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HomeMy WebLinkAboutContract 1543DORSEY & WHITNEY LLP WASHINGTON, D,C. PILLSBURY CENTER. SOUTH 220 SOUTH SIXTH STREET MINNEAPOLIS, MINNESOTA 55402-1498 TELEPHONE: (612) 340-2600 FAX: (612) 340-2868 DAVID L. McCUSKEY (612) 340-2834 FAX (612) 340-2643 mccuskey.david @ dorseylaw.com October 2, 2000 BILLINGS Gi~EAT FALLS MISSOULA BP. USSELS FAIkGO HONG KONG IKOCHESTEI~. SALT LAKE CiTY VANCOUVEr. VIA MESSENGER Mr. James D. Hoeft Barna, Guzy & Steffen, Ltd. 400 Northtown Financial Center 200 NW Coon Rapids Blvd. Minneapolis, MN 55433-5894 Re: Lease between City of Columbia Heights and Families Moving Forward Date: July 11,'2000 Your File No. 46000-097 Dear Jim: Enclosed is the original copy of your September 25, 2000 letter to me, as executed by Families Moving Forward. Please have a copy executed by the City and return it to me for my file. Thanks for your assistance in this matter. DLM:ml Enclosure cc: Ms. Leslie Frost Mr. Phillip M. Engel Very truly yours, avl . ¢us BERNARD E. STEFFEN RICHARD A. MERRILL DARRELL A. JENSEN JEFFREY S. JOHNSON RUSSELL H. CROWDER JON P. ER1CKSON LAWRENCE R. JOHNSON DAVID A. COSSI THOMAS E MALONE MICHAEL E HURLEY HERMAN L. TALLE CHARLES M. SEYKORA DANIEL D. GANTER, JR. BEVERLY K. DODGE BGS Barna, Guzy & Steffen, Ltd. ATTORNEYS AT LAW 400 Northtown Financial Plaza 200 Coon Rapids Boulevard Minneapolis, MN 55433-5894 (763) 780-8500 FAX (763) 780-1777 Writer's Direct Line: (763) 783-5122 Internet E-Mail Address: jhoefi~bgslaw, corn JAMES D. HOEFF JOAN M. QUADE SCOTT M. LEPAK STEVEN G. THORSON ELIZABETH A. SCHADING WILLIAM E HUEFNER BRADLEY A. KLETSCHER MALCOLM P. TERRY KRISTI R. RILEY CHRISTOPHER DE LA FOREST MATTHEW M. QUINN CHERYL A. JORGENSEN Of Counsel ROBERT A. GUZY September 25, 2000 David L. McCuskey, Esq. Dorsey & Whitney, LLP 220 S Sixth Street, #1700 Mineapolis, MN 55402-1498 Lease Between City of Columbia Heights and Families Moving Forward Property Address: 4101 Central Avenue NE Date: July 11, 2000 Our File No. 46000-097 Dear Mr. McCuskey: It has come to my attention that Families Moving Forward has purchased property within the City of Minneapolis that it intends to use as its new "home". As a result thereof, it has also been brought to my attention that Families Moving Forward would like to terminate any existing lease hold rights to the property owned by the City of Columbia Heights and located at 4101 Central Avenue NE established pursuant to the above referenced lease. Upon such termination, the City would refund the "security" deposit of $20,000 pursuant to Article 17 of said lease. Accordingly, please have a duly authorized representative of Families Moving Forward sign the Statement of Lease Termination set forth below. I have drafted the statement with a waiver of the 30 day notice as set forth in Article 6.2. I have done so with the assumption that Families Moving Forward would like their deposit returned sooner than 30 days. The City also hereby waives any requirement of receiving prior notice of termination, either in writing or verbally. An Equal Opportunity Employer September 25, 2000 Page 2 Thank you for your assistance and consideration throughout this entire relationship. Sincerely, Columbia Heights City Attorney JDH:set STATEMENT OF LEASE TERMINATION Pursuant to Article 6.2 of the Lease between the City of Columbia Heights and Families Moving Forward, effective immediately, Families Moving Forward hereby terminates any and all rights it has to the property located at 4101 Central Avenue NE in the City of Columbia Heights. Upon receipt of a copy of this letter executed by a duly authorized representative of Families Moving Forward, the City of Columbia Heights shall refund the "security" deposit of $20,000 to Families Moving Forward within 5 business days. Furthermore, any personal property of Families Moving Forward shall be removed from said premises also within five business days upon the City's receipt hereof. Both the City (landlord) and Families Moving Forward (tenant) acknowledge that this termination and refund of said deposit will fully and completely terminate any and all rights either party may hold pursuant to the above-referenced lease. ~Gary Pell~son, Mayor V~Talt Fehst, City'Mana~r FAMILIES MOVING FORWARD Its: By: Its: 98418 I EXECUTION COPY PURCHASE AGREEMENT THIS AGREEMENT is made as of July 11, 2000, between FAMILIES MOVING FORWARD, a Minnesota nonprofit corporation ("Seller"), and the CITY OF COLUMBIA HEIGHTS, MINNESOTA, a municipal corporation and political subdivision of the State of Minnesota ("Buyer"). In consideration of this Agreement, Seller and Buyer agree as follows: 1. Sale and Leaseback of Property. Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller, the real property located in Anoka County, Minnesota described on the attached Exhibit A ("Land") together with (1) all buildings and improvements constructed or located on the Land ("Buildings") and (2) all easements and rights benefiting or appurtenant to the Land (collectively the "Property"). Upon the closing of such purchase and sale, Buyer agrees to lease to Seller, and Seller agrees to lease from Buyer, the Property upon the terms and conditions set forth in the Lease attached hereto as Exhibit B (the "Lease"), which shall be executed and delivered by Buyer and Seller at such closing. Except as otherwise expressly set forth in this Agreement, Buyer is purchasing the Property based upon its own investigation and inquiry and is not relying on any representation of Seller or other person and is agreeing to accept and purchase the Property "AS IS, WHERE IS," WITH ALL FAULTS, IF ANY, AND WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, subject only to the conditions of examination herein set forth and the express warranties herein contained. 2. Purchase Price and Manner of Payment. The total purchase price ("Purchase Price") to be paid for the Property shall be $360,000 and shall be payable to Seller by wire transfer of funds on the Closing Date. 3. ~. The obligations of Buyer under this Agreement are contingent upon each of the following: 3.1 Representations and Warranties. The representations and warranties of Seller contained in this Agreement must be true now and on the Closing Date as if made on the Closing Date. 3.2 Title. Title to the Property shall have been found acceptable, or been made acceptable, in accordance with the requirements and terms of Section 6 below. 3.3 Access and Inspection. Seller shall have allowed Buyer, and Buyer's agents, access to the Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing the same. Buyer shall pay all costs and expenses of such investigation and testing, shall restore the Property, and shall hold Seller and the Property harmless from all costs and liabilities relating to Buyer's activities. 4. Closing. The closing of the purchase and sale contemplated by this Agreement (the "Closing") shall occur on Julyl 1, 2000 (the "Closing Date"). The Closing shall take place at 1:30 p.m. local time at the office of Dorsey & Whitney LLP, Pillsbury Center South, 220 South Sixth Street, Minneapolis, MN 55402. Seller agrees to deliver possession of the Property to Buyer on the Closing Date. 4.1 Seller's Closing Documents. On the Closing Date, Seller shall execute and deliver to Buyer the following (collectively, "Seller's Closing Documents"), all in form and content reasonably satisfactory to Buyer: 4.1.1 Deed.. A Quitclaim Deed conveying the Real Property to Buyer. 4.1.2 Lease. At least two counterparts of the Lease. 4.1.2 Other Documents. All other documents reasonably determined by the Closing Agent to be necessary to transfer title to the Property to Buyer. 4.2 Buyer's Closing Documents. On the Closing Date, Buyer will execute and deliver to Seller the following (collectively, "Buyer's Closing Documents"): 4.2.1 Purchase Price. Funds representing the Purchase Price, by wire transfer. 4.2.2 Lease. At least two counterparts of the Lease 5. Allocation of Costs. Seller and Buyer agree to the following allocation of costs regarding this Agreement: 5.1 Closing Fees and Title Insurance and Closing Fee. Buyer will pay all costs of the Title Evidence, the cost of, and any premiums required for, any mortgagee's title insurance policy required in connection with any financing obtained by Buyer, the cost of, and any premiums for, any owner's title insurance policy requested by Buyer and any closing fee or charge imposed by any title company or other closing agent ("Closing Agent"); provided that Buyer shall not be required to pay any fees or charges of Dorsey & Whitney LLP. -2- 5.2 5.3 5.4 5.5 6.1 6.2 Deed and Mortgage Registry_ Tax. Buyer shall pay all Deed Tax and any Mortgage Registry Tax payable in connection with any financing obtained by Buyer. Real Estate Taxes and Special Assessments. Seller has paid and/or will pay one-half of the Real Estate Taxes and Special Assessments, if any, payable in the year 2000 and the remaining one-half thereof shall be paid by Buyer; provided, however, that Seller shall be entitled to seek and retain any reimbursement from the applicable taxing authorities for any real estate taxes heretofore paid by it with respect to the Property. Operating Costs. All other operating costs of the Property shall be allocated between Seller and Buyer as of the Closing Date, so that Seller pays that part of operating costs payable before the Closing Date, and Buyer pays that part of operating costs payable from and after the Closing Date. Attorney's Fees. Each of the parties will pay its own attorney's fees, except that a party defaulting under this Agreement or any Closing Document will pay the reasonable attorney's fees and court costs incurred by the nondefaulting party to enforce its rights hereunder. 6. Title Examination. Title Examination will be conducted as follows: Seller's Title Evidence. Seller shall, within seven (7) days after the date on which this Agreement is executed and delivered to Seller by Buyer, furnish the following (collectively, "Title Evidence") to Buyer: (a) an Abstract of Title to the Real Property certified to a current date to include all appropriate judgment and bankruptcy searches; and (b) copies of the survey prepared by Schoell and Madson dated June 4, 1998 as Project No. 63039-0001 and the Survey Affidavit of Seller's donor dated December 30, 1999. Buyer's Objections. Within seven (7) days after receiving the last of the Title Evidence, Buyer will make written objections ("Objections") to the form and/or contents of the Title Evidence. Buyer's failure to make Objections within such time period will constitute waiver of the Objections. Those matters referred to on Exhibit C and any matter shown on such Title Evidence and not objected to by Buyer shall be a "Permitted Encumbrance" hereunder. Seller will have 30 days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed, if necessary. Seller shall use its best efforts to correct any Objections. If the Objections are not cured within such 30-day period, Buyer will have the option to do any of the following: -3- 6.2.1 Terminate this Agreement. 6.2.2 Waive the objections and proceed to close. Buyer as follows: Representations and Warranties by Seller. Seller represents and warrants to 7.1 Existence; Authority. Seller is duly organized, qualified and in good standing, and has the requisite power and authority to enter into and perform this Agreement and Seller's Closing Documents; such documents have been duly authorized by all necessary action; such documents are valid and binding obligations of Seller, and are enforceable in accordance with their terms. 7.2 FIRPTA. Seller is not a "foreign person", "foreign partnershiP", "foreign trust" or "foreign estate", as those terms are defined in Section 1445 of the Internal Revenue Code. 7.3 Wells. The Seller certifies and warrants that the Seller does not know of any "Wells" on the described Property within the meaning of Minn. Stat. § 1031. This representation is intended to satisfy the requirements of that statute. 7.4 Reports. Seller has delivered to Buyer copies of the following reports relating to the Property which are in the possession of Seller: (a) Environmental Profile, Phase I Environmental Site Assessment, PN #1-01305, dated May 29, 1998, prepared by EnPro Assessment Corp. and reliance letter from EnPro Assessment Corp. to Families Moving Forward dated December 30, 1999. (b) Letter dated May 29, 1998 from Korsunsky Krank Erickson to Timothy Welch, Leonard Street and Deinard relating to Rixman Properties - Columbia Heights, MN, Physicial Condition Survey, KKE No. 98-03-1086-01. (c) Roof Management Report prepared by Dalco Roofing Sheet Metal Inc. relating to Norwest Bank - Columbia Heights, 4101 Central Ave. N.E., Columbia Heights, MN. -4- (d) Phase I Environmental Audit and Boundary Survey prepared by Schoell & Madsen, Inc. for Norwest Properties relating to Site No. 44, Columbia Heights Office, 4101 Central Avenue Northeast, Columbia Heights, Minnesota 55421. (e) Polarization Asbestos Assessment Report prepared by Professional Service Industries, Inc. 8. No Brokers. Seller and Buyer represent to each other that they have dealt with no other brokers, finders or the like in connection with this transaction, and agree to indemnify and hold each other harmless from all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorneys' fees. 9. Assignment. Either party may assign its rights under this A~greement with the prior written consent of the other party, before or after the Closing. Any such assignment will not relieve such assigning party of its obligations under this Agreement. 10. Survival. All of the terms of this Agreement and warranties and representations herein contained shall survive and be enforceable after the Closing. 11. Notices. Any notice required or permitted hereunder shall be given by personal delivery upon an authorized representative of a party hereto; or if mailed by United States registered or certified mail, return receipt requested, postage prepaid; or if transmitted by facsimile copy followed by mailed notice; or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed as follows: If to Seller: With Copy to: Families Moving Forward 1832 James Avenue North Minneapolis, MN 55411 Attention: Carol Merriweather, Executive Director Fax: (612) 529-2278 Leslie Frost Lutheran Community Foundation 625 Fourth Avenue South, Suite 1315 Minneapolis, MN 55415 Fax: (612) 340-1409 -5- If to Buyer: With Copy to: City of Columbia Heights 590 40t~ Avenue Northeast Columbia Heights, MN 55421-3878 Attention: City Manager Fax: (763) 706-3601 Mr. James D. Hoeft Bama, Guzy & Steffen, Ltd. 400 Northtown Financial Center 200 NW Coon Rapids Blvd. Minneapolis, MN 55433-5894 Fax: (763)780-1717 Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit, as aforesaid; provided, however, that if notice is given by deposit, the time for response to any notice by the other party shall commence to run one business day after any such deposit. Any party may change its address for the service of notice by giving notice of such change 10 days prior to the effective date of such change. 12. Miscellaneous. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the Property. There are no verbal agreements that change this Agreement, and no waiver of any of its terms will be effective unless in a writing executed by the parties. This Agreement binds and benefits the parties and their successors and assigns. This Agreement has been mad6 under the laws of the State of Minnesota, and such laws will control its interpretation. 13. Remedies. If either party defaults under this Agreement, the other party may exercise any one or more of the following remedies: (1) terminate this Agreement upon notice to the other party; and/or (2) seek and exercise any and all other rights and remedies (including, without limitation, damages for nonperformance and specific performance) available to it at law or in equity. Time is of the essence of this Agreement. 14. Withdrawal of Offer. This Agreement shall be deemed to be withdrawn, unless accepted by Seller, and a fully executed counterpart of this Agreement returned to Buyer on or before July 11, 2000. -6- 15. Prior Purchase Agreement Withdrawn. This Agreement supersedes and replaces the Purchase Agreement dated May 4, 2000, a copy of which was signed by Seller and submitted to Buyer's counsel but was not accepted by Buyer. Buyer and Seller agree that said Purchase Agreement dated May 4, 2000 is of no force or effect and is hereby withdrawn by Seller. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS] -7- Seller and Buyer have executed this Agreement as of the date first written above. Date of Signature July 11, 2000 Date of signature July 11, 2000 SELLER: U BUYER: CITY OF COLUMBIA HEIGHTS, MINNESOTA ~ts ~ 0 [SIGNATURE PAGE TO PURCHASE AGREEMENT] -8- EXHIBIT A TO PURCHASE AGREEMENT Legal Description The South 20 feet of Lot 26; all of Lots 27, 28, 29 and 30; that part of the West One-half of Lot 31 lying South of the North 120 feet thereof; all in Block 4, Reservoir Hills; according to the recorded plat thereof, Anoka County, Minnesota. EXHIBIT B TO PURCHASE AGREEMENT LEASE Between CITY OF COLUMBIA HEIGHTS, MINNESOTA Landlord And FAMILIES MOVING FORWARD Tenant Address of Premises: 4101 Central Avenue N.E. Columbia Heights, Minnesota Dated as of July 11, 2000 Article 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Exhibit A Exhibit B INDEX Title of Article Page Definitions .................................................. 1 Premises Lease Term Rent ....................................................... 4 Impositions .................................................. 5 Use ........................................................ 5 Surrender ................................................... 7 Insurance ................................................... 8 Indemnification of Landlord .................................... 8 Operation, Repairs and Maintenance; Alterations .................... 9 Discharge of Liens ............................................ 11 Compliance with Laws ......................................... 11 Damage or Destruction ........................................ 12 Condemnation ............................................... 13 Assignment ................................................. 14 Default ..................................................... 15 Security .................................................... 16 Entry by Landlord; Performance of Covenants ...................... 17 Notices ..................................................... 18 Miscellaneous ............................................... 19 Legal Description of the Land Preapproved Alterations -ii- BASIC TERMS The information provided on this page is for convenience purposes only. In the event of any conflict or inconsistency between the terms set forth below and the terms of the attached Lease, the terms of the Lease shall be controlling. DATE: July 11, 2000 BUILDING ADDRESS: 4101 Central Avenue N.E., Columbia Heights, Minnesota USE: Office and day center for homeless persons and related uses. LANDLORD'S NAME AND ADDRESS: City of Columbia Heights, Minnesota 590 - 40t~ Avenue N.E. Columbia Heights, Minnesota 55421-3878 Attention: City Manager Telephone: (763) 706-3600 Telecopier: (763) 706-3601 TENANT'S NAME AND ADDRESS: Families Moving Forward 1832 James Avenue North Minneapolis, Minnesota 55441 Attention: Carol Merriweather, Executive Director Telephone: (612) 529-2185 Telecopier: (612) 529-2278 LEASE TERM: July 11, 2000 through July 10, 2002, subject to earlier termination at option of Tenant. OPTIONS TO EXTEND: None INITIAL MONTHLY BASE RENT: $1.00 SECURITY DEPOSIT: $20,000 -i- LEASE THIS LEASE ("Lease") is made as of July 11, 2000 by and between the CITY OF COLUMBIA HEIGHTS, MINNESOTA, a municipal corporation and political subdivision of the State of Minnesota, having an office at 590 - 40th Avenue N.E., Columbia Heights, Minnesota 55421-3878 ("Landlord"), and FAMILIES MOVING FORWARD, a Minnesota nonprofit corporation, having an office at 1832 James Avenue North, Minneapolis, Minnesota 55441 ("Tenant"). ARTICLE 1 Definitions 1.1 Certain Definitions. Landlord and Tenant agree that the following capitalized terms when used herein shall, unless the context otherwise requires, have the following meanings: "Accessibility Regulation" shall mean a Law relating to accessibility of facilities or properties for disabled, handicapped and/or physically challenged persons, including, without limitation, the Americans With Disabilities Act of 1991, as amended. Base Rent. "Additional Rent" shall mean all sums payable by Tenant pursuant to this Lease, except "Alteration" shall have the meaning ascribed to such term in Section 10.3 hereof. "Base Rent" shall mean the sums payable to Landlord pursuant to Section 4.1.1 hereof. "Building" shall mean the building located on the Land, together with all fixtures, building systems, equipment, and any personal property located therein and used in the operation and maintenance thereof, to the extent now owned by Landlord, together with all other improvements now or hereafter constructed on the Land. hereof. "Disclosure Documents" shall have the meaning ascribed to such term in Section 6.3 "Environmental Regulation" shall mean a Law relating to the environment and/or the impact thereof on human health or safety, or governing, regulating or pertaining to the generation, treatment, storage, handling, transportation, use or disposal of any Hazardous Substance. "Event of Default" shall mean any of the events or circumstances described in Section 16.1 hereof. "Expiration Date" shall mean July 10, 2002. "Full Insurable Value" shall mean the replacement cost of the Building, without allowance for depreciation, but excluding footings, foundations and other portions of improvements which are not insurable. "Hazardous Substance" means any substance or material defined in or governed by any Environmental Regulation as a dangerous, toxic or hazardous pollutant, contaminant, chemical, waste, material or substance, and also expressly including urea-formaldehyde, polychlorinated biphenyls, dioxin, asbestos, asbestos containing materials, nuclear fuel or waste, radioactive materials, explosives, carcinogens and petroleum products, including but not limited to crude oil or any fraction thereof, natural gas, natural gas liquids, gasoline and synthetic gas, or any other waste, material, substance, pollutant or contaminant which would subject the owner or operator of the Premises to any damages, penalties or liabilities under any applicable Environmental Regulation. "Impositions" shall mean all real estate taxes, assessments, water, sewer, heat, electricity, gas and all other utility rates and other governmental charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of every kind and nature whatsoever, including, but not limited to, assessments for local improvements and betterments, which are assessed, levied, confirmed, imposed or shall become payable upon or with respect to the Premises during the term hereof. "Land" shall mean the parcel of land described in Exhibit A attached hereto, together with all appurtenances thereto and easements benefitting such parcel. "Law" shall mean any federal, state or local law, statute, code, ordinance, rule or regulation which is applicable to the Premises or the use or operation thereof. "Lease Term" shall mean the term of this Lease as identified in Article 3 hereof. 6.2 hereof. "Optional Termination Date" shall have the meaning ascribed to such term in Section "Permitted Encumbrances" shall mean: 1. Any state of facts which an accurate survey of the Premises would show, and/or which a physical inspection thereof would disclose or reveal. 2. All Laws. 3. The revocable nature of the right, if any, to maintain vaults, vault spaces, basement and sub-basement spaces, areas, structures, coal chutes, fuel pipes, sidewalk doors and elevators, canopies, marquees, signs, ledges, cornices, parapets, window sills, facade ornamentation, -2- standpipes, doors, show windows, exhaust pipes and any other encroachment or projection across or beyond the building lines. 4. All notes or notices of violations of Law heretofore or hereafter noted in or issued by any governmental or municipal board, body, agency, authority or department, whether or not affecting the Premises as of date hereof, including, without limitation, any such violations which might be disclosed by an examination, inspection or search of the Premises by any governmental or municipal board, body,, agency or department, or any condition which, following an inspection of the Premises, might give rise to such a note or notice of violation. 5. All covenants, restrictions, easements, conditions, and agreements, including, without limitation, any party wall agreements, of record, if any. 6. All rights, grants or easements affecting the Premises, whether or not of record, heretofore or hereafter given, afforded to or acquired by any public utility company or governmental authority furnishing utilities to the Premises, or in or to the area in which the Premises are located, including easements to maintain wires, pipes, conduits, and other facilities which enter or cross the Premises. Premises. The present condition and state of repair of the structures included in the 8. All Impositions. "Preapproved Alteration" shall mean any Alteration described in Exhibit B hereto and any other Alteration approved in writing by Landlord at or prior to the time such Alteration is made. "Premises" shall mean the Land and Building and all other buildings and improvements now, or at any time hereafter, erected or situated on the Land. "Rent" shall mean all Base Rent and Additional Rent. "Security Deposit" shall have the meaning ascribed to such term in Section 17.1 hereof. ARTICLE 2 Premises 2.1 Leasing. Landlord hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord, subject to the Permitted Encumbrances and upon all of the terms, covenants and conditions set forth herein. -3- 2.2 Acceptance "As Is". Tenant has investigated the Premises to Tenant's satisfaction, and has had the benefit of a full physical inspection thereof; and Tenant represents that it is fully familiar with the physical condition and state of repair of the Premises, with any notices of existing violations, and with any conditions constituting, or which might constitute violations. Tenant accepts the Premises and all appurtenances thereto "as is", in their present condition and state of repair, without any representation or warranty, express or implied, having been made by Landlord or by any person on Landlord's behalf with respect thereto. ARTICLE 3 Lease Term The Premises are leased to Tenant for a term commencing on July 11, 2000 and ending on the earlier of the Expiration Date or the Optional Termination Date, if any, unless sooner terminated, as hereinafter provided. ARTICLE 4 Rent 4.1 Rent. Tenant agrees to pay to Landlord during the Lease Term, without demand and without deduction, set-off or counterclaim, at the address set forth hereinabove, or at such other place as Landlord may from time to time designate in writing, Rent for the Premises as follows: 4.1.1 Base Rent. A monthly Base Rent in the amount of $1.00 per month shall be due and payable in advance on the first day of each and every calendar month during the Lease Term. 4.1.2 Additional Rent. Tenant shall pay as Additional Rent all other sums of money required to be paid pursuant to this Lease during the Lease Term, which shall be paid at the time and in the amounts set forth elsewhere in this Lease. 4.2 Rent is Net of All Costs. It is the purpose and intent of Landlord and Tenant that the Base Rent payable by Tenant hereunder shall be absolutely net to Landlord, so that this Lease shall yield, net to the Landlord, the Base Rent in each year during the Lease Term, and that all costs, fees, expenses, interest (other than mortgage interest, if any), charges, reimbursements and obligations of every kind and nature whatsoever relating to the Premises (except those expressly stated in this Lease to be obligations of the Landlord, if any), which may arise or become due during the Lease Term shall be paid or discharged by Tenant as Additional Rent hereunder, whether or not specifically designated as such, and Tenant agrees to indemnify and hold Landlord harmless from and against such costs, fees, interest, charges, expenses, reimbursements and obligations, and interest thereon. ARTICLE 5 Impositions 5.1 Tenant to Pay Impositions. Tenant covenants to pay, as Additional Rent, when due and before any fine or penalty is added thereto for the nonpayment thereof, all Impositions which become due and payable during the years which are included in whole or in part in the Lease Term; provided, however, that if any such Imposition may be paid in installments, Tenant may pay each installment before any fine or penalty is added to any such installment for the nonpayment thereof. Impositions which become due and payable during the years when the Lease Term commences and terminates shall be prorated according to the number of days in such years which are included in the Lease Term. 5.2 Evidence; Contents. Tenant shall deliver to Landlord from time to time duplicate receipts or photostatic copies thereof showing payment of all Impositions within 60 days after the respective payment dates. Subject to Tenant's right to terminate this Lease as provided in Section 6.2 hereof, Landlord shall, at its option, have the right at any time during the Lease Term to pay, without the necessity of inquiring into the validity or legality thereof, any delinquent Impositions and interest and penalties thereon, and the amount so paid, shall be so much Additional Rent due from the Tenant to Landlord at the next rental payment date after such payment; provided, however, that if Tenant shall in good faith proceed to contest any such Impositions or the validity thereof by proper legal proceedings which shall operate to prevent the collection thereof and the sale of the Premises or any part thereof to satisfy the same, Tenant shall not be required to pay, discharge or remove any Impositions so long as such proceeding is pending and Tenant is diligently prosecuting such proceeding; provided further that Tenant, not less than 10 days before any such Impositions shall become delinquent, shall give notice to Landlord of Tenant's intention to contest the validity thereof. 5.3 Utilities. Tenant expressly agrees that Landlord shall not be required to furnish to Tenant any water, sewer, gas, heat, electricity, light, power or any other facilities, equipment, labor, materials or any services of any kind whatsoever. Tenant shall make its own arrangements, at its own cost and expense, for the furnishing to the Premises of all utilities, facilities or services required for Tenant's use, and Tenant shall pay for all such utilities, facilities or services to the Premises during the Lease Term. ARTICLE 6 Use 6.1 Use. The Leased Premises shall be used and occupied by Tenant for operation of an office and day center for homeless persons and related uses, and such use and occupancy shall be in compliance with all Laws; provided, however, that Landlord acknowledges and agrees that Tenant's -5- proposed use of the Premises, as set forth in the initial clause of this sentence, complies with all Laws of Landlord relating to zoning and permitted uses of the Premises and is not and shall not be proscribed or prohibited, either temporarily or permanently, under any such Laws or under any moratorium or other similar action heretofore or hereafter declared or taken by Landlord under or with respect to such Laws. 6.2 Tenant's Right to Abandon Premises and Terminate Lease. Tenant shall have the right at any time, in its sole and absolute discretion, to abandon the Premises and terminate this Lease by giving written notice to Landlord at least 30 days prior to the effective date of such abandonment and termination ("Optional Termination Date") specifying such Optional Termination Date, whereupon Tenant shall have no further obligations for the payment of Base Rent for any period after such Optional Termination Date or for the payment of any Impositions or Additional Rent imposed or becoming payable after, or imposed or becoming payable with respect to any period after, such Optional Termination Date. 6.3 Compliance with Environmental Regulations. Tenant has provided to Landlord the following documents relating to the Premises (the "Disclosure Documents"): (a) Environmental Profile, Phase I Environmental Site Assessment, PN #1- 01305, dated May 29, 1998, prepared by EnPro Assessment Corp. and reliance letter from EnPro Assessment Corp. to Families Moving Forward dated December 30, 1999. (b) Letter dated May 29, 1998 from Korsunsky Krank Erickson to Timothy Welch, Leonard Street and Deinard relating to Rixman Properties - Columbia Heights, MN, Physical Condition Survey, KKE No. 98-03- 1086-01. (c) Roof Management Report prepared by Dalco Roofing Sheet Metal Inc. relating to Norwest Bank - Columbia Heights, 4101 Central Ave. N.E., Columbia Heights, MN. (d) Phase I Environmental Audit and Boundary Survey prepared by Schoell & Madsen, Inc. for Norwest Properties relating to Site No. 44, Columbia Heights Office, 4101 Central Avenue Northeast, Columbia Heights, Minnesota 55421. (e) Polarization Asbestos Assessment Report prepared aby Professional Service Industries, In. -6- Except as disclosed in the Disclosure Documents and except for substances and in quantities which are normally used in the operation of Tenant's business or for the maintenance or operation of the Premises, and which are used, stored and disposed of in accordance with all applicable Environmental Regulations, Tenant shall not, nor shall it permit others to, place, store, locate, generate, produce, create, process, treat, handle, transport, incorporate, discharge, emit, spill, release, deposit or dispose of any Hazardous Substance in, upon, under, over or from the Premises. Tenant shall cause all Hazardous Substances found in or under the Premises which are not disclosed in the Disclosure Documents or otherwise permitted under the foregoing sentence and which exist in quantities which violate applicable Environmental Regulations to be properly removed therefrom and properly disposed of at Tenant's expense. Tenant shall not install or permit to be installed any underground storage tank on or under the Land. Tenant shall, promptly after obtaining actual knowledge thereof, give notice to Landlord of (i) any activity in violation of any applicable Environmental Regulation relating to the Premises not disclosed in the Disclosure Documents, (ii) any governmental or regulatory actions instituted or threatened under any Environmental Regulation affecting the Premises, (iii) all claims made or threatened by any third party against Tenant or the Premises relating to any Hazardous Substance or a violation of any Environmental Regulation, and (iv) any discovery by Tenant of any occurrence or condition on or under the Premises, not disclosed in the Disclosure Documents, which would subject Landlord, Tenant or the Premises to a claim under any Environmental Regulation. 6.4 Compliance with Accessibility Regulations. Tenant shall, at its sole cost and expense, comply with all Accessibility Regulations which are applicable to the Premises; provided, however, that if Tenant exercises its fight under Section 6.2 hereof to abandon the Premises and terminate this Lease, without having occupied the Premises, Tenant shall have no obligation to comply with Accessibility Regulations. ARTICLE 7 Surrender 7.1 Time; Condition. Upon termination of this Lease, whether pursuant to Section 6.2 hereof or by reason of lapse of time, forfeiture or otherwise, Tenant shall immediately surrender possession of the Premises to Landlord in good order, condition and repair (subject to the proviso clauses contained in Section 6.4, Section 10.1 and the last sentence of Section 10.3.2 hereof), ordinary wear and tear and loss by insured casualty excepted, and all fixtures and improvements on the Premises shall, at the option of Landlord, become the property of Landlord without any obligation on the part of Landlord to compensate Tenant therefor; subject, however to the provisions of Section 7.2 and Section 17.1 hereof. If possession be not immediately surrendered, Landlord may forthwith re-enter the Premises and repossess the same or any part thereof and expel and remove therefrom all persons and property without prejudice to any other legal remedy available to Landlord. -7- 7.2 Removal of Fixtures. Notwithstanding the preceding Section hereof, if this Lease terminates by reason of the expiration of the Lease Term and if Tenant is not in default in any respect hereunder, Tenant may remove its fixtures and equipment, provided that such removal shall be made prior to the end of the Lease Term. Any damage resulting from removal shall be repaired by Tenant. ARTICLE 8 Insurance 8.1 Required Insurance. Tenant, at its sole cost and expense, shall maintain in effect at all times during the Lease Term the following insurance: 8.1.1 A Commercial General Liability Insurance policy, which policy shall include coverage for bodily injury, property damage and personal injury liability. Such policy shall provide coverage of at least $1,000,000 for each occurrence and annual aggregate coverage of at least $3,000,000. 8.1.2 Insurance on the Building against loss by fire and other hazards covered by the so-called "all-risk" form of policy, in an amount not less than the Full Insurable Value. Such policy may include a deductible in an amount not greater than $5,000. 8.2 Insured Parties; Other Provisions. During the Lease Term, all property insurance policies shall name Landlord and Tenant as the insured parties and loss payees, as their interests may appear, and all liability insurance policies shall name both Landlord and Tenant as insured parties. Each of the foregoing policies shall contain the agreement of the insurer that such policy shall not be cancelled except upon 15 days' prior notice to each named insured. 8.3 Policies; Renewals; Failure to Provide. Copies of all policies required to be furnished hereunder shall be deposited with the Landlord as soon as is administratively practicable after the commencement of the Lease Term, and evidence of the payment of premium to continue coverage in force shall all be deposited with Landlord on or prior to the date on which such insurance would otherwise expire. ARTICLE 9 Indemnification of Landlord 9.1 Indemnity. Tenant shall indemnify and hold Landlord harmless against and from all liabilities, obligations, damages, penalties, claims, costs, charges and expenses, including reasonable attorneys' and other consultants' fees, which may be imposed upon, incurred by or asserted against -8- Landlord by reason of any accident, injury, death or damage to property occurring in, on or about the Premises during the Lease Term. 9.2 Release. Tenant hereby expressly releases Landlord, its agents and employees, from any claim or cause of action for any loss or damage whatsoever to the Premises or Tenant's property therein or business conducted therefrom arising out of any negligence or alleged negligence (other than gross negligence or willful misconduct) of the Landlord, its agents or employees. ARTICLE 10 Operation, Repairs and Maintenance; Alterations 10.1 Operation, Repairs and Maintenance. Throughout the Lease Term, Tenant shall, at Tenant's sole cost and expense, take good care of the Premises and shall put and keep the same in good order, condition and repair, and shall make all repairs thereto, all as may be necessary to keep the Premises and the fixtures, appurtenances, and installations therein contained in good order and condition and in compliance with all Laws; provided, however, that if Tenant exercises its right under Section 6.2 hereof to abandon the Premises and terminate the Lease, without having occupied the Premises, Tenant shall have no obligation to repair or correct any defect which exists on the date of this Lease. 10.2 No Landlord Obligations. Landlord shall not be required to furnish any services or facilities or to make any repairs or Alterations in or to the Premises whatsoever, Tenant hereby assuming the full and sole responsibility for the condition, operation, repair, replacement, maintenance and management of the Premises during the Lease Term. Landlord shall nevertheless have the right to enter the Premises at all reasonable times during regular business hours and (except in the case of emergency) upon reasonable notice to Tenant for the purpose of inspecting all or any part thereof. If Tenant shall fail to perform any repairs, restoration or other work which Tenant is obligated to perform under this Lease, and if such default is not remedied within the applicable grace period provided therefor in this Lease, Landlord shall have the right (without being obligated to do so) to enter the Premises and to perform such work. 10.3. Alterations. Tenant may, at its sole cost and expense, make changes, alterations, additions, restorations or improvements (herein collectively referred to as an "Alteration") in, to or of the Premises, subject to and in compliance with the following: 10.3.1 Tenant shall, except in emergency and except in the case of a non-structural Alteration costing less than $25,000, give at least seven (7) days' prior written notice to Landlord of the proposed Alteration. -9- 10.3.2 No Alteration shall be undertaken until Tenant shall have procured and paid for, so far as the same may be required from time to time, all required permits and authorizations of any federal, state or municipal government or department, or subdivision of any of them, having jurisdiction over the Premises. Landlord shall join in the application for such permits or authorizations, if and to the extent required, but at Tenant's sole cost and expense. Notwithstanding the foregoing, Landlord approves and consents to the Alterations described in Exhibit B hereto; provided, however, that Tenant shall have no obligation to make any of such Alterations. 10.3.3 No Alteration shall be of such character as to materially reduce the value and utility of the Premises for the uses permitted hereunder below the value and utility thereof prior to commencement of such Alteration. 10.3.4 Any Alteration shall be made promptly and in a good and workmanlike manner and in material compliance with all applicable permits and authorizations and building and zoning laws, and with all other applicable Laws. 10.3.5 The cost of any Alteration shall be paid when due so that the Premises shall at all times be free of liens for labor and materials supplied or claimed to have been supplied to the Premises and free from any encumbrances, chattel mortgages, conditional bills of sale, or security interests. 10.3.6 No Alteration shall increase the height of the Building, or combine, tie-in or connect the Building and/or any other portion of the Premises, or any structure or improvement thereon erected or situated, with any other building or improvement located on any adjoining property; and Tenant shall in no event include or attempt to include the Premises with other properties in a common zoning lot under any zoning ordinance Or related'~tatute which may now or hereafter be applicable to the Premises in such respect. 10.3.7 At the request of Landlord, Tenant shall, at Tenant's option, either (a) remove all Alterations other than Preapproved Alterations at or prior to the end of the Lease Term, and repair any damage caused by such removal, or (b) leave the Security Deposit on deposit with Landlord, in which case Landlord may use the Security Deposit to effect such removal and repair, subject, however to Section 17.2.2 hereof. -10- ARTICLE 11 Discharge of Liens 11.1 No Liens. If any lien for work performed or materials supplied after the commencement of the Lease Term is filed against the Premises or Landlord's or Tenant's interest therein, other than liens arising as a result of acts of Landlord, Tenant shall cause same to be discharged of record within 30 days after notice of such filing. Tenant, at its sole expense, shall defend the Premises and Landlord against all suits for the enforcement of any such lien or any bond in lieu of such lien, and Tenant hereby indemnifies Landlord against any and all loss, cost, damage, expense or liability resulting from any such lien or suit. Should Tenant fail to so discharge any such lien, Landlord may do so by payment, bond or otherwise on 30 days' written notice to Tenant, and the amount paid or incurred therefor by Landlord shall be reimbursed to Landlord by Tenant as Additional Rent upon demand. 11.2. Right to Contest. Tenant shall have the right to contest any such mechanic's or other lien claim filed against the Premises or any part thereof if Tenant notifies Landlord in writing of its intention so to do, diligently prosecutes any such contest, at all times effectually stays or prevents any official or judicial sale of the Premises under execution or otherwise, and pays or otherwise satisfies any final judgment adjudicating or enforcing such contested mechanic's or other lien and thereafter promptly procures and records a satisfaction and release of same. 11.3 No Consent. Nothing in this Lease shall be deemed to constitute the consent or request of Landlord to any contractor, subcontractor or material supplier for the performance of any labor or the furnishing of any materials for any specific improvement to the Premises. Notice is hereby given that Landlord has assumed no obligation and shall not be liable or responsible for or in connection with any labor or materials hereafter furnished to Tenant, or to any other party, whether on credit, or otherwise, and that no mechanic's or other lien for any such labor or materials shall attach to or affect the Premises, or Landlord's reversionary interest and estate therein. Landlord shall have the right to post and maintain on the Premises, notice of nonresponsibility under the laws of the State of Minnesota. ARTICLE 12 Compliance with Laws 12.1 Compliance. Throughout the Lease Term, Tenant shall at Tenant's sole cost and expense, promptly remove of record any and all material violations of any applicable Law noted or filed against the Premises, and, unless Tenant exercises its right to terminate this Lease as provided in Section 6.2 hereof, Tenant shall correct all conditions constituting such material violations of Law and shall promptly comply in all material respects with all present and future Laws and directives of all federal, state and municipal governments, departments, commissions, boards and officers, and all -11- orders, rules and regulations of the National Board of Fire Underwriters, or any other body or bodies exercising similar functions, which may be applicable to the Premises. 12.2 Insurance Requirements. Tenant shall likewise at Tenant's sole expense observe and comply in all material respects with the material requirements of all policies of public liability and property insurance, and all other policies of insurance at any time in force with respect to the Premises. ARTICLE 13 Damage or Destruction 13.1 Casualty. Notwithstanding any provisions of this Lease to the contrary, in the event that the Premises shall be damaged or destroyed by fire or other casualty, whether or not covered by insurance, Tenant shall promptly give written notice thereof to Landlord, and, unless Tenant exercises its right to terminate this Lease as provided in Section 6.2 hereof, Tenant shall promptly repair, restore, replace, or rebuild the same, as nearly as may be practicable, to its condition and character immediately prior to such damage or destruction. Such restoration, repairs, replacements or rebuilding shall be commenced promptly and prosecuted with reasonable diligence, subject only to unavoidable delays. The net insurance proceeds, if any, on account of such damage or destruction, and collected by Landlord and/or Tenant shall be made available to Tenant for use in making the repairs, restoration or replacement required under this Article 13. If such insurance money shall be insufficient to pay the entire cost of such work, Tenant shall not be required to pay any deficiency above the amount of any deductible under the applicable insurance policy. At any time after the completion of such work, or in the event that Tenant elects to terminate this Lease pursuant to Section 6.2 hereof before completing such work, the balance of the insurance money not theretofore used pursuant to the foregoing provisions of this section shall be paid to Landlord. 13.2 Restoration Controls. The provisions and conditions of Articles 9 and 10 shall apply to the repairs, restoration or replacement required to be performed by Tenant under this Article 13. 13.3 Release. Landlord releases Tenant from all claims, and all liability or responsibility to Landlord and to anyone claiming through or under Landlord, by way of subrogation or otherwise, for any loss or damage to the Building caused by fire or other peril, even if such fire or other peril was caused in whole or in part by the negligence or other act or omission of Tenant or its agents or employees; provided, however, that this release and waiver of subrogation shall (i) only be effective to the extent that the loss or damage is covered by the insurance maintained by Tenant pursuant to this Lease, (ii) not apply to the extent of any deductible applicable to such insurance, and (iii) only apply if such insurance includes a full release from liability and waiver of subrogation privilege permitting the release and waiver contemplated by this provision without jeopardizing the rights of Landlord to recover under such insurance. -12- ARTICLE 14 Condemnation 14.1 Total Taking. If the entire Premises shall be condemned or taken through or under the power of eminent domain, or if such a material portion of the Premises is so taken that in the reasonable opinion of Landlord or Tenant the restoration of the remaining portions of the Premises for the uses thereof at the time of such partial taking is economically unfeasible, this Lease and the term hereof shall cease and terminate upon the date of the vesting of title in the condemning authority, and all Rent, Impositions and other Additional Rent hereunder shall be apportioned to such date of termination, and any payments theretofore made in advance by Tenant shall be refunded ratably to Tenant. Landlord shall be entitled in such event to receive the entire award for the property so taken or condemned which may be made in such condemnation proceeding, and Tenant shall not be entitled to receive any portion thereof. Tenant hereby assigns and transfers to Landlord any and all claims to such award and waives and relinquishes any fight to make any claim for an award for the value of this Lease, or otherwise; provided, however, that Tenant shall be permitted to make separate claims for Tenant's own trade fixtures and equipment, and for relocation expenses and allowances, to the extent available. 14.2 Partial Taking. If less than such a material portion of the Premises shall be taken or condemned, as aforesaid, this Lease shall continue and shall remain in full force and effect, unless Tenant exercises its right to terminate this Lease as provided in Section 6.2 hereof. In the event of such a partial condemnation, Tenant shall (unless it exercises its fight to terminate the Lease as provided in Section 6.2 hereof) promptly make, or cause to be made, all demolition, repairs, reconstruction, restoration, replacement or rebuilding and all other work necessary, as nearly as may be practicable, to restore the Premises to the value, rentability, utility and condition immediately prior to such taking (with such Alterations, if any, as may be constructed under and in accordance with the provisions of Article 10). The net proceeds of the award in respect of such partial taking or condemnation, after the payment of all fees and expenses incurred in connection with the collection of such award, shall be paid over to Landlord, and shall be held in trust by Landlord or Landlord's designee and shall be made available to Tenant for use in making the demolition, repairs, restoration or replacement required under this Article 14. If such proceeds shall be insufficient to pay the entire cost of such work, Tenant shall not be required to pay any deficiency. At any time after the completion of such work, or in the event that Tenant elects to terminate this Lease pursuant to Section 6.2 hereof before completing such work, the balance of the proceeds not theretofore used pursuant to the foregoing provisions of this section shall be paid to Landlord. 14.3 Temporary_ Taking. If the whole or any part of Tenant's estate or interest under this Lease shall be taken or condemned by any governmental agency or authority for its temporary use or occupancy, this Lease shall not terminate by reason thereof, and, unless Tenant exercises its fight to terminate this Lease as provided in Section 6.2 hereof, Tenant shall continue to pay, in the manner and at the times herein specified, the Base Rent, the Impositions and all other Additional Rent, and all other -13- charges payable by Tenant hereunder, without any abatement or reduction thereof, and, except only to the extent that Tenant may be prevented from so doing pursuant to the terms of the order of the condemning authority, Tenant shall perform and observe all of the other terms, covenants, conditions. and obligations hereof upon the part of Tenant to be performed and observed, as though such taking had not occurred. Tenant shall be entitled to receive the entire award paid for or in connection with such a taking, whether by way of damages, as rent, or otherwise, so long as Tenant shall not be in default hereunder; provided, however, that if the award is paid in a lump sum, or shall be payable less frequently than in monthly installments, the award shall be paid to and held jointly by Landlord and Tenant, in Landlord's and Tenant's names, in an interest-bearing account with a commercial banking organization designated by Landlord and such award shall be applied as follows: (a) If the award shall be made in a lump sum, it shall be divided by the number of months included in the period of such temporary use or occupancy and, so long as Tenant shall not be in default hereunder, an amount equal to the quotient shall be paid over to Tenant monthly; and (b) If the award or awards shall be paid less frequently than in monthly installments, each such installment shall be divided by the number of months to which it is attributable and, so long as Tenant shall not be in default hereunder, an amount equal to the quotient shall be paid over to Tenant monthly; provided, however, that if such period of temporary use or occupancy shall extend beyond the expiration of the Lease Term, Landlord shall be entitled to receive and retain the amount of the award attributable to the period subsequent to the expiration of the Lease Term. 14.4 Landlord's Waiver of Condemnation Right. Notwithstanding any provision of this Agreement, Landlord waives the right, during the Lease Term, to condemn or take through or under the power of eminent domain Tenant's leasehold interest in the Premises. ARTICLE 15 Assignment 15.1 Assignment by Tenant. Tenant shall not, without obtaining the prior written consent of Landlord, assign, convey, mortgage or otherwise transfer this Lease or any interest hereunder, or sublet the Premises or any part thereof. Tenant shall by notice in writing advise Landlord of any request to assign this Lease or to sublet all or any part of the Premises. Tenant's notice shall include all of the terms of and consideration for the proposed assignment or sublease, the proposed effective date, the name and address of the proposed assignee or subtenant and a true and complete copy of the proposed assignment or sublease and any other related agreements. -14- 15.2 Assignment by Landlord. In the event that Landlord, or any successor owner of the Premises, or any holder of Landlord's interest in this Lease, or any fee owner of all or any portion of the Premises (or the owner of any interest or estate therein), shall convey or otherwise dispose of such title, interest or estate, then all liabilities and obligations thereafter accruing or maturing on the part of Landlord or any such successor-owner of the Premises, or former holder of Landlord's interest under this Lease, or former fee owner of the Premises or any interest or estate therein, shall cease and terminate, and each successor-owner of the Premises or holder of Landlord's interests under this Lease, shall, without further agreement, be bound by Landlord's covenants and obligations, but only during the respective periods of the ownership by such parties; and, unless Tenant exercises its right to terminate this Lease as provided in Section 6.2 hereof, Tenant shall continue to be bound by this Lease and shall recognize the successor to Landlord's interests as the Landlord hereunder. ARTICLE 16 Default 16.1 Events of Default. There shall be an "Event of Default" hereunder and the Landlord may terminate this Lease upon 60 days' notice to Tenant: 16.1.1 If Tenant shall be in default in the payment of any Rent and such default is not cured within 15 days after written notice thereof given by Landlord; or 16.1.2 If Tenant shall be in default in the performance of any of the terms, covenants, conditions and provisions of this Lease on Tenant's part to be performed (other than the covenants for the payment of Rent) and such default is not cured within 60 days after written notice thereof given by Landlord; or if such default shall be of such nature that it cannot be cured completely within said 60 day period, if Tenant shall not have promptly commenced curing such default within such period and shall not thereafter proceed with reasonable diligence and dispatch and in good faith to remedy such default; or 16.1.3 If Tenant shall be adjudicated a bankrupt, shall make a general assignment for the benefit of its creditors, or invoke the benefit of any insolvency act, or if a permanent receiver or trustee in bankruptcy be appointed for Tenant's property and such appointment is not vacated within 90 days; or 16.1.4. If, after commencement of the Lease Term, the Premises are permitted to be physically vacant or deserted (unless as a result of an insured casualty) for a period of 60 consecutive days; or 16.1.5 If this Lease shall be mortgaged or assigned, or if the Premises, or any portion thereof, are sublet, other than in accordance with the terms hereof. -15- 16.2 Termination. If Landlord shall give the 60 days' notice of termination provided in Section 16.1, then, upon the expiration of such 60 day period, this Lease shall terminate and Tenant shall then quit and surrender the Premises to Landlord. If this Lease shall so terminate, it shall be lawful for Landlord, at its option, without formal demand or notice of any kind, to re-enter the Premises by summary dispossession proceedings, or by any other lawful means, and to remove Tenant therefrom without being liable for any damages therefor. 16.3 Remedies. In the event of termination of this Lease and re-entry by Landlord as provided in Section 16.2, or in the event Landlord shall dispossess Tenant by summary proceedings, or otherwise, Landlord may re-let the Premises, or any part or parts thereof on such conditions and for such term or terms as Landlord may deem advisable, if Landlord so elects, which terms may at Landlord's option be less than or exceed the unexpired period which would otherwise have constituted the remainder of the Lease Term, and may grant rent concessions and other credits to the lessees (including credits or allowances to accommodate the cost of Alterations), and may charge a greater or lesser rental than that reserved in this Lease. 16.4 No Waiver. The remedies of Landlord and Tenant provided in this Lease are cumulative and shall not exclude any other remedies to which either may be lawfully entitled. The failure of either party to insist upon strict performance by the other of any term, covenant or condition herein contained shall not be a waiver of such term, covenant or condition by the non-objecting party for the future. No waiver or change or any provision of this Lease shall be effective unless contained in a written instrument signed by both Landlord and Tenant. ARTICLE 17 Security 17.1 Security Deposit. Tenant shall deposit with Landlord on or before July 11, 2000, the sum of $20,000 (the "Security Deposit"), as security for the full and faithful performance and observance by Tenant of each and all of the terms, covenants, conditions, provisions, limitations and agreements of this Lease. 17.2 Application of Security Deposit. 17.2.1 In the event of any default by Tenant hereunder, or the occurrence of any Event of Default, including defaults in the payment of Rent, any Imposition or other charges and any default in the payment or performance of Tenant's obligations under Section 10.3.7, Landlord may use, apply or retain the whole or any part of the Security Deposit, to the extent required for the payment of any such Rent, Impositions and other charges as to which such Tenant is then in default, or to reimburse Landlord for any sum which Landlord may reasonably be required to expend by reason of such default or Event of Default. In the event that Tenant shall -16- fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the Security Deposit, without interest, shall be returned to Tenant within 10 days after the expiration of the Lease Term and delivery of possession of the Premises to Landlord. 17.2.2 In the event that Tenant exercises its option under Section 10.3.7(b) hereof to leave the Security Deposit on deposit with Landlord in lieu of removal of the applicable Alteration and repair of the Premises, Landlord may use, apply or retain the whole or any part of the Security Deposit to effect such removal and repair; provided, however, that: (a) if such removal and repair is not effected by Landlord within 180 days after the end of the Lease Term, Landlord shall return the Security Deposit, without interest, to Tenant; (b) if such removal and repair is effected by Landlord within 180 days after the end of the Lease Term but the cost thereof is less than the amount of the Security Deposit, the amount by which the Security Deposit exceeds such cost, without interest, shall be returned to Tenant; and (c) if such removal and repair is effected by Landlord within 180 days after the end of the Lease Term but the cost thereof exceeds the amount of the Security Deposit, Tenant shall, upon demand by Landlord, pay to Landlord the amount by which such cost exceeded the amount of the Security Deposit. ARTICLE 18 Entry by Landlord; Performance of Covenants 18.1 Entry. Tenant shall permit Landlord or its agents to enter the Premises during normal business hours (and at any time in cases of emergency) (i) for the purpose of inspection thereof, (ii) for showing the Premises to persons wishing to purchase the same, or in connection with mortgage or other financing, and (iii) at any time within 12 months prior to the expiration of the Lease Term, for exhibition to persons wishing to rent the same. 18.2. Cure of Covenants. If Tenant shall be in default hereunder, Landlord may, with or without declaring an "Event of Default", upon 30 days' prior notice to Tenant, or without notice in case of an emergency, cure such default on behalf of Tenant (unless Tenant shall itself, within such period, commence and thereafter diligently proceed to cure such default), and for the purpose thereof may enter upon the Premises, and upon demand (unless Tenant exercises its right to terminate this Lease as provided in Section 6.2 hereof) Tenant shall reimburse Landlord for any reasonable and necessary expenses incurred to effect such cure. 18.3 No Eviction. No entry of Landlord or its employees, agents or representatives, or by any other party at the direction of Landlord, shall ever be construed or interpreted as an ouster of Tenant from possession or as a constructive eviction or to alter, diminish or abate Landlord's rights or Tenant's obligations under this Lease. -17- ARTICLE 19 Notices 21.1 Notices. All notices, demands, consents, or requests under this Lease must be in writing and shall be sent postage prepaid by United States registered or certified mail addressed, or telecopied and followed within one day by registered or certified mail, if the party for whom intended is the Landlord, to Landlord at the following address and telecopy number: City of Columbia Heights 590 40t~ Avenue Northeast Columbia Heights, MN 55421-3878 Attention: City Manager Telephone: (763) 706-3600 Fax: (763) 706-3601 With Copy to: Mr. James D. Hoeft Bama, Guzy & Steffen, Ltd. 400 Northtown Financial Plaza 200 NW Coon Rapids Blvd. Minneapolis, MN 55433-5894 Telephone: (763) 780-8500 Fax: (763) 780-1717 and if such party is the Tenant, to Tenant at the following address and telecopy number: Families Moving Forward 1832 James Avenue North Minneapolis, MN 55411 Attention: Carol Merriweather, Executive Director Telephone: (612) 529-2185 Fax: (612) 529-2278 With Copy to: Leslie Frost Lutheran Community Foundation 625 Fourth Avenue South, Suite 1315 Minneapolis, MN 55415 Telephone: (612) 340-4192 Fax: (612) 340-4109 -18- Notices, demands, consents or requests served or given as aforesaid shall be deemed sufficiently served or given for all purposes hereunder on the day on which such telecopying or mailing shall occur; provided, however, that in lieu of such notice by United States registered or certified mail, the party giving the notice may do so by personal delivery to the addresses above specified. Either party shall have the right to change the address or telecopy number to which notices shall thereafter be sent to it by giving notice to the other party as aforesaid, but not more than two addresses shall be in effect at any given time for Landlord and Tenant hereunder. ARTICLE 20 Miscellaneous 20.1 Quiet Possession. Landlord covenants that Tenant shall peaceably and quietly enjoy the Premises for as long as Tenant performs and observes its obligations hereunder. 20.2 Holding Over by Tenant. No holding over by Tenant after the expiration of the Lease Term shall operate to extend the Lease Term. In the event of any unauthorized holding over, Tenant shall indemnify Landlord against all claims for damages by any other lessee to whom Landlord may have leased all or any part of the Premises effective upon the termination of this Lease. 20.3 Binding Effect. The terms, covenants, conditions and agreements herein contained shall run with the Premises and shall bind and inure to the benefit of the parties hereto and their respective representatives, successors and assigns; it being understood, however, that neither the provisions of this Section 20.3, nor any other provision in this Lease contained, shall be deemed to authorize the assignment of this Lease by Tenant without the prior written consent of Landlord, as herein required. 20.4 Captions. The captions of this Lease are for convenience and ease of reference only, and in no way define, limit or describe the scope or intent of this Lease, nor in any way affect this Lease, and shall be disregarded in the interpretation hereof. 20.5 Severable. If any provisions of this Lease shall be declared invalid or unenforceable, the remainder hereof shall remain unaffected thereby and shall continue in full force and effect. 20.6 Interpretation. It is acknowledged that in preparation of this Lease, indistinguishable contributions have been made by representatives of both Landlord and Tenant, and that Landlord and Tenant each waives any and all rights, either at law or in equity, to have this Lease, or any term or provision herein contained, construed in favor of either party over the other by reason of who drafted the same. -19- 20.7 Entire Agreement. This Lease contains the entire and only agreement between the parties hereto with respect to the Premises; and no oral statements, agreements or representations not embodied in this Lease shall have any force or effect. This Lease shall not be modified or amended in any manner except in writing, by instrument executed by both parties. 20.8 Interpretation of Terms. All personal pronouns used in this agreement shall include the other genders whether used in the masculine or feminine or neuter gender, and the singular shall include the plural whenever and as often as may be appropriate. 20.9 No Partnership. This Lease does not create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and Tenant, the sole relationship between the parties being that of landlord and tenant. The laws of the State of Minnesota shall govern the validity, performance and enfomement of this Lease. 20.10. Brokers. Landlord and Tenant each represents and warrants to the other that no other realtors, brokers or agents were involved in the negotiation and execution of this Lease. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -- SIGNATURE PAGE FOLLOWS] -20- IN WITNESS WHEREOF, Landlord and Tenant have each duly executed this Lease as of the date and year first above written. LANDLORD: CITY OF COLUMBIA HEIGHTS, MINNESOTA By. Its And Its TENANT: FAMILIES MOVING FORWARD By. Its And Its -21- EXHIBIT A Legal Description The South 20 feet of Lot 26; all of Lots 27, 28, 29 and 30; that part of the West One-half of Lot 31 lying South of the North 120 feet thereof; all in Block 4, Reservoir Hills; according to the recorded plat thereof, Anoka County, Minnesota. EXHIBIT B Initial Preapproved Alterations The initial Preapproved Alterations shall consist of the following: 1. Alterations necessary to restore to working order the existing heating, ventilating, air conditioning, electrical, mechanical, plumbing (including sanitary) and other facilities, systems and amenities included in the Property. 2. Alterations described in the attached Application for Building Permit dated March 17, 2000 and related Floor Plan & Elevations dated February 16, 2000 (the "Plan"), with the following modifications: If the showers and shower stalls shown in items 2/Al, 3/Al, 4/Al, 5/Al and 6/Al of the Plan are installed, a toilet stool arm will be included in each shower stall so that upon expiration of the Lease Term Landlord may, if it wishes, remove the shower heads, cap the shower plumbing and install an additional toilet stool in what was the shower stall. 3-16-200 8:41AH FRON COMtVlUNITY DEV.- CH 61278228~7 CITY OF COLUHBIA HEIGHTS 673-706-3678 APPLICATION FOR BUILDING PER~IT NEW CONSTRUCTION/COMMERCIAL &.INDUSTRIAL REHODELS/ADDNS. JILDING DEPARTMENT: roperty Owner:'~r~a~,/_z_/?-$ /~q.~.,~ i ty: ~G~/c State: ~nant: ~/~ ~.~ ~~ Address: P~ne: rch~tect: ~~ ~/~c~, ~. Address: _/~ ~_~~ ~ _ ity: ~d/~V~ ' - '' State: -- ~ ZiP:~F/ Phone: ¢/~ m~ ~;lder/Contractor: ~/~ ~~ ~ Address: ~ C¢~~ Address.: s Contractor licensed by: Co].Hgts. 3DR/SS OF NEW CONSTRUCTiON/REHODEL: uildlng, to be used esi ~2~--~¢~ . __ or State of Hn. _ License -z~'/o / VALUATI ON/CONST. COST:.~ /,-,~CP ~ sscrlption of Work to be Done: .~b ~.~?-~-c~.~;. ~.~ ~;~- ~ .. [zest Front ~' Oepth ~'Height:' Stories: Construction Type: m ist l~atlons/sizes of amenities: (i.e. garage, deck, flreplace, etc.) 'PLICANTS SiGnORE: ~ ~ __~ _OA~: ~//7~e minimum of ten (10) ~rki9g days required for olam. revie~ Drlor to pe~it issuances.) ~SESSNE~T DEPARTMENT: ~dress of N~ Construction: ~gal Description: Lot: Block: __ Addn./Subd.: ~is application (does) (does not) constitute a property ~ubd~v~slon. ~e Cit¥'Counci) on .... , . · Signed: {Assessing 0ep~j) It w'ill be presented to CG ! NEER I NG DEPAR?HENT: ~proval: Denied: Date: Signed: '-- -CF--hq .' Oept, .) Remarks:: IRE DEPARTMENT: ~prova ): Den i ed: Da te: Remarks: Signed: (Fire Dept.) EXHIBIT C TO PURCHASE AGREEMENT Permitted Encumbrances See attached Schedule B to Chicago Title Insurance Company Commitment Case No. 15546. CHICAGO TITLE INSURANCE COMPANY COMMITMENT No.: 15546 SCHEDULE B Upon payment of thc full coluideration to, or for thc account o/', the grantors or mortgagors, and recording of the deeds and/or mortgages, the form ,'md execution of which is satisfactory to the Company. the policy or policies to be issucd containing exceptions ir~ Schcdule B thereof to the following matters (unless tile same are disposed of Ihe satisfaction or' thc Company): If an owner's policy is to be issued, the mortgage enctunbrance, il any, created as part of the purchase Iransaction. Defects, liens, encumbrances, adwrse claims or other matters, if any, created, first appearing in thc public records or attacl~iag subsequent to ~c ~ffccOve date hereof but prior to ~c datc ~e proposed ~ured acquires for value of record thu ~state.or interest or mortgage ~ereon covered by ~is col~li~llel~t. ~gh~ or cla~ of parties ~ possession ~t shown by ~e public r~ords. ~croac~en~, owrlaps' bo~da~ line dlspu~s, and any o~cr maRel~ which would ~ disclosc~ by a~ accufit survey ~d his~ction of Ibc praises. Easements or claims of easements not shown by th~: public records. Any lien, or right to ~. lien, for services, l~bor or material heretofore or hereafter furnished, imposed by law and not shown by the public records. Taxes or special assessments which are not shown as er, isling liens by thc public records. General and special taxes and assessments as hereafter listCd, if any (all amounts shown being exclusive o1: interest, penalties and costs): ^) Real estate taxes payable in 2000 are $14,326,37 and :are half paid. Property Identification No. 36-30-24-23-0130 Real estate taxes payablc in 2000 arc $307.91 and are unpaid. I~'operty Identification No. 36-30-24-23-0133 n) NOTE: There are no delinquent taxes of record. Levied or pending assessments of record if any, NOTE: An assessment search has been requested and an endorsemcut will follow with the results of that search, 9. Rights or claims of tenants, as tenants only, in possession under unrecorded leases, 10, Notice of Lis Pendens to Condemn Land dated May 26, 2000, filed May ;16, 2000~ as i'~°cument No. 1502673 by City of Columbia Hdghts. 11. Easement for street m~d utilities in favor of the City of Cohanbia Heights as created in document dated April 23, 1981~ filed April 30, 1981, as Document No. 569597. 12/ Easement for sidewalk in favor of the City of Columbia Helgh~ as crealed in document dated March 26, 198~, filed April 20, 1984, as Document No. 640901. SCHEDULE fl ALTA Co~)n~ tment NO/ED 'd 'ON XW3 'WH ED:lO ~qM nnn2-n2-Nnr CHICAGO TITLE INSURANCE COMPANY COMMITMENT Case No.: 15546 SCHEDULE B 13. 14. Easement for utilities in favor of the City of Cohunbla Hclghts as created in document deled March 28, 1984, filed April 20, 1984, as Document No. 640903. Minerals and mineral rights reservcd by thc State of Minnesota as shown in Docmnent No. 211444 Book 485~ Page 529; Document No. 97528 in Book 1174, Page 1451 and Docm~mnt No. I111136 in Book 193, Page $69. END OF SCHEDIJLE B EXCEPTIONS NOTI~ FOR INFORMATION Upon om- receipt and review of a standard form of affidavit, Item Nos. 3, 5 and 7 of Schedule ]1 may be deleted from the Final policy. Item No. 9 wa'Il be modified to reflect the interests of specific tenants. A current survey, certlrted %o ConmaerclalPartners Title, LLC and Chic'ago Title Insure.ncc Company~ will bc required to delete Item Nos, 4 and S or Schedule B from the final policy. We require a Well Disclosure Certificate be completed and furnished aG the time of closlng for all deeds that require a Certificate of Real Estate Value. OR The following slatement mint be added to the deed: Thc seller certifies that the seller docs not know of any wells on the described real propc~-ty. The Tan Reform Act of 1986 requires that the seller provide the following information at the time of closing: 1. Tax Identification Number 2. Full Forwarding Addre.~. SCHEDUL£ ALTA PO/DO 'd 'ON XVJ WA RD:tn