Forty Thousand and 00/200 Dollars ($40, 000. 00) of any award which is allocable to the Premises. Landlord shall be entitled to and shall receive that portion of any award which is granted during the first ten (10) years of the Term of this Lease allocable to the Premises in excess of Forty Thousand and 00/100 Dollars ($40, 000 .00) and the entire portion of any award allocable to the Premises granted after the first ten (10) years of the Term of this Lease. In addition, at all times during the Term of this Lease, Landlord shall be entitled to and shall receive the total award in the Proceedings which are not allocable to the Premises. 11.2) If during the Term less than the entire Premises, but twenty-five percent (25t) or more of the Improvements (calculated by the number of square feet of floor space) or fifty percent (50U or more of the Land shall be taken by the Proceedings, the Lease shall, upon taking of possession pursuant to the Proceedings, terminate as to the portion of the Land and Improvements so taken, and Tenant may terminate the Lease as to the remainder of the Premises. Such termination as to the remainder of the Premises shall be 'effected by a notice to Landlord in writing given not more than sixty (60) days after the date of taking of possession pursuant to such Proceedings, and shall specify a date not more than sixty (60) days after the giving of such notice as the date of such termination. Upon the 8 . date specified in such notice, the Term and all right, title, and interest of Tenant hereunder shall cease and come to an end. If Tenant elects not to terminate the Lease, the Lease shall continue in full force and effect, but the Base Rent shall be reduced pro rata in accordance with the percentage of value of the Premises so taken compared with the total value of the Premises immediately prior to said taking. Nothing herein contained shall affect Tenant 's obligation to pay in full the Additional Rent. Landlord shall, however, at Landlord's sole cost and expense, restore that portion of the Premises not so taken to a complete architectural unit for the use and occupancy of Tenant. The Lease shall continue in full force and effect, but the Base Rent shall be reduced pro rata as aforesaid. If the parties cannot agree on the pro rata reduction of the Base Rent after said taking, or on the allocation of any award made in the Proceedings, as above set forth, Landlord and Tenant shall submit the question to arbitration as provided in Article 12 hereof. ARTICLE 12. r ARBITRATION In cases in which a dispute arises under the Lease, the same shall be settled by arbitration in accordance with the then existing rules of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Any such arbitration shall be had before a panel of three (3) arbitrators (unless Landlord or Tenant agree to one (1) arbitrator) designated by the American Arbitration Association in accordance with the rules of such association, and the decision of the majority of such arbitrators shall be binding upon the panties. The arbitrators designated and acting under the Lease shall make their award in strict conformity with such rules and shall have no power to depart from or change any of the provisions thereof. Each party to the arbitration shall pay one-half (1/2) of the costs thereof. All arbitration proceedings hereunder shall be conducted in Minneapolis, Minnesota. ARTICLE 13 . ASSIGNMENT AND SUBLETTING Tenant shall not assign or transfer any of its rights under the Lease or sublease any part of the Premises (an Assignment) without prior written consent from Landlord. No Assignment shall relieve Tenant from any of its obligations contained in the Lease, nor shall any Assignment be effective unless the assignee shall, at the time of such Assignment, assume in writing all the terms, covenants, and conditions of the Lease to be performed thereafter by Tenant and shall agree in writing to be bound thereby. Tenant agrees to pay on behalf of Landlord any and all costs of Landlord, including reasonable attorneys ' fees occasioned by each Assignment. Consent by Landlord to any 9 . Assignment shall not be a waiver of Landlord' s rights as to subsequent Assignment . ARTICLE 14 . DEFAULTS OF LESSEE 14. 1) If during the Term of the Lease (a) Tenant shall make an assignment for the benefit of creditors, or (b) Tenant shall file a voluntary petition under the Bankruptcy Code of the United States or any state statute similar thereto, or Tenant be adjudged insolvent or a bankrupt pursuant to an involuntary petition, or (c) a receiver or trustee be appointed for the property of Tenant by reason of insolvency of Tenant, or (d) any department of the state or federal government, or any officer thereof duly authorized, shall take possession of the business or property of Tenant by reason of the insolvency of the Tenant, or (e) Tenant continues in possession without the appointment of a receiver or trustee under Chapter 11 of the Bankruptcy Code, or (f) Tenant is the subject of any petition or proceeding related to relief from creditors, the Lease shall, upon the happening of any of said contingencies and at Landlord's option, be terminated and the same shall expire as fully and completely as if the day of the happening of such contingency were the date herein specifically fixed for the expiration of the Term and Tenant will then quit and surrender the Premises, but Tenant shall remain liable as hereinafter provided. 14 . 2) If during the Term Tenant shall default in fulfilling any of the covenants of the Lease (other than the covenants for the payment of Base Rent or Additional Rent) , Landlord may give Tenant notice of any default or of the happening of any contingency referred to in this paragraph, and if at the expiration of thirty (30) days after the service of such notice the default or contingency upon which said notice was based shall continue to exist, or in the case of a default or contingency which cannot with due diligence be cured within a period of thirty (30) days, it Tenant fails to proceed promptly after the service of such notice and with all due diligence to cure the same and thereafter to prosecute the curing of such default with all due diligence, Landlord, at its option, may terminate the Lease, and upon such termination, Tenant will quit and surrender the Premises to Landlord, but Tenant shall remain liable as hereinafter provided. 14.3) If Tenant shall default in the payment of the Base Rent expressly reserved hereunder, or any part of the same, and such default shall continue for ten (10) days after notice thereof by Landlord, or such default in the payment of any item of Additional Rent to be paid by Tenant hereunder, or any part of the same, and such default shall continue for thirty (30) days after notice thereof by Landlord, or if the Lease shall expire as provided in paragraphs 14 .1 or 14.2 of this Article, Landlord or Landlord' s agents and servants may immediately or at any time 10. thereafter re-enter the Premises and remove all persons and any or all property therefrom, either by summary dispossession proceedings or by any suitable action or proceedings at law or by force or otherwise and repossess and enjoy said Premises, together with all additions, alterations, and improvements, without re-entry and repossession working forfeiture or waiver of the rents to be paid and the covenants to be performed by Tenant during the Term hereof. Upon the expiration of the Term of the Lease by reason of any of the events described in paragraphs 14 .1 or 14.2, or in the event of termination of the Lease by summary dispossession proceedings or under any provision of law now or hereafter in force by reason of or based upon or arising out of a default under or a breach of the Lease on the part of Tenant (except where such breach or default is determined by a court of competent jurisdiction to be justified because of Landlord's acts or omissions) , or upon Landlord recovering possession of the Premises in the manner or in any of the circumstances whatsoever, whether with or without legal proceedings, by reason of or based upon or arising out of a default under or a breach of the Lease on the part of Tenant, Landlord may, at its option, at any time and from time to time, relet the Premises, or any part thereof, for the account of Tenant or otherwise, and receive and collect the rents therefor, applying the same first to the payment of such expenses as Landlord may have incurred in recovering possession of the Premises, including legal expenses and attorneys ' fees, and for putting the same into good order or condition or preparing or altering the same for re-rental and all other expenses, commissions, and charges paid, assumed, or incurred by Landlord in reletting the Premises and then to the fulfillment of the covenants of Tenant hereunder. Any such reletting herein provided for may be for the remainder of the Term of the Lease as originally granted or for a longer or shorter period. in any such case or whether or not the Premises, or any part thereof, is relet, Tenant shall pay to Landlord the Base Rent and the Additional Rent required to be paid by Tenant up to the time of such termination of the Lease, as the case may be, and thereafter, except in a case where liability of Tenant as hereinafter provided arises by reason of any of the contingencies referred to in paragraph 14.1 hereof, Tenant covenants and agrees, if required by Landlord, to pay to Landlord until the end of the Term of the Lease the equivalent of the amount of all the Base Rent and Additional Rent reserved herein less the net proceeds of reletting, if any. Landlord shall have the election, in place and stead of holding Tenant so liable, forthwith to recover against Tenant, as damages for loss of the bargain and not as penalty, an aggregate sum which at the time of such termination of the Lease for such recovery of possession of the Premises by Landlord, as the case may be, represents the then present worth of the excess, if any, of the aggregate of the Base Rent and Additional Rent payable by Tenant hereunder that would have accrued for the balance of the Term, over the aggregate rental value of the Premises for the balance of such Term. 11 . 14 .4) The specified remedies to which Landlord may resort under the terms of the Lease are cumulative and are not intended to be exclusive of any other remedies or means of redress to which Landlord may be lawfully entitled in case of any breach or threatened breach by Tenant of any provision of the Lease. The failure of Landlord to insist in any one or more cases upon the strict performance of any of the covenants of the Lease or to exercise any option herein contained shall not be construed as a waiver or a relinquishment for the future of such covenant or option. A receipt by Landlord of Base Rent or Additional Rent, including payment of Base Rent or Additional Rent by Tenant' s receiver, trustee in bankruptcy, creditor, or assignee, with knowledge of breach of any covenant hereof (other than the payment of Base Rent or Additional Rent) shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Landlord. In addition to other remedies provided in this Lease, Landlord shall be entitled to the restraint by injunction for -the violation or attempted or threatened violation of the covenants, conditions, or provisions of the Lease. ARTICLE 15. ATTORNEYS ' FEES If it is necessary for Landlord to retain the services of an attorney at law to enforce any of the terms, covenants, or provisions hereof, or to collect any sums due hereunder, Tenant shall pay to Landlord upon demand, as Additional Rent hereunder, the cost of such services. ARTICLE 16 . REMOVAL OF IMPROVEMENTS AND FIXTURES Any improvements or fixtures installed by Tenant in the Improvements or on the Land, whether used solely in Tenant ' s business or whether usable in the Improvements without regard to such business or otherwise, shall become the property of Landlord upon the termination of the Lease. ARTICLE 17. CONDITION OF PREMISES AT TERMINATION At the termination of the Lease by lapse of time or otherwise, Tenant shall return the Premises in as good a condition as when Tenant took possession, excepting only ordinary wear and tear and condemnation, damage, or destruction as described in Articles 10 and 11 herein. At Landlord' s option, Tenant agrees it shall remove all of its personal property, including fixtures and equipment and the Improvements, from the Premises and shall repair any damage caused by the removal and 12 . I I restore the Premises to the good and clean condition which existed prior to the construction of the Improvements on the Premises, including sodding the Premises. ARTICLE 18 . HOLDING OVER in the absence of any written agreement to the contrary, if Tenant should continue to occupy the Premises following the expiration of the Term of the Lease, Tenant shall so remain as a tenant from month to month and all provisions of the Lease applicable to such tenancy shall remain in full force and effect. During such tenancy, the same Base Rent and the same terms and conditions as prevailed during the last month of the Term demised shall prevail . In any such event, Tenant shall be liable to Landlord for damages which Landlord may incur as a result of such holding over, including but not limited to damages incurred because of doss of a prospective successor tenant. If Tenant is a hold-over tenant and if Tenant continues to occupy the Premises following the termination of such holdover (by a proper notice as to such month-to-month tenancy) , then the foregoing provisions of this Article shall apply in the same manner as when Tenant continued in occupancy following the expiration of the Term of the Lease. ARTICLE 19 . USE OF PREMISES The Premises shall be used only for the operation of an office for Tenant 's business and for no other use or purpose whatsoever. Notwithstanding anything to the contrary contained herein, Tenant shall not use the Premises in violation of the Declaration of Restrictive Covenants recorded against the Premises. Specifically, Tenant shall not use the Premises for retail or private commercial purposes, including, but not limited to retail government purposes, such as a municipal liquor store, or for school purposes. Tenant shall not use or occupy the Premises or knowingly permit the Premises to be used or occupied contrary to any statute, rule, order, ordinance, requirement, or regulation applicable thereto or in any manner which would violate any certificate of occupancy affecting the same, or which would cause structural injury to the Premises or cause the value or usefulness of the Premises or any part thereof to substantially diminish (reasonable wear and tear excepted) or which would constitute a public or private nuisance or waste. Tenant shall promptly upon discovery of any such use, take all necessary steps to compel the discontinuance of such use. ARTICLE 20 . PERMITS Tenant shall maintain in force and effect all permits, licenses, and similar authorizations to use the Premises for the 13 . +1 aforesaid purposes required by any governmental authority having jurisdiction over the use thereof. Tenant's failure to maintain such permits, licenses, and similar authorizations shall not relieve Tenant from the performance of its obligations and covenants hereunder (except obligations and covenants as may be prohibited by law) , nor from the obligations to pay Base Rent or Additional Rent, as set forth herein. Tenant shall, at Landlord's request, join with Landlord in executing, acknowledging, and delivering any and all petitions, consents, subordinations, plats, or easement deeds that may be required for the installation of any utilities, public improvements, roads, water lines, sewer lines, storm drainage facilities, subdivision, rezoning, special use, platting, or other similar development of the Premises, which do not affect Tenant's use of the Premises during the Term. ARTICLE 21. COMPLIANCE WITH LAW 21. 1) Tenant, at its sole expense, shall promptly comply with all laws, ordinances, and requirements of federal, state, county, and municipal authorities relating to Tenant's use and occupation of the Premises, and with any lawful order or direction of any public officer relating to Tenant' s use and occupation of the Premises during the Term of the Lease. Nothing herein contained, however, shall prohibit Tenant from appealing from or contesting the validity or legality of such laws, ordinances, requirements, orders, or directions and, notwithstanding the foregoing provisions of this Article, Tenant shall not be deemed to be in default hereunder so long as Tenant diligently prosecutes such appeal or contest. 21.2) Neither Tenant, nor any entity or person shall, at any time during the Term: (i) "release" or actively or passively consent to the "release" or "threatened release" of any Hazardous Substance (as defined below) from any "facility" or vessel" located on or used in connection with the Premises; or (ii) take any action in "response" to a "release" in connection with the Premises except with Landlord's prior written consent; or (iii) otherwise engage in any activity or omit to take any action which could subject Landlord or Tenant to claims for intentional or negligent torts, strict or absolute liability, either pursuant to statute or common law, in connection with Hazardous Substances (as defined below) located in the Premises, including the generating, transporting, treating, storage, or manufacture of any Hazardous Substance (as defined below) . The terms set within quotation marks above shall have the meaning given to them in the Comprehensive Environmental Response and Liability Act, 42 U.S.C. § 9601 et seg. , as amended by SARA (CERCLA) and the Minnesota Environmental Response and Liability Act, Minn. Stats. Ch. 115B (MERLA) . "Hazardous Substances" means hazardous waste, toxic substances, formaldehyde, urea, polychlorinated biphenyls, asbestos, petroleum, natural gas, synthetic gas usable for fuel 14. or mixtures thereof, any materials related to any of the foregoing, and substances defined as "hazardous substances, " "toxic substances, " "hazardous waste, " "pollutant, " or "contaminant" in CERCLA, MERLA, the Hazardous Materials Transportation Act, 49 U.S .C. § 1801 et sea. , the Minnesota Water Pollution Control Act, Minn. Stats. Ch. 115, the Clean Water Act, 33 U.S.C. S 1251 et seq. , or any regulations promulgated pursuant to any of the foregoing statutes. 21.3) Neither Tenant, nor any entity or person shall, at any time, during the Term, install, use, or remove any storage tank on or in connection with the Premises without Landlord's prior written consent. Tenant shall provide to Landlord, with any request for Landlord's approval of a tank, evidence of Tenant' s financial responsibility (by insurance, performance bond, or similar method acceptable to Landlord) with respect to the installation, use, and removal of such tank. Any such tank to which Landlord consents, shall be installed, used and removed in full compliance with Minn. Stats . Ch. 115C, Minn. Stats. H 116 .46- .50, 42 U.S,C. 6991-69911 and all other relevant and applicable local, state and federal laws, ordinances and regulations proposed and promulgated (the Storage Tank Laws) . Any such tank shall be, at all times, the sole property of Tenant, and Tenant shall remove same in accordance with the Storage Tank Laws prior to the termination or expiration of this Lease and repair any damage to the Premises caused thereby, all at Tenant's expense. Tenant shall deliver to Landlord copies of all notices or other documents received or given by Tenant pursuant to the Storage Tank Laws. 21.4) Tenant agrees to indemnify and reimburse Landlord, its successors and assigns, including, without limitation, the holders of any mortgage affecting the Premises, for any breach of this Article 21 hereof and from any loss, damage, expense, or cost arising out of or incurred by Landlord which is the result of any such breach, including attorneys ' fees incurred by Landlord in connection therewith. This Article 21 shall be deemed to continue for Landlord and its successors and assigns and shall survive any termination or expiration of this Lease. The amount of all such indemnified losses, damages, expenses, and costs shall bear interest thereon at the rate of ten percent (10t) per annum, and shall be immediately due and payable in full on demand of Landlord. 21.5) Landlord agrees to indemnify, defend and hold Tenant harmless for any loss, damage, expense or cost arising from soil contamination which existed before the execution of this Lease. ARTICLE 22. LANDLORD'S ACCESS TO PREMISES 22 . 1) Tenant shall permit Landlord and the authorized representatives of Landlord to enter the Premises at all times 15 . during usual business hours for the purpose of inspecting the same and making any necessary repairs to comply with any laws, ordinances, rules, regulations, or requirements of any public authority or of the Board of Fire Underwriters or any similar board. Nothing herein shall imply any duty upon the part of Landlord to do any such work which, under any provision of the Lease, Tenant may be required to perform, and the performance thereof by Landlord shall not constitute a waiver of Tenant's default in failing to perform the same. Landlord may, during the progress of any work in the Premises, reasonably keep and store upon the Premises all necessary materials, tools, and equipment. Landlord shall not in any event be liable for inconvenience, annoyance, disturbance, loss of business, or other damage to Tenant by reason of making repairs or the performance of any work in the Premises, or on account of bringing materials, supplies, and equipment onto or through the Premises during the course thereof, and the obligations of Tenant under the Lease shall not hereby be affected in any manner whatsoever. Landlord shall, however, in connection with the doing of any such work cause as little inconvenience, annoyance, disturbance, loss of business, or other damage to Tenant as may reasonably be possible in the circumstances . 22 .2) Landlord is hereby given the right during usual business hours to enter the Premises and to exhibit the same for the purpose of sale and during the final six (6) months of the Term hereof. Landlord shall be entitled to display on the Premises in such manner as not to unreasonably interfere with Tenant' s business the usual "For Sale" or "To Let" signs, and Tenant agrees that such signs may remain unmolested upon the Premises and Landlord may exhibit said Premises to prospective tenants during such period. ARTICLE 23 . INDEMNITY Tenant shall indemnify and save harmless Landlord against and from any and all claims by or on behalf of any person or persons, firm or firms, corporation or corporations, arising from the conduct or management of or from any work or thing whatsoever done in, on, or about the Premises, and will further indemnify and save Landlord harmless against and from any and all claims arising during the Term of the Lease from any condition of the Premises or any street, curb, sidewalk adjoining the Premises, or of any passageways or spaces therein or appurtenant thereto, or arising from any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of Tenant to be performed, pursuant to the terms of the Lease, or arising from any act of negligence of Tenant, or any of its agents, contractors, servants, employees, or licensees, or arising from any accident, injury, or damage whatsoever caused to any person, firm, or corporation occurring during the Term of the Lease, in or about the Premises, or upon or under the sidewalks and the 16. land adjacent thereto, and from and against all costs, reasonable attorneys' fees, expenses, and liabilities incurred in or about any such claim or action or proceeding brought thereon; and in case any action or proceeding is brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall resist or defend such action or proceeding by counsel reasonably satisfactory to Landlord. ARTICLE 24. ESTOPPEL CERTIFICATE Tenant shall, at any time and from time to time, upon not less than twenty (20) days' prior notice by Landlord, execute, acknowledge, and deliver to Landlord a statement in writing certifying that the Lease is unmodified and in full force and effect (or if there shall have been modifications that the Lease is in full force and effect as modified and stating the modifications) and the dates to which the Base Rent and Additional Rent have been paid in advance, if any, and stating whether or not (to the best knowledge of Tenant) Landlord is in default in the performance of any covenant, agreement, or condition contained in the Lease and, if so, specifying each such default of which Tenant may have knowledge, it being intended that any such statement delivered pursuant to this Article shall be in a form approved by and may be relied upon by any prospective assignee of Landlord's interest in the Lease or any mortgagee of the Premises or any assignee of any mortgage upon the Premises. ARTICLE 25 . SUBORDINATION The Lease shall, at Landlord's election, be subject and subordinate to the terms and conditions of all mortgages which may now or hereafter encumber the Premises and to all renewals, modifications, consolidations, replacements, and extensions of such mortgages. In confirmation of such subordination, Tenant shall promptly execute any certificate of subordination or other such documents which Landlord or its mortgagees may request. ARTICLE 26. SIGNS Upon prior written approval by Landlord of design and construction, which approval shall not be unreasonably withheld, Tenant may erect such signs upon the Premises as it may deem desirable, as long as said signs do not exceed in weight the safe carrying capacity of any bearing structure, or violate the laws of the state or ordinances of the municipality in which the Premises is situated. 17. ARTICLE 27. NOTICES Any notice or election herein requested or permitted to be given or served by either party hereto upon the other, shall be deemed given or served in accordance with the provisions of the Lease if delivered to either party hereto and receipt is obtained therefor, or if mailed in a sealed wrapper by United States registered or certified mail, postage prepaid, properly addressed to such other party at the address hereinafter specified. Unless and until changed by notice as herein provided, notices and communications shall be addressed as follows: If to Landlord: City of Elk River P.O. Box 490 13055 Orono Parkway Elk River, Minnesota 55330 At to: . If to Tenant: Elk River Area Chamber of Commerce Sv /o Each such mailed notice or communication shall be deemed to have been given to, or served upon the party to which addressed, on the date the same is deposited in the United States registered or certified mail, postage prepaid, properly addressed in the manner above provided. Each such delivered notice or communication shall be deemed to have been given to, or served upon, the party to whom delivered, upon delivery thereof in the manner above provided. Either party may change the address to which mailed notice is to be sent to it by giving to the other party hereto not less than thirty (30) days ' advance written notice thereof. All payments of Base Rent or Additional Rent hereunder shall be made to Landlord at the address above designated, or as may be hereafter designated. ARTICLE 28. MISCELLANEOUS 28 . 1) Entire Agreem nt - The Lease contains the entire agreement between the parties, and there are no other terms, obligations, covenants, representations, statements, or conditions, oral or otherwise, of any kind whatsoever. Any agreement hereafter made shall be ineffective to change, modify, discharge, or effect an abandonment of the Lease in whole or in part unless such agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge, or abandonment is sought. 18 . 28 .2) Release of Landlord - If Landlord sells or otherwise transfers all of its interest in the Premises, Landlord shall, without further action by any party, be released and discharged from any further obligation or duty under the Lease, and no claim or demand upon Landlord shall thereafter be made by Tenant arising out of any obligation or duty of Landlord hereunder. Upon request by Landlord, Tenant shall execute an attornment agreement with Landlord' s transferee in form satisfactory to such transferee. 28 . 3) Severability - If any term, condition, or provision of the Lease or the application thereof to any person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder thereof and the application of such terms, provisions, and conditions to persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and the Lease and all the terms, provisions, and conditions hereof shall, in all other respects, continue to be effective and to be complied with to the full extent permitted by law. 28 . 4) Short Form Lease - At the request of either party hereto, a short form lease shall be prepared in form and substance reasonably satisfactory to each of the parties and shall be executed by each of the parties in duplicate, such lease to be filed for record in Sherburne County, Minnesota. 28 .5} Headings - The headings incorporated in the Lease are for convenience in reference only and are not a part of the Lease and do not in any way limit or add to the terms and provisions hereof. 28 . 6) Binding Effect - All of the covenants, conditions, and agreements herein contained shall extend to, be binding upon, and inure to the benefit of the parties hereto and their respective heirs, successors, and assigns. IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written. LANDLORD: CITY OF ELK RIVER `L . By: , l By: Its : 19 . TENANT: ELK RIMER AREA CHAMBER OF COMMERCE BY: , is By: Its: THIS INSTRUMENT WAS DRAFTED BY: LARKIN, HOFFMAN, DALY & LINDGREN, LTD. 1500 Norwest Financial Center 7900 Xerxes Avenue South Bloomington., Minnesota 55431 (612) 835-3800 APM.AO6s 20 . • � ti .� t l EXHIBIT A to that certain LEASE by and between CITY OF ELK RIVER, Landlord and ELK RIVER AREA CHAMBER OF COMMERCE, Tenant Legal Description of the Property: Property Lease DescripUoa Yoe The City of]ilk Rivez Ch mmber Of Commerce 'nat part of Lot 1, Block 1, Creamery Addition, according to said plat on file and of record in the office of the County Recorder, Sherburne County, Minnesota, descn`bed as follows, Beginning at the most Northerly comer of said Lot 1; thence South 12 degrees 26 minutes 08 seconds West, an assumed bearing along the Westerly line of said Lot 1, a distance of 135.23 feet to the Southwesterly corner of said Lot 1, thence South 51 degrees 47 minutes 48 seconds East, along the Southwesterly line of said Lot 1, a distance of 181.43 feet; thence North 38 degrees 12 minutes 12 seconds East, a distance of 47.00 feet; thence North 51 degrees 47 minutes 48 seconds West, a distance of 86.89 feet; thence North 38 degrees 12 minutes 12 seconds East, a distance of 72.95 feet to the Northeasterly line of said Lot 1; thence Northwesterly, a distance of 153.69 feet, along said Northeasterly line of Lot 1, said line being a non-tangential curve concave to the Southwest having a radius of 3729.83 feet, a central angle of 02 degrees 21 minutes 39 seconds and a chord bearing of North 50 degrees 45 minutes 29 seconds West, to the point of beginning. 040.0412,.mg rm �rti�fFs � OD it I[ is C7 ? y cn CD En AC ........ .. :::;.fti;• V � .� z :. . ...'. ao-^ _ .•.•^.• 1.��:.•::-:''::.:•:.•••••••'` :•:':•;• •.`a "'i''r.r: •.:;:;t �_•'.•'..,' +••fir r .Z' Ch cA EA •r:� 8 i ? :�}}:°:::°;:=and •'r i� ® �Zj .: z .J Q ® (A mm cn 7 Lj M c. _ -4 AA Z rn N y C,��: I !