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SETTLEMENT AGREEMENT • THIS SETTLEMENT AGREEMENT (this "Agreement") is made as of the day of 2003, by and among the City of Falcon Heights, a Minnesota municipal corporation (the "City"), JEMJAHS No. 3 Partnership, a Minnesota general partnership ("JEMJAHS"), Falcon Heights Town Center Limited Partnership, a Minnesota limited partnership ("Landlord"), and Sky Ventures, LLC, a Minnesota limited liability company ("Tenant"). RECITALS A. Landlord and Tenant are parties to a lease dated , 19_ (the "Lease"). The Lease entitled Tenant to possession of certain premises in a shopping center located at 1650 Snelling Avenue North in Falcon Heights, Minnesota, as more particularly described in the Lease (the "Premises"). B. In connection with the proposed redevelopment of the shopping center in which the Premises are located, the City has initiated condemnation proceedings with respect to said property. C. The term of the Lease is scheduled to continue until , 20 .Landlord and Tenant have agreed that Tenant will relocate from the Premises in accordance with this Agreement. D. Tenant has asserted a claim against the City for a condemnation award and/or relocation benefits associated with the termination of the Lease and Tenant's proposed move from the Premises to a different location. • E. The parties hereto have agreed to settle such claim in accordance w' lth the terms and conditions of this Agreement. AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: 1. Promptly after the execution of this Agreement, Landlord and Tenant will enter into an amendment to the Lease providing that the Lease will terminate on March 31, 2004, or on an earlier date (but not earlier than December 31, 2003) selected by Landlord, provided that Landlord gives Tenant not less than thirty days written notice of such earlier termination date. Landlord and Tenant agree that Landlord shall pay Tenant $125,000.00 upon the date of termination of the Lease. 2. Promptly after the execution of this Agreement, Landlord and Tenant will enter into a new lease for premises in a building to be constructed on the shopping center site, which new lease (i) shall include the provisions set out in Exhibit A attached hereto (including without limitation a payment by Landlord to Tenant of $400,000.00 on the date that Tenant takes possession of the premises) and (ii) shall be in form and substance reasonably acceptable to Landlord and Tenant. 3. In the event that such new building is not substantially completed within 36 months from the termination date of the Lease, Tenant shall be entitled to liquidated damages from Landlord • in the amount of $710,000.00 (and Tenant shall be entitled to retain the $125,000.00 previously paid to it pursuant to paragraph 1 above). 108339