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HomeMy WebLinkAbout8.a. Approve Purchase and Lease Agreements for St Joseph Catholic ChurchCITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION City Council Meeting Date DECEMBER 21, 2004 AGENDA ITEM: APPROVE PURCHASE AND LEASE AGENDA SECTION: AGREEMENTS ST JOSEPH New Business CATHOLIC CHURCH PREPARED BY: JAMIE VERBRUGGE, CITY ADMIN AGENT- fi' ATTACHMENTS. Purchase Agreement APPROVED BY Lease Agreement RECOMMENDED ACTION: MOTION TO APPROVE THE PURCHASE AGR EMENT AND LEASE AGREEMENT WITH ST. JOSEPH CATHOLIC CHURCH ACTION. ISSUE The City of Rosemount is purchasing land that will be the future site for a branch library of the Dakota County Library System Acquisition of land for a library has been one of the City Council's most important goals since early 2003 BACKGROUND The City of Rosemount is the last sizeable community in Dakota County that does not have a branch library in the Dakota County Library System The City has been working with Dakota County for nearly two years to identify a location for a future library The County's interest is to provide a library for this growing community and to relieve pressure from the Galaxie Library in Apple Valley, which is the busiest library in the system In March 2003, a point committee was formed consisting of representatives from Dakota County staff, the Dakota County Library Board, the Rosemount City Council, and two Rosemount citizens appointed by the City Council The committee began its work by identifying 27 potential sites in the community that were within the service area identified by the County This list was eventually narrowed to three properties that both the County's requirements and the City's desires to locate the library in or around the downtown area The three final sites were the former Sunrise Lumber site on South Robert Trail across from the entrance to the high school, the Ratzlaff block between 146 and 147 on South Robert Trail in the heart of downtown, and the St Joseph Catholic Church campus on South Robert Trail The Dakota Library Board and Dakota County Board of Commissioners both approved the final three sites Follow -up discussions with the City Council directed to staff to pursue the St Joseph property as the preferred alternative The St Joseph parish community had dust relocated to a new Library Land Acquisition December 21, 2004 Page 2 of 6 church on Biscayne Avenue and Connemara Trail, although the St. Joseph School was continuing to operate at the original campus St Joseph Church also maintains and operates a rectory and former parish office (now serving as the kindergarten classrooms) on the site The City began negotiations with the Church early in 2004 The Church hired an appraiser to value the property The City also commissioned a market value study by an appraiser In addition to negotiating purchase terms, the Church required six years to continue operating the St Joseph School at its present site After thoughtful and thorough examination of the needs and interests of both parties, City staff presented a proposed settlement to the City Council in August 2004. Council directed staff to proceed with final negotiations which have resulted in the attached purchase agreement and lease agreement Purchase Terms The details of the $2,375,691 84 acquisition are as follows The purchase price for the entire 4 37 acre campus is $2,375,691.84. This includes $2,275,691 84 for the land and buildings, and $100,000 for relocation expenses related to the owned personal property as well as the residency status of the pastor and two nuns The City will assume the outstanding debt for an assessment related to the Connemara Trail Phase II public improvements, levied against the new church property, in the principal amount of $749,532 94 The assumption of this assessment by the City is a deduct from the total acquisition price The City will accept pre -paid rent for continued operation of St Joseph School for the school years 2005 -06 through 2007 -08 in the amount of $259,200 The pre -paid rent is a deduct from the total acquisition price The final cash settlement due to seller is $1,466,958 90 To better describe the acquisition and represent the various considerations, the table below defines the elements Purchase Price Relocation Assumed assessment Pre -paid rent Proposed settlement $2,375,691 84 100,000 00 (749,532 94) (259,200 00) The City Council had previously encumbered $900,000 for future library land acquisition The City also negotiated a $500,000 contribution from the SKB Environmental Rosemount Community Trust Fund to be used for library land acquisition The remainder of the cash settlement is proposed to come from a transfer of Port Authority reserves The closing for the property is scheduled for January 14, 2005 The assumed assessment related to the Connemara Trail Phase II project will represent an 2 Library Land Acquisition December 21, 2004 Page 3 of 5 ongoing financial obligation to the City that will require the City to levy an annual amount to satisfy the debt According to Al Erickson, the City's financial consultant at Springsted Inc the assumed debt may be considered special debt that will fall outside of levy limits if they are reinstituted The assessment payments will be levied beginning in 2006 and going through 2013 The payment of the assessments for the second half of 2004 and all of 2005 are proposed to be paid from reserves The total amount of reserves for the three payments $170,32572 A sources and uses descriptor is below to clearly state how funds will be allocated USES Cash Purchase 1,466,958 90 Assessment 2nd half 2004 60,007 84 Assessment 2005 110,317 88 Assessment Future year principal* 612.91120 2.250,195 82 SOURCES Encumbered library land funds 900,000 00 SKB Trust Fund donation 500,000.00 Port Authority Transfer 66,958 90 Reserves 170,325 72 Future year levies* 612,911 20 2 250.195 82 -The debt schedule for future year assessment payments and levies is principal only The current interest on the assessments is 4 888% According to Mr Erickson, the actual interest on the bond issue is 2,888% Mr Erickson advises that the City can restructure the debt schedule to repay at an interest rate that is 2% lower than the schedule Regarding the 2 nd half 2004 assessment payment, the City will be paying that installment before December 31, 2004 Because the installment payment occurs before the actual closing, the City has a letter of agreement with the Church that, if the deal does not close and the acquisition is not finalized, the Church will reimburse the City for the installment paid 3 Library Land Acquisition December 21, 2004 Page 4 of 5 Other Issues and Obligations The City will act as landlord for the property while the St Joseph School continues to operate Beginning with the school year 2008 -09 and continuing through 2010 -11, the school will make rent payments that will be adjusted for inflation using the Consumer Price Index Rent for the pre -paid term of three years is set at $4 per square foot The CPI adjustment will be added annually to the per square foot rent The lease agreement describes the terms and obligations for the City and the School The school will be relocating its kindergarten classes from the former parish office building to the Gathering Space that connects the school and sanctuary In order to accommodate the relocation of the kindergarten classes to the Gathering Space, several minor modifications to the building are required The City agrees to construct a wall separating the space from the church Our architect estimates the cost at $1,200 This is a materials cost only as the City anticipates using staff to perform the construction Also, the bathroom needs to be modified Our architect estimates the cost of the bathroom improvement at $10,000 Finally, classroom accessories (whiteboards, cabinets, etc need to be relocated to the new class space Again, this work will be performed by City staff The lease agreement stipulates that the City will not expend more than $15,000 for these minor modifications The school has an ongoing need for outdoor recreational space for its students Currently the school utilizes the playground in the southeast corner of the property This space will continue to be available until the summer of 2007 when the County is expected to begin construction of the library The play area will shift to the area that is now used for parking in the northeast corner of the property The City agrees to install a 10 -foot fence around this area, similar to the fence that currently exists in the southeast corner, as a safety measure for the play activities Regarding parking, the school will have exclusive use of the current parking area during school hours and non exclusive use during non school hours The school also has non exclusive use of the public parking area across South Robert Trail to accommodate its parking needs beginning in 2007 The City, as landlord, will perform snowplowing of the surface areas on the property One last important issue is the future use of the old church As Council is aware, the City has retained an architect to evaluate the condition of the church and look at cost estimates to renovate the church for future use Because the City is taking possession of the church, there is likely to be a fair amount of investment to bring the structure into compliance with ADA requirements if it is to be used as a public facility The end use of the church is likely to be a sensitive issue for the community as there are strong feelings of attachment to the building Staff is suggesting that a community -based task force be appointed at some time in 2005 or 2006 to begin discussions on the future of the facility This will be a future discussion item for the Council in 2005 SUMMARY The approval of the purchase and lease agreements with St Joseph Church represents a significant accomplishment for the City Council in achieving its objective of acquiring land for M Library Land Acquisition December 21, 2004 Page 5 of 5 a future library site This proposed acquisition has been crafted to represent the Church's interest in maximizing the value of the property, relieving debt obligations to better position it for future growth, and to maintain the operation of St Joseph School until such time as a new school may be constructed The City's objectives were to acquire land in an optimal location while minimizing the cash outlay and future debt obligations The negotiating parties are confident that all interests and objectives have been satisfied in a responsible manner The process to finalize the agreements for closing is to receive approval from the Archdiocese St Joseph Church has been working with the appropriate diocesan officials and do not anticipate any delay in receiving approval. Dakota County anticipates the planning process for the church to begin in 2006, with construction starting in 2007, and the library opening to occur in early 2009 City staff updated the Dakota County Library Board regarding the progress of this issue at a meeting on December 9, 2004 The Library Board is excited about the prospect of bringing this tremendous community asset to Rosemount Assuming that Council approval, approval from the Archdiocese, and closing occur as anticipated, staff will be scheduling a presentation for the January 19 City Council meeting that will include representatives of the Dakota County Library Board and special acknowledgement to the SKB Environmental Rosemount Community Trust Fund for their generous and substantial donation 5 PURCHASE AGREED'JENT THIS AGREEMENT is made as of this 21st day of December, 2004, by and between The Church of St Joseph of Rosemount, Minnesota, a Mimnesota religious corporation, "Seller") and the City of Rosemount, aMinnesota municipal corporation "City" or `Buyer") RECITALS A Seller is the owner of the St Joseph Catholic Church campus property located at 14375 Robert Trail South, Rosemount, Minnesota, which is legally described as follows Parcel 1 Lot 26, Auditor's Subdivision No 1 and Parcel 2 The North 110 feet of Lot 25, Auditor's Subdivision No 1 and Parcel 3 Lot 25 except the North 110 feet, Auditor's Subdivision No 1 and Parcel 4 Lot 24 except the Southern 13 7 feet of Auditor's Subdivision No 1 and Parcel 5 The north 44 3 feet of Lot 20, Auditor's Subdivision No 1 and Parcel 6 Lots 10 11, School Addition and Parcel 7 The South 27 1 /2 feet of Lot 8 and Lot 9, School Addition, All in Section 29, Township 115, Range 19, Rosemount, Minnesota "Subject Property') B The Subject Property includes all plants, shrubs and trees, storm windows and /or inserts, storm doors, screens, awnings, window shades, blinds, curtain- traverse- drapery rods, attached hglitmg fixtures with bulbs, plumbing fixtures, water heater, heating system, humidifier, central air conditioning, electronic air filter, automatic garage door opener with controls, water softener, cable television outlets and cabling, and built -ins, including dishwasher, garbage disposal, trash compactor, ovei(s), cook top stove, microwave oven, hood -fan, intercom and installed carpeting located on the premises which are the property of Seller, but excluding any sacred objects Tenant shall retain ownership of existing playground equipment near the Parish Center and shall hay e the right to relocate it on or off the Demised Premises as defined in Exhibit One to this Purchase Agreement Such playground equipment shall be relocated upon direction from Seller There is no personal property included in the sale CLL- 2542180 1 RS220 -162 AGREEMENT 1 Offer /Acceptance for Sale of Property. The Seller agrees to sell to the City the Subject Property and the City agrees to purchase the same, according to the terms of this Agreement 2. Purchase Price for Property and Terms. A PURCHASE PRICE: The total Purchase Price for the Subject Property is Two Million Three Hundred Seventy -Five Thousand Six Hundred Ninety -One and 84 /100ths Dollars ($2,375,691 84) B TERMS (1) PAYMENT OF PURCHASE PRICE a Earnest Monev The sum of Zero Dollars -0 Earnest Money shall be paid by Buyer and Seller b Cash at Closing Buyer will pay by check or electronic transfer of funds on the Closing Date the sum of One Million Four Hundred Sixty -Six Thousand Nine Hundred Fifty -Eight and 90 /100ths Dollars ($1,466,958 90) c Payment of Assessments Seller is the owner of property located at 13900 Biscayne Avenue West in Rosemount, Minnesota, which is currently subject to a lien for special assessments in the amount of Seven Hundred Forty -Nine Thousand Five Hundred Thirty -Two and 94/100 Dollars (5749,532 94) in favor of Buyer Buyer will accept transfer of Seven Hundred Forty -Nine Thousand Five Hundred Thirty Two and 94/100 Dollars ($749,532 94) in value of the Subject Property as payment of such special assessments and will notify Dakota County of the cancellation of such special assessments within 30 days of the Closing Date d The parties will execute a lease for a portion of the Subject Property in the form of Exhibit Two attached hereto and made a part hereof Seller will accept credit of Two Hundred Fifty Nine Thousand Two Hundred Dollars ($259,200 00) of the purchase price as three years of non refundable prepaid base rent as more fully described in Exhibit Two (2) DEED /MARKETABLE TITLE Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed conveying CLL2542180 2 RS220 -162 marketable title to the Subject Property to Buyer, subject only to the following exceptions a. Building and zoning laws, ordinances, state and federal regulations b Reservation of minerals or mineral rights to the State of Minnesota, if any c Public utility and drainage easements of record which will not interfere with Buyer's intended use of the Subject Property. (3)• DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER In addition to the Warranty Deed required at paragraph 213(2) above, Seller shall deliver to the Buyer a Standard form Affidavit of Seller b Abstract of title, if available c A "bring- down" certificate, certifying that all of the warranties made by Sellers in this Purchase Agreement remain true as of the date of closing d Certificate that Seller is not a foreign national e If an environmental investigation by or on behalf of the Buyer discloses the existence of petroleum product or other pollutant, contaminant or other hazardous substance on the Subject Property, either (i) a closure letter from the Minnesota Pollution Control Agency (MPCA) or other appropriate regulatory authority that remediation has been completed to the satisfaction of the MPCA or other authority, or (n) Agreement for remediation/mdemnificatlon and security as the Buyer may require f Well disclosure certification, if required, or, if there is no well on the Subject Property, the Warranty Deed given pursuant to paragraph 2B(2) above must include the following statement "The Seller certifies that the Seller does not know of any wells on the described real property g Any other documents reasonably required by the Buyer's title insurance company or attorney to evidence that title to the Subject Property is marketable and that Seller has complied with the terins of this Purchase Agreement ci.il2542180 3 RS220 -162 h Any documents reasonably required by Buyer to certify that there are no residential occupants of the Subject Property occupying the Subject Property under a claim of title or right, by lease or otherwise Any residential occupancy continuing after the Closing Date must be in accordance with and subject to the terms of Exhibit Two An executed lease in the form of Exhibit Two which shall be executed by Buyer at Closing Contingencies. Buyer's obligation to buy is contingent upon the following. A Buyer's determination of marketable title pursuant to paragraph 4 of this Agreement B Buyer's determination, in its sole discretion, that the results of the environmental investigation under this Agreement are satisfactory to Buyer Buyer shall have until the Date of Closing to remove the foregoing contingencies The contingencies are solely for the benefit of Buyer and maybe waived by Buyer If Buyer or its attorney gives written notice to Seller that the contingencies are duly satisfied or waived, the Buyer and Seller shall proceed to close the transaction as contemplated herein If, however, one or more contingencies is not satisfied, or is not satisfied on time, and is not waived, this Purchase Agreement shall thereupon be void at the written option of Buyer, Seller shall return the Earnest Money to Buyer, and Buyer and Seller shall execute and deliver to each other the termination of this Purchase Agreement 4 Title Examination /Curing Title Defects. The Buyer shall, at its expense and within a reasonable time after Seller's acceptance of this Agreement, obtain a commitment for title insurance "commitment for the Subject Property Buyer shall have ten (10) business days after receipt of the commitment to examine the same and to deliver written objections to title, if any, to Sellers or Buyer's right to do so shall be deemed waived Sellers shall have until the Closing Date (or such later date as the parties may agree upon) to make title marketable, at the Seller's cost In the event that title to the Subject Property cannot be made marketable or is not made marketable by the Sellers by the Closing Date, then, this Agreement maybe terminated at the option of either party At Closing, Seller shall surrender to Buyer all abstracts of title to the Subject Property. Environmental Matters. A The Seller warrants that the Property has not been used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos (other than asbestos used as pipe wrapping and tile adhesive in the school building) product during the period of time the Seller has owned the Property The Seller further warrants that the Seller has CLL- 2542180 4 RS220 -162 no knowledge or information of any fact which would indicate the Subject Property w as used for production, storage, deposit or disposal of any toxic or hazardous A aste or substance, petroleum product or asbestos product prior to the date the Seller purchased the Subject Property Notwithstanding the above, the Seller's warranty regarding petroleum products does not preclude the presence of heating oil or other similar products used as a heating fuel for the Subject Property or above- ground gasoline or oil used for routine maintenance of the Subject Property but the Seller does warrant that if there N as a fuel tank on the Subject Property used for the storage of heating oil or other similar product, the Seller has no knowledge of any leak in the tank or contamination caused thereby B Buyer and its agents shall have the right to enter upon the Subject Property after the date of this Purchase Agreement for the purpose of inspecting and surveying the Subject Property and conducting such environmental examination and tests as Buyer deems necessary Buyer agrees to indemnify the Seller against any liens, claims, losses, or damage occasioned by Buyer's exercise of its right to enter and work on the Subject Property Buyer agrees to provide Seller with a copy of any report as a result of such examination and tests 6 Real Estate Taxes and Special Assessments. The Seller shall pay all real estate taxes payable in 2004 prior to Closing Seller shall pay all real estate taxes payable in previous years There are no special assessments for public improvements levied or pending in the Subject Property The entire unpaid balance of special assessments, and all installments of special assessments levied and pending, including special assessments payable after the year of closing Seller agrees to pay all assessments related to service charges furnished to the Subject Property prior to the date of closing (e g delinquent water or sewer bills), including those charges levied, pending, or certified to payable 2004 taxes Buyer shall pay all special assessments levied after Closing and real estate taxes payable in 2005 and thereafter (except as provided otherwise in Exhibit Two 7. Closing Date. Unless otherwise agreed by the parties, the date of closing will be on or before January 14, 2005 (the "Closing Date However, all tenants and residential occupancies must be vacated prior to the Closing Date. If all tenants and residential occupants have not vacated by January 14, 2005, the closing will be delayed until such time that all tenants and residential occupants have vacated the Subject Property or assurance that is satisfactory to Buyer, in its absolute and sole discretion, that such continuing occupancy is pursuant only to Exhibit Two and subject to the terms thereoL No rent will be paid to the Seller as the tenants vacate the property and the Seller is responsible for returning all security deposits to the tenants as provided by law. Delivery of all papers and the closing shall be made at the offices of City, 2875 145` Street West, Rosemount, Minnesota 55068, or at such other location as is mutually agreed upon by the parties All deliveries and notices to City shall be made to the above address and marked to the attention of City Administrator CLG2542180 5 RS220 -162 Possession /Removal of Property /Utilities /Escrow. (a) Possession. Buyer shall take and Seller shall surrender possession at the time of closing subject to the terms of Exhibit Two (b) Removal of Property. All personal property on the Subl ect Property shall be removed pior to closing except as otherwise provided in Exhibit Two (c) Utilities. Seller agrees to pay all charges for sewer, water, electric, gas, and cable television (collectively, "utilities provided to Subject Property prior to the Closing Date (d) No encumbrances. Seller agrees not to place any liens or encumbrances on the Subject Property after the date of this Purchase Agreement Well Disclosure. Seller warrants that there is no well on the property 10 Seller and Signatory Warranties. (a) Sewer and water. Seller warrants that the Subject Property is connected to city sewer and city water (b) Mechanics' Liens. Seller warrants that, prior to the closing, Seller shall pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure upon or improvement to the Subject Property (c) Notices. Seller warrants that it has not received any notice from any governmental authority as to violation of any law, ordinance or regulation in connection with the Subject Property (d) Corporate Authority. Seller warrants that it is the owner of the Subject Property, that is has full authority to enter into this Purchase Agreement for the sale of the Subject Property, and that there are no other parties who hold any unrecorded interest in the Subject Property (e) Authority of Signatories. The signatories to this Purchase Agreement represent and warrant that they are representatives of the Seller and that they have the authority to enter into thus Agreement on Seller's behalf 11 Broker Commission. Each party represents to the other that it has not utilized the services of any real estate broker or agent in connection with this Purchase Agreement or the transaction contemplated by this Purchase Agreement Each party agrees to indemnify, defend, and hold harmless the other party against and in respect of any such obligation and liability based in anyway upon agreements, arrangements, or understandings made or claimed to have been made by the party with any third person CLL- 2542180 6 RS220 -162 12 Closing Costs/Recording Fees/Deed Tax. Buyer will pay (a) the closing fees charged by the title insurance or other closing agent. if any, utilized to close the transaction contemplated by this Agreement, (b) the premium for title insurance policy, if any, obtained b} the City, (c) any transfer taxes and recording fees required to enable the Buyer to record its deed from Seller under this Agreement Seller will pay all other fees normally paid by Sellers, including fees and charges related to the filing of any instrument required to make title marketable Each party shall pay its own attorney fees 13 Inspections. From the date of this Agreement to the Date of Closing, Buyer, its employees and agents, shall be entitled to enter upon the Subject Property to conduct such surveying, inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and testing of groundwater monitoring wells, as Buyer shall elect, provided, that Seller is given at least 24 hours' notice to Gary Mitchell, at (651) 423 -4402 Copies of any such reports obtained by Buyer shall be provided to Seller if the closing does not occur 14 Risk of Loss. If there is any loss or damage to the Subject Property between the date hereof and the date of closing, for any reason including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on the Seller If the Subject Property is destroyed or substantially damaged before the closing date, this Purchase Agreement shall become null and void, at Buyer's option At the request of Buyer, Seller agrees to sign a cancellation of Purchase Agreement 15 Relocation. Seller expressly reserves Seller's right to receive relocation benefits and reimbursements to which Seller may be entitled by law as a result of the transaction contemplated by this Purchase Agreement 16 Salvage For five years after the Closing Date, as the Subject Property is developed and used in the future, if the following items of personal property are not used or incorporated into the project by Buyer, Seller shall have the right to remove and salvage such items subject to such rules and restrictions as may be imposed by Buyer for the protection of the Buyer and the Subject Property Parish Center /Rectory Fumiture /Appliances Phone systems (connected to the school s Prior to demolition (Opportunity for parishioners to purchase doors, built -in shelving, etc Church Bell from the steeple Exterior and interior stain glass windows (if not used in the future remodel) Pews (possible sale to parishioners /given to church in need) 17 Notice. Any notice, demand, request or other communication which mayor shall be given or sere ed by the parties, shall be deemed to have been given or served on the date the same is personally served upon one of the following indicated recipients for notices or is CL1,254218v3 RS220 -162 deposited in the United States Mail, registered or certified, return receipt requested, postage prepaid and addressed as follows SELLER The Church of St Joseph of Rosemount, Minnesota 13900 Biscayne Avenue West Rosemount, MN 55068 BUYER City Administrator City of Rosemount 2875 145' St W Rosemount, MN 55068 AGENT Kennedy Graven, Chartered ATTN Charles L LeFevere 470 US Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 18 Entire Agreement. This Purchase Agreement, Exhibits, and other amendments signed by the parties, shall constitute the entire Agreement between Seller and City and supercedes any other written or oral agreements between the parties relating to the Subject Property This Purchase Agreement can be modified only in a writing properly signed on behalf of Seller and City 19 Survival. Notwithstanding any other provisions of law or court decision to the contrary, the provisions of this Purchase Agreement shall survive closing IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above CITY OF ROSEMOUNT THE CHURCH OF ST JOSEPH OF ROSEMOUNT, MINNESOTA f: :A Its Mayor Its Its Clerk Its CLL2542180 8 RS220 -162 EXHIBIT ONE Parcel 1 Lot 26, Auditor's Subdivision No 1 and Parcel 2 The North 110 feet of Lot 25, Auditor's Subdivision No. 1 and Parcel 3 Lot 25 except the North I I0 feet, Auditor's Subdivision No. 1 and Parcel Lot 24 except the Southern 13.7 feet of Auditor's Subdivision No. I and Parcel 5 The north 44 3 feet of Lot 20, Auditor's Subdivision No. 1 and Parcel 6 Lots 10 11, School Addition and Parcel 7 The South 27 Meet of Lot 8 and Lot 9, School Addition, All in Section 29, Township 115, Range 19, Rosemount, Nhnnesota LEASE AGREEMENT THIS LEASE made and entered into on this 21st day of December, 2004, by and between the City of Rosemount, a Minnesota municipal corporation (hereinafter referred to as "Landlord') and the Church of St Joseph of Rosemount, Minnesota, a Minnesota religious corporation (hereinafter referred to as "Tenant WITNESSETH ARTICLE I GRANT AND TERM 1 I DEMISED PREMISES In consideration of the rents, covenants and agreements herein reserved and contained on the part of Tenant to be performed, Landlord does hereby lease to Tenant a portion of the parcel of land legally described on the attached Exhibit One which is hereby made a part hereof (the "Premises such portion being that part of the Premises depleted on Exhibit Two which is hereby made a part hereof, as the "School the "Storage Garage" and "Gathering Area together with certain rights to use certain other areas of the Premises by revocable permit or shared use as is more fully described herein (the "Demised Premises 12 TERM The tern of this Lease and Tenant's obligation to pay rent hereunder shall commence upon the date first mentioned above and the term of the lease shall expire on July 31, 2008 In addition, provided Tenant is not in default hereunder, Tenant shall have the option to extend the term of this Lease for three additional periods of one year on all the same terms and conditions contained herein, provided that Tenant shall have given Landlord written notice of the exercise of such option at least six (6) months prior to the expiration of the initial term and each renewal term ARTICLE 11- RENT 21 BASE RENT (a) Base Rent for Initial Term Base Rent for the initial term to July 31, 2008, in the amount of Two Hundred Fifty -Nine Thousand Two Hundred Dollars ($259,200) has been prepaid as a discount to the purchase price of the Subject Property, in accordance with the Purchase Agreement for the Premises between the parties dated December 21, 2004 (b) Base Rent for Renewal Terms Annual Base Rent for each renewal term will be determined by adlustmg the sum of Eighty -Six Thousand Four Hundred Dollars ($86,400) by a fraction, the numerator of which is the reference index for the Consumer Price Index, all items, all urban consumers, U S City Average, for the month of May preceding the renewal term, and the denominator of which is the corresponding reference index for November 2007 (For example, if the published U S Department of Labor, Bureau of Labor Statistics reported a CPI of 210 6 for November of 2007 and 214 2 for May, 2008, the Annual Base Rent from August 1, 2008 through July 31, 2009, would be 214 2 divided by 210 6 (214 2 210 6 1 017) tunes $86,400 (1 017 x $86,400) or $87,868 80 If the CPI for May 2009 were 216 3, the Annual Base Rent from August 1, 2009 through July 31, 2010 would be 216 3 divided by 210 6 times $86,400 or $88,738 46 CLL2542970 1 RS220 -162 Annual rent for each renewal term shall be paid in equal monthly installments paid in advance on the first of each month 22 ADDITIONAL RENT Any other charges to be paid by the Tenant pursuant to the provisions of any other sections of this Lease shall be designated as "Additional Rent" Additional Rent will be paid within thirty (30) days of invoice therefor from the City, which will submit m-,oices no more often than monthly Additional Rent shall include any real estate or personal property taxes levied and due by reason of Tenant's use and occupancy of the Demised Premises Failure of Tenant to pay Additional Rent shall give Landlord the right to declare an event of default in accordance with Article XIV 23 RENT DELINQUENCIES Should the Tenant, for any reason whatsoever, fail to pay, when the same is due and payable, any Base Rent or Additional Rent and should said rent not be paid within ten (10) days of due date, Tenant shall pay a late penalty equal to six percent (6 of total rents due In addition, all unpaid rents shall bear interest from the date due to the date of payment at the rate of tw o percent (2 per annum in excess of the prime rate as quoted by U S Bank Minneapolis, N A to its best customers, or the highest rate permitted by law, whichever is less. ARTICLE III TAXES 3 1 TAXES Tenant shall pay before delinquent all real estate taxes with respect to the Demised Premises due and payable during the term of this Lease by reason of the use and occupancy thereof by Tenant Such taxes shall be prorated for the first and last years of the term of this Lease Special assessments shall be paid by Landlord ARTICLE IV USE OF PREMISES 41 TENANTS USE During the term of this Lease, the Demised Premises shall be used solely for the purpose of school, church services, church meetings and related church activities and for no other purpose without prior written consent of Landlord, which shall not be unreasonably withheld 42 COMPLIANCE WITH LAWS AND REGULATIONS (a) Tenant covenants and agrees that at all times during the term hereof it will maintain and conduct its business insofar as the same relates to the occupancy of the Demised Premises in such a manner and under such regulations as to be in strict compliance with any and all applicable governmental and /or quasi governmental laws, rules, regulations and orders, as well as any and all applicable provisions of insurance underwriters of the Demised Premises provided prior written notice of such provisions is given to Tenant Tenant shall indemnify Landlord, Landlord's insurer, and the property of Landlord against any and all claims or losses or actions or causes of action resulting from Tenant's failure to comply with said laws, rules, regulations and orders and underwriting provisions (b) Tenant hereby agrees to maintain the premises and operate its business in accordance with applicable provisions of the ADA (the Americans With Disabilities Act), codified CLL 25429703 2 RS220 -162 at 42 U S SS 12101 et seg Failure to do so shall operate as an event of default and a breach of the Lease 4.3 AFFIRMATIVE COVENANTS OF TENANT Without in any way limiting or restricting other covenants of Tenant elsewhere in this Lease contained, the Tenant affirmatively covenants and agrees as follows (a) Tenant shall neither permit or suffer and conduct, odor or other nuisance m, on or about said Demised Premises to annoy or disturb any persons occupying adjacent premises or common areas or suffer and conduct noise on or about said Demised Premises that is unreasonable for the uses permitted herein and causes such annoyance or disturbance, (b) Tenant shall keep the Demised Premises, including all service and/or loading areas for the Demised Premises, free from all litter, dirt and obstructions and from snow and ice not removed by Landlord under Section 5 2, (c) Tenant shall keep said Demised Premises clean and in the sanitary condition required by ordinance and regulations of any governmental or quasi governmental unit having jurisdiction, (d) Tenant shall neither permit nor suffer the Demised Premises, or the walls, ceilings or floors thereof to be endangered by overloading, (e) Tenant shall not use or permit the Demised Premises to be used for any purpose or purposes other than that set forth in Section 4 1 hereof, ARTICLE V MAINTENANCE AND REPAIRS 5 1 TENANT'S MAINTENANCE AND REPAIRS Tenant agrees that, from and after the date that possession of the Demised Premises is delivered to the Tenant, and until the end of the term hereof it will be responsible for all cleaning, repairs, maintenance and replacements to the Demised Premises including, but not limited to. the interior and exterior portions of all doors, locks, frames, hardware incorporated into the Demised Prermses, the mechanical plumbmg (provided that any plumbing repair having a cost in excess of $2,000 ryill be paid by Landlord), electrical equipment and systems (provided any electrical repair having a cost in excess of $1,000 will be paid by Landlord), the HVAC system (provided that any repairs or replacement exceeding $2,500 will be the responsibility of the Landlord), partitions, and all other fixtures, appliances and facilities furnished by Landlord or Tenant Tenant shall not, however, be responsible for repair of any damage caused by any negligence of Landlord, its employees or agents Tenant shall be required to pay for any structural repairs or alterations that may be required by governmental rules, orders or regulations as a result of Tenant's use and or occupancy of the Dernised Premises During reasonable business hours, Landlord may inspect the Demised Premises to insure Tenant's compliance with the above and foregoing requirements Tenant accepts the Demised Premises as being in good and sanitary order, condition and repair and, with full knowledge of the condition of the Demised Premises, accepts it in its as-is condition Except as specifically provided herein, Landlord shall be responsible for all structural repairs or replacements Windows and plate glass damaged or destroyed by Tenant, its officers, agents, employees, contractors and invitees will be CLL254297v3 3 RS220 -162 repaired by Tenant at Tenant's expense Windows and plate glass damaged or destroyed by Landlord, its officers, agents, employees, contractors and invitees will be replaced by Landlord at Landlord's expense In all other cases, damaged or destroyed windows and plate glass will be repaired by Landlord and the costs of such repair, less any casualty insurance proceeds received by Landlord. will be reimbursed by Tenant to Landlord 52 LANDLORD'S MAINTENANCE AND REPAIRS Landlord will plow snow from parking area and drew ays to the same standard applied to other municipal parking lots Landlord will mow and care for grass areas to the same standard applicable to grounds around City hall Landlord will be responsible for repairs, replacement and maintenance of roofs, foundations and exterior building walls 53 SURRENDER OF PREMISES. At the expiration or termination of this Lease, Tenant shall surrender the Demised Premises in the same condition as existed on the commencement date of this Lease. except for Landlord approved modifications, ordinary wear and tear excepted All fixtures that have become attached shall be part of the Demised Premises, except trade fixtures Within ninety (90) days prior to the expiration of the term, Landlord shall during reasonable business hours, have the right to show the Demised Premises to third parties for the purposes of again leasing same ARTICLE VI— LANDLORD IMPROVEMENTS 61 INTERIOR WALL By July 31, 2005, Landlord will construct a wall to separate the Gathering Area from the Church, as depicted on Exhibit Two 62 FENCE By August 31, 2007, Landlord will construct a fence 10 feet in height in the approximate location labeled as "Future Fence" on Exhibit Two 63 INTERIOR IMPROVEMENTS Landlord will reimburse Tenant for approved capital improvements to the Gathering Area to enable relocation of classes to such area, in an amount not to exceed fifteen thousand and no /100ths dollars ($15,000) ARTICLE VII USE OF DEMISED PREMISES 71 RECTORY USE Tenant is given a revocable permit to use the building labeled as the "Rectory" on Exhibit Two in its as -is condition, subject to termination by Landlord at any time upon 120 days' written notice to Tenant Until vacated by Tenant, Tenant shall be responsible for all maintenance, repair and replacement of the Rectory and its HVAC, mechanical, electrical and structural systems at its own expense, and will pay for all utility expenses on a pro rata basis Tenant may vacate such building at any time upon written notice to Landlord 72 CHURCH USE Tenant is given a revocable permit to use the building labeled as the "Church" on Exhibit Two in its as -is condition, subject to termination by Landloid at any time upon 30 days' wntten notice to Tenant Until vacated by Tenant, Tenant will provide cleaning services follow mg each use and will pay for all utility expenses on a pro rata basis Tenant may vacate such building at any time upon written notice to Landlord CLL- 2542970 4 RS220 -162 73 PARISH CENTER USE Tenant is given a revocable permit to use the building labeled as the "Parish Center" on Exhibit Two in its as -is condition, subject to tenrnnation by Landlord at any time upon 120 days' written notice to Tenant Until vacated by Tenant, Tenant shall be responsible for all maintenance, repair and replacement of the Parish Center and its HVAC, mechanical, electrical and structural systems at its own expense, and will pay for all utility expenses on a pro rata basis Tenant may vacate such building at anytime upon written notice to Landlord 74 SIGNAGE Tenant may leave in place and maintain sipage existing on the date of this Lease and may add signage with prior w ntten approval by Landlord 75 LANDLORD IMPROVEMENTS PROJECT, It is currently planned that Landlord will continence construction of a public library on a part of the Premises on or after June 1, 2007 After the date of comrnencement of construction "Library Construction Commencement Date Tenant will have no use or occupancy of the area labeled "Future Library Site" on Exhibit Two attached hereto and made a part hereof 76 USE OF PARKING LOTS AND GROUNDS (a) Following the Library Construction Commencement Date, Tenant shall have exclusive use of all parking and yard areas outside of the Future Library Site (b) Prior to the Library Construction Commencement Date, Tenant will have exclusive use of the parking areas and grounds labeled "Daytime Parking and Playground Area" on Exhibit Three, attached hereto and made a part hereof, for parking and playground purposes until 4 00 p in each weekday, and shared non exclusive use of such area with Landlord at all other times 77 EAST PARKING LOT, Tenant shall have non exclusive right to use the city parking lot across Highway 3 to the east of the Premises ARTICLE VIII UTILITIES 8 1 CHARGES Tenant shall pay for all utility services including gas, electricity, domestic water and sewer for the Demised Premises and all other utility services furnished the Tenant for use in the Demised Premises, provided such utilities are separately metered For utilities that are not separately metered and for use by Tenant of parts of the Premises authorized by Sections 7 1, 7 2 and 7 3, Landlord will pay for such utilities and bill Tenant for its share of such costs, pro rated by use of the space, which costs will be included in Additional Rent 82 SUPPLY OF UTILITY SERVICES Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electricity, water, sewer, or gas furnished by reason of any change, requirement, act, neglect or omission of the public utility serving the Demised Premises 83 INTERRUPTION OR DISCONTINUANCE OF LANDLORD'S SERVICE Tenant agrees that Landlord shall not be liable for failure to supply any service, including, but not limited to, heating, ventilating and air conditioning when Landlord uses reasonable diligence to CLL-2542970 5 85220 -162 supply the same, it being understood that Landlord reserves the right to temporarily discontinue such services, or any of them, at such times as may be necessary by reason of accident, unavailability of employees, failure of supply, repairs, alterations or improvements, or by reason of fire, strikes, flood, lockouts, nots, acts of God or any other happening beyond the reasonable control of Landlord When Landlord causes services to be rendered by independent third parties, Landlord shall have no liability for the performance thereof or liability therefor 84 GARBAGE AND REFUSE COLLECTION All garbage and refuse shall be kept in containers and shall be placed outside of the Demised Premises prepared for processing and/or collection Tenant shall arrange for, and pay for the collection and disposal of garbage and refuse generated dunng Tenant's use of the Demised Premises ARTICLE IX ALTERATIONS 91 ALTERATIONS Tenant may, from time to time during the term, make, at its own cost and expense, any alterations or changes in the interior of the School and Gathering Area in good and workmanlike manner in compliance with all applicable requirements of law, provided Tenant follows the notice procedure and obtains Landlord's consent where required, all in accordance with this Article Landlord agrees to cooperate with Tenant for the purpose of securing necessary permits for any changes, alterations, or additions permitted under this section without expense to the Landlord All costs of any such work shall be paid promptly by Tenant so as to prevent the assertion of any liens for labor or matenals Tenant agrees to advise Landlord in writing of the date upon which such alterations will commence in order to permit Landlord to post notice of non responsibility 92 NOTICE TO LANDLORD Pnor to the initiation of any alterations, Tenant shall give Landlord wntten notice thereof and specify the work to be performed in reasonable detail and include the names of the contractors and matenalmen to be utilized After receipt of said notice, Landlord shall have a reasonable period of time during which it shall make a determination, in its sole discretion, as to whether or not the proposed work would create a structural or design change Tenant shall prop ide Landlord upon request with any further information reasonably necessary for such determination by Landlord and Tenant shall not commence work or accept matenals prior to receiving written notice of Landlord's determination If Landlord detemmnes that the proposed work would create a structural or design change, then the same must be approved in writing by Landlord prior to the commencement of any work or the delivery of any matenals therefor ARTICLE X PUBLIC LIABILITY 101 TENANT'S LIABILITY INSURANCE Tenant shall during the entire term hereof keep in full force and effect insurance upon all glass and plate glass in the Demised Premises and a policy of public liability and property damage insurance with respect to the Demised Premises, and the business operated by Tenant and any sublessees with respect to the Demised Premises, in which the limits of public liability shall not be less than $1,000,000 per person and $1,000,000 per accident and in which the property damage liability shall not be less than $500,000 The policy shall name Landlord as additional insured and shall contain clauses that losses shall be payable notwithstanding any act or negligence of the insured that might otherwise result in forfeiture of said insurance, and that the insurer will not cancel or change the insurance without first giving the C1_1L25429M 6 RS220 -162 Landlord thirty (30) days prior written notice The insurance shall be with an insurance company approved to do business in Minnesota or self insurance program and reasonably acceptable to Landlord Tenant shall deliver a copy of the policy or a certificate of insurance to Landlord prior to taking possession of the Demised Premises, and a renewal certificate at least thirty (30) days prior to the expiration of any policy term Tenant may self insure with respect to liability insurance required under this Agreement, in which event Tenant shall be responsible for all protection of Landlord, its officers, agents and employers that would have been afforded by the liability cov erage required under this Agreement 102 INDEMNIFICATION Except for claims ansmg out of the willful or negligent act of the other party or its representatives, each party shall indemnity and defend the other party against all claims, expenses and liabilities incurred, including reasonable attorneys' fees, in connection with loss of life, personal injury, and/or damage to property ansmg out of any occurrence in, upon or at the Demised Premises, or the occupancy or use thereof by said party, or occasioned wholly or in part by any act or omission of said party, its agents, employees, contractors, sublessees, concessionaires, guests or licensees Nothing herein shall be deemed a waiver of the limitations on liability set forth in Minnesota Statutes, Chapter 466 ARTICLE XI DESTRUCTION AND RESTORATION III RESTORATION OPTION IF MORE THAN 30% DAMAGED If the Demised Premises shall be damaged to the extent of thirty percent (30 or more of the cost of replacement thereof or damaged by any uninsured casualty, Landlord shall have the option to rebuild or to terminate this Lease by exercise of notice to Tenant given not more than sixty (60) days from the date of such damage 112 RESTORATION OPTION IF LESS THAN 30% DAMAGED (a) If the demised Premises shall be damaged to the extent of less than thirty percent (30 of the cost of replacement by fire or other casualty covered by Landlord's policy of fire coverage insurance during the term of this Lease the minimum rental herein shall abate as of the date of the occurrence in accordance with the provisions of Section 11 2(b), and the Landlord shall restore the Demised Premises If such an event occurs during the last one (1) year of the initial term of this Lease or thereafter, then Landlord shall have the option to rebuild or terminate this Lease to be exercised by notice to tenant given not more than sixty (60) days from the date of such damage (b) In the event of such partial destruction or damage whereby Tenant shall be deprived of occupancy and use for only a portion of the Demised Premises, then Base Rent shall be equitably apportioned according to the area of the Demised Premises that is unusable by Tenant from the date of occurrence, until such time as the Demised Premises are repaired or restored as provided herein 113 TOTAL DESTRUCTION In the event of total destruction of the Demised Premises, Tenant's rent shall completely abate from the date of such destruction If Landlord elects to rebuild as aforesaid, Tenant's rent shall completely abate from the date of such destruction until forty five (45) days after the date when Landlord notifies tenant that the shell of the demised Premises is ready for commencement of Tenant's work, or upon the day when Tenant opens for CLL- 254297v3 7 RS220 -162 business, whichever event shall first occur In the event of total destruction, Tenant may elect, by giving written notice to Landlord within sixty (60) days of such destruction, to tern inate this Lease 114 TENANTS INSURANCE COVERAGE Tenant shall carry insurance against fire and such other risks as are from time to time included in standard extended coverage insurance for the full insurable value of Tenant's merchandise, trade fixtures, furmshmgs, equipment and all other items of personal property of Tenant located on or within the Demised Premises Any insurance policies required to be earned pursuant to this paragraph shall name Landlord as an additional insured, and Tenant shall furnish Landlord evidence of such insurance coverage Such insurance policies may not be modified or terminated without thirty (30) days advance notice to Landlord Landlord shall maintain at its own expense such other property- casualty insurance as it deems reasonable and necessary to protect its interests in the Premises 115 [INTENTIONALLYLEFT BLANK 116 [INTENTIONALLYLEFTBLANK] 117 ADDITIONAL HAZARDS Tenant covenants and agrees that it will not do or permit anything to be done in or upon the Demised Premises or bring in anything or keep anything therein that shall cause the cancellation of Tenant's insurance policies, or increase the rate of insurance, on the Demised Premises, above the standard rate on said premises and buildings for the use to which the Demised Premises is put as of the date of this Lease Tenant further agrees that in the event it shall do anything to so increase the insurance rate, Tenant shall promptly pay to Landlord on demand any such increase resulting therefrom, which shall be due and payable as Additional Rent hcieunder At Tenant's request, Landlord shall make available for Tenant's inspection during regular business hours, all documents pertaining to Landlord's calculation of Tenant's Additional Rent required under this section 11 8 NOTICE Tenant shall give immediate written notice to Landlord of any damage caused to the Demised Premises by fire or other casualty, or of any cancellation or reduction of Tenant's insurance coverage required pursuant to this Lease 119 ABATEMENT Tenant agrees that during any period of reconstruction or repair of the Demised Premises, it will continue the operation of its business within the Demised Premises to the extent practicable If Landlord is required to, or elects to, repair and rebuild, then during the period from the occurrence of the casualty until Landlords repairs are completed, the Base Rent set forth herein shall be reduced to such extent as may be fair and reasonable under the circumstances, however, there shall be no abatement of the other charges provided for herein CLL- 2542970 8 RS220 -162 I Y[��Yi:Y1��1�I�Y�iZY]�I \I►1 121 PARTIAL OR TOTAL CONDEMNATION If the whole or any part of the Demised Premises or the structure encompassing same shall be taken by any public authority under the power of eminent domain, the Tenant shall have no claim to, nor shall Tenant be entitled to, any portion of any award, for damages or otherwise In the event only a portion of the Dermsed Premises are taken, the Lease shall terminate as to the part taken, and the rent and other charges herein reserved shall be adjusted for the remainder of the Demised Premises so that the Tenant shall be required to pay for the balance of the term that portion of the rent resen ed which the value of the part of the Demised Premises remaining after condemnation bears to the value of the Dermsed Piermses immediately prior to the date of condemnation The rental and other charges shall be apportioned as afoiesaid by agreement between the parties or by arbitration or legal proceedings, but pending such deternnation the Tenant shall pay at the time and in the manner above provided the rental herein reserved and all other charges herein required to be paid by the Tenant, without deduction, and upon such determination, the Tenant shall be entitled to credit for any excess rentals paid If, however, by reason of the condemnation there is not sufficient space left in the Demised Premises for the Tenant to reasonably conduct business, then, in such event, the Lease shall terminate Although all damages in the event of condemnation belong to Landlord whether awarded as compensation for diminution in value of the leasehold or to the fee of the leased premises, nothing herein shall be construed to prevent Tenant to claim and recover from the condemning authority such compensation as may be separately awarded or recoverable by Tenant in Tenant's own right for its leasehold interest ARTICLE XIII ASSIGNMENT AND SUBLETTING 13 1 CONSENT REQUIRED Tenant may not assign this Lease and/or sublet the Demised Premises, or any part thereof to any party other than a subsidiary or affiliate of Tenant without in each instance obtaining the prior written consent of the Landlord, which consent shall not be unreasonably withheld The consent by Landlord to any assignment or subletting may not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting This prohibition against assigning or subletting shall be construed to include a prohibition against any assigmnent or subletting by operation of law If this Lease is assigned, or if the Demised Premises or any part thereof is underlet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, under- tenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, under letting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, under -tenant or occupancy as Tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained Notwithstanding any assignment or sublease, Tenant shall remain fully liable on this Lease and shall not be released from performing any of the terms, covenants, and conditions of this Lease Tenant shall pay to Landlord any reasonable costs and expenses (including legal fees) incurred by Landlord in connection with such assignment or subletting ARTICLE XN TENANT'S DEFAULT 141 EVENTS OF DEFAULT The following events shall be deemed to be events of default by Tenant under this Lease CLL- 2542970 9 RS220 -162 (a) Tenant shall fail to pay when due any installment of rent, or other charges provided herein, or any portion thereof and the same shall remain unpaid for a period of ten (10) days after the same has become due, or (b) [This paragraph intentionally Left blank], or (c) Tenant shall do or permit to be done anything that creates a ben upon the Demised Premises, and does not, within ten (10) days after written notice from Landlord either (i) cause said lien as to Landlord's interest to be released, or (i) diligently pursue a challenge to such lien having first given to Landlord such security as the Landlord deems adequate to protect its interests, or (d) Any representation or warranty made in writing to Landlord in this Lease or in connection with the making of this Lease, by Tenant, shall prove at any time to have been incorrect in any material respect when made or becomes incorrect, or (e) Tenant or any guarantor shall make an assignment for the benefit of creditors, for a petition in bankruptcy, be adjudicated insolvent or bankrupt or admit in writing the inability to pay debts as they mature, petition or apply to any tribunal for the appointment of a receiver, trustee or similar officer for Tenant or any guarantor or a substantial part of the assets of Tenant or any guarantor, or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, or if there shall have been filed any such petition or application, or any such proceeding shall have been commenced against Tenant that remains undismissed for a period of thirty (30) days or more, or Tenant or any guarantor by any act or omission shall indicate their consent to, approN al of or acquiescence in any such petition, application or proceeding, or the appointment of a receiver of or any trustee or similar officer for Tenant or any guarantor or any substantial part of any of the properties of Tenant or any guarantor, or shall suffer any such receivership or trusteeship to continue undischarged for a period of thirty (30) days or more, or any judgment, writ, warrant or attachment or execution or similar process shall be issued or levied against a substantial part of the property of Tenant or any guarantor and such judgment, writ, or similar process shall not be released, vacated or fully bonded within thirty (30) days after its issue or leery, or (f) Tenant shall have failed to comply with any other provisions of this Lease and shall not cure any failure within thirty (30) days, or such longer period of time as may be reasonably required to cure such default, after Landlord, by wntten notice, has informed Tenant of such noncompliance, 14 2 LANDLORD'S REMEDIES Upon the occurrence of any of the above lettered events of default, Landlord may elect to either (1) terminate this Lease, or (2) termmate Tenant's right to possession only without terminating this Lease, hereinafter referred to as re- entry, (3) pursue any other remedy available at law or inequity Landlord shall have all remedies provided in the Lease and under governing law All of the remedies given to Landlord in this Lease or by law shall be cumulative, and the exercise of one right or remedy by landlord shall not impair its right to exercise any other right or remedy CLL 10 RS220 -162 In the event of election under (2) above to terminate Tenant's right to possession only, Landlord may, at Landlord's option, proceed to demand possession by notice and proceeding under the Unlawful Detauier Law of Minnesota and take and hold possession thereof without such proceeding or entry into possession terminating this Lease or releasing Tenant in whole or in part from Tenant's obligation to pay the rent hereunder for the full term Upon re -entry Landlord may remove all personal property from the Demised Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, all w ithout service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage that maybe occasioned thereby Upon and after entry into possession without termination of the Lease, Landlord shall use reasonable efforts to relet the premises, or any part thereof for the account of Tenant, to any other person, firm or corporation, for such rent and other charges for such time and upon such terms as Landlord, in Landlord's sole subjective discretion shall determine, but Landlord shall not be required to accept any potential tenant offered by Tenant or to observe any instruction given by Tenant about such reletting Landlord may make repairs or redecorate the premises to the extent deemed by the Landlord necessary or commercially reasonable Notwithstanding any action of possession or re -entry into the Leased Premises by the Landlord as permuted in this Article, or termination of this Lease as permitted under Article XIV, it is stipulated and agreed that tenant shall remain liable to Landlord for damages for breach of this Lease and of Tenant's covenants hereunder in an amount equal to the total of the following (a) All unpaid fixed Base Rent and Additional Rent, late charges, Additional Rent payable for taxes and otherwise, and any and all other charges payable by Tenant hereunder or under other agreements with the Landlord due for the current lease term, together with additional late charges from due date until paid, PLUS (b) All costs and expenses incurred by Landlord in connection with re -entry and repossession of the Leased Premises, including attorneys' fees 14 3 COSTS, EXPENSES AND ATTORNEYS FEES If one party is required to seek legal counsel for collection or to commence litigation or arbitration in order to enforce the covenants and agreements in this Lease, the party prevailing in such collection, litigation or arbitration shall have the right to remnbursenent from the other party of all reasonable costs, expenses and attorney's fees ARTICLE XV— LANDLORD DEFAULT 15.1 DEFAULT NOTICE TO LANDLORD Should Landlord default in the performance of any of the covenants on the part of the Landlord to be kept or performed and such default shall continue for thirty (30) days after v<ntten notice to Landlord from Tenant specifying such default, or should any warranty or representation made by Landlord be untrue and remain untrue after thirty (30) days after written notice from Tenant specifying such untruth, then and only in such event, shall termination of this Lease be effected or action taken or remedy pursued If the default or untruth is of such character so as to require more than thirty (30) days to remedy, the Landlord shall have a reasonable period in which to remedy the same, provided Landlord is proceeding diligently CLL- 2542970 11 Rs220 -162 ARTICLE XVI MISCELLANEOUS PROVISIONS 161 HOLDING OVER In the event that Tenant shall continue to occupy the demised Premises after the expiration of the term of this Lease or written extension of the term hereof without entering a new Lease or written extension of the term hereof said tenancy shall be construed to be a "tenancy from month to month" upon all of the other terms and conditions herein contained, except where same are not applicable, and except that the rental during such holdover period shall be the then current Base Rent plus fifty percent (50 thereof and all Additional Rent shall continue to be paid 162 NO PARTNERSHIP It is expressly understood that the Landlord and Tenant are not partners or co- venturers, and that the Landlord has no right, title or interest in and to the business of the Tenant, and that the Tenant has no right to represent or bind the Landlord in any respect whatsoever, and that nothing herein contained shall be deemed, held or construed as making the Landlord a partner or associate of the Tenant, or as rendering the Landlord liable for any debts, liabilities or obligations incurred by the Tenant, it being expressly understood that the relationship between the parties hereto is, and shall at all times remain, that of Landlord and Tenant 16 3 WAIVER Failure on the part of the Landlord to complain of any action or non- action on the part of Tenant, no matter how long the same may continue, and no matter what other action or non action by Tenant that Landlord has already complained of shall never be deemed to be a waiver by Landlord of any of his rights hereunder Further, it is covenanted and agreed that no waiver at any time of any of the provisions hereof by Landlord, shall be construed as a waiver of any of the other provisions hereof and that a waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions The consent or approval of the Landlord to or of any action by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant No payment by Tenant, or acceptance by Landlord, of a lesser amount than shall be due from Tenant to Landlord, even after demand by Landlord for rent pursuant to Tenant's rent default shall be treated otherwise than a payment on account The acceptance by Landlord of a check for a lesser amount with an endorsement or statement thereon, or upon any letter accompanying such check, that said lesser amount is payment in full shall be given no effect, and Landlord may accept such check without prejudice to any further rights or remedies which Landlord may have against Tenant Further, failure of the Landlord to bill timely for taxes or other additional rent as heretofore required shall not be deemed a waiver of Tenant's liability to pay same 16,4 COVENANT OF QUIET ENJOYMENT Tenant, subject to the tennis and provisions of this Lease, on payment of the rent and observing, keeping and performing all of the terms and provisions of this Lease on its part to be observed, kept and performed, shall lawfully, peaceably and quietly have, hold occupy and enjoy the Demised Premises during the term hereof without hindrance or objection by any persons lawfully claiming under Landlord CLL- 2542970 12 RS220 -162 165 ENTIRE AGREEMENT This Lease is executed in identical counterparts, each of which, when bearing original mitials of the parties on each page and at each change in the text hereof as well as original signatures at the end of each document, shall constitute an original for all purposes All previous agreements, whether oral or written, are superseded by and merged with this Lease Subsequent change shall not be binding unless reduced to writing and signed by the parties hereto 16 6 INVALIDATION OF PARTICULAR PROVISIONS, If any clause, term or provision of this Lease, or the application thereof to any person or circumstance shall to any extent, be invalid or unenforceable, the remainder of this lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law It is the intention of the parties hereto that in lieu of each clause, tern or provision of this Lease that is illegal invalid or unenforceable, there be added as part of this Lease a clause, term or provision similar to such illegal invalid or unenforceable clause, term or provision as may be possible and would be legal valid and enforceable 16,7 PROVISIONS BINDING, ETC Except as herein otherwise expressly provided, the terms hereof shall be binding upon and shall inure to the benefit of the heirs, successors, assigns and legally appointed representative, respectively, of the Landlord and the Tenant Each term and each provision of this Lease to be performed by Tenant shall be construed to be both a covenant and a condition 16 8 GOVERNING LAW The laws of the State of Minnesota shall govern the interpretation, validity, performance and enforcement of this Lease 16.9 NOTICES Any notice which is required under this Lease shall be deemed "given" upon hand delivery or three (3) days after prepaid posting in the U S Mail whichever shall first occur Notice shall be addressed to Landlord at City Administrator City of Rosemount 2875 145 °i St W Rosemount, MN 55068 Tenant at The Church of St Joseph of Rosemount, Minnesota 13900 Biscayne Avenue West Rosemount, MN 55068 or to any other address as shall be designated by written notice Where in tlus Lease a certain number of days from date of notice to a given action is specified, unless the specific provision otherwise states, the days shall be counted as follows The CLL- 254297v3 13 RS220 -162 first calendar day shall be excluded and the last day shall be included, unless the last day is a Saturday, Sunday, or legal holiday, in which eN ent the period shall be extended to include the next day which is not a Saturday, Sunday or legal holiday 1610 DATE OF LEASE All references to the "date of this Lease" or "date hereof' shall be deemed to be that date stated in the first paragraph of this Lease 16 11 HEADINGS The heading, section numbers and article numbers appearing to this Lease are not intended in any manner to define, limit or describe the scope of any such section or article and are solely inserted for ready reference purposes 16 12 PRONOUNS As utilized in this Lease, the "singular" pronouns shall include the "plural and the "masculine" shall include the "feminine" and the "neuter and vice versa, unless a contrary intent specifically appears 1613 TERMINATION FOR CONVENIENCE BY TENANT Tenant may terminate this Lease for convenience at any time upon six months' prior written notice to Landlord Additional Rent shall continue to be paid to the effective date of termination Base Rent for the initial term w ill be refunded to Tenant by Landlord for the number of unused days remaining in the initial term after the effective date of termination, at the rate of $236 71 per day, but not in any event exceeding the sum of Eighty -Six Thousand Four Hundred Dollars ($86,400) 16.14 LANDLORD CONSENT Whenever Landlord consent is specifically required under this Agreement, such consent will not be unreasonably withheld or delayed 16 15 RENT ABATEMENT Tenant's rent will be abated if the part of the Demised Premises depicted on Exhibit Two as the "School" becomes uninhabitable or unusable due to damage or destruction or due to default by Landlord continuing more than thirty (30) days The amount of abatement will be the Base Rent pro rated by the number of days in the Base Rent payment period during which the School becomes uninhabitable For the initial term the amount of the abatement will be $236 71 per day during which the School is uninhabitable Rent abatements of prepaid rent will be credited to later payments of Base Rent and Additional Rent payable by Tenant Any abatement due to Tenant upon termination of the Lease will be reimbursed by Landlord within thirty (30) days of termination CLL- 254297v3 14 125220 -162 IN WITNESS WHEREOF, the parties hereto have affixed their signatures the day and year first above written LANDLORD CITY OF ROSEMOUNT Im ITS MAYOR AND BY ITS CLERK TENANT THE CHURCH OF ST JOSEPH OF ROSEMOUNT, MINNESOTA m. ITS CLL- 254297v3 15 RS220 -162 EXHIBIT ONE Parcel I Lot 26, Auditor's Subdivision No 1 and Parcel 2 The North 110 feet of Lot 25, Auditor's Subdivision No 1 and Parcel 3 Lot 25 except the North 110 feet, Auditor's Subdivision No. 1 and Parcel 4 Lot 24 except the Southern 13 7 feet of Auditor's Subdivision No. 1 and Parcel 5 The north 44.3 feet of Lot 20, Auditor's Subdivision No 1 and Parcel 6 Lots 10 11, School Addition and Parcel 7 The South 27'/2 feet of Lot 8 and Lot 9, School Addition, All in Section 29, Township 115, Range 19, Rosemount, Minnesota EXMIT TWO t. Storage Garage School 1� Fence 1 EXEIIBU THREE Daytime Parking and CLI- 2J4ZM2 85316162 Ie 3 an_S T—M EXHIBIT TWO . ..... .... Storage Garage School Church — Rectory Fence Gathering Area New Interior Wall Daytime Parking and F CLL- 254297v2 RS220 -162 EXHIBIT THREE �4 t �• I i I i .143RD _ ST_ W...-.,-.... ...... ._- ....___._..__._. -�_. AGREEMENT 1. Offer /Acceptance for Sale of Property. The Seller agrees to sell to the City the Subject Property and the City agrees to purchase the same, according to the terms of this Agreement. 2. Purchase Price for Property and Terms. A. PURCHASE PRICE: The total Purchase Price for the Subject Property is and No/ 100ths Dollars ($ .00). B. TERMS: (1): PAYMENT OF PURCHASE PRICE. a. Earnest Money The sum of Zero Dollars ($ -0 -) Earnest Money shall be paid by Buyer and Seller. b. Cash at Closing Buyer will pay by check or electronic transfer of funds on the Closing Date the sum of C. Payment of Assessments Seller is the owner of property located at 13900 Biscayne Avenue West in Rosemount, Minnesota, which is currently subject to a lien for special assessments in the amount of Seven Hundred Forty -Nine Thousand Five Hundred Thirty -Two and 94/100 Dollars ($749,532.94) in favor of Buyer. Buyer will accept transfer of Seven Hundred Forty -Nine Thousand Five Hundred Thirty- Two and 94/100 Dollars ($749,532.94) in value of the Subject Property as payment of such special assessments and will notify Dakota County of the cancellation of such special assessments within 30 days of the Closing Date. d. The parties will execute a lease for a portion of the Subject Property in the form of Exhibit Two attached hereto and made a part hereof. Seller will accept credit of Two Hundred Fifty - Nine Thousand Two Hundred Dollars ($259,200.00) of the purchase price as three years of non - refundable prepaid base rent as more fully described in Exhibit Two (2): DEED /MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Subject Property to Buyer, subject only to the following exceptions: CLL- 254218v5 2 RS220 -162 a. Building and zoning laws, ordinances, state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. C. Public utility and drainage easements of record which will not interfere with Buyer's intended use of the Subject Property. (3): DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. In addition to the Warranty Deed required at paragraph 2B(2) above, Seller shall deliver to the Buyer: a. Standard form Affidavit of Seller. b. Abstract of title, if available. C. A "bring- down" certificate, certifying that all of the warranties made by Sellers in this Purchase Agreement remain true as of the date of closing. d. Certificate that Seller is not a foreign national. C. If an environmental investigation completed on or before the Closing Date, by or on behalf of the Buyer discloses the existence of petroleum product or other pollutant, contaminant or other hazardous substance on the Subject Property, and both Buyer and Seller wish to proceed with the sale. either (i) a closure letter from the Minnesota Pollution Control Agency (MPCA) or other appropriate regulatory authority that remediation has been completed to the satisfaction of the MPCA or other authority; or (ii) Agreement for remediation/indemnification and security as the Buyer may require Seller shall not have any affirmative duty specified in this subsection 3(e) with respect to any environmental investigation completed after the Closing Date. or in the event of the discovery of the existence of petroleum product or other pollutant, contaminant or other hazardous substance after the Closing Date f. Well disclosure certification, if required, or, if there is no well on the Subject Property, the Warranty Deed given pursuant to paragraph 2B(2) above must include the following statement: "The Seller certifies that the Seller does not know of any wells on the described real property." cLL -25421 sv5 3 RS220 -162 g. Any other documents reasonably required by the Buyer's title insurance company or attorney to evidence that title to the Subject Property is marketable and that Seller has complied with the terms of this Purchase Agreement. h. Any documents reasonably required by Buyer to certify that there are no residential occupants of the Subject Property occupying the Subject Property under a claim of title or right, by lease or otherwise. Any residential occupancy continuing after the Closing Date must be in accordance with and subject to the terms of Exhibit Two i. An executed lease in the form of Exhibit Two which shall be executed by Buyer at Closing. 3. Contingencies. Buyer's obligation to buy is contingent upon the following: A. Buyer's determination of marketable title pursuant to paragraph 4 of this Agreement. B. Buyer's determination, in its sole discretion, that the results of the environmental investigation under this Agreement are satisfactory to Buyer. Buyer shall have until the Date of Closing to remove the foregoing contingencies. The contingencies are solely for the benefit of Buyer and may be waived by Buyer. If Buyer or its attorney gives written notice to Seller that the contingencies are duly satisfied or waived, the Buyer and Seller shall proceed to close the transaction as contemplated herein. If, however, one or more contingencies is not satisfied, or is not satisfied on time, and is not waived, this Purchase Agreement shall thereupon be void at the written option of Buyer, Seller shall return the Earnest Money to Buyer, and Buyer and Seller shall execute and deliver to each other the termination of this Purchase Agreement. 4. Title Examination /Curing Title Defects. The Buyer shall, at its expense and within a reasonable time after Seller's acceptance of this Agreement, obtain a commitment for title insurance ( "commitment ") for the Subject Property. Buyer shall have ten (10) business days after receipt of the commitment to examine the same and to deliver written objections to title, if any, to Sellers or Buyer's right to do so shall be deemed waived. Sellers shall have until the Closing Date (or such later date as the parties may agree upon) to make title marketable, at the Seller's cost. In the event that title to the Subject Property cannot be made marketable or is not made marketable by the Sellers by the Closing Date, then, this Agreement may be terminated at the option of either party. At Closing, Seller shall surrender to Buyer all abstracts of title to the Subject Property. CLL -25421 sv5 4 RS220 -162 5. Environmental Matters. A. The Seller warrants that the Property has not been used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos (other than asbestos used as pipe wrapping and tile adhesive in the school building) product during the period of time the Seller has owned the Property. The Seller further warrants that the Seller has no knowledge or information of any fact which would indicate the Subject Property was used for production, storage, deposit or disposal of any toxic or hazardous waste or substance, petroleum product or asbestos product -prior to the date the Seller purchased the Subject Property. Notwithstanding the above, the Seller's warranty regarding petroleum products does not preclude the presence of heating oil or other similar products used as a heating fuel for the Subject Property or above - ground gasoline or oil used for routine maintenance of the Subject Property but the Seller does warrant that if there was a fuel tank on the Subject Property used for the storage of heating oil or other similar product, the Seller has no knowledge of any leak in the tank or contamination caused thereby. B. Buyer and its agents shall have the right to enter upon the Subject Property after the date of this Purchase Agreement for the purpose of inspecting and surveying the Subject Property and conducting such environmental examination and tests as Buyer deems necessary. Buyer agrees to indemnify the Seller against any liens, claims, losses, or damage occasioned by Buyer's exercise of its right to enter and work on the Subject Property. Buyer agrees to provide Seller with a copy of any report as a result of such examination and tests If such environmental examination results in a finding that there are or may be pollutants or contaminants on the Subject Property, either Seller or Buyer may terminate this Agreement, at any time prior to the Closing Date 6. Real Estate Taxes and Special Assessments. The Seller shall pay all real estate taxes payable in 2004 prior to Closing. Seller shall pay all real estate taxes payable in previous years. There are no special assessments for public improvements levied or pending in the Subject Property. The entire unpaid balance of special assessments, and all installments of special assessments levied and pending, including special assessments payable after the year of closing. Seller agrees to pay all assessments related to service charges furnished to the Subject Property prior to the date of closing (e.g., delinquent water or sewer bills), including those charges levied, pending, or certified to payable 2004 taxes. Buyer shall pay all special assessments levied after Closing and real estate taxes payable in 2005 and thereafter (except as provided otherwise in Exhibit Two ). 7. Closing Date. Unless otherwise agreed by the parties, the date of closing will be on or before January 14, 2005 (the "Closing Date "). However, all tenants and residential occupancies must be vacated prior to the Closing Date. If all tenants and residential occupants have not vacated by January 14, 2005, the closing will be delayed CLL- 254218v5 5 RS220 -162 until such time that all tenants and residential occupants have vacated the Subject Property or assurance that is satisfactory to Buyer, in its absolute and sole discretion, that such continuing occupancy is pursuant only to Exhibit Two and subject to the terms thereof. No rent will be paid to the Seller as the tenants vacate the property and the Seller is responsible for returning all security deposits to the tenants as provided by law. Delivery of all papers and the closing shall be made at the offices of City, 2875 — 145 Street West, Rosemount, Minnesota 55068, or at such other location as is mutually agreed upon by the parties. All deliveries and notices to City shall be made to the above address and marked to the attention of City Administrator. 8. Possession /Removal of Property /Utilities /Escrow. (a) Possession. Buyer shall take and Seller shall surrender possession at the time of closing subject to the terms of Exhibit Two (b) Removal of Property. All personal property on the Subject Property shall be removed prior to closing except as otherwise provided in Exhibit Two (c) Utilities. Seller agrees to pay all charges for sewer, water, electric, gas, and cable television (collectively, "utilities ") provided to Subject Property prior to the Closing Date. (d) No encumbrances. Seller agrees not to place any liens or encumbrances on the Subject Property after the date of this Purchase Agreement. 9. Well Disclosure. Seller warrants that there is no well on the property. 10. Seller and Signatory Warranties. (a) Sewer and water. Seller warrants that the Subject Property is connected to city sewer and city water. (b) Mechanics' Liens. Seller warrants that, prior to the closing, Seller shall pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure upon or improvement to the Subject Property. (c) Notices. Seller warrants that it has not received any notice from any governmental authority as to violation of any law, ordinance or regulation in connection with the Subject Property. (d) Corporate Authority. Seller warrants that it is the owner of the Subject Property, that is has full authority to enter into this Purchase Agreement for the sale of the Subject Property, and that there are no other parties who hold any unrecorded interest in the Subject Property. CLL -25421 M 6 RS220 -162 (e) Authority, of Signatories. The signatories to this Purchase Agreement represent and warrant that they are representatives of the Seller and that they have the authority to enter into this Agreement on Seller's behalf. 11. Broker Commission. Each party represents to the other that it has not utilized the services of any real estate broker or agent in connection with this Purchase Agreement or the transaction contemplated by this Purchase Agreement. Each party agrees to indemnify, defend, and hold harmless the other party against and in respect of any such obligation and liability based in any way upon agreements, arrangements, or understandings made or claimed to have been made by the party with any third person. 12. Closing Costs /Recording Fees/Deed Tax. Buyer will pay: (a) the closing fees charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Agreement; (b) the premium for title insurance policy, if any, obtained by the City; (c) any transfer taxes and recording fees required to enable the Buyer to record its deed from Seller under this Agreement. Seller will pay all other fees normally paid by Sellers, including fees and charges related to the filing of any instrument required to make title marketable. Each party shall pay its own attorney fees. 13. Inspections. From the date of this Agreement to the Date of Closing, Buyer, its employees and agents, shall be entitled to enter upon the Subject Property to conduct such surveying, inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and testing of groundwater monitoring wells, as Buyer shall elect; provided, that Seller is given at least 24 hours' notice to Gary Mitchell, at (651) 423 -4402. Copies of any such reports obtained by Buyer shall be provided to Seller if the closing does not occur. 14. Risk of Loss. If there is any loss or damage to the Subject Property between the date hereof and the date of closing, for any reason including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on the Seller. If the Subject Property is destroyed or substantially damaged before the closing date, this Purchase Agreement shall become null and void, at Buyer's option. At the request of Buyer, Seller agrees to sign a cancellation of Purchase Agreement. 15. Relocation. Seller expressly reserves Seller's right to receive relocation benefits and reimbursements to which Seller may be entitled by law as a result of the transaction contemplated by this Purchase Agreement. 16. Salvage. For five years after the Closing Date, as the Subject Property is developed and used in the future, if the following items of personal property are not used or incorporated into the project by Buyer, Seller shall have the right to remove and salvage such items subject to such rules and restrictions as may be imposed by Buyer for the protection of the Buyer and the Subject Property: Parish Center /Rectory: - Furniture /Appliances - Phone systems (connected to the school system) CLL- 254218v5 7 RS220 -162 Prior to demolition (Opportunity for parishioners to purchase doors, built -in shelving, etc.) Church: - Bell from the steeple Exterior and interior stain glass windows (if not used in the future remodel) - Pews (possible sale to parishioners /given to church in need) 17. Notice. Any notice, demand, request or other communication which may or shall be given or served by the parties, shall be deemed to have been given or served on the date the same is personally served upon one of the following indicated recipients for notices or is deposited in the United States Mail, registered or certified, return receipt requested, postage prepaid and addressed as follows: SELLER: The Church of St. Joseph of Rosemount, Minnesota 13900 Biscayne Avenue West Rosemount, MN 55068 BUYER: City Administrator City of Rosemount 2875 145 St. W. Rosemount, MN 55068 AGENT: Kennedy & Graven, Chartered ATTN: Charles L. LeFevere 470 US Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 18. Entire Agreement. This Purchase Agreement, Exhibits, and other amendments signed by the parties, shall constitute the entire Agreement between Seller and City and supercedes any other written or oral agreements between the parties relating to the Subject Property. This Purchase Agreement can be modified only in a writing properly signed on behalf of Seller and City. 19. Survival. Notwithstanding any other provisions of law or court decision to the contrary, the warranties and representations of this Purchase Agreement, and the provisions of Sections 8.10. 11 and 16 of this Purchase Agreement shall survive closing. CLL- 254218v5 8 RS220 -162 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above. CITY OF ROSEMOUNT THE CHURCH OF ST. JOSEPH OF ROSEMOUNT, MINNESOTA By By: Its Mayor Its: :A Its Clerk Its: CLL- 254218v5 9 RS220 -162 LEASE AGREEMENT THIS LEASE made and entered into on this 21 st day of December, 2004, by and between the City of Rosemount, a Minnesota municipal corporation (hereinafter referred to as "Landlord ") and the Church of St. Joseph of Rosemount, Minnesota, a Minnesota religious corporation (hereinafter referred to as "Tenant "). WITNESSETH: ARTICLE I - GRANT AND TERM 1.1 DEMISED PREMISES. In consideration of the rents, covenants and agreements herein reserved and contained on the part of Tenant to be performed, Landlord does hereby lease to Tenant a portion of the parcel of land legally described on the attached Exhibit One which is hereby made a part hereof (the "Premises "), such portion being that part of the Premises depicted on Exhibit Two which is hereby made a part hereof, as the "School ", the "Storage Garage" and "Gathering Area ", together with certain rights to use certain other areas of the Premises by revocable permit or shared use as is more fully described herein (the "Demised Premises "). 1.2 TERM. The term of this Lease and Tenant's obligation to pay rent hereunder shall commence upon the date first mentioned above and the term of the lease shall expire on July 31, 2008. In addition, provided Tenant is not in default hereunder, Tenant shall have the option to extend the term of this Lease for three additional periods of one year on all the same terms and conditions contained herein, provided that Tenant shall have given Landlord written notice of the exercise of such option at least six (6) months prior to the expiration of the initial term and each renewal term. ARTICLE II - RENT 2.1 BASE RENT. (a) Base Rent for Initial Term Base Rent for the initial term to July 31, 2008, in the amount of Two Hundred Fifty -Nine Thousand Two Hundred Dollars ($259,200) has been prepaid as a discount to the purchase price of the Subject Property, in accordance with the Purchase Agreement for the Premises between the parties dated December 21, 2004. (b) Base Rent for Renewal Terms Annual Base Rent for each renewal term will be determined by adjusting the sum of Eighty -Six Thousand Four Hundred Dollars ($86,400) by a fraction, the numerator of which is the reference index for the Consumer Price Index, all items, all urban consumers, U.S. City Average, for the month of May preceding the renewal term, and the denominator of which is the corresponding reference index for November 2007. (For example, if the published U.S. Department of Labor, Bureau of Labor Statistics reported a CPI of 210.6 for November of 2007 and 214.2 for May, 2008, the Annual Base Rent from August 1, 2008 through July 31, 2009, would be 214.2 divided by 210.6 (214.2 _ 210.6 = 1.017) times $86,400 (1.017 x $86,400) or $87,868.80. If the CPI for May 2009 were 216.3, the Annual Base Rent from August 1, 2009 through July 31, 2010 would be 216.3 divided by 210.6 times $86,400 CLL- 254297v5 1 RS220 -162 or $88,738.46.) Annual rent for each renewal term shall be paid in equal monthly installments paid in advance on the first of each month. 2.2 ADDITIONAL RENT. Any other charges to be paid by the Tenant pursuant to the provisions of any other sections of this Lease shall be designated as "Additional Rent ". Additional Rent will be paid within thirty (30) days of invoice therefor from the City, which will submit invoices no more often than monthly. Additional Rent shall include any real estate or personal property taxes levied and due by reason of Tenant's use and occupancy of the Demised Premises. Failure of Tenant to pay Additional Rent shall give Landlord the right to declare an event of default in accordance with Article XIV. 2.3 RENT DELINQUENCIES. Should the Tenant, for any reason whatsoever, fail to pay, when the same is due and payable, any Base Rent or Additional Rent and should said rent not be paid within ten (10) days of due date, Tenant shall pay a late penalty equal to six percent (6 %) of total rents due. In addition, all unpaid rents shall bear interest from the date due to the date of payment at the rate of two percent (2 %) per annum in excess of the prime rate as quoted by U.S. Bank Minneapolis, N.A. to its best customers, or the highest rate permitted by law, whichever is less. ARTICLE III - TAXES 3.1. TAXES. Tenant shall pay before delinquent all real estate taxes with respect to the Demised Premises due and payable during the term of this Lease by reason of the use and occupancy thereof by Tenant. Such taxes shall be prorated for the first and last years of the term of this Lease. Special assessments shall be paid by Landlord. ARTICLE IV - USE OF PREMISES 4.1 TENANTS USE. During the term of this Lease, the Demised Premises shall be used solely for the purpose of school, church services, church meetings and related church activities and for no other purpose without prior written consent of Landlord, which shall not be unreasonably withheld. 4.2 COMPLIANCE WITH LAWS AND REGULATIONS. (a) Tenant covenants and agrees that at all times during the term hereof it will maintain and conduct its business insofar as the same relates to the occupancy of the Demised Premises in such a manner and under such regulations as to be in strict compliance with any and all applicable governmental and/or quasi - governmental laws, rules, regulations and orders, as well as any and all applicable provisions of insurance underwriters of the Demised Premises provided prior written notice of such provisions is given to Tenant. Tenant shall indemnify Landlord, Landlord's insurer, and the property of Landlord against any and all claims or losses or actions or causes of action resulting from Tenant's failure to comply with said laws, rules, regulations and orders and underwriting provisions. (b) Tenant hereby agrees to maintain the premises and operate its business in accordance with applicable provisions of the ADA (the Americans With Disabilities Act), CLL- 254297v5 2 RS220 -162 codified at 42 U.S. SS 12101 et seq .) Failure to do so shall operate as an event of default and a breach of the Lease To the extent that any non - conforming facilities are legally grandfathered, they shall be allowed to continue. This Lease shall not independently require improvements or alterations to comply with the ADA unless such improvements or alterations are required by law, and ordered to be completed by the proper government authori 4.3 AFFIRMATIVE COVENANTS OF TENANT. Without in any way limiting or restricting other covenants of Tenant elsewhere in this Lease contained, the Tenant affirmatively covenants and agrees as follows: (a) Tenant shall neither permit or suffer and conduct, odor or other nuisance in, on or about said Demised Premises to annoy or disturb any persons occupying adjacent premises or common areas or suffer and conduct noise on or about said Demised Premises that is unreasonable for the uses permitted herein and causes such annoyance or disturbance; (b) Tenant shall keep the Demised Premises, including all service and /or loading areas for the Demised Premises, free from all litter, dirt and obstructions and from snow and ice not removed by Landlord under Section 5.2; (c) Tenant shall keep said Demised Premises clean and in the sanitary condition required by ordinance and regulations of any governmental or quasi - governmental unit having jurisdiction; (d) Tenant shall neither permit nor suffer the Demised Premises, or the walls, ceilings or floors thereof to be endangered by overloading; (e) Tenant shall not use or permit the Demised Premises to be used for any purpose or purposes other than that set forth in Section 4.1 hereof; ARTICLE V - MAINTENANCE AND REPAIRS 5.1 TENANT'S MAINTENANCE AND REPAIRS. Tenant agrees that, from and after the date that possession of the Demised Premises is delivered to the Tenant, and until the end of the term hereof it will be responsible for all cleaning, repairs, maintenance and replacements to the Demised Premises including, but not limited to: the interior and exterior portions of all doors, locks, frames, hardware incorporated into the Demised Premises; the mechanical plumbing (provided that any plumbing repair having a cost in excess of $2,000 will be paid by Landlord); electrical equipment and systems (provided any electrical repair having a cost in excess of $1,000 will be paid by Landlord); the HVAC system (provided that any repairs or replacement exceeding $2,500 will be the responsibility of the Landlord); partitions, and all other fixtures, appliances and facilities furnished by Landlord or Tenant. Tenant shall not, however, be responsible for repair of any damage caused by any negligence of Landlord, its employees or agents. Tenant shall be required to pay for any structural repairs or alterations that may be required by governmental rules, orders or regulations as a result of Tenant's use and or occupancy of the Demised Premises. During reasonable business hours, Landlord may inspect the Demised Premises to insure Tenant's compliance with the above and foregoing requirements. CLL- 254297v5 3 RS220 -162 Tenant accepts the Demised Premises as being in good and sanitary order, condition and repair and, with full knowledge of the condition of the Demised Premises, accepts it in its as -is condition. Except as specifically provided herein, Landlord shall be responsible for all structural repairs or replacements. Windows and plate glass damaged or destroyed by Tenant, its officers, agents, employees, contractors and invitees will be repaired by Tenant at Tenant's expense. Windows and plate glass damaged or destroyed by Landlord, its officers, agents, employees, contractors and invitees will be replaced by Landlord at Landlord's expense. In all other cases, damaged or destroyed windows and plate glass will be repaired by Landlord and the costs of such repair, less any casualty insurance proceeds the claim for which Landlord will diligently un rsue, received by Landlord, will be reimbursed by Tenant to Landlord but not to exceed 2,000.00 in any year of the Lease 5.2 LANDLORD'S MAINTENANCE AND REPAIRS. Landlord will plow snow from the street sidewalks,.-.p area and driveways to the same standard applied to other municipal parking lots. Landlord will mow and care for grass areas to the same standard applicable to grounds around City hall. Landlord will be responsible for repairs, replacement and maintenance of roofs, foundations and exterior building walls. 5.3 SURRENDER OF PREMISES. At the expiration or termination of this Lease, Tenant shall surrender the Demised Premises in the same condition as existed on the commencement date of this Lease, except for Landlord approved modifications, ordinary wear and tear excepted. All fixtures that have become attached shall be part of the Demised Premises, except trade fixtures. Within ninety (90) days prior to the expiration of the term, Landlord shall during reasonable business hours, have the right to show the Demised Premises to third parties for the purposes of again leasing same. ARTICLE VI — LANDLORD IMPROVEMENTS 6.1 INTERIOR WALL. By July 31, 2005, Landlord will construct a wall to separate the Gathering Area from the Church, as depicted on Exhibit Two 6.2 FENCE. By August 31, 2007, Landlord will construct a fence 10 feet in height in the approximate location labeled as "Future Fence" on Exhibit Two - 6.3 INTERIOR IMPROVEMENTS. Landlord will reimburse Tenant for approved capital improvements to the Gathering Area to enable relocation of classes to such area, in an amount not to exceed ($ ) . ARTICLE VII — USE OF DEMISED PREMISES 7.1 RECTORY USE. Tenant is given a revocable permit to use the building labeled as the "Rectory" on Exhibit Two in its as -is condition, subject to termination by Landlord at any time upon 120 days' written notice to Tenant. Until vacated by Tenant, Tenant shall be responsible for all maintenance, repair and replacement of the Rectory and its HVAC, mechanical, electrical and structural systems at its own expense, and will pay for all utility expenses on a pro rata basis. Tenant may vacate such building at any time upon written notice to Landlord. CLL- 254297v5 4 RS220 -162 7.2 CHURCH USE. Tenant is given a revocable permit to use the building labeled as the "Church" on Exhibit Two in its as -is condition, subject to termination by Landlord at any time upon 30 days' written notice to Tenant. Until vacated by Tenant, Tenant will provide cleaning services following each use and will pay for all utility expenses on a pro rata basis. Tenant may vacate such building at any time upon written notice to Landlord. 7.3 PARISH CENTER USE. Tenant is given a revocable permit to use the building labeled as the "Parish Center" on Exhibit Two in its as -is condition, subject to termination by Landlord at any time upon 120 days' written notice to Tenant. Until vacated by Tenant, Tenant shall be responsible for all maintenance, repair and replacement of the Parish Center and its HVAC, mechanical, electrical and structural systems at its own expense, and will pay for all utility expenses on a pro rata basis. Tenant may vacate such building at any time upon written notice to Landlord. 7.4 SIGNAGE. Tenant may leave in place and maintain signage existing on the date of this Lease and may add signage with prior written approval by Landlord. 7.5 LANDLORD IMPROVEMENTS PROJECT. It is currently planned that Landlord will commence construction of a public library on a part of the Premises on or after June 1, 2007. After the date of commencement of construction ( "Library Construction Commencement Date ") Tenant will have no use or occupancy of the area labeled "Future Library Site" on Exhibit Two attached hereto and made a part hereof 7.6 USE OF PARKING LOTS AND GROUNDS. (a) Following the Library Construction Commencement Date, Tenant shall have exclusive use of all parking and yard areas outside of the Future Library Site. (b) Prior to the Library Construction Commencement Date, Tenant will have exclusive use of the parking areas and grounds labeled "Daytime Parking and Playground Area" on Exhibit Three attached hereto and made a part hereof, for parking and playground purposes until 4:00 p.m. each weekday, and shared non - exclusive use of such area with Landlord at all other times. 7.7 EAST PARKING LOT. Tenant shall have non - exclusive right to use the city parking lot across Highway 3 to the east of the Premises. ARTICLE VIII - UTILITIES 8.1 CHARGES. Tenant shall pay for all utility services including gas, electricity, domestic water and sewer for the Demised Premises and all other utility services furnished the Tenant for use in the Demised Premises, provided such utilities are separately metered. For utilities that are not separately metered and for use by Tenant of parts of the Premises authorized by Sections 7.1, 7.2 and 7.3, Landlord will pay for such utilities and bill Tenant for its share of such costs, pro rated by use of the space, which costs will be included in Additional Rent. CLL- 254297v5 5 RS220 -162 8.2 SUPPLY OF UTILITY SERVICES. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electricity, water, sewer, or gas furnished by reason of any change, requirement, act, neglect or omission of the public utility serving the Demised Premises. 8.3 INTERRUPTION OR DISCONTINUANCE OF LANDLORD'S SERVICE. Tenant agrees that Landlord shall not be liable for failure to supply any service, including, but not limited to, heating, ventilating and air conditioning when Landlord uses reasonable diligence to supply the same, it being understood that Landlord reserves the right to temporarily discontinue such services, or any of them, at such times as may be necessary by reason of accident, unavailability of employees, failure of supply, repairs, alterations or improvements, or by reason of fire, strikes, flood, lockouts, riots, acts of God or any other happening beyond the reasonable control of Landlord. When Landlord causes services to be rendered by independent third parties Landlord shall have no liability for the performance thereof or liability therefor. 8.4 GARBAGE AND REFUSE COLLECTION. All garbage and refuse shall be kept in containers and shall be placed outside of the Demised Premises prepared for processing and/or collection. Tenant shall arrange for, and pay for the collection and disposal of garbage and refuse generated during Tenant's use of the Demised Premises. ARTICLE IX - ALTERATIONS 9.1 ALTERATIONS. Tenant may, from time to time during the term, make, at its own cost and expense, any alterations or changes in the interior of the School and Gathering Area in good and workmanlike manner in compliance with all applicable requirements of law, provided Tenant follows the notice procedure and obtains Landlord's consent where required, all in accordance with this Article. Landlord agrees to cooperate with Tenant for the purpose of securing necessary permits for any changes, alterations, or additions permitted under this section without expense to the Landlord. All costs of any such work shall be paid promptly by Tenant so as to prevent the assertion of any liens for labor or materials. Tenant agrees to advise Landlord in writing of the date upon which such alterations will commence in order to permit Landlord to post notice of non - responsibility. 9.2 NOTICE TO LANDLORD. Prior to the initiation of any alterations, Tenant shall give Landlord written notice thereof and specify the work to be performed in reasonable detail and include the names of the contractors and materialmen to be utilized. After receipt of said notice, Landlord shall have a reasonable period of time during which it shall make a determination, in its sole discretion, as to whether or not the proposed work would create a structural or design change. Tenant shall provide Landlord upon request with any further information reasonably necessary for such determination by Landlord and Tenant shall not commence work or accept materials prior to receiving written notice of Landlord's determination. If Landlord determines that the proposed work would create a structural or design change, then the same must be approved in writing by Landlord prior to the commencement of any work or the delivery of any materials therefor. ARTICLE X - PUBLIC LIABILITY CLL- 254297v5 6 RS220 -162 10.1 TENANT'S LIABILITY INSURANCE. Tenant shall during the entire term hereof keep in full force and effect ' and plate glass it th e D em i se d - Premises -tea a policy of public liability and property damage insurance with respect to the Demised Premises, and the business operated by Tenant and any sublessees with respect to the Demised Premises, in which the limits of public liability shall not be less than $1,000,000 per person and $1,000,000 per accident and in which the property damage liability shall not be less than $500,000. The policy shall name Landlord as additional insured and shall contain clauses that losses shall be payable notwithstanding any act or negligence of the insured that might otherwise result in forfeiture of said insurance, and that the insurer will not cancel or change the insurance without first giving the Landlord thirty (30) days prior written notice. The insurance shall be with an insurance company approved to do business in Minnesota or self insurance program and reasonably acceptable to Landlord. Tenant shall deliver a copy of the policy or a certificate of insurance to Landlord prior to taking possession of the Demised Premises, and a renewal certificate at least thirty (30) days prior to the expiration of any policy term. Tenant may self - insure with respect to liability insurance required under this Agreement, in which event Tenant shall be responsible for all protection of Landlord, its officers, agents and employers that would have been afforded by the liability coverage required under this Agreement. 10.2 INDEMNIFICATION. Except for claims arising out of the willful or negligent act of the other party or its representatives, each party shall indemnity and defend the other party against all claims, expenses and liabilities incurred, including reasonable attorneys' fees, in connection with loss of life, personal injury, ' and/or damage to property arising out of any occurrence in, upon or at the Demised Premises, or the occupancy or use thereof by said party, or occasioned wholly or in part by any act or omission of said party, its agents, employees, contractors, sublessees, concessionaires, guests or licensees. Nothing herein shall be deemed a waiver of the limitations on liability set forth in Minnesota Statutes, Chapter 466. ARTICLE XI - DESTRUCTION AND RESTORATION 11.1 RESTORATION OPTION IF MORE THAN 30% DAMAGED. If the Demised Premises shall be damaged to the extent of thirty percent (30 %) or more of the cost of replacement thereof or damaged by any uninsured casualty, Landlord shall have the option to rebuild or to terminate this Lease by exercise of notice to Tenant given not more than sixty (60) days from the date of such damage. 11.2 RESTORATION OPTION IF LESS THAN 30 % DAMAGED. (a) If the demised Premises shall be damaged to the extent of less than thirty percent (30 %) of the cost of replacement by fire or other casualty covered by Landlord's policy of fire coverage insurance during the term of this Lease the minimum rental herein shall abate as of the date of the occurrence in accordance with the provisions of Section 11.2(b), and the Landlord shall restore the Demised Premises. If such an event occurs during the last one (1) year of the initial term of this Lease or thereafter, then Landlord shall have the option to rebuild or terminate this Lease to be exercised by notice to tenant given not more than sixty (60) days from the date of such damage. CLL- 254297v5 7 RS220 -162 (b) In the event of such partial destruction or damage whereby Tenant shall be deprived of occupancy and use for only a portion of the Demised Premises, then Base Rent shall be equitably apportioned according to the area of the Demised Premises that is unusable by Tenant from the date of occurrence, until such time as the Demised Premises are repaired or restored as provided herein. 11.3 TOTAL DESTRUCTION. In the event of total destruction of the Demised Premises, Tenant's rent shall completely abate from the date of such destruction. If Landlord elects to rebuild as aforesaid, Tenant's rent shall completely abate from the date of such destruction until forty five (45) days after the date when Landlord notifies tenant that the shell of the demised Premises is ready for commencement of Tenant's work, or upon the day when Tenant opens for business, whichever event shall first occur. In the event of total destruction, Tenant may elect, by giving written notice to Landlord within sixty (60) days of such destruction, to terminate this Lease. 11.4 TENANTS INSURANCE COVERAGE. Tenant shall carry insurance against fire and such other risks as are from time to time included in standard extended coverage insurance for the full insurable value of Tenant's merchandise, trade fixtures, furnishings, equipment and all other items of personal property of Tenant located on or within the Demised Premises. Any insurance policies required to be carried pursuant to this paragraph shall name Landlord as an additional insured, and Tenant shall furnish Landlord evidence of such insurance coverage. Such insurance policies may not be modified or terminated without thirty (30) days advance notice to Landlord. Landlord shall maintain at its own expense such other property - casualty insurance as it deems reasonable and necessary to protect its interests in the Premises. 11.5 [INTENTIONALLY LEFT BLANK.] 11.6 [INTENTIONALLY LEFT BLANK.] 11.7 ADDITIONAL HAZARDS. Tenant covenants and agrees that it will not door permit anything to be done in or upon the Demised Premises or bring in anything or keep anything therein that shall cause the cancellation of Tenant's insurance policies, or increase the rate of insurance, on the Demised Premises, above the standard rate on said premises and buildings for the use to which the Demised Premises is put as of the date of this Lease. Tenant further agrees that in the event it shall do anything to so increase the insurance rate, Tenant shall promptly pay to Landlord on demand any such increase resulting therefrom, which shall be due and payable as Additional Rent hereunder. At Tenant's request, Landlord shall make available for Tenant's inspection during regular business hours, all documents pertaining to Landlord's calculation of Tenant's Additional Rent required under this section. 11.8 NOTICE. Tenant shall give immediate written notice to Landlord of any damage caused to the Demised Premises by fire or other casualty; or of any cancellation or reduction of Tenant's insurance coverage required pursuant to this Lease. 11.9 ABATEMENT. Tenant agrees that during any period of reconstruction or repair of the Demised Premises, it will continue the operation of its business within the Demised Premises to the extent practicable. If Landlord is required to, or elects to, repair and rebuild, then during CLL- 254297v5 8 RSM -162 the period from the occurrence of the casualty until Landlords repairs are completed, the Base Rent set forth herein shall be reduced to such extent as may be fair and reasonable under the circumstances; however, there shall be no abatement of the other charges provided for herein. ARTICLE XII - EMINENT DOMAIN 12.1 PARTIAL OR TOTAL CONDEMNATION. If the whole or any part of the Demised Premises or the structure encompassing same shall be taken by any public authority under the power of eminent domain, the Tenant shall have no claim to, nor shall Tenant be entitled to, any portion of any award, for damages or otherwise. In the event only a portion of the Demised Premises are taken, the Lease shall terminate as to the part taken, and the rent and other charges herein reserved shall be adjusted for the remainder of the Demised Premises so that the Tenant shall be required to pay for the balance of the term that portion of the rent reserved which the value of the part of the Demised Premises remaining after condemnation bears to the value of the Demised Premises immediately prior to the date of condemnation. The rental and other charges shall be apportioned as aforesaid by agreement between the parties or by arbitration or legal proceedings, but pending such determination the Tenant shall pay at the time and in the manner above provided the rental herein reserved and all other charges herein required to be paid by the Tenant, without deduction, and upon such determination, the Tenant shall be entitled to credit for any excess rentals paid. If, however, by reason of the condemnation there is not sufficient space left in the Demised Premises for the Tenant to reasonably conduct business; then, in such event, the Lease shall terminate. Although all damages in the event of condemnation belong to Landlord whether awarded as compensation for diminution in value of the leasehold or to the fee of the leased premises, nothing herein shall be construed to prevent Tenant to claim and recover from the condemning authority such compensation as may be separately awarded or recoverable by Tenant in Tenant's own right for its leasehold interest. ARTICLE XIII - ASSIGNMENT AND SUBLETTING 13.1 CONSENT REQUIRED. Tenant may not assign this Lease and/or sublet the Demised Premises, or any part thereof to any party other than a subsidiary or affiliate of Tenant without in each instance obtaining the prior written consent of the Landlord, which consent shall not be unreasonably withheld. The consent by Landlord to any assignment or subletting may not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. This prohibition against assigning or subletting shall be construed to include a prohibition against any assignment or subletting by operation of law. If this Lease is assigned, or if the Demised Premises or any part thereof is underlet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, under - tenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, under - letting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, under - tenant or occupancy as Tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. Notwithstanding any assignment or sublease, Tenant shall remain fully liable on this Lease and shall not be released from performing any of the terms, covenants, and conditions of this Lease. Tenant shall pay to Landlord any reasonable costs and expenses (including legal fees) incurred by Landlord in connection with such assignment or subletting. CLL- 254297v5 9 RS220 -162 ARTICLE XIV — TENANT'S DEFAULT 14.1 EVENTS OF DEFAULT. The following events shall be deemed to be events of default by Tenant under this Lease: (a) Tenant shall fail to pay when due any installment of rent, or other charges provided herein, or any portion thereof and the same shall remain unpaid for a period of ten (10) days after the same has become due; or (b) [This paragraph intentionally left blank]; or (c) Tenant shall do or permit to be done anything that creates a lien upon the Demised Premises; and does not, within ten (10) days after written notice from Landlord either (i) cause said lien as to Landlord's interest to be released, or (ii) diligently pursue a challenge to such lien having first given to Landlord such security as the Landlord deems adequate to protect its interests; or (d) Any representation or warranty made in writing to Landlord in this Lease or in connection with the making of this Lease, by Tenant, shall prove at any time to have been incorrect in any material respect when made or becomes incorrect; or (e) Tenant or any guarantor shall make an assignment for the benefit of creditors, for a petition in bankruptcy, be adjudicated insolvent or bankrupt or admit in writing the inability to pay debts as they mature, petition or apply to any tribunal for the appointment of a receiver, trustee or similar officer for Tenant or any guarantor or a substantial part of the assets of Tenant or any guarantor, or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or if there shall have been filed any such petition or application, or any such proceeding shall have been commenced against Tenant that remains undismissed for a period of thirty (30) days or more; or Tenant or any guarantor by any act or omission shall indicate their consent to, approval of or acquiescence in any such petition, application or proceeding, or the appointment of a receiver of or any trustee or similar officer for Tenant or any guarantor or any substantial part of any of the properties of Tenant or any guarantor, or shall suffer any such receivership or trusteeship to continue undischarged for a period of thirty (30) days or more; or any judgment, writ, warrant or attachment or execution or similar process shall be issued or levied against a substantial part of the property of Tenant or any guarantor and such judgment, writ, or similar process shall not be released, vacated or fully bonded within thirty (30) days after its issue or levy; or (f) Tenant shall have failed to comply with any other provisions of this Lease and shall not cure any failure within thirty (30) days, or such longer period of time as may be reasonably required to cure such default, after Landlord, by written- notice, has informed Tenant of such noncompliance. 14.2 LANDLORD'S REMEDIES. Upon the occurrence of any of the above - lettered events of default, Landlord may elect to either (1) terminate this Lease; or (2) terminate Tenant's CLL- 254297v5 10 RS220 -162 right to possession only without terminating this Lease, hereinafter referred to as re- entry; (3) pursue any other remedy available at law or in equity. Landlord shall have all remedies provided in the Lease and under governing law. All of the remedies given to Landlord in this Lease or by law shall be cumulative, and the exercise of one right or remedy by landlord shall not impair its right to exercise any other right or remedy. In the event of election under (2) above to terminate Tenant's right to possession only, Landlord may, at Landlord's option, proceed to demand possession by notice and proceeding under the Unlawful Detainer Law of Minnesota and take and hold possession thereof without such proceeding or entry into possession terminating this Lease or releasing Tenant in whole or in part from Tenant's obligation to pay the rent hereunder for the full term. Upon re -entry Landlord may remove all personal property from the Demised Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage that may be occasioned thereby. Upon and after entry into possession without termination of the Lease, Landlord shall use reasonable efforts to relet the premises, or any part thereof for the account of Tenant, to any other person, firm or corporation, for such rent and other charges for such time and upon such terms as Landlord, in Landlord's sole subjective discretion shall determine, but Landlord shall not be required to accept any potential tenant offered by Tenant or to observe any instruction given by Tenant about such reletting. Landlord may make repairs or redecorate the premises to the extent deemed by the Landlord necessary or commercially reasonable. Notwithstanding any action of possession or re -entry into the Leased Premises by the Landlord as permitted in this Article, or termination of this Lease as permitted under Article XIV, it is stipulated and agreed that tenant shall remain liable to Landlord for damages for breach of this Lease and of Tenant's covenants hereunder in an amount equal to the total of the following: (a) All unpaid fixed Base Rent and Additional Rent, late charges, Additional Rent payable for taxes and otherwise, and any and all other charges payable by Tenant hereunder or under other agreements with the Landlord due for the current lease term, together with additional late charges from due date until paid; PLUS (b) All costs and expenses incurred by Landlord in connection with re -entry and repossession of the Leased Premises, including attorneys' fees. 14.3 COSTS, EXPENSES AND ATTORNEYS FEES. If one party is required to seek legal counsel for collection or to commence litigation or arbitration in order to enforce the covenants and agreements in this Lease, the party prevailing in such collection, litigation or arbitration shall have the right to reimbursement from the other party of all reasonable costs, expenses and attorney's fees. ARTICLE XV— LANDLORD DEFAULT 15.1 DEFAULT NOTICE TO LANDLORD. Should Landlord default in the performance of any of the covenants on the part of the Landlord to be kept or performed and such default shall continue for thirty (30) days after written notice to Landlord from Tenant specifying such default, or should any warranty or representation made by Landlord be untrue and remain CLL- 254297v5 1 1 RS220 -162 untrue after thirty (30) days after written notice from Tenant specifying such untruth, then and only in such event, shall termination of this Lease be effected or action taken or remedy pursued. If the default or untruth is of such character so as to require more than thirty (30) days to remedy, the Landlord shall have a reasonable period in which to remedy the same, provided Landlord is proceeding diligently. ARTICLE XVI - MISCELLANEOUS PROVISIONS 16.1 HOLDING OVER. In the event that Tenant shall continue to occupy the demised Premises after the expiration of the term of this Lease or written extension of the term hereof without entering a new Lease or written extension of the term hereof said tenancy shall be construed to be a "tenancy from month to month" upon all of the other terms and conditions herein contained, except where same are not applicable, and except that the rental during such holdover period shall be the then current Base Rent plus fifty percent (50 %) thereof and all Additional Rent shall continue to be paid. 16.2 NO PARTNERSHIP. It is expressly understood that the Landlord and Tenant are not partners or co- venturers, and that the Landlord has no right, title or interest in and to the business of the Tenant, and that the Tenant has no right to represent or bind the Landlord in any respect whatsoever, and that nothing herein contained shall be deemed, held or construed as making the Landlord a partner or associate of the Tenant, or as rendering the Landlord liable for any debts, liabilities or obligations incurred by the Tenant; it being expressly understood that the relationship between the parties hereto is, and shall at all times remain, that of Landlord and Tenant. 16.3 WAIVER. Failure on the part of the Landlord to complain of any action or nonaction on the part of Tenant, no matter how long the same may continue, and no matter what other action or non - action by Tenant that Landlord has already complained of shall never be deemed to be a waiver by Landlord of any of his rights hereunder. Further, it is covenanted and agreed that no waiver at any time of any of the provisions hereof by Landlord, shall be construed as a waiver of any of the other provisions hereof and that a waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent or approval of the Landlord to or of any action by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant. No payment by Tenant, or acceptance by Landlord, of a lesser amount than shall be due from Tenant to Landlord, even after demand by Landlord for rent pursuant to Tenant's rent default shall be treated otherwise than a payment on account. The acceptance by Landlord of a check for a lesser amount with an endorsement or statement thereon, or upon any letter accompanying such check, that said lesser amount is payment in full shall be given no effect, and Landlord may accept such check without prejudice to any further rights or remedies which Landlord may have against Tenant. Further, failure of the Landlord to bill timely for taxes or CLL- 254297v5 12 RS220 -162 other additional rent as heretofore required shall not be deemed a waiver of Tenant's liability to pay same. 16.4 COVENANT OF QUIET ENJOYMENT. Tenant, subject to the terms and provisions of this Lease, on payment of the rent and observing, keeping and performing all of the terms and provisions of this Lease on its part to be observed, kept and performed, shall lawfully, peaceably and quietly have, hold occupy and enjoy the Demised Premises during the term hereof without hindrance or objection by any persons lawfully claiming under Landlord. 16.5 ENTIRE AGREEMENT. This Lease is executed in identical counterparts, each of which, when bearing original initials of the parties on each page and at each change in the text hereof as well as original signatures at the end of each document, shall constitute an original for all purposes. All previous agreements, whether oral or written, are superseded by and merged with this Lease. Subsequent change shall not be binding unless reduced to writing and signed by the parties hereto. 16.6 INVALIDATION OF PARTICULAR PROVISIONS. If any clause, term or provision of this Lease, or the application thereof to any person or circumstance shall to any extent, be invalid or unenforceable, the remainder of this lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. It is the intention of the parties hereto that in lieu of each clause, term or provision of this Lease that is illegal invalid or unenforceable, there be added as part of this Lease a clause, term or provision similar to such illegal invalid or unenforceable clause, term or provision as may be possible and would be legal valid and enforceable. 16.7 PROVISIONS BINDING, ETC. Except as herein otherwise expressly provided, the terms hereof shall be binding upon and shall inure to the benefit of the heirs, successors, assigns and legally appointed representative, respectively, of the Landlord and the Tenant. Each term and each provision of this Lease to be performed by Tenant shall be construed to be both a covenant and a condition. 16.8 GOVERNING LAW. The laws of the State of Minnesota shall govern the interpretation, validity, performance and enforcement of this Lease. 16.9 NOTICES. Any notice which is required under this Lease shall be deemed "given" upon hand delivery or three (3) days after prepaid posting in the U. S. Mail whichever shall first occur. Notice shall be addressed to: Landlord at: City Administrator City of Rosemount 2875 145" St. W. Rosemount, MN 55068 Tenant at: The Church of St. Joseph of Rosemount, Minnesota CLL- 254297v5 13 RS220 -162 13900 Biscayne Avenue West Rosemount, MN 55068 or to any other address as shall be designated by written notice. Where in this Lease a certain number of days from date of notice to a given action is specified, unless the specific provision otherwise states, the days shall be counted as follows: The first calendar day shall be excluded and the last day shall be included, unless the last day is a Saturday, Sunday, or legal holiday, in which event the period shall be extended to include the next day which is not a Saturday, Sunday or legal holiday. 16.10 DATE OF LEASE. All references to the "date of this Lease" or "date hereof' shall be deemed to be that date stated in the first paragraph of this Lease. 16.11 HEADINGS. The heading, section numbers and article numbers appearing in this Lease are not intended in any manner to define, limit or describe the scope of any such section or article and are solely inserted for ready reference purposes. 16.12 PRONOUNS. As utilized in this Lease, the "singular" pronouns shall include the "plural ", and the "masculine" shall include the "feminine" and the "neuter ", and vice versa, unless a contrary intent specifically appears. 16.13 TERMINATION FOR CONVENIENCE BY TENANT. Tenant may terminate this Lease for convenience at any time upon six months' prior written notice to Landlord. Additional ReRt shall eentiatte to be paid to the effeetive date of tefminatie Convenience includes, but is not limited to, a determination by Tenant not to construct improvements or alterations required by law to comply with the ADA, or other health and safety laws. Tenant shall continue to pay Base rent for six months after written notice to Landlord (the "date of termination"), even if Tenant earlier vacates the Demised Premises. Tenant shall continue to pay Additional Rent to the date the Demised Premises is completely vacated by Tenant Base Rent for the initial term will be refunded to Tenant by Landlord for the number of unused days remaining in the initial term after the effective date of termination, at the rate of $236.71 per day, but not i ffiny event ° °°° ° „^ (except for termination for which notice is given within six months of the commencement date of this lease based on a determination by Tenant not to construct improvements or alterations to comply with the ADA or other health and safety lawsl. such refund shall not exceed the sum of Eighty -Six Thousand Four Hundred Dollars ($86,400) In the event of a termination for which notice is given within six months of the commencement date of this lease based on a determination by Tenant not to construct improvements or alterations to comply with the ADA or other health and safety law, such refund shall not exceed the sum of One Hundred Twenty -Nine Thousand Six Hundred Dollars ($129,600). Landlord will refund prepaid rent within thirty days of the date of termination. 16.14 LANDLORD CONSENT. Whenever Landlord consent is specifically required under this Agreement, such consent will not be unreasonably withheld or delayed. CLL- 254297v5 14 RS220 -162 16.15 RENT ABATEMENT. Tenant's rent will be abated if the part of the Demised Premises depicted on Exhibit Two as the "School" becomes uninhabitable or unusable due to damage or destruction or due to default by Landlord continuing more than thirty (30) days. The amount of abatement will be the Base Rent pro rated by the number of days in the Base Rent payment period during which the School becomes uninhabitable. For the initial term the amount of the abatement will be $236.71 per day during which the School is uninhabitable. Rent abatements of prepaid rent will be credited to later payments of Base Rent and Additional Rent payable by Tenant. Any abatement due to Tenant upon termination of the Lease will be reimbursed by Landlord within thirty (30) days of termination. CLL- 254297v5 15 RS220 -162 IN WITNESS WHEREOF, the parties hereto have affixed their signatures the day and year first above written. LANDLORD: CITY OF ROSEMOUNT BY: ITS MAYOR AND BY: ITS CLERK TENANT: THE CHURCH OF ST. JOSEPH OF ROSEMOUNT, MINNESOTA mm ITS: CLL- 254297v5 16 RS220 -162