4.12. SR 11-16-2015 EOty1� ,.,�� Request for Action
River
To Item Number
Mayor and City Council 4.12
Agenda Section Meeting Date Prepared by
Consent November 16, 2015 Amanda Othoudt,EDD
Item Description Reviewed by
Envision Company,LLC Assignment and Cal Portner, City Administrator
Assumption of Tax Abatement and Business Reviewed by
Subsidy Agreement and for Envision 3,LLC.
Action Requested
Approve,by motion, a resolution and supporting documents for the Assignment and Assumption of Tax
Abatement and Business Subsidy Agreement and Lease Agreement for Envision 3, LLC.
Background/Discussion
The attached agreement assigns the rights to Envision 3, LLC from Envision Company,LLC,which is a
single member entity also solely owned by Chris Carlson,being formed for organizational purposes.
The assignment contains consent for the City of Elk River to agree to the organizational changes for
business subsidy and tax abatement purposes.
Financial Impact
None
Attachments
■ Envision 3, LLC Assignment and Assumption of Tax Abatement and Business Subsidy
Agreement for Envision Companies,LLC
■ Resolution Approving Assignment of Abatement Agreement
■ Transfer Agreement
■ Vacant Land and Lease Agreement for Envision 3,LLC
POWERED 6T
AR
ASSIGNMENT AND ASSUMPTION OF TAX
ABATEMENT, MORTGAGE AND NOTE
THIS ASSIGNMENT AND ASSUMPTION OF TAX ABATEMENT,
MORTGAGE AND NOTE (this "Agreement") dated as of the day of November,
2015, is made and entered into by and among ENVISION COMPANY, LLC, a
Minnesota limited liability company (the "Assignor") and ENVISION 3, LLC, a
Minnesota limited liability company (the "Assignee").
WITNESSETH:
WHEREAS, Assignor is the Developer (i) under that certain Tax Abatement
Agreement dated September 14, 2015 (the "Abatement Agreement"), by and between
Assignor and the City of Elk River, Minnesota, a Minnesota municipal corporation
("City"); (ii) under that certain Mortgage, Security Agreement, Assignment of Leases and
Rents, and Fixture Financing Statement dated September 14, 2015 (the "Mortgage"),
from the Assignor, as mortgagor, in favor of the City; and (iii) under that certain
Promissory Note dated September 14, 2015 (the "Note") from the Developer in favor of
the City;
WHEREAS, Assignor, Assignee and Sportech, Inc., a Minnesota corporation (the
"Company") are parties to that certain Transfer Agreement of even date herewith
("Transfer Agreement"), a copy of which is attached hereto as Exhibit A and
incorporated herein by reference; and
WHEREAS, pursuant to the Transfer Agreement, Assignor desires to transfer of
Lots 1 and 2, Block 2, Natures Edge Business Center Second Addition, Sherburne
County, located in the City (the "Property") and the Project (as defined in the Abatement
Agreement) and assign its obligations, rights and interest in, to and under the Abatement
Agreement, Mortgage and Note to Assignee; and
WHEREAS, Assignee is willing to accept the assignment of the Property and
assume certain obligations of Assignor under the Transfer Agreement and the Abatement
Agreement, Mortgage and Note, all as more particularly outlined in this Assignment.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements contained herein, Assignor and Assignee hereby covenant and agree as
follows:
1. Any capitalized term used herein and not otherwise defined herein shall
have the meaning ascribed to such term in the Abatement Agreement, Mortgage and
Note.
2. Upon the fulfillment of the conditions outlined in the Transfer Agreement
("Transfer Date"), Assignor does hereby grant, transfer, and assign to Assignee all of
Assignor's rights, title, benefits and interest in, to and under the Abatement Agreement,
Mortgage and Note.
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3. Assignor hereby agrees to indemnify and defend Assignee, its successors
and assigns, and its and their employees, agents, members, managers and officers
(collectively the "Assignee Indemnified Parties") against, and hold the Assignee
Indemnified Parties harmless from, any and all cost, liability, loss, damage or expense,
including, without limitation, reasonable attorneys' fees and expenses (collectively,
"Losses and Liabilities"), arising out of or in any way related to a failure by Assignor, its
successors or assigns to keep and perform, or a default by Assignor, its successors or
assigns under, any of the covenants, obligations and agreements to be performed by the
Developer under the Abatement Agreement, Mortgage and Note prior to the Transfer
Date.
4. Assignee, as of the Transfer Date, hereby accepts the foregoing
assignment, and assumes and agrees to faithfully abide by, perform, and discharge each
and every term, covenant, and condition of the Contract applicable to the "Developer,"
(the "Assumed Obligations") and to be fully bound by all of the foregoing.
5. Assignor hereby warrants and represents to Assignee as follows:
(a) The Abatement Agreement, Mortgage and Note have not been modified or
amended and are full force and effect as of the date hereof, and
(b) To Assignor's knowledge, there is no Event of Default in existence under
the Abatement Agreement, Mortgage and Note, nor is there in existence any state of facts
or circumstances which, with the giving of notice or lapse of time or both, would
constitute an Event of Default under the Abatement Agreement, Mortgage and Note.
6. Assignor will not enter into any modification or amendment of the
Abatement Agreement, Mortgage and Note that would adversely affect the rights and
interest of Assignee thereunder or the Assumed Obligations unless such modification or
amendment is entered into by Assignee. Assignor will not enter into any agreement
terminating the Abatement Agreement, Mortgage or Note without the prior written
consent of Assignee.
7. Assignor shall give and deliver a copy of any notice, demand or other
communication which Assignor gives or delivers to, or receives from, City under the
Abatement Agreement, Mortgage or Note, and that relates to or may affect the rights and
interest of Assignee under the Abatement Agreement, Mortgage and Note or the
Assumed Obligations, to Assignee in the manner set forth in Section 5.3 of the
Abatement Agreement and Mortgage, addressed or delivered personally to Assignee as
follows:
ENVISION 3, LLC
10800— 175th Ave NW
Elk River, MN 55330
Attn: Christopher Carlson
or at such other address as Assignee may, from time to time, designate by written notice
to Assignor given or delivered in the manner set forth in Section 5.3 of the Abatement
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471047v2 JSB BL185-31
Agreement and Mortgage. Assignee shall give and deliver a copy of any notice, demand
or other communication which Assignee gives or delivers to, or receives from, City under
the Abatement Agreement and Mortgage, and that relates to or may affect the rights and
interest of Assignor under the Abatement Agreement and Mortgage, delivered personally
to Assignor or given or delivered in the manner set forth in Section 5.3 of the Abatement
Agreement and Mortgage to Assignor pursuant to the notice address set forth therein, or
at such other address as Assignor may, from time to time, designate by written notice to
Assignee.
8. Assignee expressly represents, for the benefit of the City, that it is a
limited liability company duly organized and in good standing under the laws of the
Minnesota, is not in violation of any provisions of its organizational documents or (to the
best of its knowledge) the laws of the State of Minnesota, is duly authorized to transact
business within the State of Minnesota, has power to enter into this Agreement and has
duly authorized the execution, delivery and performance of this Agreement by proper
action of its governing body.
9. The Assignor acknowledges that the City's rights and remedies against the
Developer under the Abatement Agreement, Mortgage and Note are unaffected by this
Assignment.
10. Assignor and Assignee agree that neither this Assignment nor the
Abatement Agreement, the Mortgage, nor the Note shall be amended or changed in any
way without prior written approval of the City or as specifically provided therein.
11. This Assignment shall be binding on and inure to the benefit of the parties
hereto and their successors and assigns and shall further be for the benefit and reliance of
the City.
12. This Assignment shall be governed by and construed in accordance with
the laws of the State of Minnesota.
13. This Assignment may be executed in counterparts, which counterparts
when considered together shall constitute a single, binding, valid and enforceable
agreement.
[Signature pages follow]
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471047v2 JSB BL185-31
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered
this Assignment and Assumption of Tax Abatement, Mortgage and Note as of the date
first above written.
ASSIGNOR:
ENVISION COMPANY, LLC, a Minnesota
limited liability company
By
Christopher Carlson
Its Chief Manager
ASSIGNEE:
ENVISION 3, LLC, a Minnesota limited
liability company
By:
Christopher Carlson
Its Chief Manager
S-1
471047v2 JSB BL185-31
CONSENT AND AGREEMENT
November , 2015
The undersigned, City of Elle River, Minnesota, a Minnesota municipal
corporation ("City"), hereby (i) consents, in accordance with Section 3.6 of the
Abatement Agreement, to (A) the transfer of the Property (as defined in the foregoing
Assignment and Assumption of Tax Abatement, Mortgage and Note) (the "Assignment
and Assumption") by the Assignor named therein (the "Assignor") to the Assignee
named therein (the "Assignee"), and (B) the execution and delivery by the Assignor and
the Assignee of the Assignment and Assumption, and the terms and provisions thereof,
(ii) agrees that in the event of any inconsistency between the terms and provisions of the
Assignment and Assumption and the terms and provisions of the Abatement Agreement,
Mortgage and Note (as defined in the Assignment and Assumption), the terms and
provisions of the Assignment and Assumption shall control; (iii) releases Assignor from
all the Assumed Obligations as defined in the Assignment and Assumption; (iv) warrants,
represents and certifies to the Assignee as follows:
(A) To the knowledge of the undersigned, the Abatement Agreement,
Mortgage or Note have not been modified or amended and are in full force and effect as
of the date hereof, and
(B) To the knowledge of the undersigned, there is no Event of Default in
existence, nor is there in existence any state of facts or circumstances which, with the
giving of notice or lapse of time or both, would constitute an Event of Default under the
Abatement Agreement, Mortgage or Note.
(C) If the City delivers any notice, demand or other communication to the
Developer under the Abatement Agreement, Mortgage or Note that relates to or may
affect the rights and interest of the Assignee under the Abatement Agreement, Mortgage
or Note or the Assumed Obligations, the City will deliver a copy of such notice, demand
or communication to the Assignee in the manner set forth in the Abatement Agreement
and Mortgage, as applicable, addressed or delivered personally to the Assignee as
follows:
ENVISION 3, LLC
10800— 175th Ave NW
Elk River, MN 55330
Attn: Christopher Carlson
or at such other address as the Assignee may, from time to time, designate by written
notice to City given or delivered in the manner set forth in the Abatement Agreement and
Mortgage, as applicable.
Consent-1
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IN WITNESS WHEREOF, City has caused this Consent and Agreement to be
duly executed as of the date first written above.
CITY OF ELK RIVER, MINNESOTA
By:
Its Mayor
By:
Its City Clerk
Consent-2
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EXHIBIT A
Transfer Agreement
A-1
471047v2 JSB BL185-31
Extract of Minutes of Meeting of the
City Council of the City of Elk River, Sherburne County, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Elk
River, Minnesota, was duly held in the City Hall in the City of Elk River, on November 16, 2015,
commencing at or after P.M.
The following members were present:
and the following were absent:
Member introduced the following resolution and moved its adoption:
Resolution No. 15-
A Resolution of the City of Elk River Approving an Assignment and Assumption of Tax
Abatement Agreement, Mortgage and Note
BE IT RESOLVED By the City Council (the "City Council") of the City of Elk River,
Sherburne County,Minnesota(the"Cit ') as follows:
Section 1. Background;Findings.
(a) The City has entered into a Tax Abatement Agreement dated September 14, 2015
(the "Abatement Agreement"), with Envision Company, LLC, a Minnesota limited liability
company (the "Assignor"), a Mortgage, Security Agreement, Assignment of Leases and Rents, and
Fixture Financing Statement dated September 14, 2015 (the "Mortgage") from the Assignor in
favor of the City and a Promissory Note dated September 14, 2015 (the "Note").
(b) The Assignor has requested that the City consent to the transfer of Lots 1 and 2,
Block 2, Natures Edge Business Center Second Addition, Sherburne County, located in the City
(the "Property") and the Project (as defined in the Abatement Agreement) and the assignment of
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the Assignor's rights and obligations under the Abatement Agreement, Mortgage and Note and the
Project and property described therein to Envision 3, LLC, (the "Assignee") pursuant to an
Assignment and Assumption of Tax Abatement, Mortgage and Note by and between the Assignor
and the Assignee (the "Assignment and Assumption Agreement").
Section 2. Approval of Assignment.
(a) The City hereby consents to the transfer the Property and the Project and the
assignment of the Assignor's rights and obligations under the Abatement Agreement,Mortgage and
Note to the Assignee pursuant to the Assignment and Assumption Agreement.
(b) The Assignment and Assumption Agreement is hereby approved in substantially the
form submitted to the City.
(c) The Mayor and the City Clerk are hereby authorized to execute the Consent and
Agreement to the Assignment and Assumption Agreement on behalf of the City.
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The motion for the adoption of the foregoing resolution was duly seconded by Member
and upon vote being taken thereon,the following voted in favor thereof-
and the following voted against:
whereupon said resolution was declared duly passed and adopted.
Passed and adopted this day of 2015.
John J. Dietz,Mayor
ATTEST:
Tina Allard, City Clerk
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STATE OF MINNESOTA )
COUNTY OF SHERBURNE ) SS.
CITY OF ELK RIVER )
I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River,
Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of
minutes of a regular meeting of the City Council held on November 16, 2015,with the original thereof
on file in my office and the same is a full, true and complete transcript therefrom insofar as the same
relates to the approval of an assignment of tax abatement,mortgage and note.
WITNESS My hand as City Clerk and this day of November,2015.
City Clerk
City of Elk River,Minnesota
471033vl JSB BL185-31
AGREEMENT
THIS AGREEMENT("Agreement")is made as of the day of ,2015,by and
among Envision Company, LLC, a Minnesota limited liability company ("Grantor"), Envision 3,
LLC, a Minnesota limited liability company("Grantee")and Sportech,Inc.,a Minnesota corporation
("Company"). The Grantor,Grantee and Company may be referred to collectively as the"Parties"or
individually as a"Party".
RECITALS:
(Rl) On or around September 14, 2015, the City of Elk River(the "City") sold and conveyed to
Grantor (the "Sale") that certain real property legally described as Lots 1 and 2, Block 2,
Nature's Edge Business Center, Second Addition, Elk River, Minnesota(the"Property").
(R2) As part of the Sale, Grantor and City entered into certain ancillary documents related therefo,
including that certain Tax Abatement and Business Subsidy Agreement dated September 14,
2015 (collectively, the"City Abatement Agreement").
(R3) As further part of the Sale, Grantor and the County of Sherburne(the"County")entered into
certain documents related thereto,including that certain Tax Abatement and Business Subsidy
Agreement dated September 14,2015 (the"County Abatement Agreement"and together with
the City Abatement Agreement as the"Abatement Agreements").
(R4) The Sale and execution of the Abatement Agreements was all related to Grantor's desire to
develop the Property and construct a manufacturing facility(the"Facility")on the Property,
which Facility would be leased to Company (the"Project").
(R5) Grantor now desires to transfer ownership of the Property to Grantee and Grantee is willing
to accept the Property from Grantor, subject to the terms and conditions of this Agreement.
NOW,THEREFORE,based on the mutual covenants contained herein and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. Deed. Upon the execution of this Agreement and the satisfaction of the conditions
precedent set forth in Section 6 below, Grantor agrees to execute a quit claim deed,in substantially
the same form set forth in the attached Exhibit A,transferring ownership of the Property to Grantee
(the"Transfer"). Grantor and Grantee acknowledge, agree and understand that the Transfer shall be
subject to all mortgages and other encumbrances on the Property.
2. Lease. Contemporaneous with the Transfer, Grantee and Grantor shall enter a land
lease,whereby Grantor leases the Property from Grantee in substantially the same form set forth in
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the attached Exhibit B(the"Lease"). The Lease shall provide that Grantor has the right to complete
the Project and lease the Facility to Company.
3. Grantee's Obligations. Grantee acknowledges and agrees that(i)after completion of
the Transfer and construction of the Project,Grantee shall lease the Property to Grantor,as set forth
in Section 2 above; and (ii) Grantee shall be be jointly and severally liable along with Grantor for
Grantor's obligations under the Abatement Agreements.
4. Grantor's Continued Obligations. Grantor acknowledges and agrees that(i)after
the execution of the Lease, Grantor shall construct and develop the Project, including the
construction of the Facility, (ii)upon completion of the Facility, Grantor shall lease the Facility to
Company; and (iii) Grantor is and shall remain jointly and severally liable with Grantee under the
terms and conditions of the Abatement Agreements,including the obligation to complete the Project.
5. Company's Continued Obligations. Company acknowledges and agrees that (i)
Company will lease the Facility and (ii) Company is and shall remain liable under the terms and
conditions of the Abatement Agreements, including Company's commitment to fulfill the Project
Goals (as defined in the Abatement Agreements).
6. Conditions Precedent. The Transfer of the Property from Grantor to Grantee is
subject to the following conditions precedent:
(a) The City consenting to the Transfer;
(b) The County consenting to the Transfer; and
(c) The City and County acknowledging that the Transfer and Lease do not result in or
create an event of default under the Abatement Agreements.
7. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement between the
Parties concerning the subj ect matter hereof. There are no other outstanding agreements,provisions
or schedules on this subject matter. This Agreement may be amended only by an instrument in
writing and executed by both of the Parties to this Agreement.
(b) Additional Documents and Acts. Each Party agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate and perform the terms and conditions of this Agreement and the transactions
contemplated hereby.
(c) Multiple Counterparts. This Agreement may be executed in several counterparts,each
of which shall be deemed an original and all of which shall constitute one and the same instrument.
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(d) Headings. The captions and headings of the various sections of the Agreement are for
convenience only and are not to be construed as confining or limiting in any way the scope or intent
of the provisions hereof.
(e) Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
(f) Voluntary and Knowing Act. The Parties have had the opportunity to thoroughly
review and to consult with legal counsel concerning the terms of this Agreement and are fully
advised of their rights, responsibilities and benefits described herein.
(g) Severability. If any provision of this Agreement is held invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated. To this end, the provisions are severable.
(h) Governing Law. This Agreement and the rights of the Parties hereunder will be
governed by,interpreted,and enforced in accordance with the laws of the State of Minnesota,exclusive
of its conflict of law provisions.
(i) Interpretation. The Parties agree that should any dispute arise over the
interpretation of this Agreement, any rule requiring interpretation against the Party drafting the
various provisions shall not apply and the Agreement shall instead be interpreted in a neutral
manner.
0) Exhibits. The Exhibits referred to herein, whether or not attached hereto, are
incorporated herein by such reference as if fully set forth in the text hereof.
(k) Third Party Beneficiaries. This Agreement, and each provision hereof,is intended
solely for the mutual benefit of the Parties hereto and their respective successors and assigns and is
not intended for the benefit of any third parry who shall be a third party beneficiary of this
Agreement. No other third parry shall be entitled to rely upon or enforce this Agreement or any
provision hereof.
(1) Notices. Except as otherwise expressly provided in this Agreement, a notice,
demand or other communication under this Agreement by any party to any other shall be
sufficiently given or delivered if it is dispatched by registered or certified mail,postage prepaid,
return receipt requested, or delivered personally, and
(1) in the case of the Grantee is addressed to or delivered personally to:
Envision 3, LLC
10800 - 175th Ave NW
Elk River, MN 55330
Attn: Chris Carlson
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(2) in the case of the Grantor is addressed to or delivered personally to:
Envision Company, LLC
10800- 175'Ave NW
Elk River, MN 55330
Attn: Chris Carlson
(3) in the case of the Company is addressed to or delivered personally to:
Sportech, Inc
10800- 175th Ave NW
Elk River, MN 55330
Attn: Chris Carlson
or at such other address with respect to any such party as that party may,from time to time,designate
in writing and forward to the other, as provided in this Section.
(m) Waiver of Breach. The waiver by either Party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of any other breach of
the other Party.
(n) Costs and Expenses. Each Party shall be liable for its own costs and expenses
incurred in negotiation and preparation of this Agreement, including legal and accounting fees.
Should legal action be brought to enforce any term or agreement herein contained, the prevailing
Party in such action shall be entitled to recover reasonable attorneys' fees, regardless of whether
the matter is concluded by Court action or otherwise,plus actual costs incurred.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement effective the date first
written above in a manner appropriate to each.
ENVISION COMPANY, LLC
By
Christopher Carlson
Its Chief Manager
ENVISION 3, LLC
By
[Name]
Its Chief Manager
SPORTECH, INC.
By
[Name]
Its
Signature Page of Agreement Between
Envision Company, LLC; Envision 3, LLC; and Sportech, Inc.
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EXHIBIT A
Quit Claim Deed Transferring Property from Envision Company, LLC to Envision 3, LLC
(See Attached)
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EXHIBIT B
Vacant Land Lease Between Envision 3, LLC and Envision Company, LLC
(See Attached)
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VACANT LAND LEASE AGREEMENT
This VACANT LAND LEASE AGREEMENT ("Lease") is made and entered into on
October ,2015,with an effective date of ,2015 (the"Effective Date")by and
between Envision 3, LLC, a Minnesota limited liability company ("Landlord") and Envision
Company, LLC, a Minnesota limited liability company ("Tenant"). Landlord and Tenant may be
referred to collectively as the "parties" or individually as a"party".
In consideration of the mutual agreements set forth herein and for other good and valuable
consideration,the receipt and sufficiency of which are hereby acknowledged,Landlord and Tenant
do hereby agree as follows:
1. Description of Leased Property. Landlord hereby rents and leases to Tenant the
following vacant parcel of land: Lots 1 and 2, Block 2, Nature's Edge Business Center, Second
Addition, Elk River, Minnesota("Leased Premises").
2. Term of Lease. This Lease is for a period of fifteen (15)years ("Lease Term") to
commence on the Effective Date; provided, however, the Base Rent (as defined below) shall not
begin until , 2015 (the"Rent Commencement Date").
3. Option to Purchase. Tenant is hereby granted a one-time option to buy the Leased
Premises at the end of the Lease Term for the then current fair market value (excluding the
Improvements, as defined below, which shall be the property of Tenant). To exercise the right
granted herein, Tenant must provide Landlord written notice of its intent to exercise such option
within sixty (60) days before the end of the Lease Term. Upon such notification, the parties will
negotiate and sign a purchase agreement and any other required legal documentation necessary to
transfer and convey title to the Leased Premises to Tenant.
4. Rent. Tenant shall pay rent to Landlord during the Lease Term in the amount of Fifty
Thousand and No/100($50,000.00)Dollars per year("Base Rent"). The first payment of Base Rent
shall be due and payable on or before the Rent Commencement Date and each subsequent annual
installment of Base Rent shall be due and payable on or before the anniversary of the Rent
Commencement Date in each succeeding calendar year during the Lease Term. All payments of
Base Rent and other monetary amounts under this Lease shall be made to Landlord, or to such other
party as may be designated by Landlord.
5. Quiet Enjoyment. If Tenant pays the Base Rent and complies with all other terms of
this Lease, Tenant may use the Leased Premises for the term of this Lease.
6. Use of Leased Premises. The Leased Premises may be used for purposes consistent
with that certain Agreement entered between Landlord,Tenant and Sportech,Inc. (the"Company")
dated ,2015 (the"Transfer Agreement"). Specifically,Tenant may use the Leased
Premises to construct and maintain a manufacturing facility(the"Facility")and to lease the Facility
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to Company. Tenant shall maintain the Leased Premises in accordance with applicable laws,rules,
ordinances, orders and regulations of federal, state, county, municipal, and other governmental
agencies and bodies having jurisdiction over the Leased Premises, as well as, all such promises and
agreements described in the Transfer Agreement.
7. Construction and Alterations. Tenant shall have the unrestricted right to construct
the Facility and any permanent structures or improvements on the Leased Premises(collectively with
the Facility as the"Improvements")and make any alterations or additions to such Improvements as
Tenant deems necessary or appropriate. Such Improvements shall not be deemed to be part of the
Leased Premises, but shall remain the property of Tenant.
8. Repairs. Tenant shall take good care of the Improvements during the Lease Term
and shall maintain the same in reasonably good condition,including repairs to the interior, exterior
and structure, as well as maintenance of the grounds, sidewalks and parking areas surrounding the
Facility(including the mowing of grass,care of shrubs and general landscaping),it being understood
that Landlord shall not be required to make any repairs to the Leased Premises, including to any
Improvements, during the Lease Term. The Improvements shall not be maintained as, nor shall
Tenant permit the Improvements to become, a public or private nuisance, and Tenant shall not
maintain any nuisance in the Improvements.
9. Equipment, Fixtures and Signs. Tenant shall have the right to erect, install,
maintain and operate on the Leased Premises such equipment, trade and business fixtures, signs,
monuments and other personal property as Tenant may deem necessary or appropriate,and the same
shall not be deemed to be part of the Leased Premises, but shall remain the personal property of
Tenant. At any time during the Lease Term and within thirty(30)days after termination of the Lease
Term, Tenant shall have the right to remove its equipment, fixtures, signs and other personal
property from the Leased Premises,but shall remain liable for the costs of removal or any damages
caused to the Leased Premises as a result thereof.
10. Easements. Landlord hereby grants and conveys to Tenant, Tenant's employees,
representatives, subtenants and invitees, a transferable interest in any easement benefitting the
Leased Premises. However,Tenant shall be subject to any and all easements which are a burden on
the Leased Premises.
11. Right of Entry. Landlord and Landlord's agents may enter upon the Leased Premises
at reasonable hours to inspect the Leased Premises.
12. Representations and Covenants of Landlord. As of the Effective Date,
Landlord represents, warrants and covenants to Tenant as follows:
(a) That Landlord has good and marketable fee simple title to the Leased Premises,
possesses full power and authority to deal therewith in all respects and no other party has any right
or option thereto or in connection therewith(excluding any interests,liens,easements,mortgages or
other encumbrances of public record);
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(b) That there are no pending or threatened condemnation proceedings or actions
affecting the Leased Premises;
(c) That there are no pending or threatened actions or legal proceedings affecting the
Leased Premises or Landlord's interest therein;
(d) That there are no unpaid special assessments for sewer, sidewalk, water, paving,
electrical or power improvements or other capital expenditures or improvements, matured or
unmatured;
(e) That Landlord is not aware of any facts or circumstances which would materially
adversely affect the use or value of the Leased Premises;
(f) That the execution of this Lease shall be valid and binding upon Landlord and shall
not constitute a default under any contract to which Landlord is a party or by which it is bound;
(g) That Landlord has not received notice nor does Landlord have any knowledge of any
violation of any law, regulation, ordinance, order or other requirement of any governmental
authority having jurisdiction over or affecting any part of the Leased Premises; and
(h) That Landlord is not obligated on any contract,lease or other agreement,written or
oral, with respect to the ownership,use, operation or maintenance of the Leased Premises, except
for those contracts,leases and agreements which have been disclosed to Tenant in writing,including
through such reference in the Transfer Agreement.
13. Utilities. Tenant shall pay,or cause to be paid,all charges incurred for the setup and
use of utility services at the Leased Premises including, without limitation, gas, electricity, water,
sanitary sewer, storm sewer, cable television, and telephone. Additionally, Tenant, at its sole cost
and expense, shall(i)provide any necessary utility meters,transformers or other required hardware
in connection with the delivery of utilities to the Leased Premises, (ii) be responsible for any
outstanding or pending assessments and any required city,county and/or connection fees associated
with bringing utilities to the Leased Premises, and (iii) maintain all utility lines and connections
installed up to the points of hookup by Tenant on the Leased Premises.
14. Taxes,Assessments and other Governmental Impositions. Tenant shall pay before
they become delinquent all real estate taxes (both real and personal), assessments(both general and
special)and other governmental impositions(collectively,the"Taxes")lawfully created and assessed
against the Leased Premises and Improvements or any part thereof during Lease Term. Any Taxes
created,levied,or arising prior to the Effective Date of this Lease,any installment of any such Taxes
created prior to the Effective Date or any Taxes applicable to a period of time prior to the Effective
Date,but assessed or otherwise imposed during the Lease Term, shall be paid by Landlord. Tenant
shall deliver to Landlord,if requested,receipts or other reasonably satisfactory evidence of payment
of all such Taxes so paid by Tenant. At the expiration of the Lease Term, Taxes, impositions,
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assessments, or other similar expenses required to be paid by Tenant hereunder shall be apportioned
in the same manner as such taxes were apportioned prior to the Effective Date, and Landlord shall
pay that portion thereof applicable to the period after the expiration of the term of this Lease.
15. Insurance. Tenant shall maintain,in full force and effect during the Lease Term, a
policy or policies of commercial general liability insurance including contractual liability coverage
insuring against the tort liabilities assumed under this Lease in the amount of not less than three
million ($3,000,000) dollars for any one occurrence. Landlord and Tenant shall both be named
insureds on any such policies. Tenant shall deliver a certificate of insurance evidencing such
coverage to Landlord. Such policy shall contain a provision requiring thirty(30)days written notice
to Landlord before cancellation of the policy can be effected.
16. Indemnification. Tenant agrees to hold Landlord harmless from and indemnify
Landlord against any and all liabilities,damages and expenses arising from injury,damage or loss to
or caused by Tenant, its employees, guests, agents, subtenants or visitors, on or about the Leased
Premises. Tenant shall make no claim against Landlord for any loss of or damage to the personal
property of Tenant stored upon or located on the Leased Premises caused by theft, burglary, the
elements or other means, unless said loss or damage is caused by gross negligence or willful
misconduct of Landlord.
17. Assignment and Subletting.
(a) Tenant's Rights. Except for the Tenant's right to lease of the Facility to Company,
Tenant may not assign this Lease,lease the Leased Premises to anyone else(sublet), sell this Lease
or permit any other person to use the Leased Premises without the prior written consent of Landlord,
which consent may not be unreasonably withheld, conditioned or delayed by Landlord. Except as
permitted herein,any assignment or sublease made without Landlord's prior written consent will not
be effective and will not be accepted by Landlord.
(b) Landlord's Rights. Landlord may sell the Leased Premises and assign its rights under
this Lease at any time at its sole discretion;however,any such assignee shall be liable for compliance
with the terms and obligations of Landlord,including but not limited to those terms and obligations
as set forth the Transfer Agreement.
18. Surrender of Leased Premises. Tenant shall remove all of Tenant's equipment and
other personal property from the Leased Premises when the Lease Term ends.
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19. Miscellaneous.
(a) Entire Agreement. This Lease constitutes the entire agreement between the parties
concerning the subject matter hereof. There are no other outstanding agreements, provisions or
schedules on this subject matter. This Lease may be amended only by an instrument in writing and
executed by both of the parties to this Lease.
(b) Additional Documents and Acts. Each party agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate and perform the terms and conditions of this Lease and the transactions
contemplated hereby.
(c) Multiple Counterparts. This Lease may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same instrument.
(d) Headings. The captions and headings of the various sections of the Lease are for
convenience only and are not to be construed as confining or limiting in any way the scope or intent
of the provisions hereof.
(e) Successors and Assigns. This Lease shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
(f) Voluntary and Knowing Act. The parties have had the opportunity to thoroughly
review and to consult with legal counsel concerning the terms of this Lease and are fully advised of
their rights, responsibilities and benefits described herein.
(g) Severability. If any provision of this Lease is held invalid,void or unenforceable,the
remainder of the provisions shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. To this end, the provisions are severable.
(h) Governing Law. This Lease and the rights of the parties hereunder will be governed by,
interpreted,and enforced in accordance with the laws of the State of Minnesota,exclusive of its conflict
of law provisions.
(i) Interpretation. The parties agree that should any dispute arise over the
interpretation of this Lease, any rule requiring interpretation against the party drafting the various
provisions shall not apply and the Lease shall instead be interpreted in a neutral manner.
0) Exhibits. The Exhibits referred to herein, whether or not attached hereto, are
incorporated herein by such reference as if fully set forth in the text hereof.
(k) Third Party Beneficiaries. This Lease, and each provision hereof,is intended solely
for the mutual benefit of the parties hereto and their respective successors and assigns and is not
intended for the benefit of any third party who shall be a third party beneficiary of this Lease. No
other third party shall be entitled to rely upon or enforce this Lease or any provision hereof.
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(1) Notices. Except as otherwise expressly provided in this Agreement, a notice,
demand or other communication under this Agreement by any party to any other shall be
sufficiently given or delivered if it is dispatched by registered or certified mail,postage prepaid,
return receipt requested, or delivered personally, and
(1) in the case of the Landlord is addressed to or delivered personally to:
Envision 3, LLC
10800 - 175th Ave NW
Elk River, MN 55330
Attn: Chris Carlson
(2) in the case of the Tenant is addressed to or delivered personally to:
Envision Company, LLC
10800- 175th Ave NW
Elk River, MN 55330
Attn: Chris Carlson
or at such other address with respect to any such party as that party may,from time to time,designate
in writing and forward to the other, as provided in this Section.
(m) Waiver of Breach. The waiver by either party of a breach of any provision of this
Lease by the other party shall not operate or be construed as a waiver of any other breach of the
other party.
(n) Costs and Expenses. Each party shall be liable for its own costs and expenses
incurred in negotiation and preparation of this Lease, including legal and accounting fees.
Should legal action be brought to enforce any term or agreement herein contained, the prevailing
party in such action shall be entitled to recover reasonable attorneys' fees, regardless of whether
the matter is concluded by Court action or otherwise,plus actual costs incurred.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease to be
effective as of the Effective Date.
LANDLORD:
Envision 3, LLC
By: Christopher Carlson
Its: Chief Manager
TENANT:
Envision Company, LLC
By: Christopher Carlson
Its: Chief Manager
Signature Page of Vacant Land Lease Agreement Between
Envision Company, LLC and Envision 3, LLC
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