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HomeMy WebLinkAboutCC RES 92-043 RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE THE LEASE TERMINATION AND MUTUAL RELEASE AGREEMENT AND AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE LEASE AGREEMENT WITH REGARD TO CITY PROPERTY LOCATED AT 2700 HIGHWAY 88 IN THE CITY OF S Meeting Sheet IIIIII VIII VIII VIII VIII VIII IIII IIII 103579 Box: 26 Folder: RES 1992 Document: CC RES 92-043 RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE THE LEASE TERMINATION AND MUTUAL RELEASE AGREEMENT AND AUTHORIZING THE MAYOR AND CIN MANAGER TO EXECUTE THE LEASE AGREEMENT WITH REGARD TO CIN PROPERTY LOCATED AT 2700 HIGHWAY 88 IN THE CITY OF S IRV CITY OF ST. ANTHONY RESOLUTION 92-043 A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE THE LEASE TERMINATION AND MUTUAL RELEASE AGREEMENT AND AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE LEASE AGREEMENT, BOTH WITH REGARD TO CITY-OWNED PROPERTY LOCATED AT 2700 HIGHWAY 88 IN THE CITY OF ST. ANTHONY WHEREAS, the City of St. Anthony, being the owner of the building located at 2700 Highway 88 and Lawrence W. Manning had entered into a rental agreement on October 26, 1987 for space in said building; and WHEREAS, by mutual agreement, said parties desire to terminate that rental agreement; and WHEREAS, Highwood Food Services, Inc. desires to enter into a lease agreement with the City of St. Anthony for said space at 2700 Highway 88. . BE IT RESOLVED, that the City Council of the City of St. Anthony hereby authorizes the Mayor to execute the Lease Termination and Mutual Release Agreement, attached hereto, by and among the City and Manning's Cafe, Inc., and Lawrence W. Manning. BE IT FURTHER RESOLVED, that, in addition, the City Council of the City of St. Anthony hereby authorizes the Mayor and City Manager to execute the Lease Agreement attached hereto between the City and Highwood Food Services, Inc. on behalf of the City of St. Anthony. Adopted this day of 11992. , 1992. ayor ATTEST: Q City Clerk Reviewed for administration: • City Manager LEASE TERMINATION AND MUTUAL RELEASE AGREEMENT THIS LEASE TERMINATION AND MUTUAL RELEASE AGREEMENT ("Agreement") is made and entered into as of the jLr,day of August, 1992, by and among the City of St. Anthony (the "City"), Manning's Cafe, Inc. ("Manning"), and Lawrence W. Manning ("Guarantor"). RECITALS: A. The City, as lessor, and Manning, as lessee, entered into that certain Lease Agreement dated November 3, 1987 (the "Lease"), under the terms of which the City leased to Manning certain premises consisting of approximately 507 square feet of kitchen space and 267 square feet of office and storage space (the "Leased Premises"), in the building located at 2700 Highway 88, St. Anthony, Minnesota, as more particularly described in the Lease. B. Guarantor has executed that certain Guaranty dated October 26, 1987 (the "Guaranty") relating to the Lease. t C. The City and Manning desire to terminate the Lease in accordance with the terms and conditions hereinafter set forth. D. The City, Manning and Guarantor also desire to resolve all disputes, whether existing or potential, known or unknown, whether mentioned herein or not, that arise out of any representation, action or inaction occurring in connection with the Lease prior to the date of this Agreement, without the need for litigation, according to the terms contained herein. NOW, THEREFORE, in consideration of the foregoing recitals, the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Termination. The Lease shall, without the further act of the parties hereto, terminate as of 11:59 P.M. on September 15, 1992 (the "Effective Date"), and shall thereafter be of no further force or effect whatsoever; provided, however, that the obligations of Manning under this Agreement shall survive the termination of the Lease, and Guarantor shall remain personally liable under the Guaranty for Manning's performance hereunder. 2. Survival Until Termination. During the period of time intervening • between the date of execution of this Agreement and the Effective Date, the City and Manning shall remain responsible for the performance of their respective • covenants and obligations under the Lease, and the Lease shall remain in full force and effect until the Effective Date. 3. Surrender. Manning shall surrender the Leased Premises to the City on the Effective in good condition and repair, reasonable wear and tear during the term of the Lease excepted, in accordance with the provisions of Section 23 of the Lease. On or before the Effective Date, Manning shall remove from the Leased Premises all furniture, inventory and other personal property owned by Manning, except for any such items that are being sold to Erich Schuhmacher ("Schuhmacher"), and any damage caused to the Leased Premises by Manning in connection with the removal of such items shall be repaired promptly by Manning, at Manning's expense. All personal property of Manning left in or about the Leased Premises upon the termination of the Lease, except for any such property that has been sold to Schuhmacher, shall thereupon become the property of the City, to be disposed of by the City as it deems expedient. 4. Release. (a) Manning and Guarantor hereby waive, release and relinquish all rights, claims and defenses they may have against the City, its elected officials, employees, agents and other representatives, that arise out of any representation, action or inaction occurring in connection with the • Lease or the Guaranty prior to the date of this Agreement. (b) Except as otherwise stated in this Agreement, the City hereby waives, releases and relinquishes all rights it may have against Manning or Guarantor and their respective officers, partners, employees, agents and other representatives that arise out of any representation, action or inaction occurring in connection with the Lease or the Guaranty prior to the date of this Agreement. Notwithstanding anything in this Agreement to the contrary, the City does not waive, release or relinquish any rights it may have against Manning or Guarantor (i) in the nature of contribution for or indemnification of claims which may be asserted against the City by any third party, including without limitation Bruce Johnson of Restaurant Brokers of Minnesota, Inc., by reason of any representation, action or inaction of Manning, or (ii) for breach of any of the terms, covenants or conditions contained in this Agreement. (c) All waivers, releases and relinquishments set forth herein are made on behalf of the parties, their heirs, legatees, devisees, executors, trustees, beneficiaries, assigns, officers, partners, directors, shareholders, employees and agents, and include any and all manner of actions or inactions, suits, claims, demands, judgments and levies of execution, Is -2- whether direct, indirect or derivative, liquidated or unliquidated, fixed or contingent, known or unknown. 5. Brokerage Commission. The City has been informed that Manning has engaged the services of Bruce Johnson at Restaurant Brokers of Minnesota, Inc. Manning represents and warrants that it has not dealt with any other brokers, finders or the like in connection with the sale of Manning's business operated at the Leased Premises or the sale of any equipment used in connection therewith, and that any and all brokerage commission, finder's fee or similar fees or charges owing to Bruce Johnson or Restaurant Brokers of Minnesota, Inc. in connection with said transactions shall be paid by Manning. Manning agrees to indemnify and to hold the City harmless against all claims, damages, costs and expenses of or for any and all brokerage commissions, finder's fees or similar fees or commissions resulting from its actions or agreements regarding said transactions, and will pay all costs of the City, including reasonable attorney's fees, of defending any action or lawsuit brought to recover any such brokerage commissions, finder's fees or similar fees. 6. Schuhmacher's Right of Entry. Manning hereby agrees to allow Schuhmacher, and his agents, employees and representatives, to enter onto the Leased Premises or any part thereof at any time during the hours that Manning is open for business at the Leased Premises from September 4, 1992 though and including the Effective Date for the purposes of observing the operations of the • restaurant and to move equipment, inventory and supplies owned by Schuhmacher into the Leased Premises; provided that such entry shall not unreasonably interfere with Manning's use of the Leased Premises, and provided that any such entry shall be subject to reasonable requirements that Manning may impose to protect recipes and/or trade secrets located on the Leased Premises. It is agreed and understood that the City shall not be liable for any damages, costs, expenses, losses or claims of any nature whatsoever arising out of, or in any way relating to, any such entry by Schuhmacher, or his agents, employees and/or representatives. 7. Attorneys' Fees. If any action or claim is brought or asserted to enforce any term, covenant or condition of this Agreement, the successful party in said action or in said claim shall be awarded its reasonable costs and expenses, including reasonable attorneys' fees incurred therein. 8. Entire Agreement. This Agreement contains all of the agreements of the parties hereto with respect to the subject matter hereof, and no other agreement, understanding or representation of or by the parties made at any time prior to or contemporaneously with the signing of this Agreement shall be effective for any purpose except as set forth herein. • -3- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. CITY OF ST. ANTHONY By ; Its Mn � r MANNING'S CAFE, INC. By I _r4lapill-0 iLa ence W. Mannin a � 311 1 r q • -4- ti LEASE AGREEMENT THIS LEASE AGREEMENT ("Lease"), made in this 31 . day of August, 1992, by and between the CITY OF ST. ANTHONY ("Lessor"), and HIGHWOOD FOOD SERVICES, INC. ("Lessee"). WITNESSETH: That Lessor in consideration of rents and covenants, hereinafter mentioned, to be paid and performed by said Lessee, does hereby demise, lease and let unto Lessee, and Lessee does hereby hire and take from Lessor, the following described premises situated in the City of St. Anthony, County of Hennepin, State of Minnesota, to-wit (the "Leased Premises"): The ground floor kitchen space in the building (the "Building") at 2700 Highway 88, St. Anthony, Minnesota shown cross-hatched on the floor plan drawing attached to this Lease as page one of Exhibit A (comprising approximately 507 square feet), together with the basement storage and office space in the Building shown* cross-hatched on the drawing attached to this Lease as page two of Exhibit A (comprising approximately 267 square feet); together with the use Lessor's table and seating area in the Building, to be used by Lessee in accordance with the provisions of this Lease in common with Lessor's use of such area in conjunction with Lessor's operation of a bar in the Building. TO HAVE AND TO HOLD the Leased Premises ASIS, without any liability, or obligation on the part of Lessor to make any alterations, improvements or repairs of any kind on or about Leased Premises or the Building, or the equipment, fixtures, plumbing, appliances, or machinery in, upon or serving same, or the streets, alleys, areas, area-ways or passages adjoining or appurtenant thereto, for the term of five years and fifteen days from and after the 16th day of September, 1992 through the 30th day of September, 1997, both dates inclusive, for the following purposes and for no other purposes, to-wit: The Leased Premises will be used only for a restaurant and storage of inventory in connection therewith. Lessee agrees to operate a restaurant from the Leased Premises at all times during the term of this Lease on all days Lessor's bar in the Building is open for business unless prevented from doing so by fire, accident, acts of God or other acts beyond Lessee's control, excluding financial causes, and Lessee agrees to continuously operate the restaurant on said days for no less than the hours between (a) 11:00 A.M. and 10:00 P.M. on Mondays and Tuesday, (b) 11:00 A.M. and 11:00 P.M. on Wednesdays, Thursdays and • Fridays, and (c) 8:00 A.M. and 11:00 P.M. on Saturdays, all with normal table service, using at all times a sufficient number of adequately-training personnel for efficient service. Lessee agrees to conduct the restaurant in a first-class manner, consistent with normal restaurant standards and practices. Lessee agrees that all liquor and soft drinks other than coffee, tea and milk will be served from Lessor's bar and that all revenues relating to that sale of such beverages will belong to Lessor. Lessee agrees that no cigarettes will be sold by Lessee. Lessee agrees to pay Lessor as base rent for the Leased Premises the sum of Seventy Thousand Two Hundred and No/100ths Dollars ($70,200.00) in monthly payments, subject to increases provided hereinafter, said monthly payments being made as follows: (i) on November 16, 1992, Lessee shall pay Lessor as base rent for the period commencing on November 16, 1992 through and including November 30, 1992, the sum of Six Hundred and No/100ths Dollars ($600.00); (ii) commencing on the 1st day of December, 1992 and on the 1st day of each and every month thereafter for and during the full term of this Lease, Lessee shall pay Lessor the balance of said base rent in fifty-eight (58) consecutive monthly payments of One Thousand Two Hundred and No/100ths Dollars ($1,200.00). Each of said payments shall be delivered to Lessor at the office of the Lessor as designated from time to time. Lessor hereby waives the payment of base rent and additional percentage rent (as set forth in Section 16 of this Lease) for the period commencing on September 16, 1992 through and including November 15, 1992. • 1. LESSEE TO MAINTAIN AND SURRENDER LEASED PREMISES IN GOOD ORDER Lessee also covenants and agrees with the Lessor as follows: That Lessee will keep at its own expense the Leased Premises and the equipment, plumbing, drains, fixtures, appliances and machinery in, upon, serving or appurtenant to the Leased Premises, including without limitation the Restaurant Equipment (as defined in Section 24 of this Lease), in good repair and in good sanitary condition during said term, and that it will at its own expense promptly repair and/or replace (with any such replacement being the same quality as the item being replaced) any and all of said items as necessary keep the same in good order, and will promptly replace at its expense any and all glass broken in or about the Leased Premises with glass of the same quality; that it will make no alterations in or additions to the Leased Premises, without first obtaining the Lessor's written consent, and that it will not permit any use of the Leased Premises which are not consistent with the purposes set forth above, and that it will not in any manner deface or injure the Leased Premises, or any part thereof, or overload the floors, or, to the extent reasonably within the control of Lessee, do or permit anything to be done upon the Leased Premises or in the passageways, alleys, areas, area-ways, sidewalks or streets adjacent thereto, that will amount to or create a nuisance; and that it will not use the Leased Premises or permit the same or any part thereof to be used for lodging or sleeping purposes, or for any purpose contrary to the laws, s -2- ordinances or regulations of the United States of America, the State of Minnesota, the City of St. Anthony or of any boards or officers of said City; and that Lessee agrees to return the Leased Premises peaceably and promptly to the Lessor at the end of the term of this Lease, or at any previous termination thereof, in as good condition as the same are now in or may hereafter be put in, loss by fire or other casualty and ordinary wear excepted. 2. ICE AND SNOW: UTILITIES. Lessor covenants and agrees to keep the sidewalks bordering on the Leased Premises at all times reasonably free from ice and snow and other obstructions. Lessee covenants and agrees to neither waste nor misuse water, electricity, gas, steam, or other utilities or agencies which are or may be furnished by the Lessor, and to promptly pay all rates, costs and charges for the same, except as to such of the same, if any, as Lessor has specifically agreed herein to furnish free of charge. All utilities servicing the Leased Premises will be separately metered and will be paid for by Lessee from and after the commencement date of this Lease through and including the date that this Lease is terminated. 3. SIGNS. Lessee shall not erect or permit to be erected any sign on the Leased Premises or on the exterior of the Building without the prior written consent of . Lessor, which consent may be arbitrarily withheld. Lessee shall not place or permit to be placed in any portion of the Leased Premises any fixtures, equipment or materials the weight of which is in excess of the reasonable or safe carrying capacity of the Building. 4. CONDMON OF PREMISES; RELEASE OF LESSOR. Lessee acknowledges the receipt of the Leased Premises and the same to be in tenantable condition, and acceptable to the Lessee; and the Lessee hereby releases the Lessor from any and all claims arising from any defects in the condition of the Leased Premises, or the equipment, fixtures or appliances in or serving the Lease Premises, including without limitation the Restaurant Equipment. S. SUBLEASING. Lessee agrees that it will not sublet the Leased Premises, or any part thereof, and will not assign this Lease or any interest therein, not permit this Lease to become transferred by operation of law or otherwise, and that no act or acts will be done or suffered whereby the same may be or become sublet or assigned in whole or in part. Lessee agrees that the restaurant at the Leased Premises will be operated by Lessee and Lessee only, or by day or shift managers who are employed by, and under s -3- the direction of, Lessee, and that Lessee will not contract with anyone else for the operation or management of said restaurant. Lessee shall not sell, assign or otherwise transfer a controlling interest in the stock of Lessee without Lessor's prior written consent. 6. BANKRUPTCY. Any assignment, sale in bankruptcy or insolvency of Lessee may, at the option of the Lessor, be considered an assignment within the meaning of this Lease and as a breach of the covenants hereof. 7. LIABILITY AND RISK OF LOSS. The parties agree that Lessee will have no part in the conduct of Lessor's liquor operation in the Building, except that the parties intend to arrange for use of Lessee's employees who are serving food to also serve beer, wine and liquor on behalf of Lessor; provided that Lessee's employees shall be certified in accordance with requirements established by Lessor's liquor liability insurance carrier prior to serving any beer, wine or liquor on behalf of Lessor, and provided further that such employees shall not be deemed to be Lessor's employees as the result of any such activities. Lessor agrees that in the event that Lessee's employees are serving beer, wine or liquor, Lessee shall be named as an additional insured on Lessor's policy of liquor liability insurance, so long as such employees have been • certified in accordance with requirements established by Lessor's liquor liability insurance carrier prior to serving any beer, wine or liquor on behalf of Lessor and that if Lessor is self-insured and has filed a bond with the State of Minnesota related to such self-insurance, then Lessor shall name Lessee as an additional party on the bond. The cost of certifying Lessee's employees as provided in the foregoing provisions of this paragraph shall be paid by Lessor, except that any wages or hourly rates owing to any such employees for time spent by such employees in connection with such certification shall be paid by Lessee. Lessee agrees that Lessor shall not be liable to Lessee, or its employees, with respect to any injury or damage or loss of property sustained by Lessee, or its employees, by reason of Lessee's use of the Leased Premises, of the Building, or by use of any streets, sidewalks or other areas adjoining or appurtenant to the Leased Premised or the Building, unless such damage or loss is caused by Lessor's gross negligence or willful misconduct. Except as otherwise expressly set forth herein, Lessee assumes all risk of loss of or damage to Lessee's equipment, fixtures or other property within the Building, including without limitation any loss or damage caused by water leakage, bursting of pipes, fire, windstorm, explosion, theft, or other cause. -4- 8. LIABILITY OF LESSOR AND LESSEE. Except asexP Y ressl set forth hereinabove in Section 7 of this Lease relating to the sale of liquor and the liability of Lessor therefor and with respect to damage or loss cause by Lessor's gross negligence or willful misconduct, Lessee assumes all liability and obligation on account of all damages on account of the matters and things above referred to, and agrees to save Lessor harmless thereon and therefrom, and to indemnity Lessor on account thereof, unless any such damage is caused by the sale of liquor or Lessor's gross negligence and willful misconduct. This provision shall apply especially, but not exclusively, to damage caused by water, snow, rain, hail, backing up of water mains or sewers, frost, steam, sewage, illuminating gas, sewer gas, or odors, electricity and electric current, and by the bursting, stoppage or leaking of pipes or radiators, plumbing, sinks and fixtures in or about the Leased Premises or the Building. In case of such damage Lessor may at its option repair such damage, and if such damage has occurred in the Leased Premises or on account of the defects in the Leased Premises, or in the equipment, fixtures, appliances, or machinery in, upon or serving same against which Lessee has agreed to make repairs, Lessee shall thereupon reimburse Lessor for the costs of repairing such damage, excluding the amount of any net insurance proceeds paid to Lessor (after deducting therefrom the any expenses incurred by Lessor in collecting such proceeds), and if the Lessee fails to perform any of the covenants or agreements herein provided to be kept or performed by Lessee, the Lessor may perform the same and charge Lessee with the expense of such performance, and Lessee agrees • promptly on demand to repay to Lessor the cost of such performance by Lessor. Any language above to the contrary notwithstanding, Lessor shall be responsible to maintain the structural integrity of the Leased Premises, to maintain the roof thereof in a watertight condition, and to maintain heating and electrical to the Leased Premises. 9. LESSEE TO COMPLY WITH CITY REGULATIONS. Lessee further covenants and agrees at is own expense to observe and keep all regulations and requirements of the City of St. Anthony or other public authorities in force at the time of the taking possession by Lessee of the Leased Premises or which may thereafter by made regarding the condition and conduct of the Leased Premises, any part thereof, including all buildings, fire, sanitary, police or other regulations. Lessee will, at its expense, promptly comply with all licensing and permit requirements of any governmental authority or agency, and with any other laws, regulations and governmental orders pertaining to the Leased Premises or the operations of Lessee to be conducted in the Leased Premises. Lessee will pay all license fees, taxes, an other charges by any governmental authority on Lessee's property or fixtures or business in the Leased Premises or relating to Lessee's use of the Leased Premises. Lessee will not commit or permit any act or omission which -5- results in the violation of any law, governmental regulation or insurance policy of Lessor relating to the Building or which will increase Lessor's insurance rates on the Building. 10. TAKING FOR PUBLIC USE. Lessee further agrees that if the Leased Premises, or any part thereof, or any part of the improvements of which they form a part, shall be taken for any street or public use, or shall during the continuance of this Lease be destroyed by the action of the public authorities, then this Lease shall thereupon terminate. Lessor shall be entitled to the full amount of any award or payment for the taking of the real estate. Lessee shall be entitled only to separate payments, if any, made for the loss of good will relating to Lessee's restaurant operation, Lessee's trade fixtures and payments made under applicable relocation regulations; provided that Lessee shall in no event be entitled to any part of the award for the taking of the real estate or leasehold estate. 11. DESTRUCTION BY FIRE. It is further agreed between Lessor and Lessee that if during the term of this Lease or any renewal hereof the Leased Premises or the improvements thereon shall be injured or destroyed by fire or the elements, or through any other cause, so as to render the Leased Premises unfit for occupancy, or makes it impossible to • conduct the business of Lessee thereon, or to such an extent that they cannot be repaired with reasonable diligence within one hundred twenty (120) days from the happening of such injury, then either party may terminate this Lease from the date of such damage or destruction, and Lessee shall immediately surrender the Leased Premises and all interest therein to Lessor, and Lessee shall pay rent only to the time of such surrender; and in case of any such destruction or injury Lessor may re-enter and repossess the Leased Premises discharged of this Lease, and may dispossess all parties then in possession thereof. But if the Leased Premises can be restored within one hundred twenty (120) days from the happening of the injury thereto, and Lessor within thirty (30) days from the occurrence of such injury elects in writing to so repair or restore the Leased Premises within one hundred twenty (120) days from the happening of the injury thereto, then this Lease shall not end or terminate on account of such injury by fire or otherwise, but the rent shall not run or accrue after the injury and during the process of repairs, and up to the time when the repairs shall be completed, except only that Lessee shall during such time pay a pro rata portion of such rent apportioned to the portion of the Leased Premises which are in condition for occupancy, then Lessor shall repair the same with reasonable promptness, and in that case the rent shall be reasonably adjusted to account for any diminished use or value to Lessee. -6- 12. QUIET ENJOYMENT. Lessor agrees and covenants that gl' Lessee, on paying the rent and performing the covenants aforesaid, shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the term aforesaid, except as in this Lease otherwise provided. 13. BOND AGAINST LIENS. It is understood and agreed with respect to all alterations and repairs, improvements or alterations to the Leased Premises, or any part thereof, which shall only be with the written consent of Lessor as set forth above, that Lessee shall and will in each instance save Lessor and the Leased Premises forever harmless and free from all costs, damages, loss and liability of every kind and character which may be claimed, asserted or charged, including liability to adjacent owners based upon the acts of negligence of Lessee or its agents, contractors or employees, or upon the negligence of any other person or persons in or about the Leased Premises or upon the failure of any of said parties to observe and comply with any requirement of the law or with the regulations of the authorities in the City of St. Anthony and will preserve and hold Lessor and the Leased Premises forever free and clear from liens for labor and material furnished. Lessee further agrees that it will from time to time before making any such repairs, improvements or alterations furnish Lessor with a bond in an amount reasonably satisfactory to Lessor conditioned for the • performance by Lessee of the matters and things in this Section required to be done by Lessee. 14. RIGHT OF RE-ENTRY; SUBLEASING AND TERMINATION OF LEASE UNDER BANKRUPTCY. It is further agreed between Lessor and Lessee that this Lease is made upon the condition that if Lessee shall neglect or fail to keep, observe and perform any of the covenants and agreements contained in this Lease, which are to be kept, observed or performed by Lessee, or if the leasehold interest of Lessee shall be taken on execution or other process of law, or if Lessee shall petition to be or be declared bankrupt or insolvent according to law, or if Lessee shall vacate the Leased Premises or abandon the same during the term of this Lease or cease to operate the restaurant at the Leased Premises as required herein during the term of this Lease, then and in any of said cases, Lessor may immediately or at any time thereafter, demand, enter in and upon the Leased Premises, or any part thereof, in the name of the whole, and take absolute possession of the same fully and absolutely, without such re-entry working a forfeiture of the rents to be paid and the covenants to be performed by Lessee for the full term of this Lease, and may at Lessor's election lease or sublet the Leased Premises, or any part thereof, and after crediting the rent actually collected by Lessor from such reletting on the rentals stipulated to be paid under this Lease by -7- Lessee from time to time, collect from Lessee any balance remaining due from time to time on the rent reserved under this Lease, charging to Lessee such reasonable expenses as Lessor may expend in putting the Leased Premises in tenantable condition; or Lessor may at its election and upon written notice to Lessee declare this Lease forfeited and void, and may thereupon re-enter and take full and absolute possession of the Leased Premises as the owner thereof, and free from any right or claim of Lessee, or any person or persons claiming through or under Lessee; and such election and re-entry last mentioned shall be and constitute an absolute bar to any right to enter by Lessee upon the payment of all arrearages of rent and costs after a dispossession under any suit or process for breach of any of the covenants of this Lease, Lessee hereby waiving any and all redemption rights under Minnesota Statutes, Section 504.02, and the commencement by Lessor of any action to recover possession of the Leased Premises shall be deemed a sufficient notice of election of said Lessor to treat this Lease as void and terminated, unless Lessor shall in writing, before beginning such proceeding, notify the Lessee that after obtaining such possession Lessor will continue to look to Lessee for the performance of this Lease and will submit the Leased Premises on Lessee's account, in the manner as above provided. 15. REAL ESTATE TAXES. Lessee covenants and agrees that it is responsible for any and all real • estate taxes or any payments in lieu of real estate taxes due to Hennepin County on the Leased Premises during the term of this Lease and any extensions thereof; provided that if any such taxes or payments in lieu are assessed against the Building or the Leased Premises, Lessee shall not be obligated for any such taxes or payments if Lessee elects to terminate this Lease, which election shall be made, if at all, by giving written notice to Lessor (the "Termination Notice") within 15 days from the date that Lessee receives notice from Lessor of any such assessment. If Lessee delivers a Termination Notice to Lessor in accordance with the immediately foregoing proviso, the Lease shall terminate on the date which is 60 days after the date that Lessor receives the Termination Notice, without any further action of the parties hereto, and Lessee shall vacate the Leased Premises on said termination date in accordance with Section 23 herein, and thereafter neither party shall have any further obligation under this Lease, except with respect to any accrued obligation thereto unpaid or unperformed. 16. PERCENTAGE RENTAL AGAINST MINIMUM RENTAL. In addition to the base rent provided for in this Lease, Lessee shall pay to Lessor, as additional rent for each lease month (as defined hereinafter), an amount equal to the amount by which six (6) percent of gross sales (as defined hereinafter) for each such lease month exceeds the sum of One Thousand Two Hundred and No/100ths Dollars ($1,200.00). The term "lease month" shall mean • -8- the partial calendar month period commencing on the 16th day of November, 1992 through and including November 30, 1992, and each succeeding calendar month (or part thereof) thereafter during the term of this Lease. 17. GROSS SALES. The term "gross sales" shall mean the selling price of all merchandise or services sold or delivered in, at, on or from any part of the Leased Premises and shall include sales and charges for cash or credit, regardless of collections in the case of the latter, but shall exclude (i) returns and refunds in fact made by Lessee, (ii) exchange of merchandise between stores or warehouses of Lessee where such exchanges are made solely for the convenient operation of Lessee's business and not for the purposes of consummating a sale which has been made at, in, on or from the ' Leased Premises, (iii) the amount of any city, county, state or federal sales, luxury or excise tax on such sales which is both added to the selling price (or absorbed therein) and paid to the taxing authority by Lessee (but not by any vendor of Lessee), (iv) the selling price of merchandise delivered to Lessee at the Leased Premises for sale to the public but not yet sold to the public, (v) bad debts provided Lessee writes such bad debts off its books, (vi) trading stamps or other premiums distributed by Lessee. A sale shall be deemed to be made in the Leased Premises if any order therefore is secured or received in the Leased Premises, whether or not such order is filled in the Leased Premised or elsewhere or if, pursuant to mail, telegraph, telephone or other • similar means, orders are receive or filled at or from the Leased Premises. If any part of Lessee's business shall be sublet, pursuant to the provisions of this Lease, by Lessee or conducted by any person, firm or corporation other than Lessee, then there shall be included in gross sales for the purpose of fixing the percentage rate payable hereunder all the gross sales of such other person in the same manner and with the same effect as if the business or sales of such other person had been conducted by Lessee itself. Lessee shall, during the term hereof, keep for a period of two years following the end of each lease, year, a permanent, complete and accurate record of all sales of merchandise or services and all revenue derived from the business conducted in the Leased Premises by Lessee and by all other persons conducting any business upon the Leased Premises. Lessee shall submit to Lessor within twenty (20) days following the end ! of each lease month a written statement in a form acceptable to Lessor signed and certified by Lessee to be a true and correct statement of the amount of gross sales during the preceding lease month and containing such other information as Lessor may reasonably request, and Lessee shall at the same time pay to Lessor the amount of percentage rent, if there be any due, as shown by said statement. Lessee will keep in an orderly manner and at a location in the Minneapolis/St. Paul metro area notice of which has been furnished to Lessor, a permanent accurate set of books and records of all purchases and sales of • -9- merchandise and all revenue derived from business conducted in the Leased Premises kept according to sound accounting principles. Lessee will keep excise tax reports, state sales tax reports (including quarterly and annual reports with information necessary to isolate sales from the Leased Premises), business and occupation tax reports, gross income tax reports, general ledgers, other financial registers or books of original entry such as are customarily kept and maintained in the restaurant business in the Minneapolis/St. Paul metro area, and monthly financial statements. Such records will be retained for at least two years after the expiration of each lease year. Lessor, or its duly authorized representatives, will have access, at all reasonable times during ordinary business hours at the above said location, to the books and sales records of the Lessee for the purpose of inspecting and auditing to verify gross sales. Lessor agrees to keep all such information confidential. If Lessor conducts an audit of gross sales and the audit establishes gross sales in an amount which exceeds the gross sales reported by Lessee by five percent (5%) or more, Lessee will promptly pay the cost of the audit. Lessor will provide Lessee with a copy of any audit conducted. 18. WAIVER OF SUBROGATION. If any property of Lessee, its agents, employees, representatives, • customers, invitees or others claiming through or under Lessee, which may be at any time in or about the Leased Premises or the Building, is damaged or destroyed, all claims against Lessor, its agents, employees, representatives and invitees and all right of subrogation of any insurance company carrying any insurance covering said loss or damage are hereby waived by Lessee. If any damage to or destruction of the Leased Premises or the Building occurs by causes which could be covered by standard Minnesota form fire and extended coverage insurance, all claims of Lessor against Lessee, its agents, employees, representatives and invitees for any such loss and damage and all right of subrogation of any insurance company carrying any insurance covering such loss or damage are hereby waived by Lessor. 19. NOTICE UPON DEFAULT. If Lessee defaults in its performance of any covenant or agreement contained in this Lease, the Lessor shall give Lessee written notice of such default and Lessee shall have ten (10) days in which to cure such default before Lessor may exercise its remedies outlined above. • -10- 20. INSURANCE. r Lessee agrees that it will reimburse Lessor for ten (10) percent of the cost of insuring the Building against loss by reason of fire, storm, or other extended or "all-risk" casualties. Upon payment by Lessor of the premiums for such insurance, Lessor shall submit to Lessee a statement of Lessee's share of such insurance costs, and Lessee shall promptly reimburse Lessor for its percentage share. Lessee agrees, at Lessee's own cost and expense, to maintain in force throughout the term of this Lease, and any renewals hereof public liability insurance with limit of not less than $1,000,000.00. The insurance policy or policies shall be issued by an insurance company or insurance companies reasonably satisfactory to Lessor and such policy or policies shall name Lessor as an additional insured with respect to obligations under this Lease. Lessee further agrees to deliver to Lessor certificate(s) of insurance evidencing such insurance coverage. Lessee shall keep all of its fixtures and equipment located on the Leased Premises, either now owned or acquired at any time in the future, insured against loss by fire or other casualty and shall provide Lessor with a copy of such insurance and evidence that the premiums have been paid. 21. RENEWAL OPTION. • Lessorants Lessee the option to extend th gr' p e term of this Lease for one additional period of five (5) years, subject to the following conditions: (a) At time Lessee exercises the option, Lessee is not in default under this Lease. (b) Lessee gives Lessor at least six (6) months before the end of the term written notice of Lessee's election to extend. (c) The extended terms will be on the same terms, covenants and conditions provided during the initial term, except there will be no further option to extend, and the monthly base rent for the extension of the term will be an amount equal to the monthly base rent for the initial term of this Lease multiplied by a fraction, the numerator of which is the Consumer Price Index ("CPI") most recently published at the commencement of the renewal term, and the denominator of which is the most recently published CPI at the commencement of the initial term. In no event will the monthly base rent for renewal term be less than the monthly base rent for the initial term. For purposes of this Lease, the term "lease year" means the twelve-month period following commencement of this Lease and successive twelve-month periods thereafter. • -11- For purposes of this Lease, "Consumer Price Index" or "CPI" means the Consumer Price Index for All Urban Consumers, Minneapolis-St. Paul, Minnesota-Wisconsin, All items (1982-84 = 100), as promulgated by the Bureau of Labor Statistics of the United States Department of Labor. If a substantial change is made in the method of establishing the CPI, the CPI will be appropriately adjusted to a figure that would have resulted had no such change occurred. If the CPI is not available, a reliable governmental or other non-partisan publication establishing a comparable index selected by Lessor will be used. (d) At the request of either, Lessor and Lessee will execute and deliver appropriate documents covering extension of the term, the new monthly rent and other terms of the Lease during the extended term. 22. WATER. Lessee agrees to pay for all water used in the operation of dishwashers, refrigeration used on the Leased Premises at the same rates charged by the Water Department of the City of St. Anthony, Minnesota. 23. VACATION OF PREMISES. • Lessee, upon leaving the Leased Premises, shall at its own expense remove all ashes, dirt, rubbish and refuse, and upon Lessee's failure to do so, Lessor may immediately without further notice to Lessee do the same at Lessee's expense, which Lessee shall immediately pay upon receipt of a bill for same from Lessor. Any holding over by Lessee after the expiration of this Lease or any renewal thereof shall be deemed a month-to-month tenancy with rental set at one and one-half times the level provided for herein. Lessee agrees that no assent, express or implied, by the Lessor to any breach of any of Lessee's covenants or agreements shall be deemed or taken to be a waiver of any succeeding breach of such covenant. 24. KITCHEN AND RESTAURANT EOUII'MENT. Lessor shall to lease to Lessee during the term of this Lease and any renewal hereof, the kitchen and restaurant equipment described on Exhibit B attached hereto and made a part hereof (the "Restaurant Equipment") AS-IS, without any representations or warranties. Lessee has fully inspected the Restaurant Equipment, and acknowledges that the same is in good condition and repair. Lessee shall pay to Lessor, as additional rent for the lease of the Restaurant Equipment, the amount of One Hundred and No/100ths Dollars ($100.00) on • -12- September 16, 1992 for the period commencing September 16, 1992 through and including September 30, 1992, and thereafter Lessee shall pay the monthly amount of Two Hundred and No/100ths Dollars ($200.00) for each month commencing October 1, 1992 through and including (a) September 30, 1997, or (b) the date that Lessee exercises its option to purchase the Restaurant Equipment in accordance with this Section, as the case may be. Provided that Lessee is not in default under this Lease, which default remains uncured, Lessee shall have the option at any time during the term of this Lease to purchase the Restaurant Equipment for the sum of Forty Thousand and No/100ths Dollars ($40,000.00) (the "Purchase Price"). Lessee shall exercise said option by delivering the Purchase Price to Lessor by wire transfer or certified check. Promptly upon receipt of the Purchase Price, Lessor shall deliver to Lessee a Bill of Sale for the Restaurant Equipment. Lessee understands that the Farmer Brothers coffee brewer and the Hobart dishwasher, which are located on the Leased Premises as of the date hereof, are not owned by Lessor, and that Lessor does not have any obligations whatsoever with respect to said equipment. 25. RELATIONSHIP OF PARTIES. The relationship between the parties to this Lease shall be and is expressly one of landlord and tenant, and no partnership, joint venture or other • association or relationship exists between Lessor and Lessee. No employee of Lessee will be deemed an employee of Lessor, and no employee of Lessor will be deemed an employee of Lessee. Each party will be responsible for the acts and omissions of only its own employees and not those of the other party. 26. COMPETITION. Neither Lessee nor any person, partnership, corporation or other entity under the control of Lessee or under common control with Lessee will own, operate or manage a restaurant within a one-mile radius of the Leased Premises during the term of this Lease. 27. BROKERS. Lessor has been informed that Lawrence W. Manning has retained Bruce Johnson of Restaurant Brokers of Minnesota as a broker in connection with the transaction between Manning's Cafe, Inc. and Lessee. Lessee acknowledges that Lessor shall not be liable for all or any portion or the brokerage commission or fee in connection therewith. Except as set forth in the first sentence of this Section, Lessor and Lessee represent and warrant one to another that neither of them has employed or otherwise used any broker or agent in relation to this Lease. Lessor will indemnify and hold Lessee harmless, and Lessee will indemnify and hold Lessor • -13- harmless, from and against any claims for brokerage or other commissions or fees arising out of any breach of the foregoing representation and warranty by the respective indemnitors. 28. SALE BY LESSOR Lessor's interest under this Lease shall be freely assignable, and the obligations of Lessor arising or accruing under this Lease after an assignment will be enforceable only against the assignee. So long as Lessee agrees to attorn to any such assignee, such assignee shall assume all obligations of Lessor hereunder from and after the date of any such assignment. 29. SUBORDINATION. At the request of any mortgagee or ground lessor, this Lease will be subject and subordinate to any mortgage or ground lease which may now or hereafter encumber the Building, and Lessee will execute, acknowledge and deliver to Lessor any document reasonably requested by Lessor to evidence the subordination. 30. ESTOPPEL CERTIFICATES. • Within ten (10) days after written request from Lessor, Lessee will execute, acknowledge and deliver to Lessor a truthful and accurate document furnished by Lessor, which document may be relied upon by Lessor and any prospective purchaser or mortgagee of the Building, stating (a) that this Lease is unmodified and is in full force and effect (or if modified, that the Lease is in full force and effect as modified and stating the modifications), (b) the dates to which rent and other charges have been paid, (c) the current monthly rent, (d) the dates on which the term begins and ends, (e) that Lessee has accepted the Leased Premises and is in possession, (f) that Lessor is not in default under this Lease, or, if Lessor is in default, specifying any such default, and (g) including such other information as the prospective purchaser or mortgagee may reasonably require. 31. RIGHT OF ENTRY. Lessor shall at all times have the right to enter upon the Leased Premises to inspect their condition, and at its election to make reasonable and necessary repairs thereon for the protection and preservation thereof, but nothing herein shall be construed to require Lessor to make such repairs, and the Lessor shall not be liable to Lessee, or any other person or persons, for failure or delay in making said repairs, or for damage or injury to person or property caused in or by the making of such repairs, or the doing of such work. In connection with any such entry upon the Leased Premises, Lessor shall take reasonable steps to minimize any • -14- substantial or material interference with Lessee's use of the Leased Premises, but Lessor shall not be required to employ labor at overtime rates. Lessor shall have the right during the last thirty (30) days of the term of this Lease to show the Leased Premises to prospective tenants. Each of the covenants, terms and agreements of this Lease shall inure to the benefit of and shall be obligatory upon the respective heirs, executors, administrators, successors and assigns of Lessor and Lessee respectively. There are no understandings or agreements outside of this Lease. IN TESTIMONY WHEREOF, the Lessor and Lessee have hereunto set their hands to this Lease the day and year first above written. WITNESSES: LESSOR CITY OF ST. ANTHONY BY:46-4 Its Mnvnr By f� Its L' i�w Mn Atir. oP-r • LESSEE HIGHWOOD FOOD SERVICES, INC. s By Its • -15- WA W7 WQA EXHIBIT A s Nk M , y�. 0 r w i EXHIBIT A, Page 2 EXHIBIT B ITEM No. ITEM AND DESCRIPTION 1 1 Stainless steel NFPA 96 approved exhaust hood - 12'x4'x2'6" with stainless steel filters 2 1 "Vulcan Hart" 6 burner range with convection 1 door oven, stainless steel finish, front and sides, stainless steel riser with shelf on casters . 3 1 "Keating" Model 48-BFLD Miraclean gas griddle, 2411x48" - 40,000 BTU, SNI R-39677C with stainless steel stand, lower shelf on casters 4 1 Stainless steel wall panel - 16 LF x 6-1/2' High 4k3 "Frymaster" stainless steel deepfryers - Model fMJ-45-EUSD on casters with (1) Filtrator 6 1 "Delfield" custom stainless steel double sided Chefs counter - 13' long cs/o: (1) "Wells" Model 10D soup . warmer with remote thermostat (1) "Alto-Shaam" 3 drawer food warmer (1) 6" diameter cup lowerator (2) Plate lowerators 1 - 10" diameter 1 - 12"x9" (1) "Delfield" self contained 3 door preparation table - Model 11884-P-32, SN# 108272 (1) 32" steam table with (2) 1211x20" cutouts (1) 24" 2 lower shelf unit (1) 16" lowerator dipwell section (1) Upper stainless steel 2 tier shelf unit - 18" wide x 13' long with 8-1/2' check minder and (2) "Hatco" 800 watt food warmers - 36" long ITEM R0. QTY ITEM AND DESCRIPTION 7 1 "Savory" 4 slice pop-up toaster 8 1 microwave ooven, 1400 watt 9 1 "Silver King" stainless steel lettuce dispenser, wall mounted, Model 1SR-SB, SNI 222429 10 1 Lot of miscellaneous stainless steel walls shelves cs/o: 2 - 18"x54" 1 - 121100" 2 - 121lx96" 2 - 1211x48" 11 1 "Hugin-Sweda" Prechecker register with slip printer - • Model 14645, SNI E-6602 12 1 Built in stainless steel work station - 8'L00" with 6" backsplash with "Delfield" water dispensing unit and ice bin with (2) dish rack dispensers 13 1 Stainless steel soiled dish table - 3011x48" with sink, spray assembly and glass wall rack 14 1 Stainless steel clean table - 30"x60" with stainless steel upper shelf • 1 "Eagle" stainless steel wall sink with connections - 9-1/2"x13-1/21Ix7" TEM NO. QTY ITEM AND DESCRIPTION I steel-9-compaz�nen ---------- sink - 96" with right hand and left hand drainboards, 3 quick drains with connections 17 1 "Hobart" Model 1512-1 slicer - SNI 56-652492 18 1 Stainless steel custom work table - 30"x90" with backsplash, (1) 3 drawer storage unit with plastic liner, (1) Sink 21"x21"x12" with connections, (1) Right hand liner shelf - 19 1 "Hobart" 20 quart mixer on stainless steel stand with bowl, beater and whip 20 1 "Hobart" self contained 2 door refrigerator - Model 14A-2 - SNI 32-525-156-HN 21 1 "Hobart" self contained 2 door freezer - Model 1QAF-2 - SNI 32-521-800-LH 22 1 "Ansulex" Model 1R-102, 4 head exhaust hood fire extinguisher system with 1 tank - 1-1/2" mechanical gas valve 23 7 Stainless steel corner guards - 2"x2"x4B" 24 1 "Kold Locker" metal clad walk-in cooler 7 '6"Wx7'6"x6'H - SN1 87401553, Model 1KLCBB-WL-26, Job 1883901R with "Control Temp." door heater Model 1KL26X66 with: (1 ) - light ( 1) - metal floor • (1) - temp. gauge (1) - "Norlake" cooler blower Job 1171724 VE M NO. QTY ITEM AND DESCRIPTION -------------------------------------- _25 1 Lot of "Metro" storage shelves throughout cs/o: (8) chrome posts - 86" (10) chrome posts - 62" (4) chrome posts - 14" (19) 401lx24" wire shelves (3) 361148" wire shelves (5) 241lx24" wire shelves (20) 481lx24" wire shelves (5) 361lx24" wire shelves (4) 36"42" wire shelves 26 1 "Weather-Rite" Model #TOT112 air makeup unit with connections • • GUARANTY In consideration of One Dollar ($1.00) and other good and valuable consideration to the undersigned in hand paid, receipt of which is hereby acknowledged, and in further consideration for and as an inducement to the CITY OF ST. ANTHONY, a municipal corporation under the laws of the State of Minnesota (the "City"), to enter into a certain Lease Agreement of even date herewith (the "Lease") with HIGHWOOD FOOD SERVICES, INC., a Minnesota corporation, as lessee ("Lessee"), relating to certain premises located in the building owned by the City and known as the "Stonehouse", as more fully described in the Lease, the undersigned ("Guarantor"), does hereby agree as follows: 1. Guarantor does hereby absolutely and unconditionally guaranty to the City, its successors and assigns, the full payment, performance and observance by Lessee of all the covenants, obligations, conditions and agreements in the Lease provided to be paid, performed and observed by Lessee for the entire term of the Lease, including any extensions or renewals thereof ("Guarantied Obligations"). 2. Guarantor expressly agrees that the validity of this Guaranty and the obligations of the Guarantor hereunder shall in no way be terminated, affected or • impaired by reason of the bankruptcy of Lessee or the assertion by the City against Lessee of any of the rights or remedies reserved to the City pursuant to the provisions of the Lease. 3. Guarantor hereby waives exhaustion of recourse against Lessee and agrees that any action brought for the enforcement of rights under the Lease or under this Guaranty may, in the City's discretion, be brought against the undersigned Guarantor and/or Lessee, jointly or severally. Guarantor hereby agrees that the failure of the City to require strict performance of any of the terms of the Lease, or any extension of time, concession, indulgence or waiver of performance granted by the City shall not release Guarantor from liability under this Guaranty. 4. Guarantor waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives presentment, demand of payment or performance, protest, notice of dishonor, nonpayment or nonperformance of any such liabilities, and all other notices and demands of any kind and description relating to the Guarantied Obligations now or hereafter provided for by any statute, law, rule or regulation. 5. The City may at any time and from time to time without the consent of, or notice to, the Guarantor, without incurring responsibility to the Guarantor, without affecting, impairing or releasing any of the obligations of the Guarantor • hereunder, alter, change, modify, extend, release, renew, cancel, supplement or amend in any manner the Lease or any of the Guarantied Obligations, and the guaranty and agreements herein made shall continue to apply to the Guarantied Obligations after giving effect to any such alteration, change, modification, extension, release, renewal, cancellation, supplement or amendment. 6. No invalidity, irregularity or unenforceability of all or any part of the Guarantied Obligations or of any security therefor or other recourse with respect thereto shall affect, impair or be a defense to this Guaranty and this Guaranty is a primary obligation of the Guarantor. 7. Guarantor agrees to pay to the City its reasonable attorneys' fees and all other costs incurred by the City in enforcing or protecting any of the City's rights, remedies or recourses hereunder or under the Lease, whether suit be brought or not. 8. This Guaranty shall be governed by the laws of the State of Minnesota and shall be binding upon the undersigned Guarantor. This Guaranty is an absolute and completed one and the undersigned Guarantor waives notice of acceptance of this Guaranty, said acceptance being conclusively presumed. 9. Until the terms, covenants and conditions of the Lease and this Guaranty are fully performed, Guarantor shall not be released by any act or thing which might, but for this provision of this Guaranty, be deemed a legal or equitable discharge of a surety. • IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed as of this 31. day of R,4 1992. ri • -2- STATE OF MINNESOTA ) ) SS. ` COUNTY OF - ) The foregoing instrument was acknowledged before me this `31 day of u-4-i 1992,by ERICH SCHUHMACHER Notary Publi CONNIE J.KROEPLIN s' NOTARY PUBLIC•MINNESOTA HENNEPIN COUNTY x MY Conan.Exp.April 25.1996 �WYY7/YV • -3-