HomeMy WebLinkAbout[05] Colts Academy Purchase Agreement
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Council Agenda Item
MEETING DATE:
June 15
AGENDA ITEM:
Purchase Agreement, Colts Academy
SUBMITTED BY:
Administration
BOARD/COMMISSION/COMMITTEE RECOMMENDATION:
None
PREVIOUS COUNCIL ACTION:
City Council negotiating with ISD 742 for the purchase of Colts
Academy for a community center in the amount of $2.3M. During the negotiations the Council identified
the items of concern for staff to negotiate a purchase agreement with ISD 742 and Little Saints.
BACKGROUND INFORMATION:
Staff has been working with representatives of ISD 742 to
negotiate a lease for Colts Academy. The Council had requested that the purchase agreement include the
following:
1) City purchases the property and becomes the property owner in 2015.
2) District 742 will be a tenant of the facility, and will not be charged rent.
3) The City will only contribute up to $ 15,000 per year for the typical maintenance and
utilities for the duration of the lease.
4) The City will assume the water bill and will be responsible for the snow removal and
lawn care upon the completion of the purchase.
5) The City will negotiate a lease with Little Saints and will receive the annual rent to
help offset the maintenance costs.
6) The City will be allowed use of Gym periodically after hours and on weekends as
coordinated with the District.
7) The City will have the ability to add additional structures to the property at any time
while ISD 742 is a tenant.
8) ISD 742 will remove the playground equipment when they leave the building at no
cost to the City
9) The district will vacate the building no later than July 1, 2017 or when the facility is
no longer needed. ISD will provide the City with a 90 day notice of intent to vacate.
Due to timing, the School Board has already reviewed and approved the proposed purchase agreement. It
was understood that the Council has not seen the proposed purchase agreement and it would be scheduled
for June 13 and there could be changes.
ATTACHMENTS:
Request for Council Action – Public Hearing Proposed Tax Abatement
Purchase and Lease Agreement between the City of St. Joseph and ISD 742
REQUESTED COUNCIL ACTION:
Determine if the purchase agreement satisfies the concerns of the
City and if so, authorize execution of the purchase agreement. If it does not identify those items for
consideration.
REAL ESTATE PURCHASE AGREEMENT
Independent School District #742, a public corporation under the laws of Minnesota (the
"Seller"), and The City of St. Joseph, a municipal corporation (the "Buyer"), make this Real
Estate Purchase Agreement (the "Agreement") effective as of ________________, 2015 (the
"Effective Date").
In consideration of the parties' mutual covenants and representations in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the parties agree as follows:
1. Sale of Property. Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, all of Seller's right, title, and interest in the real property located at South First Avenue,
St. Joseph, Stearns County, Stearns County Tax Parcel 84-53457-0005, consisting of
approximately 16.94 acres and legally described on the attached Exhibit A (the "Land"), together
with (a) the building, structures, facilities, fixtures, floor coverings, window coverings,
appliances, equipment and improvements (including all replacements and additions) constructed
or located on the Land (the "Building"); and (b) all easements, privileges, rights, permits,
certificates, variances, approvals, authorizations, licenses, warranties, plans and records
benefiting or appurtenant to the Land or the Building (all of the foregoing collectively referred to
as the "Property").
2. Purchase Price and Manner of Payment. The total purchase price (the "Purchase
Price") Buyer will pay to Seller for the Property will be Two Million Three Hundred Thousand
and no/100 Dollars ($2,300,000.00) payable in cash, check, or wire funds as follows:
a.Earnest Money. $10,000.00 as earnest money (the "Earnest Money") which Buyer
will deposit with a title company Seller designates (the "Title Company"), to be
applied against the Closing Payment (as hereinafter defined) on the Closing Date
or otherwise disbursed all as provided in this Agreement. The Earnest Money
shall be immediately refunded to Buyer upon the failure of any contingency
provided in this Agreement or as otherwise provided in this Agreement.
b.Installment Payments. The balance of the Purchase Price shall be paid by Buyer to
Seller on the Closing Date in cash, certified check or wire transfer as follows:
Two Million Two Hundred Ninety Thousand and no/100 Dollars ($2,290,000.00)
(The “Closing Payment”).
3. Contingencies. Buyer's obligations under this Agreement are expressly contingent
upon satisfaction or waiver of each of the following conditions on or before the Closing Date:
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a.Title. Title to the Property shall have been found acceptable to Buyer, or been
made acceptable, in accordance with this Agreement's requirements and terms.
b.Performance of Seller's Obligations. Seller shall have performed all of its
obligations, covenants, and agreements required to be performed or complied with
by Seller under this Agreement, as and when required by this Agreement, on or
before the Closing Date.
c.Representations and Warranties. All of Seller's representations and warranties
contained in this Agreement must be true and correct both now and as of the
Closing Date as if made on the Closing Date, and Seller shall have delivered to
Buyer at Closing a certificate signed by an officer of Seller and dated as of the
Closing Date certifying and reaffirming that all of Seller's representations and
warranties are true and accurate as of the Closing Date (the "Bring Down
Certificate").
d.Inspections. Buyer shall have determined that it is satisfied, in its sole discretion,
with such investigations, inspections and testings of the Property (the
"Inspections") including, without limitation, any surveys, building inspections,
soil tests, hazardous waste and environmental reviews, including, Phase I and
Phase II environmental site assessments and environmental reports and other tests
of the Property, as Buyer, in its sole discretion, deems to be necessary or
appropriate to determine the suitability and feasibility of the Property for Buyer's
intended use of the Property as a community center and education facility. Seller
shall allow Buyer, and Buyer's agents, physical access to the Property without
charge at all reasonable times for the purpose of Buyer's Inspections. Buyer shall
pay all costs and expenses of such Inspections and shall hold Seller and the
Property harmless from all costs and liabilities relating to the Buyer's Inspections.
Buyer shall further repair and restore any damage to the Property caused by or
occurring during Buyer's Inspections and return the Property to substantially the
same condition as existed prior to such entry. Buyer shall use its best efforts to
have all of its initial building inspections completed within forty-five (45) days of
the Effective Date.
e.Document Review. Buyer shall have determined that it is satisfied, in its sole
discretion, with its review and analysis of the Due Diligence Documents (as
defined herein) and the information contained therein. Within ten ( 10) days after
the Effective Date, Seller shall provide Buyer with true, correct and complete
copies of all surveys, property tax statements, contracts, plans, records,
certificates of occupancy, engineering, soil, physical condition, environmental
inspection, geotechnical and any other reports, documents and information
relating to the Property which are currently in Seller's possession or control which
Seller has reasonable access to (collectively, the Due Diligence Documents").
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f.Governmental Approvals. Buyer shall have obtained any and all final
governmental approvals, licenses, permits, certificates, variances, and
authorizations (collectively the "Approvals) for Buyer's intended use of the
Property, which are necessary in Buyer's sole discretion. Seller agrees to join in
any applications for, cooperate with, and execute such documents required by
Buyer in transferring or obtaining all Approvals related to Buyer's intended use of
the Property. Buyer shall be responsible for all fees and costs associated with all
Approvals.
g.Survey. Buyer shall have been satisfied, in its sole discretion, with the results of a
survey of the Property (the "Survey") obtained by Buyer at its option and cost.
h.Condition of Property. The Property shall be in substantially the same condition
on the Closing Date as it was as of the Effective Date and not materially altered or
changed and Buyer shall be satisfied with its final review and inspection of the
Property to confirm that the Property is in substantially the same condition and
that no material change or alteration has occurred to the Property as of the Closing
Date.
i. Zoning. Buyer shall have obtained assurances that the Property is properly zoned
for Buyer's intended use of the Property.
If any contingency has not been satisfied or waived by Buyer on or before the Closing
Date, then Buyer may at its option terminate this Agreement by written notice to the Seller at any
time on or before the Closing Date. Upon termination of this Agreement pursuant to this Section
3 (and except as otherwise provided herein), all of the Earnest Money, shall be immediately
released to Buyer, this Agreement shall terminate and neither party shall have any further rights
or obligations regarding this Agreement or the Property.
4. Closing. The closing of the purchase and sale contemplated by this Agreement
(the "Closing") shall be held at a mutually acceptable time on or before September 1, 2015 (the
"Closing Date") at the Title Company's office, or another mutually agreed upon location, or such
other date, time and place the parties agree upon. Notwithstanding the Closing, Buyer shall allow
Seller to remain on the Property and lease the Property from Buyer for a rent-free term
commencing on the Closing Date and continuing thereafter until July 1, 2017, pursuant to the
terms and conditions outlined within the Lease attached as Exhibit B (the "Lease").
a. Seller's Closing Documents. On the Closing Date, Seller will execute and deliver
to Buyer all of the following documents (collectively, "Seller's Closing
Documents"):
(1) Warranty Deed. A Warranty Deed (the "Deed") in a recordable form
reasonably acceptable to Buyer conveying the Property to Buyer and
warranting marketable title free and clear of all encumbrances, except the
Permitted Encumbrances.
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(2) Title Documents. An Affidavit of Title by Seller indicating that on the
Closing Date there are no outstanding, unsatisfied judgments, tax liens or
bankruptcies against or involving Seller or the Property; that there has
been no skill, labor or material furnished to the Property for which
payment has not been made or for which mechanics' liens could be filed;
and that there are no other unrecorded interests in the Property, together
with whatever standard owner's affidavit and/or indemnity forms and other
documents which may be reasonably required by the Title Company or the
Buyer to close the transaction and issue the Title Policy with standard
exceptions waived and providing extended coverage.
(3) FIRPTA Affidavit. A non-foreign affidavit, properly executed and in
recordable form, containing such information as is required by IRC
Section 1445(b)(2) and its regulations.
(4) IRS Reporting Form. The appropriate Federal Income Tax reporting
form, if any, required by law or the Title Company.
(5) Well, Septic System, and Storage Tanks. All certificates, disclosure forms
or affidavits required by the Title Company regarding any wells, private
septic systems, or underground or above ground storage tanks on the
Property, if any.
(6) Keys. All keys owned by and in possession of Seller and used in
connection with the Property, including key cards, security codes and
combinations.
(7) Closing Statement. A joint closing statement in a form reasonably
acceptable to parties.
(8) Bring Down Certificate. The Bring Down Certificate containing the
certification described in Section 3(c) of this Agreement.
(9) Lease. The Lease attached to this Agreement as Exhibit B.
(10) Other Documents. All other documents reasonably determined by Buyer
or the Title Company to be necessary to transfer the Property to Buyer free
and c1ear of all encumbrances except the Permitted Encumbrances.
b. Buyer's Closing Documents. On the Closing Date, Buyer wil1 execute and deliver
to Seller all of the following (collectively, "Buyer's Closing Documents"):
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(1) Closing Payment. The Closing Payment.
(2) Lease. The Lease attached to this Agreement as Exhibit B.
(3) Title Documents. Such affidavits of Buyer, Certificates of Value or other
documents as may be reasonably required by the Title Company to record
the Seller's Closing Documents and issue the Title Policy.
5. Prorations. Seller and Buyer agree to the following prorations and allocation of
costs regarding this Agreement:
a.Title Insurance, Closing Fee, Deed Tax, Recording Fees. Seller will pay all costs
of the Title Commitment and any fees charged by the Title Company for any
escrow required regarding Buyer's Objections. Buyer will pay all premiums
required for the issuance of a Title Policy. Seller and Buyer will each pay one-half
(½) of any reasonable and customary closing fees or charges imposed by the Title
Company. Seller will pay all local and state deed, stamp or transfer taxes
regarding the Deed and the cost of recording all documents necessary to place
record title in the condition warranted and requested of Seller in this Agreement.
Buyer will pay the cost of recording the Deed. Seller will pay the costs to record
all documents necessary to release any mortgages, liens or other encumbrances
which are not Permitted Encumbrances. Each party will pay their own attorney's
fees.
b.Real Estate Taxes and Special Assessments. Seller shall pay in full, on or before
the Closing, all general real estate taxes and installments of special assessments
payable therewith payable in all years prior to the year of Closing. Seller will pay
in full, on or before the Closing Date, all special assessments levied, pending,
certified or constituting a lien against the Property as of the Closing Date,
including without limitation any installments of special assessments including
interest payable with general real estate taxes in the year of Closing. Seller and
Buyer shall prorate general real estate taxes payable in the year of Closing as of
the Closing Date based upon a calendar year. Seller shall pay all deferred real
estate taxes or special assessments which may become payable as a result of the
sale contemplated by this Agreement. Seller shall pay all delinquent real estate
taxes and special assessments, together with all penalties, interest, and costs
payable in the year of Closing and all prior years. Buyer shall pay all real estate
taxes and special assessments payable therewith in all years after the Closing.
c.Utilities. All utility costs of the Property will be paid pursuant to the Lease terms
so that Seller pays the utility costs accruing during the Lease term, and Buyer
pays the utility costs accruing on and after the termination or expiration of the
Lease. Seller and Buyer will arrange to have all such services and companies to
have accounts opened in Buyer's name beginning on the first day after the
termination or expiration of the Lease.
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d.Attorneys' Fees. Each of the parties will pay its own attorneys' fees, except that a
party defaulting under this Agreement or any closing document will pay the
reasonable attorneys' fees and court costs incurred by the non-defaulting party to
enforce its rights regarding such default.
6. Title Examination. Except for the Permitted Encumbrances, Seller will satisfy all
liens or encumbrances against the Property, and Buyer will receive the Property free and clear of
any and all liens or encumbrances. The title examination for the Property will be conducted as
follows:
a. Seller's Title Evidence. Seller shall within ten (10) days after the Effective Date
and at Seller's cost and expense, furnish to Buyer all of the following title
evidence (the "Title Evidence"): a title commitment (the "Title Commitment") to
issue an owner's title insurance policy (the "Title Policy") issued by the Title
Company. The Title Commitment will commit the Title Company to insure that
Buyer will have good and marketable title to the Property and its appurtenances
on the Closing Date free and clear of all liens, mortgages and encumbrances,
except the Permitted Encumbrances, and shall be updated prior to Closing. Seller
will also provide Buyer with a copy of Seller's existing survey of the Property, if
any (the "Existing Survey"), which shall be included as part of the Title Evidence.
Buyer may obtain at its cost and expense, a current or updated survey certified to
and reasonably satisfactory to Buyer and the Title Company, showing the
Property and all other matters required by Buyer and the Title Company (the
"Survey").
b. Buyer's Objections. Within twenty (20) business days after Buyer's receipt of all
of the Title Evidence, including copies of all documents listed in Schedule B of
the Title Commitment, Buyer will make written objections (the "Objections") to
the form and/or contents of the Title Evidence and the status of title. If an update
to the Title Commitment reveals any encumbrance that did not appear in the
original Title Commitment, Buyer shall have the right to make Objections to such
encumbrance and the provisions of this Section 6(b) shall again apply to such
Objections. Any matter shown on the Title Evidence to which Buyer has not made
an Objection and the Mortgage shall be a "Permitted Encumbrance" under this
Agreement. Seller shall use its best efforts to correct all Objections within thirty
(30) days after receiving the Objections (the "Cure Period"), during which period
the Closing will be postponed as necessary. Seller further agrees to use all
reasonable efforts and to expend such sums as may be reasonably necessary to
make such title marketable in the event a defect is disclosed. To the extent an
Objection can be satisfied by the payment of money, Buyer at its option shall
have the right to apply a portion of the Purchase Price payable to Seller at the
Closing to satisfaction of such Objection and the amount so applied shall reduce
the amount of the Purchase Price payable to Seller at the Closing. If the
Objections are not cured within the Cure Period and on the Closing Date and
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Seller cannot deliver marketable title, Buyer will have the option to do any of the
following:
(1) Terminate this Agreement without any liability and receive a full refund of all
Earnest Money; or
(2) Withhold from the Purchase Price an amount which, in the reasonable
judgment of the Title Company, is sufficient to assure cure of the Objections.
Any amount so withheld will be placed in escrow with the Title Company,
pending such cure. If Se1ler does not cure such Objections within sixty (60)
days after such escrow is established, Buyer may then cure such Objections
and charge the costs of such cure (including reasonable attorneys' fees) against
the escrowed amount. If such escrow is established, the parties agree to
execute and deliver such documents as may be reasonably required by the
Title Company, and Seller agrees to pay the charges of the Title Company to
create and administer the escrow; or
(3) Waive the Objections and proceed to close; provided that Buyer shall have
the option, at Closing, to pay directly any liens, mortgages, charges or similar
encumbrances against the Property that are liquidated in amount and to which
an Objection has been made by Buyer, and Buyer may deduct the amount so
paid from the Purchase Price.
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c.Title PolicyBuyer may obtain, at Buyer's expense, at the Closing the Title Policy
issued by the Title Company pursuant to the Title Commitment, or a suitably marked
up commitment initiated by the Title Company undertaking to issue such a Title
Policy required by the Title Commitment as approved by Buyer.
7. Operation Before Closing. During the period from the Effective Date to the
Closing Date, Seller will operate and maintain the Property in the ordinary course of business in
accordance with prudent, reasonable business standards, including the maintenance of adequate
liability insurance and insurance against loss by fire, windstorm and other hazards, casualties and
contingencies, including vandalism and malicious mischief. Seller will not enter into or consent
to any agreement or obligation regarding the Property that is not terminable on or before the
Closing Date without Buyer's prior written consent. Seller will give Buyer written notice of any
notice which Seller receives from any governmental authority concerning any alleged violation
of any law, ordinance, code, rule, regulation or order regulating the Property or its use.
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8. Seller's Representations and WarrantiesSeller represents and warrants to Buyer
now and as of the Closing Date as follows:
a. Organization. Seller is duly organized, validly existing and in good standing
under Minnesota law. Seller has all requisite power and authority to own the
Property and has taken all necessary action to enter into this Agreement. Seller
has the requisite power and authority to enter into and perform this Agreement
and those Seller's Closing Documents signed by it, such documents have been
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duly authorized by all necessary action on the part of Seller and have been or will
be duly executed and delivered. The execution, delivery and performance by
Seller of such documents does not and will not conflict with or result in a
violation of any agreement, judgment, order, or decree of any court or arbiter to
which Seller is a party, such documents are valid and binding obligations of Seller
and are enforceable in accordance with their terms, and no consents or approvals
are required for Seller to enter into this Agreement and consummate the
transactions it contemplates.
b. Title to Property. Seller owns the Property, and on the Closing Date, the Property
will be free and clear of all encumbrances except the Permitted Encumbrances.
Notwithstanding the foregoing, part of the premises is currently leased to Little
Saints Academy.
c. Contracts and Permits. Seller has made or will make available to Buyer for review
within ten (10) days after the Effective Date a correct and complete copy of each
of the service and maintenance contracts, utility contracts, equipment leases and
other contracts regarding the Property (collectively the "Contracts") and all
permits, certificates, variances, licenses and governmental registrations, filings,
authorizations and approvals related to the Property and its current use
(collectively the "Permits"), including all amendments thereto. As of the Effective
Date, there are no defaults under the Contracts or Permits. The Contracts and
Permits are in full force and effect and neither Seller nor any party is in default
under any of the Contracts or Permits. There are no oral or other contracts or
permits regarding the Property. All other contracts in effect regarding the Property
are terminable on or before the Closing Date. Except for the Permits, no other
permits are required by any governmental entity in order to operate the Property
as it is now operated.
d.Assessments. Except for special assessments of record and levied against the Property
as of the Effective Date, Seller has no knowledge of and has not received any notice
of actual or threatened special assessments or reassessments of the Property, or any
hearing notice of a new public improvement project from any governmental assessing
authority, the costs of which may be assessed against the Property. Seller will
promptly provide Buyer with any notices it receives regarding any special
assessments or other charges against the Property.
e. Rights of Others to Purchase Property. Seller is the sole owner of the Property and
Seller has not entered into, and will not enter into, any other contracts for the sale or
lease of the Property, nor are there or will there be any rights of first
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refusal, options to purchase, rights to build, leases or any other agreements regarding
the Property, or any other rights of others that might prevent this Agreement's
consummation or Buyer's purchase of the Property in any way.
f. Construction Liens. No materials have been delivered nor any work or labor
performed on the Property under contracts with Seller during the last one hundred
twenty (120) days which have not been fully paid for, and no person or entity
presently has any lien, or right of lien, against the Property for labor or materials.
Seller will defend, indemnify, and hold Buyer harmless from and against all amounts
that Buyer may be compelled to pay in discharging or settling any mechanics lien
filed for record against the Property and relating to such labor and/or materials.
g. Wells, Septic Systems, Tanks. There are no wells or septic systems located on the
Property. The Property does not contain, and has not contained, any above ground or
underground storage tanks. The Property is connected to municipal water and sanitary
sewer.
h. Compliance with Law. The Property is in compliance with, and shall be in
compliance with on the Closing Date, all applicable zoning ordinances, building
codes and other applicable federal, state and local laws, regulations and ordinances
with respect to the Property.
i. Proceedings. There is no action, litigation, investigation, condemnation or proceeding
of any kind pending or, to Seller's best knowledge, threatened against Seller or any
portion of the Property.
i. Environmental Issues. The Property does not contain any hazardous waste or
materials and has been and is in compliance with all applicable federal, state and
local environmental laws, and Seller has obtained all permits required under such
environmental laws in connection with the Property's ownership and operation. Seller
has not received, nor is aware of, any notice of any past, present, or anticipated future
events, conditions, activities, investigations, plans, studies or proposals, which (a)
would interfere with or prevent compliance by Seller with any environmental law, or
(b) may give rise to any common law or statutory liability or otherwise form the basis
of a claim, action, suit, proceeding, investigation or hearing, involving Seller or the
Property and related in any way to hazardous substances or environmental laws. To
Seller's best knowledge, no investigation, administrative order, consent order and
agreement or litigation and settlement with respect to solid waste or hazardous
materials is in existence or threatened or anticipated with respect to the Property.
Seller does not have any material liability under any environmental laws. Seller has
disclosed and will provide reports and studies with respect to the Property which are
in Seller's possession. Seller is not aware of any methamphetamine
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production that has occurred on the Property.
k. Utilities. All utilities required for the Property's current operation are installed at the
Property and connected with valid permits. Seller has received no notice of actual or
threatened reduction or curtailment of any utility service now supplied to the
Property. Seller has paid for, and is current with, all utilities servicing the Property,
including all garbage hauling and sanitation services. A11 utility lines serving the
Property are located within the Property's boundaries, within lands dedicated to
public use, or within recorded easements for such purpose.
I. 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.
m. Use of Property. The Property is usable for its current uses without violating any
federal, state, local or other governmental building, zoning, health, safety, platting,
subdivision or other law, ordinance or regulation, or any applicable private restriction,
and such uses are legal conforming uses, and Seller has no knowledge of any notice
or claim to the contrary.
n. Condition. The Property is being sold “as is” with no express or implied
representations or warranties by Seller as to physical condition, quality of
construction, workmanship or fitness for a particular purpose, except for those
warranties and representations as herein set forth in Section 8 of this Real Estate
Purchase Agreement. Buyer, by closing the transaction, acknowledges satisfaction
with the property and accepts the condition of the property “as is” on the date of
Closing in all aspects and for all purposes, except for those warranties and
representations as herein set forth in Section 8 of this Real Estate Purchase
Agreement. .
o. Access. The Property has full and complete legal access from an adjoining public
road.
p. Unrecorded Documents. There are no unrecorded easements, leases or other rights or
documents affecting the Property and no party other than Seller has any unrecorded or
undisclosed legal or equitable interest in the Property.
q. Seller's Defaults. Seller is not in default concerning any of its obligations or liabilities
regarding the Property.
r. Certificate of Occupancy. Seller has received no notice of actual or threatened
cancellation or suspension of any certificates of occupancy for any portion of the
Property.
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9. Buyer's Representations and Warranties. Buyer represents and warrants to Seller
that Buyer is duly organized under Minnesota law and has the requisite power and authority to
enter into this Agreement and the Buyer's Closing Documents signed by Buyer. Buyer's Closing
Documents will have been duly authorized by all necessary action on Buyer's part and will have
been duly executed and delivered. Buyer's execution, delivery and performance of Buyer's
Closing Documents does not conflict with or result in violation of any contract or agreement, or
any judgment, order or decree of any court or arbiter to which Buyer is a party. Buyer's Closing
Documents are Buyer's valid and binding obligations, and are enforceable in accordance with
their terms. These warranties will survive Closing.
10. Damage. If, before the Closing Date, al1 or any part of the Property is damaged
by fire casualty, the elements or any other cause, Se11er shall immediately give notice to Buyer
of such fact and at Buyer's option (to be exercised within twenty (20) business days after receipt
of Seller's notice), this Agreement shall terminate, in which event neither party will have any
further obligations under this Agreement, and al1 Earnest Money shall be returned to Buyer. If
Buyer fails to elect to terminate this Agreement despite such damage, the Buyer may at its option
(a) require Seller to assign to Buyer all right to receive the proceeds of all insurance related to
such damage, Seller shal1 have no obligation to repair such damage, and the parties shall
proceed to Closing pursuant to this Agreement's terms and conditions; or (b) require Seller to
promptly repair such damage or destruction and return the Property to its condition prior to such
damage and Seller shall be entitled to all insurance proceeds for such damage, in which case
Buyer may delay the Closing Date until the repairs are satisfactorily completed.
11. Condemnation. If, prior to the Closing Date, eminent domain proceedings are
commenced against all or any part of the Property, Seller shall immediately give notice to Buyer
of such fact, together with a legal description of the Property being taken, and Buyer shall have
the right to choose one of the following options (to be exercised within twenty (20) business days
after receiving Seller's notice):
a. Terminate this Agreement by giving notice to Seller, and the Earnest Money shall
be returned to Buyer and neither party will have further obligations under this
Agreement; or
b. Purchase any remaining part of the Property which has not been so taken by
condemnation or eminent domain, with a prorata reduction in the Purchase Price
based on the number of square feet of the Property taken, and any awards from
such condemnation or eminent domain proceedings shall belong to Seller; or
c. Purchase the Property for the Purchase Price, and Seller shall assign to Buyer at
the Closing all of Seller's right, title and interest in and to any award made or to
be made in the condemnation proceedings.
Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with
respect to the condemnation proceedings without Buyer's prior written consent, which shall not
be unreasonably withheld.
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12. Broker's Commission. Seller and Buyer represent and warrant to each other that
they have not dealt with any brokers, agents, finders, or the like (a "Broker") in connection with
this transaction and the sale of the Property. Each party shall indemnify and hold the other party
harmless from and against all loss, costs, claims, damage and expense arising out of any claims
by any Broker claiming a fee or commission as a result of such indemnifying party's acts.
13. Mutual Indemnification. Except as otherwise provided in the Lease, Seller and
Buyer agree to indemnify each other against, and hold each other harmless from, all liabilities
(including reasonable attorneys' fees in defending against claims) arising out of the ownership,
operation or maintenance of the Property for their respective periods of ownership. Such rights to
indemnification will not arise to the extent that (a) the party seeking indemnification actually
receives insurance proceeds or other cash payments directly attributable to the liability in
question (net of the cost of collection, including reasonable attorneys' fees) or (b) the claim for
indemnification arises out of the act or neglect of the party seeking indemnification. If and to the
extent that the indemnified party has insurance coverage, or the right to make claim against any
third party for any amount to be indemnified against as set forth above, the indemnified party
will, upon full performance by the indemnifying party of its indemnification obligations, assign
such rights to the indemnifying party or, if such rights are not assignable, the indemnified party
will diligently pursue such rights by appropriate legal action or proceeding and assign the
recovery and/or right of recovery to the indemnifying party to the extent of the indemnification
payment made by such party.
14. Survival. All of this Agreement's terms will survive and be enforceable after the
Closing.
15. Notices. Any notice required or permitted to be given by any party upon the other
is given in accordance with this Agreement when it is (a) delivered personally to an officer of a
party, (b) deposited in a sealed wrapper in the United States mail, postage prepaid, (c) deposited
cost paid with a nationally recognized , reputable overnight courier, or (d) faxed or emailed,
provided an original is personally delivered or deposited as provided herein, properly addressed
as follows:
If to Seller: If to Buyer:
Independent School District The City of St. Joseph
#742 25 College Ave. N.
1000 44th Ave. N., Suite 100 Box 668
St. Cloud, MN 56303-2037 St. Joseph, MN 56374
Notices will 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, that the time for response to any
notice by the other party will commence to run one business day after any such deposit. Any party
may change its address for the service of notice by giving written notice of such change to the other
party, in any manner above specified, five (5) days prior to the effective date of such change.
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16. Captions. 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.
17. Entire Agreement; Modification. 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.
Notwithstanding the foregoing, under no circumstance shall this Section's terms eliminate Buyer's
right to revise the Closing Date by providing Seller written notice as provided within Section 4 of
this Agreement.
18. Binding Effect. This Agreement binds and benefits the parties and their respective
heirs, successors and assigns.
19. Controlling Law. Minnesota law will govern this Agreement.
20. Time of the Essence. Time is of the essence with respect to all matters in this
Agreement.
21. Remedies. If Buyer defaults under this Agreement, Seller shall have the right to
terminate this Agreement by providing Buyer with written notice of such default. If Buyer fails to
cure such default within twenty (20) days of the date of such notice, Seller will have the right to: (i)
cancel and terminate this Agreement and retain the Earnest Money as liquidated damages and not as
a forfeiture or penalty; or (ii) if Buyer has not cured its default within ten (10) days after written
notice thereof, then Seller may recover any other remedy at law or in equity, all remedies being
cumulative. If Seller defaults under this Agreement, Buyer will have the right to: (i) cancel and
terminate this Agreement by not less than ten (10) days written notice to Seller, and if Seller fails to
cure the default within such ten (10) days, then Buyer may terminate this Agreement, and the Earnest
Money will be returned to Buyer; and (ii) if Seller has not cured its default within ten (10) days after
written notice thereof, then Buyer may recover any other remedy at law or in equity, all remedies
being cumulative. Such remedies may include, without limitation, an order for specific performance
compelling Seller's performance of this Agreement's terms, and a recovery of all actual damages
suffered or incurred by Buyer by reason of Seller's default.
22. Cooperation. Each of the parties, without further consideration, agrees after the
Closing to execute such additional documents as may reasonably be necessary to carry out the
purposes and intent of this Agreement and to fulfill the obligations of the respective parties under this
Agreement.
23. Counterparts. This Agreement may be executed in any number of counterparts, all of
which together shall constitute the Agreement. This Agreement may be transmitted between the
parties by email or facsimile machine. Facsimile and scanned PDF signatures shall constitute original
signatures, and a faxed or emailed scanned PDF Agreement or counterparts containing the signatures
(original, faxed or emailed) of all the parties shall be binding upon the parties.
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24. Assignment. No party may assign its rights or obligations under this Agreement
without the prior written consent of the other party.
25. Seller's Debts. Except as specifically provided in this Agreement, Buyer shall not
assume or be liable for any of Seller's debts. Seller agrees to pay any and all state and federal tax or
withholding obligations, if any, applicable to the Property's operation and all debts and obligations
applicable to the Property.
26. Representation. Neil C. Franz of Franz Hultgren Evenson, P.A., has drafted this
Agreement on Seller’s behalf. Buyer is advised to seek separate legal representation regarding this
matter.
\[Signature. Page to Follow\]
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The parties have executed this Agreement effective as of the Effective Date.
SELLER: BUYER:
Independent School District #742 The City of St. Joseph
By:______________________________________ By:______________________________________
Its:__________________________________ Its:__________________________________
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EXHIBITA
Legal Description
That part of Lot Thirty-one (31) of Auditor’s Subdivision No. 4, Village of St. Joseph, and part of the
Southeast Quarter of the Southwest Quarter (SE ¼ SW ¼) of Section Ten (10), Township 124, North of
Range 29 West, Stearns County, Minnesota, described as follows: Commencing at a point on the North
Line of the Quarter-Quarter above described, said point being 205.68 Feet East of the Northwest Corner
of said Quarter-Quarter; thence continuing along said North Line East 1,106.6 Feet to the Northeast
°20’ West
Corner of said Quarter-Quarter; thence along the East Line of said Quarter-Quarter, South 00
686.0 Feet; thence West 662.68 Feet; thence North 00°20’ East, 276 Feet; thence South 89° 57’
West, 663.28 Feet to a point on the West Line of said Quarter-Quarter; thence along said West Line,
North 1°10’ East, 274 Feet; thence North 89°49’ East, 213.95 Feet; thence North 02° 19’ West,
136.14 Feet to the point of beginning; said Tract containing 16.00 Acres, more or less, and being
subject to an existing Partial Road Right of Way along the West Line thereof; all being in Stearns
County, Minnesota. 17
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EXHIBIT B
COMMERCIAL LEASE
The City of St. Joseph, a Minnesota municipal corporation with an address of 25 College
Ave. N., Box 668, St. Joseph, MN 56374 ("Landlord"), and Independent School District #742, a
public corporation under the laws of Minnesota, with an address of 1000 44Ave. N., Suite 100, St.
th
Cloud, MN 56303-2037 ("Tenant"), make this Lease effective as of __________________, 2015 (the
"Effective Date").
In consideration of the parties' mutual covenants and agreements in this Lease, and for other
good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the
parties agree as follows:
1. LEASE OF PREMISES. Landlord leases to Tenant and Tenant leases from Landlord,
part of the real property (the "Real Property") located at 124 First Avenue SE, St. Joseph, Minnesota
and legally described as:
See attached Exhibit A,
together with all rights, privileges, easements, appurtenances, and immunities belonging to or in any
way pertaining to the Real Property and together with that part of the building (the "Building") as
depicted on the attached Exhibit C and other improvements now erected upon the Real Property (the
portion of the Real Property and the Building subject to this Lease are depicted on Exhibit C, shall
hereinafter be referred to as the "Premises").
2. TERM. This Lease's term (the "Term") will commence on September 1, 2015 (the
"Commencement Date") and shall continue thereafter until whichever of the following events occurs
first: July 1, 2017 (the "Termination Date"); the date on which the Early Childhood Education
Programs cease to use the property; or, the Lease is otherwise terminated or extended as provided for
within this Lease. All of this Lease's terms and conditions are binding and in full force and effect
from and after the Commencement Date.
2.1 Tenant's Right to Terminate. Notwithstanding the foregoing, Tenant may,
during the Term, terminate this Lease by providing Landlord with at least ninety (90) days
written notice. Upon termination by Tenant, Tenant shall no longer be liable for amounts
otherwise due under this Lease subsequent to the termination date, however, Tenant shall pay
to Landlord the amounts to be paid by Tenant under this Lease up to the time of such
termination and shall surrender the Premises to Landlord pursuant to Section 17 of this
Lease.
3. RENT. Except for Tenant's obligations with respect to any sums required to be paid
by Tenant pursuant to this Lease's terms, such as utilities, insurance, taxes (if any) and other costs
and expenses (collectively the "Rent"), Tenant shall lease the Premises rent free for the Term.
4. TENANT'S ALTERATIONS. Tenant will not make or permit anyone to make any
alterations, additions or improvements, structural or otherwise including signage of any kind
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(collectively "Alterations"), in or to any part of the Premises, without Landlord's prior written
consent and fulfillment of any conditions to such consent. All Alterations will be made in accordance
with applicable laws, codes and insurance guidelines, will be performed in a good and workmanlike
manner, and will be done with materials of grade and quality at least equal to the materials used in
constructing the Premises. Tenant will clean up and remove all construction debris resulting from
Tenant's construction, and Tenant will maintain adequate insurance as this Lease requires. All
Alterations in or to the Premises made by Tenant will become Landlord's property upon this Lease's
expiration or termination and will remain upon and be surrendered with the Premises as a part of it
without disturbance or injury, unless Landlord requires Tenant to remove specific items at Tenant's
sole expense. In the event Landlord requires Tenant to remove such items, Tenant acknowledges and
agrees that it will do so before the Lease's expiration or termination at Tenant's expense, and Tenant
will repair any damage caused by such removal. All such removals and restoration shall be
accomplished in a good workmanlike manner so as not to damage the primary structure or structural
qualities of the Building and other improvements situated on the Premises. Landlord may inspect
Tenant's Alterations and the materials used at any time during the course of Tenant's work by
providing Tenant with at least twenty-four (24) hours' notice. Tenant will indemnify and hold
Landlord harmless from, any and all liability, costs, damages, expenses (including attorney's fees and
costs) and liens arising or resulting from Tenant's Alterations. If any Alterations to the Premises are
necessary to comply with any applicable Governmental Regulations or requirements of insurance
carriers, Tenant will at its expense promptly perform such Alterations in compliance with this
Section.
MAINTENANCE AND REPAIRS.
5.
5.1 Tenant's Maintenance and Repairs. Except for Landlord's maintenance and
repair requirements under Section 5.3, Tenant, at its sole cost and expense, shall during the
entire Term, maintain and repair that part of the Building subject to this Lease, including all
improvements, fixtures and all personal property located on the Premises, in good order,
condition and repair in at least the same or substantially similar condition as when Tenant
received the Premises from Landlord, ordinary wear and tear excepted. Tenant will be
entitled to all parts and service guaranties and warranties, if any, in effect on equipment or
items which Tenant is responsible for maintaining. Without limiting the generalities of
Tenant's obligations to repair and maintain the Premises, Tenant shall keep the glass of all
windows and doors clean and presentable, replace immediately all broken glass in the
Premises, keep all plumbing clean and in a good state of repair including pipes, drains,
toilets, basins, and water heaters, and keep all utilities, including any circuit breaker, panel
box, electrical wires and conduit, Tenant's meters and utility lines and services and all HVAC
within the Premises in good order, condition and repair.
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Tenant shall also maintain and repair at its expense all other components of the Premises,
including without limitation, removal of litter, maintaining, and sweeping parking areas, driveways,
access drives, and entrances; maintenance and repair of landscaping, lawns, drainage, sidewalks,
walkways, curbing, and irrigation systems (if any); repairing and maintaining utility lines serving the
Premises, signage, refuse collection areas, lighting standards, fire protection systems; and other areas
of the Premises. Tenant will maintain all of Tenant's improvements and Alterations on the Premises
at Tenant's sole expense. Tenant will also keep the Premises free of refuse, rodents and other pests.
Notwithstanding the foregoing, if any maintenance or repair exceeds $5,000.00 in expense,
then, and in that event, the Tenant shall forward the estimate to the Landlord for approval and cost
sharing. Landlord agrees that it will participate in such maintenance and repairs and will negotiate in
good faith with the Tenant to complete the work.
5.2 Damage Caused by Tenant. Notwithstanding anything apparently to the
contrary in this Lease, Tenant will immediately pay upon billing any cost of repairs or
improvements to any part of the Premises which are occasioned by the negligence,
intentional acts or default of Tenant, its officers, employees, agents or invitees, or by
requirements of law, ordinance or other governmental directive and which arise out of the
nature of Tenant's use and occupancy of the Premises or Tenant's installations in the
Premises.
5.3 Landlord's Maintenance and Repairs. Landlord shall maintain and repair the
Buildings' structural portions, which shall be limited to the foundation, exterior walls, roof,
downspouts, gutters, and other basic structural elements of the Premises. Landlord shall be
responsible for lawn care and snow removal. If Landlord defaults in fulfilling this Section’s
requirement and fails to correct such default within thirty (30) days after receipt of written
notice from Tenant of such default, provided that if the default cannot be reasonably cured
within thirty (30) days then Landlord shall not be in default if Landlord commences to cure
the default within the 30 days and diligently and in good faith continues to cure the default,
then in such event Tenant shall be entitled to collect reasonable expenses incurred relating to
enforcing Landlord’s obligation under this Section.
6. UTILITIES AND SERVICES. Landlord will pay directly to the provider before
delinquency all charges for water, sanitary sewer, natural gas, electricity, telephone, internet access,
cable and or satellite television, garbage removal, janitorial, cleaning and other utilities and services
directly servicing the Premises. Landlord will not be liable to Tenant for damages if utility services
are interrupted or terminate. Landlord shall pay 100% of the water and sewer charges so long as
Tenant follows the existing water conservation methods. The Landlord and Tenant shall each pay ½
of the gas, electric, garbage removal, janitorial, cleaning and other utility services up to a maximum
yearly payment by the Landlord of $15,000. Landlord shall be responsible for snow removal and
lawn care at their sole cost and irrespective of the cap referred to above.
7. REAL ESTATE TAXES. Landlord will pay, if any, all real estate taxes, ad
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valorem taxes, special assessments (including installments thereof) and all other governmental
charges and taxes levied or assessed against the Premises or any part of it which during this Lease's
Term are (a) levied, assessed or accrue against the Premises, (b) are due and payable, or (c) arise out
of the use, occupancy or possession of the Premises (collectively the "Real Estate Taxes").
8. USE. Tenant will use and occupy the Premises for school and school related purposes
which Tenant is currently conducting or engaged in at the time of this Lease (the "Permitted Use")
and for no other use, subject to all Governmental Regulations and this Lease's provisions. Tenant will
not use or occupy the Premises for any unlawful purpose, will comply with all present and future
Governmental Regulations of all governmental units having jurisdiction over the Premises and will
not cause or permit any unusual noise, vibration, odor or nuisance in or about the Premises. Tenant
will make all reasonable accommodations required because of Tenant's use of the Premises. Landlord
disclaims any warranty that the Premises are suitable for Tenant's use, and Tenant acknowledges that
Tenant has had a full opportunity to make its own determination in this regard.
9. HAZARDOUS MATERIALS. Tenant will not install, use, generate, store or dispose
of in or about the Premises any hazardous substance, toxic chemical, pollutant or other material
regulated by the Comprehensive Environmental Response, Compensation and Liability Act of 1985
or the Minnesota Environmental Response and Liability Act or any similar law or regulation,
including, without limitation, any material containing asbestos, PCB, CFC or HCFC (collectively
"Hazardous Materials") without Landlord's prior written approval of each Hazardous Material.
Landlord will not unreasonably withhold its approval of Tenant's use of immaterial quantities of
Hazardous Materials customarily used in Tenant's permitted business operations so long as Tenant
uses the Hazardous Materials in accordance with all applicable laws. Tenant will indemnify, defend
and hold Landlord harmless from and against any claim, damage .or expense arising out of Tenant's
installation, use, generation, storage, or disposal of any Hazardous Materials, regardless of whether
Landlord has approved the activity. The representations in this subsection will survive this Lease's
expiration or termination.
10. ASSIGNMENT AND SUBLETTING. Tenant will not assign, transfer mortgage or
encumber this Lease, sublet, rent or permit occupancy or use, or create or permit any lien upon (any
of the above are referred to as an "Assignment" ) the Premises or any portion of it, whether voluntary
or by operation of law, without Landlord's prior written approval. Any attempt by Tenant of any
Assignment without Landlord's consent will be void and of no further force and effect. Any
Assignment will not be construed to relieve Tenant from the requirement of obtaining Landlord's
written consent to any further Assignment. Tenant will pay all attorney's fees and costs Landlord
incurs regarding any of Tenant's Assignments which Landlord approves. Notwithstanding any
Assignment by Tenant, Tenant will continue to be liable for payment of Rent and other amounts
owed under this Lease and performance of all of Tenant's obligations under this Lease to the same
extent as though no Assignment had been made.
11. RIGHT OF ENTRY. Tenant will furnish a master key to the Premises to Landlord
and permit Landlord, or its representative, to enter the Premises, to examine, inspect and protect the
Premises, and to make such alterations, renovations, restorations and/or repairs as in Landlord's
judgment may be deemed reasonably necessary or desirable for the Premises. Except in the event of
an emergency, Landlord will provide Tenant with at least twenty-four (24) hours' notice prior to
entering the Premises. Landlord will use reasonable efforts to not unreasonably interfere with the
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conduct of Tenant's business, but Landlord will in no event be liable to Tenant for any damages in
connection with such entry or installation except for damages due to Landlord's negligence or
intentional misconduct.
12. INSURANCE.
12.1 Tenant's Insurance. Tenant, at its sole cost and expense, will carry and
maintain in full force and effect during this Lease's entire Term, the following insurance:
A. Liability Insurance. Commercial general liability insurance, providing coverage for
an "occurrence" rather than a "claims made" basis, including coverage for Bodily
Injury, Property Damage, Personal Injury, Contractual Liability (applying to this
Lease), and Independent Contractors, in current Insurance Services Office Form or
other form which provides coverage at least as broad. Tenant will maintain a
combined policy limit of at least $1,500,000 per occurrence and $2,000,000 general
aggregate applying to Bodily Injury, Property Damage, and Personal Injury, which
limit may be satisfied by Tenant's basic policy, or by the basic policy in combination
with umbrella or excess policies so long as the coverage is at least as broad as that
required in this Lease. Landlord will be named as an additional insured under all such
policies.
12.2 Insurance Certificate. At least ten (10) days before the Commencement Date,
Tenant will deliver to Landlord evidence that the insurance required by this Lease is in full force and
effect. At least ten (10) days before the expiration of any insurance coverage this Lease requires,
Tenant will deliver evidence that the coverage in question will be renewed or replaced upon
expiration. All evidence of insurance will contain sufficient information to enable Landlord to
determine whether Tenant's insurance complies with this Lease's requirements. Upon request, Tenant
will also furnish to Landlord certificates of insurance for all pertinent policies. All of Tenant's
insurance policies used to provide the coverage this Lease requires will (a) be endorsed to require the
insurer to provide at least thirty (30) days written notice to Landlord before cancellation, expiration,
material modification, or non-renewal, and (b) be issued by financially sound companies qualified to
do business in Minnesota and reasonably acceptable to Landlord.
12.3 Landlord's Insurance. Landlord will carry in full force and effect the
following insurance during the Term:
A. Property Insurance. "All risk" property insurance covering the full replacement value
of the Premises, exclusive of Tenant's leasehold improvements and any binders
currently required by Tenant's insurance company.
B. Liability Insurance. Commercial general public liability insurance or its equivalent
covering the Premises, in a combined single limit amount of at least $1,000,000, and
written on “claims-made” basis.
12.4 Workers' Compensation Insurance. Tenant will keep in full force and effect
during the Term, at its sole cost and expense, workers compensation insurance to the extent and in
the amounts required by Minnesota law.
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12.5 Waiver of Subrogation. Landlord and Tenant mutually release each other
from liability and waive all right of recovery against each other for any loss or damage to the
Premises, or its contents to the extent the loss or damage is covered by insurance maintained by each
respective party whether or not the required insurance is actually maintained. This release and waiver
applies to any loss or damage from any cause whatsoever, including, without limitation, the
negligence of the other party, its occupants or permittees, and will also apply to the extent of any
deductible maintained by a party under its insurance policies. This Section will be inapplicable if it
would have the effect, but only to the extent it would have the effect, of invalidating any insurance
coverage of Landlord or Tenant.
12.6 Risk of Loss. Notwithstanding anything apparently to the contrary in this
Lease, Landlord and its partners, officers, employees and agents will not be liable to Tenant, and
Tenant releases such parties from all damage, compensation or claims from any cause other than the
intentional misconduct of Landlord or its partners, officers, employees or agents arising from: loss or
damage to personal property or trade fixtures in the Premises including books, records, files,
computer equipment, computer data, money, securities, negotiable instruments or other papers; lost
business or other consequential damage arising out of interruption in the use of the Premises; and any
criminal act by any person other than Landlord or its partners, officers or employees.
12.7 Insurance on Tenant's Personal Property. Any insurance policy on Tenant's
personal property will be payable solely by Tenant and will contain a waiver of subrogation rights
against Landlord. Landlord will have no obligation to insure Tenant's personal property.
13. INDEMNIFICATION. Tenant agrees to defend, indemnify and hold Landlord and its
partners, officers, employees, and agents harmless from and against any claim, loss or expense
arising out of injury, death or property loss or damage occurring in the Premises, or from Tenant's
occupancy or use of the Premises, or the negligent or intentionally tortuous acts or omissions of
Tenant or its agents relating to the Premises, or any part of the Premises. Tenant’s obligation to
defend, indemnify and hold the Landlord harmless shall not apply to claims caused by the negligent
acts or intentional misconduct of Landlord. Tenant's obligations under this Section will survive this
Lease's expiration or termination.
14. FIRE OR OTHER CASUALTY. In the event the Premises are damaged by fire or
other perils covered by insurance maintained by Landlord, then Landlord agrees to forthwith repair
same, and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a
proportionate reduction of the Rent from the date of damage and while such repairs are being made,
such proportionate reduction to be based upon the extent to which the damage and making of such
repairs shall reasonably interfere with the business carried on by the Tenant in the Premises. If the
damage is due to the intentional misconduct or negligence of Tenant or its employees, tenants,
agents, permittees or invitees, there shall be no Rent abatement.
In the event the Premises are damaged as a result of any cause other than the perils covered
by insurance maintained by Landlord, then Landlord shall have the option; (a) to repair or restore
such damage, this Lease continuing in full force and effect, but the Rent shall be proportionately
reduced as provided in this Section above; or (b) give notice to Tenant at any time within ninety (90)
days after such damage, terminating this Lease as of the date specified in such notice, which date
shall be no more than thirty (30) days after the giving of such notice. In the event of giving such
notice, this Lease shall expire and all interest of the Tenant in the Premises shall terminate on the
22
date so specified in such notice and the Rent reduced by a proportionate reduction, based upon the
extent, if any, to which such damage interfered with the business carried on by Tenant in the
Premises, shall be paid up to the date of such termination.
Notwithstanding anything to the contrary contained in this Section, Landlord shall not have
any obligation whatsoever to repair, reconstruct or restore the Premises if Landlord's mortgagee does
not release all of the insurance proceeds to Landlord. In such an event Tenant shall have the right to
immediately terminate the Lease and all interest and obligations of the Tenant pursuant to this Lease
shall terminate on such date. Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements of any leasehold improvements, fixtures, or other
personal property of Tenant.
15. CONDEMNATION. If more than ten (10%) percent of the Building shall be taken or
appropriated by any public or quasi-public authority under the power of eminent domain or is sold in
lieu of condemnation, either party shall have the right, at its option, within sixty (60) days after the
taking, to terminate this Lease upon thirty (30) days written notice. If more than 10% of the Building
is taken (and neither party elects to terminate this Lease) the Rent thereafter to be paid shall be
equitably reduced. In the event of any taking or appropriation or sale in lieu thereof whatsoever,
Landlord shall be entitled to any and all awards and/or settlements which may be given and Tenant
shall have no claim against Landlord for any portion of the amount that may be awarded as damages
as a result of the taking or condemnation, or for the value of any unexpired term of this Lease. Tenant
grants and assigns to Landlord any right Tenant may now have or later acquire to such damages and
agrees to execute and deliver assignment instruments which Landlord may reasonably request.
Landlord will not be entitled to any separate award made to Tenant for relocation costs. Tenant will
make no claim against Landlord for damages for termination of its leasehold interest in the Premises,
for interference with its business or for any loss resulting from a taking by condemnation. All of the
parties' obligations incurred before the termination, including without limitation Tenant's obligation
to pay Rent will survive termination.
DEFAULT.
16.
16.1 Default. Tenant shall be in default under this Lease if Tenant: (i) fails to make
the Rent payments, or any other charge provided for hereunder when the same is due, within
five (5) days after receiving written notice of such breach; (ii) breaches any of the covenants
of this Lease, and fails to remedy the same within twenty (20) days after written notice of
such breach, or, as to matters that cannot be reasonably remedied in twenty (20) days, fails to
commence efforts to remedy such default within such twenty (20) day period and thereafter
fails to diligently prosecute such efforts; (iii) files a voluntary petition in bankruptcy or
makes an assignment for its creditors' benefit, or if an involuntary petition in bankruptcy,
petition for the appointment of receiver or another creditor's action is filed against Tenant,
which is not dismissed within sixty (60) days after the filing; or (iv) dissolves, liquidates or
otherwise ceases to exist.
16.2 Remedies. Landlord may exercise any one or more of the following remedies
upon Tenant's default under this Lease, in addition to any other remedies now or later
allowed by law or equity:
A.Landlord may terminate this Lease and Tenant shall thereupon promptly vacate
the Premises.
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B.Whether or not Landlord elects to terminate this Lease, Landlord may enter upon
and repossess the Premises by force, summary proceedings, eviction, ejectment or
otherwise, and may remove Tenant and all other persons and property therefrom.
C.Whether or not this Lease has been terminated, Landlord may, but will not be
obligated to, attempt to relet the Premises for the account of Tenant in the name
of Landlord or otherwise, for such term or terms and for such uses as Landlord, in
its discretion, may determine, and may collect and receive all Rent therefore. Any
Rent received will be applied against Tenant's obligations under this Lease, but
Landlord will not be responsible or liable for any failure to collect any Rent due
upon such reletting.
D.In addition to all other remedies of Tenant, Landlord will be entitled to
reimbursement upon demand of all costs and expenses, including reasonable
attorneys' fees, Landlord incurs in connection with any default.
16.3 Effect of Termination/Repossession. No termination of this Lease or
repossession of the Premises will relieve Tenant of its liabilities and obligations under this
Lease, all of which will survive any such termination or repossession. In the event of any
such termination or repossession, whether or not the Premises will have been relet, Tenant
will pay to Landlord the amounts to be paid by Tenant under this Lease up to the time of such
termination or repossession, and thereafter Tenant, until the end of what would have been this
Lease's Term in the absence of such termination or repossession, will pay to Landlord, as and
for liquidated and agreed current damages for Tenant's default, the equivalent of the sums
and charges which would be payable under this Lease by Tenant if this Lease were still in
effect, less the net proceeds, if any, of any reletting after deducting all of Landlord's expenses
in connection with such reletting, including, without limitation, full repossession costs,
brokerage and management commissions, operating expenses, legal expenses, alteration
costs, and expense of preparation for reletting. Tenant will pay such damages to Landlord in
a lump sum equal to the total amount of such Rent discounted to present value at a rate of six
percent (6%).
17. PREMISES' SURRENDER. On or before this Lease's expiration or termination,
Tenant, at its sole cost and expense, will peaceably surrender the Premises in the same or
substantially similar condition as was delivered to Tenant, ordinary wear and tear excepted, remove
all personal property from the Premises, and repair all damage caused by such removal. All personal
property not removed by such date will be deemed abandoned and Landlord may remove, store or
dispose of it at Tenant's cost and expense. Landlord will not be responsible for the preservation or
safekeeping of the personal property. Tenant will pay to Landlord, upon demand, all expenses
incurred in the removal, storage or disposal of the personal property and all costs Landlord incurs to
cause the Premises to be in the condition required under this Section. All modifications,
improvements, Alterations, additions and fixtures which have been made or installed by either
Landlord or Tenant upon the Premises during the Lease Term or which are included in the Property
transferred to Landlord under the Purchase Agreement, will remain
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Landlord's property and will be surrendered with the Premises, except for Tenant's personal property
that has not been abandoned. Tenant will promptly surrender all keys to the Premises to Landlord at
the place then fixed for paying Rent and will inform Landlord of combinations to any locks and safes
left at the Premises.
18. HOLDING OVER. If Tenant remains in possession of the Premises after this Lease's
expiration or termination, without Landlord's written consent, Landlord may exercise any remedy to
regain immediate possession of the Premises.
19. SUBORDINATION AND ATTORNMENT. Tenant subordinates its rights under the
Lease to the lien of any mortgage, deed of trust or other security instrument, now or later in force,
against the Premises, and to all advances made or to be made on them, subject to Tenant's right of
non-disturbance so long as Tenant is not in default under the Lease. Tenant will provide evidence of
this subordination of its interest by executing a Subordination, NonDisturbance and Attornment
Agreement in a form reasonably acceptable to Landlord or the holder of any security interest in the
Premises. Neither the holder of the mortgage (whether it acquires title by foreclosure or by deed in
lieu thereof) nor any purchaser at foreclosure sale will be liable for any act or omission of Landlord.
Notwithstanding anything to the contrary in this Section, so long as Tenant is not in default under
this Lease, this Lease will remain in full force and effect and the holder of the mortgage and any
purchaser at a foreclosure sale will not disturb Tenant's possession. Tenant agrees, within five (5)
days after Landlord's request, to execute, acknowledge and deliver to Landlord or a party Landlord
designates an estoppel certificate in a form reasonably acceptable to Landlord or any third party
relying on the estoppel certificate.
20. COVENANT OF QUIET ENJOYMENT. Upon Tenant paying the Rent and
observing and performing all of the covenants, conditions, and provisions on Tenant's part to be
observed and performed under this Lease, Tenant shall peaceably and quietly hold and enjoy the
Premises for the term provided for in this Lease without hindrance or interruption by Landlord or any
other person or persons lawfully or equitably claiming by, through or under Landlord, subject
nevertheless to the terms and conditions of this Lease and the mortgages and other matters to which
this Lease is subordinate. Tenant understands that a portion of the Premises will be leased to Little
Saints Academy. Tenant and Little Saints Academy will have access to hallways for the purpose of
travel from entrances to their lease spaces, and between their leased spaces. Tenant understands that
Little Saints Academy will be leasing part of the building as set forth on the attached Exhibit C, and
that Little Saints Academy shall peaceably and quietly hold and enjoy the Premises for the term
provided for in this Lease without hindrance or interruption from Tenant. If Tenant believes that
Little Saints Academy is hindering, interrupting or disrupting Tenant’s peaceful and quiet enjoyment
of the premises, Tenant shall report the matter to Landlord and Landlord shall resolve the matter.
Tenant understands and agrees that under no circumstances shall Tenant approach Little Saints
Academy about such hindrance or disruption, but rather the matter shall be brought to the attention of
Landlord for resolution. Landlord agrees that it will provide notice to Little Saints Academy in the
event of a breach of the peaceful and quiet enjoyment of the premises. In the event the conduct of
Little Saints Academy is unresolved, and continues to hinder, disturb, or interrupt the peaceful and
quiet enjoyment to the leasehold of Tenant, Landlord shall be liable for any resulting damages arising
from such conduct.
21. NO REPRESENTATIONS BY LANDLORD. Neither Landlord nor any agent or employee
of Landlord has made any representations or promises with respect to the Premises except as
expressly set forth in this Lease, and no right, privileges, easements or licenses are acquired by
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Tenant except as expressly set forth in this Lease. Tenant has no right to light or air over any
premises adjoining the Premises. Tenant, by taking possession of the Premises, will accept the
Premises "as is" except as expressly provided in this Lease and such taking of possession will be
conclusive evidence that the Premises is in good and satisfactory condition at the time of such taking
of possession. In addition to and without limitation of the immediately preceding sentence, Tenant
agrees that it is leasing the Premises on an "AS IS", "WHERE IS" and "WITH ALL FAULTS" basis,
based upon its own judgment, and disclaims any reliance upon any statement or representation
whatsoever made by Landlord. LANDLORD MAKES NO EXPRESS OR IMPLIED WARRANTY
WITH RESPECT TO THE PREMISES, OR ANY PART OF IT, AND LANDLORD
SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY AND OF FITNESS
FOR A PARTICULAR PURPOSE AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES
ARISING OUT OF THE USE OF OR THE INABILITY TO USE THE PREMISES OR ANY PART
OF IT.
MISCELLANEOUS.
22.
22.1 Successors or Assigns. All of this Lease's terms, conditions, covenants and
agreements will extend to and be binding upon Landlord, Tenant and their respective heirs,
administrators, executors, successors, subtenants, concessionaires and assigns, and upon any
person or persons coming into ownership or possession of any interest in the Premises by
operation of law or otherwise.
22.2 Parties' Authority. Each individual executing the Lease on behalf of that party
respectively represents and warrants that: (a) the party is a duly organized and validly
existing entity; (b) the party has full right and authority to enter into the Lease; (c) the person
executing the Lease is duly authorized to execute and deliver the Lease on the party's behalf;
and (d) the Lease is binding upon that party in accordance with its terms. The parties will
provide the other party upon request with evidence reasonably confirming these
representations.
22.3 Severability. If any of this Lease's terms, covenants, or conditions or the
application of them to any person or circumstance is, to any extent, invalid or unenforceable,
or in conflict with the law of the jurisdiction, the remainder of the Lease or the application of
such term, covenant or condition to persons or circumstances other than those as to which it
is held invalid or unenforceable, will not be affected and each term, covenant or condition of
the Lease will be valid and be enforced to the fullest extent permitted by law.
22.4 Waiver. Landlord's failure to enforce any of this Leases' terms, covenants,
conditions or breaches will not be deemed a waiver of the right to do so after that. Landlord's
acceptance of Rent will not be deemed a waiver of this Lease's terms, covenants, conditions
or breaches. No waiver of any term, covenant, condition or breach will be effective unless in
writing. A written waiver of any term, covenant, condition or breach of the Lease will not be
deemed a waiver of any subsequent term, covenant, condition or breach, whether such
subsequent term, covenant, condition or breach is the same or different, except as specified in
writing in the waiver.
22.5 Construction. Both parties and their respective counsel have reviewed and
revised the Lease. The parties acknowledge that the normal rule of construction to the effect
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that any ambiguities are to be resolved against the drafting party will not be employed in the
interpretation of the Lease.
22.6 Time. Time is of the essence of this Lease and each and all of its provisions in
which performance is a factor.
22.7 Governing Law. Minnesota law will govern this Lease.
22.8 Jury Waiver Clause. The parties waive their right to trial by jury in any
action, proceeding or claim brought by either party against the other, or with respect to any
issue or defense raised therein, including the right to an advisory jury, on any matters
whatsoever relating to the Lease, the parties' relationship, Tenant's use and occupancy of the
Premises, including summary proceedings, possession actions, and any statutory remedy.
Notwithstanding the aforesaid, this jury waiver clause will not apply to actions, proceedings
or claims for personal injury or property damage.
22.9 Legal Expenses. In the event of any litigation (including any counterclaim,
cross-claim, or claim in a bankruptcy or receivership proceeding) for the enforcement of any
of the terms and conditions of the Lease, the prevailing party will be entitled to recover from
the other party all third party costs and expenses actually incurred as a result of the litigation,
including, without limitation, reasonable attorneys' fees and costs.
22.10 Notices. All notices or other communications hereunder will be in writing and
will be hand delivered or sent by registered or certified first-class mail, postage prepaid, or by
overnight air express service, (a) if to Landlord at the address set forth above, and (b) if to
Tenant, at the Premises, or Tenant's address set forth above, unless notice of a change of
address is given pursuant to the provisions of this Section. The day notice is given by mail
will be deemed to be the day following the day of mailing. Refusal to accept delivery of a
notice or the inability to deliver a notice because of an address that was not properly given
will not defeat or delay the giving of notice.
22.11 Acceptance of Keys. The acceptance of keys to the Premises by Landlord, its
agents, employees, contractors or any other person on Landlord's behalf, will not be deemed
an acceptance of surrender of the Premises or constitute a termination of the Lease.
22.12 Force Majeure. If either party is prevented, delayed or stopped from
performing any act, undertaking or obligation (except financial) under the Lease by reason of
an "event of force majeure" including adverse weather, strikes, lockouts, labor disputes,
failure of power, acts of public enemies of the United States of America, riots, insurrection,
civil commotion, inability to obtain labor or materials, governmental action or inaction, an
ADA injunction or any other similar cause (except financial), then the time for that party's
performance will be extended one day for each day's prevention, delay or stoppage by reason
of such event of force majeure. Notwithstanding the above and unless otherwise specifically
referenced in the Lease, Tenant's obligation to pay Rent due under the Lease will not be
extended for such event of force majeure.
22.13 Entire Agreement/Amendment. The Lease contains the parties' entire
agreement and all prior oral and written agreements, understandings, representations,
warranties, promises and statements of the parties and their respective officers, directors,
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partners, agents and brokers will be merged into the Lease with respect to the subject matter
of the Lease. No such prior oral or written agreement, understanding, representation,
warranty, promise or statement will be effective or binding for any reason or purpose unless
specifically set forth in the Lease. No provision of the Lease may be amended or modified
except by an agreement in writing signed by the parties or their respective successors in
interest.
22.14 Survival. All of Tenant's obligations under the Lease that are not fully
performed as of this Lease's expiration or earlier termination will survive this Lease's
expiration or earlier termination, including, without limitation, the obligation to pay Rent and
the obligations concerning the Premises' condition.
22.15 Counterparts. The parties may execute this Lease separately and
independently in any number of counterparts, each of which when so executed and delivered
will be deemed an original, but such counterparts will together constitute but one and the
same instrument. Delivered facsimile or electronic copies of signatures shall have the same
legal effect as original signed signature pages.
22.16 Parties' Relationship. Nothing contained in this Lease will be deemed or
construed to create a joint venture or partnership relationship between the parties.
22.17 Lease with Little Saints Academy. Tenant understands that Landlord will be
negotiating a new Lease with Little Saints Academy for the occupation and use of that part of
the Real Property and the Building as depicted in orange on the attached Exhibit C.
Landlord covenants that the Little Saints Lease will not conflict with the terms of this Lease.
Tenant understands that the cash flow from the lease between Landlord and Little Saints
Academy will be used to make payments on the bond issued for purchase of the Premises
from ISD 742. Tenant further understands that the Covenant of Quiet Enjoyment provided
by the Landlord extends to both Little Saints Academy and Tenant. In the event Tenant’s
conduct hinders, disturbs, or interrupts the peaceful and quiet enjoyment to the leasehold of
Little Saints Academy, Tenant shall be liable for any resulting damages arising from such
conduct. Landlord agrees that it will provide notice to Tenant in the event of a breach by
Tenant of its obligation of peaceful and quiet enjoyment and Tenant shall have two weeks to
cure such conduct.
22.18 Cooperation With Landlord. Landlord will be allowed access to the Building
and grounds periodically so that planning can occur during the term of this Lease. The
Landlord will work with the Tenant to find times that are acceptable and not disruptive to
Tenant’s operations.
22.19 New Construction. Landlord may construct an addition to the existing
building or add an additional structure on the grounds during the period of time that this
Lease is in effect. Landlord covenants not to interfere with Tenant’s operations and further to
control sounds and dust so as to not disrupt the Tenant.
22.20 Shared Use of Gym: During the term of this Lease, the Tenant will make use of the
gymnasium and the playground. Landlord shall have exclusive use of the gymnasium and
playground at all other times which are not reserved for the exclusive use of the Tenant as set
forth is this Lease Agreement. Tenant understands and agrees that Little Saints Academy
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will also make use of the gymnasium and playground. Both Tenant and Little Saints
Academy will be assigned times for exclusive use of the gym as set forth below. The
Landlord covenants that the gym will be available for the exclusive use of the Tenant
pursuant to the following schedule:
During the school year (September through the first week of June):
1) 9:00a.m. to 12:00 p.m., Monday through Friday;
2) 1:00p.m. to 4:00 p.m., Monday through Friday;
3) Monday evenings 4:00 – 6:00 p.m.;
4) Tuesday evenings 4:00 – 7:00 p.m. (plus two times during the year when the
Tuesday evening hours will extend to 8:00 p.m.);
5) Wednesday evenings 4:00 – 8:00 p.m.;
6) Thursday evenings 5:30 – 8:00 p.m.;
7) Saturday mornings 8:00 a.m. – 12:00 p.m. on 15 selected dates each year.
The dates for the 2015-2016 school year will be: October 10, October 24,
November 17, November 21, December 5, January 9, January 23, January 30,
February 13, February 20, February 27, March 19, April 2, April 16 and April
30. The 15 selected dates for the 2016-2017 school year are not presently
available, and will be negotiated with the Landlord at a later date.
During the summer break:
2015 - During the summer of 2015 the Tenant will have summer school
programs during 16 days from 8:00 a.m. until noon. During those 16 days, the
Tenant will need to use the gym or the playground, if conditions permit. The
schedule will be negotiated with the Landlord.
2016 & 2017 – During the summer of 2016 and 2017 the Tenant will use the
gym for their summer school program which will be scheduled during 16 days
over the summer from 8:00 a.m. until noon, Monday through Friday. The
schedule for the summer school program will be negotiated with the Landlord
in advance.
Tenant understands and agrees that Little Saints Academy will have exclusive use of
the gym from 8:00 AM – 9:00 AM and from 12:00 PM – 1:00 PM on school days.
Periodically the Landlord will ask to use the gymnasium after hours and on weekends
in cooperation with the Tenant. In such an event, the Landlord will provide the
Tenant with a Certificate of Insurance covering the periodic use of the gymnasium,
and Landlord will be solely responsible for security of the building during the periods
of its use.
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22.21 Playground Equipment: Landlord agrees that the Tenant may remove the
playground equipment located on the Premises when they vacate the Premises at the end of
the Lease. The removal of this playground equipment will be done at no cost to the City.
The parties have made and entered into this Lease as of the Effective Date.
Date. LANDLORD: TENANT:
The City of St. Joseph Independent School District #742
By:______________________________________ By:______________________________________
Its:___________________________________ Its:___________________________________
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EXHIBIT C
BUILDING MAP
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