EXHIBIT 10.8
LEASE
WHEREAS, SIGNAL HILLS COMPANY, a Minnesota corporation, as "Landlord", and
SIGNAL HILLS STATE BANK, as "Tenant", entered into a lease agreement dated the
26th day of June, 1969; and
WHEREAS, the demised premises subsequent thereto were conveyed to Signal
Hills Co., a partnership; and
WHEREAS, the shopping center premises commonly known and called "Signal
Hills Shopping Center" formerly owned by Landlord has been sold and conveyed to
others; and
WHEREAS, by this lease agreement the parties intend to wholly amend and
supersede the lease agreement of June 26, 1969;
NOW, THEREFORE, the parties do hereby agree as follows:
I
PREMISES
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord
those certain premises described in Exhibit "A", attached hereto, located in the
City of West Saint Xxxx, County of Dakota, State of Minnesota.
II
TERM
The term of this lease is for a period of twenty (20) years commencing as
of the 1st day of January, 1976, and ending on the 31st day of December, 1995,
unless extended or sooner terminated pursuant to the provisions of this lease.
III
RENT
3.1 RENT. Tenant shall pay to Landlord as rent for the premises in
advance on the first day of each calendar month of the term of this lease
without deduction, offset, prior notice or demand, in lawful money of the United
States, the sum of Two Thousand Five Hundred Twenty-five Dollars ($2,525.00).
3.2 ADDITIONAL MONETARY SUMS. This lease is entered into by Landlord
for the express purpose of providing Landlord with net income from rent, free
and clear of any and all expenses, charges, taxes, liens or impositions of
any kind. In addition to the rent reserved by Section 3.1, Tenant shall pay
all real estate taxes, impositions, insurance premiums, operating and
maintenance charges, construction costs, and any other charges, costs and
expenses which arise during the term of this lease. For the purpose of real
estate taxes, real estate taxes shall be deemed to arise on the date they
become due and payable. In the event of the nonpayment of all or any portion
of such charges, costs and expenses, Landlord shall have the same rights and
remedies as provided in this lease for failure of Tenant to pay rent. The
parties agree this lease is not terminable for any reason by Tenant; Tenant
in no event to be entitled to any abatement for reduction of rent or other
monetary sums payable hereunder, except as expressly herein provided,
notwithstanding any present or future law to the contrary.
IV
TAXATION
4.1 Should after the year 1975, there be levied or assessed against the
premises any special assessments for local improvements, then for and during the
calendar year in which such installments or any such special assessments are
payable, Tenant shall pay as additional rent after each installment which is due
and payable during the term of this lease the amount thereof to the Landlord.
Landlord undertakes and agrees to use its best efforts to give or cause to be
given Tenant notice of any proposed improvement which might result in the
imposition of a special assessment as soon as practicable.
V
USE
5.1 The premises shall be used and occupied by the Tenant only for the
purpose of operating a bank or other financial institution and for ancillary
office and rental office use and for no other purpose whatsoever without
obtaining the prior written consent of Landlord.
5.2 Tenant shall not use the premises or permit anything to be done in or
about the premises which will in any way conflict with any law, statute, zoning
restriction, ordinance or governmental rule or regulation or requirements or
duly constituted public authorities now in force or which may hereafter be
enacted or promulgated. Tenant shall at its sole cost and expense promptly
comply with all laws, statutes, ordinances and governmental rules, regulations
or requirements now in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the premises. The judgment of any court of competent jurisdiction against
Tenant whether Landlord be a party thereto or not, that Tenant has violated any
law, statute, ordinance or governmental rule, regulation or requirement, shall
be conclusive of that fact as between Landlord and Tenant.
VI
UTILITIES
Tenant shall pay prior to delinquency for all water, gas, heat, light,
power, telephone, sewage, air conditioning and ventilating, scavenger,
janitorial, landscaping and all other materials and utilities supplied to the
premises.
VII
MAINTENANCE AND REPAIRS, ALTERATIONS AND ADDITIONS
7.1 TENANT'S OBLIGATIONS. Throughout the term of this lease, Tenant shall
keep in good order, condition and repair the premises and every part thereof,
structural or nonstructural, and all adjacent sidewalks, landscaping, driveways,
parking lots, fences, and signs located adjacent to or included within the
premises. Landlord shall incur no expense nor have any obligation of any kind
whatsoever in connection with maintenance of the premises, and Tenant expressly
waives the benefits of any statute now or hereafter in effect which would
otherwise afford Tenant the right to make repairs at Landlord's expense or to
terminate this lease because of Landlord's failure to keep the premises in good
order. Tenant shall do all acts required to comply with all applicable laws,
ordinances, regulations and rules of any public authority relating to its
maintenance obligation as set forth herein.
7.2 SURRENDER. Upon the expiration or earlier termination of this lease,
Tenant shall surrender the premises in the same condition as received, broom
clean, ordinary wear and tear excepted. Tenant, at its sole cost and expense,
agrees to repair any damage to the premises caused by or in connection with the
removal of any articles of personal property, business or trade fixtures,
machinery, equipment, cabinetwork, furniture, movable partition, or permanent
improvements or addition, including without limitation thereto, repairing the
floor and patching and painting the walls where required by Landlord to
Landlord's reasonable satisfaction.
Tenant shall indemnify the Landlord against any loss or liability resulting
from delay by Tenant in so surrendering the premises, including without
limitation, any claims made by any succeeding tenant founded on such delay.
7.3 LANDLORD'S RIGHTS. In the event Tenant fails to perform Tenant's
obligations under this Article VII, Landlord shall give Tenant notice to do such
acts as are reasonably required to so maintain the premises; if Tenant shall
fail to commence such work and diligently prosecute it to completion, then
Landlord shall have the right but not the obligation to do such acts and expend
such funds at the expense of Tenant as are reasonably required to perform such
work. Any amount so expended by Landlord shall be paid by Tenant promptly after
demand with interest at ten percent (10%) per annum from the date of such work.
Landlord shall have no liability to Tenant for any damage, inconvenience or
interference with the use of the Premises by Tenant as a result of performing
any such work.
7.4 ALTERATIONS AND ADDITIONS.
A. Tenant shall not, without Landlord's prior written consent, make
any alterations, additions, improvements or utility installations in, on or
about the premises, except for nonstructural alterations not exceeding Fifteen
Thousand Dollars ($15,000.00) in cost. As used in this Section 7.4, the term
"utility installations" shall include ducting, power panels, fluorescent
fixtures, space heaters, conduit and wiring. As a condition to giving such
consent, Landlord may require that Tenant agree to remove any such alterations,
additions, improvements or utility installations at the expiration of the term
and to restore the premises to their prior condition. As a further condition to
giving such consent, Landlord may require Tenant to provide Landlord, at
Tenant's sole cost and expense, a lien and completion bond in an amount equal to
one and one-half times the estimated cost of such improvements, to insure
Landlord against any liability for mechanics' and materialmen's liens and to
insure completion of the work.
B. Unless Landlord requires their removal, as set forth in Paragraph
7.4-A, all alterations, additions, improvements and utility installations
(whether or not such utility installations constitute trade fixtures of Tenant),
which may be made on the premises, shall at the expiration or earlier
termination of the lease become the property of Landlord and remain upon and be
surrendered with the premises. Notwithstanding the provisions of this Paragraph
7.4-B, personal property, business and trade fixtures, cabinetwork, furniture,
movable partitions, machinery and equipment, other than that which is affixed to
the premises so that it cannot be removed without material damage to the
premises, shall remain the property of Tenant and may be removed by Tenant
subject to the provisions of Paragraph 7.2, at any time during the term of this
Lease when Tenant is not in default.
VIII
ENTRY BY LANDLORD
Landlord and Landlord's agents shall have the right at reasonable times to
enter the premises to inspect the same or to maintain or repair, or to show the
premises to prospective purchasers, tenants or lenders. Landlord may at any
time during the last ninety (90) days of the term of the lease place on or about
the premises any ordinary "for sale" or "for lease" signs. Tenant hereby waives
any claim for abatement of rent or for damages for any injury or inconvenience
to or interference with Tenant's business, any loss of occupancy or quiet
enjoyment of the premises, and any other loss occasioned thereby.
IX
LIENS
Tenant shall keep the premises and any building of which the premises are a
part free from any liens arising out of work performed, materials furnished or
obligations incurred by Tenant and shall indemnify, hold harmless and defend
Landlord from any liens and encumbrances arising out of any work performed or
materials furnished by or at the direction of Tenant. In the event that Tenant
shall not, within twenty (20) days following the imposition of any such lien,
cause such lien to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies provided herein
and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the
claim giving rise to such lien. All such sums paid by Landlord and all
expenses incurred by it in connection therewith including attorneys' fees and
costs shall be payable to Landlord by Tenant on demand with interest at the
rate of ten percent (10%) per annum. Landlord shall have the right at all
times to post and keep posted on the premises any notices permitted or
required by law, or which Landlord shall deem proper, for the protection of
Landlord and the premises, and any other party having an interest therein,
from mechanics' and materialmen's liens, and Tenant shall give to Landlord at
least ten (10) business days prior written notice of the expected date of
commencement of any work relating to alterations or additions to the premises.
X
INDEMNITY
10.1 INDEMNITY. Tenant shall indemnify and hold Landlord harmless from and
against any and all claims of liability for any injury or damage to any person
or property arising from Tenant's use of the premises, or from the conduct of
Tenant's business, or from any activity, work or thing done, permitted or
suffered by Tenant in or about the premises or elsewhere. Tenant shall further
indemnify and hold Landlord harmless from and against any and all claims arising
from any breach or default in the performance of any obligation on Tenant's part
to be performed under this lease, or arising from any negligence of Tenant or
Tenant's agents, contractors or employees, and from and against all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon. In the event any action or
proceeding is brought against Landlord by reason of any such claim, Tenant upon
notice from Landlord shall defend same at Tenant's expense by counsel
satisfactory to Landlord. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury to persons in,
upon or about the premises arising from any cause and Tenant hereby waives all
claims in respect thereof against Landlord.
10.2 EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be liable
for injury to Tenant's business or loss of income therefrom or for damage which
may be sustained by the person, goods, wares, merchandise or property of Tenant,
its employees, invitees, customers, agents or contractors or any other person in
or about the premises, caused by or resulting from fire, steam, electricity,
gas, water or rain, which may leak or flow from or into any part of the
premises, or from the breakage, leakage, obstruction or other defects of the
pipes, wires, appliances, plumbing, air conditioning or lighting fixtures of the
same, whether the said damage or injury results from conditions arising upon the
premises or upon other portions of the building of which the premises are a
part, or from other sources or places and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Tenant.
XI
INSURANCE
11.1 LIABILITY INSURANCE. Tenant shall, at Tenant's expense, procure and
maintain at all times during the term of this lease a policy of comprehensive
public liability insurance insuring Landlord and Tenant against any liability
arising out of the ownership, use, occupancy, or maintenance of the premises and
appurtenant areas. Such insurance shall at all times be in an amount of not
less than Three Hundred Thousand Dollars ($300,000.00) for injury to or death of
any one person in any one accident or occurrence and in an amount of not less
than Five Hundred Thousand Dollars ($500,000.00) for injury to or death of more
than one person in any one accident or occurrence, and in amount of not less
than Fifty Thousand Dollars ($50,000.00) for liability for property damage. The
limits of such insurance shall not limit the liability of Tenant. If the
premises are part of a larger property, said insurance shall have a Landlord's
Protective Liability endorsement attached hereto. All insurance required
hereunder shall be with companies rated AAA or better in "Best's Insurance
Guide". Tenant shall deliver to Landlord certificates of insurance evidencing
the existence and amounts of such insurance with loss payable clauses
satisfactory to Landlord, provided that in the event Tenant fails to procure and
maintain such insurance, Landlord may (but shall not be required to) procure
same at Tenant's expense after ten (10) days prior written notice. No such
policy shall be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days' prior written notice to Landlord by
the
insurer. All such policies shall be written as primary policies, not
contributing with and not in excess of coverage which the Landlord may carry.
Tenant shall, within twenty (20) days prior to the expiration of such
policies, furnish Landlord with renewals or binders or Landlord may order
such insurance and charge the cost to Tenant, which amount shall be payable
by Tenant upon demand. Tenant shall have the right to provide such insurance
coverage pursuant to blanket policies obtained by Tenant provided such
blanket policies expressly afford coverage to the premises and to Tenant as
required by this lease.
11.2 PROPERTY INSURANCE. Landlord shall, at Tenant's expense, procure and
maintain at all times during the term of this lease a policy or policies of
insurance covering loss or damage to the premises in the amount of the full
replacement value thereof (exclusive of Tenant's trade fixtures and equipment)
providing protection against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, sprinkler leakage and
special extended peril (all-risk). Tenant shall pay such annual insurance
premiums to Landlord within fifteen (15) days after receipt by Tenant of a copy
of the premium statement or other reasonably satisfactory evidence of the amount
due, which shall include the method of calculation of Tenant's share thereof if
the insurance covers other improvements than the premises. Such insurance shall
provide for payment of loss thereunder to Landlord or the holder of a first
mortgage or deed of trust on the premises.
11.3 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive any and
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such waiving party of its property or the property of others under its
control caused by fire or any of the extended coverage risks described above to
the extent that such loss or damage is insured against under any insurance
policy in force at the time of such loss or damage. The insuring party shall,
upon obtaining the policies of insurance required under this lease, give notice
to the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this lease.
XII
DAMAGE OF DESTRUCTION
12.1 OBLIGATION TO REBUILD. In the event the improvements on the premises
are damaged or destroyed, partially or totally, from any cause whatsoever,
whether or not covered by insurance, the Tenant shall repair, restore and
rebuild the premises to their condition prior to such damage or destruction and
this lease shall continue in full force and effect. Such repair, restoration
and rebuilding (hereinafter "repair") shall be commenced within a reasonable
time after such damage or destruction and shall be diligently prosecuted to
completion. The rental due hereunder shall be abated in proportion to the
portion of the premises rendered untenantable for the period reasonably
necessary to restore the premises.
12.2 AVAILABILITY OF INSURANCE PROCEEDS. If the damage or destruction
results from risk against which insurance is to be provided pursuant to Section
11.2, then the proceeds of such insurance shall be made available to Tenant for
payment of the cost and expense of the repair. Landlord may make such proceeds
available to Tenant subject to reasonable conditions, including without
limitation thereto, a requirement of architect's certification of costs,
retention of a percentage of such proceeds pending final notice of completion, a
lien and completion bond to be provided solely at Tenant's expense to insure
against mechanics' or materialmen's liens arising out of the repair and to
insure completion of the repair. In the event that the insurance proceeds are
insufficient to cover the cost of repair, then any amounts in excess thereof
required to complete the repair shall be paid by Tenant. In the event such
insurance proceeds are not made available to Tenant within ninety (90) days
after such damage or destruction Tenant shall have the option for thirty (30)
days commencing on the expiration of such ninety (90) day period, to cancel this
lease by written notice to Landlord within said thirty (30) day period. If
Tenant shall exercise such option, Tenant shall have no further obligation
hereunder and shall have no further claim against Landlord or the insurance
proceeds, provided, however, that Landlord shall promptly return to Tenant so
much of Tenant's security deposit as has not applied by Landlord.
12.2 DAMAGE NEAR END OF THE TERM. Notwithstanding anything to the contrary
contained in this lease, if the damage or destruction occurs during the last
year of the term of this lease to an extent greater than
twenty-five percent (25%) of the then replacement value of the improvements
on the premises, Tenant may elect not to restore, such election on the part
of Tenant to be given by notice to Landlord within thirty (30) days after the
date of damage or destruction. In the event Tenant so elects to terminate,
then this lease shall be terminated as of the later of the date of giving of
such notice or the date Tenant completes its vacation from the premises. In
the event of such termination, all proceeds of insurance carried in
connection with the premises shall be payable to the Landlord.
XIII
CONDEMNATION
A. If the premises or any portion thereof are taken under the power
of eminent domain, or sold by Landlord under the threat of the exercise of said
power (all of which is herein referred to as "condemnation"), this lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever occurs first. If any of the floor area of any
buildings on the premises, or more than ten percent (10%) of the land area of
the premises not covered with buildings, is taken by condemnation, either
Landlord or Tenant may terminate this lease, as of the date the condemning
authority takes possession, by notice in writing of such election within twenty
(20) days after Landlord shall have notified Tenant of the taking, or in the
absence of such notice then within twenty (20) days after the condemning
authority shall have taken possession.
B. If this lease is not terminated by either Landlord or Tenant,
then it shall remain in full force and effect as to the portion of the premises
remaining, provided the rent shall be reduced in the proportion that the floor
area of the buildings taken within the premises bears to the total floor area of
all buildings located on the premises. In the event this lease is not so
terminated then Landlord agrees, at Landlord's sole cost, to restore the
premises to a complete unit of like quality and character as existed prior to
the condemnation as soon as reasonably possible. All awards for the taking of
any part of the premises or any payment made under the threat of the exercise of
power of eminent domain shall be the property of Landlord, whether made as
compensation for diminution of value of a leasehold or for the taking of the fee
or as severance damages; provided, however, that Tenant shall be entitled to any
award for loss of or damage to Tenant's trade fixtures and removable personal
property. In the event that this lease is not terminated by reason of such
condemnation, Landlord shall, to the extent of severance damages received by
Landlord in connection with such condemnation, repair any damage to the premises
caused by such condemnation except to the extent that Tenant has been reimbursed
therefor by the condemning authority. Tenant shall pay any amount in excess of
such severance damages required to complete such repair.
XIV
ASSIGNMENT AND SUBLETTING
14.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not assign, transfer,
mortgage, pledge, hypothecate or encumber this lease or any interest therein,
and shall not sublet the premises or any part thereof, without the prior written
consent of Landlord and any attempt to do so without such consent being first
had and obtained shall be wholly void and shall constitute a breach of this
lease.
14.2 REASONABLE CONSENT. If Tenant complies with the following conditions,
Landlord shall not unreasonably withhold its consent to the subletting of the
premises or any portion thereof. Tenant shall submit in writing to Landlord:
(a) the name, and legal composition of the proposed subtenant; (b) the nature of
the proposed subtenant's business to be carried on in the premises; (c) the
terms and provisions of the proposed sublease; (d) such reasonable financial
information as Landlord may request concerning the proposed subtenant.
14.3 NO RELEASE OF TENANT. No consent by Landlord to any assignment or
subletting by Tenant shall relieve Tenant of any obligation to be performed by
the Tenant under this lease, whether occurring before or after such consent,
assignment or subletting. The consent by Landlord to any assignment or
subletting shall not relieve Tenant from the obligation to obtain Landlord's
express written consent to any other assignment or subletting. The acceptance
of rent by Landlord from any other person shall not be deemed to be a waiver by
Landlord of any provision of this lease or to be a consent to any assignment,
subletting or other transfer. Consent to one assignment, subletting or other
transfer shall not be deemed to constitute consent to any subsequent assignment,
subletting or other transfer.
14.4 ATTORNEYS' FEES. In the event Landlord shall consent to a sublease or
assignment under this Article XIV, Tenant shall pay Landlord's reasonable
attorneys' fees not to exceed Five Hundred Dollars ($500.00) incurred in
connection with giving such consent.
XV
SUBORDINATION
15.1 SUBORDINATION. This lease at Landlord's option shall be subject and
subordinate to all ground or underlying leases which now exist or may hereafter
be executed affecting the premises or the land upon which the premises are
situated or both, and to the lien of any mortgages or deeds of trust in any
amount or amounts whatsoever now or hereafter placed on or against the land or
improvements or either thereof, of which the premises are a part, or on or
against Landlord's interest or estate therein, or on or against any ground or
underlying lease, without the necessity of the execution and delivery of any
further instruments on the part of Tenant to effectuate such subordination. If
any mortgagee, trustee or ground lessor shall elect to have this lease prior to
the lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Tenant, this lease shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this lease is dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of the
recording thereof.
15.2 SUBORDINATION AGREEMENTS. Tenant covenants and agrees to execute and
deliver upon demand without charge therefor, such further instruments evidencing
such subordination of this lease to such ground or underlying leases and to the
lien of any such mortgages or deeds of trust as may be required by Landlord.
Tenant hereby appoints Landlord as Tenant's attorney-in-fact, irrevocably, to
execute and deliver any such agreements, instruments, releases or other
documents.
15.3 QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon
Tenant paying rent and other monetary sums due under the lease and performing
its covenants and conditions, Tenant shall and may peaceably and quietly have,
hold and enjoy the premises for the term, subject, however, to the terms of the
lease and of any of the aforesaid ground leases, mortgages or deeds of trust
described above.
15.4 ATTORNMENT. In the event any proceedings are brought for default
under any ground or underlying lease or in the event of foreclosure or the
exercise of the power of sale under any mortgage or deed of trust made by the
Landlord covering the premises, the Tenant shall attorn to the purchaser upon
any such foreclosure or sale and recognize such purchaser as the Landlord under
this lease; provided said purchaser expressly agrees in writing to be bound by
the terms of the lease.
XVI
DEFAULT; REMEDIES
16.1 DEFAULT. The occurrence of any of the following shall constitute a
material default and breach of this lease by Tenant:
A. Any failure by Tenant to pay the rent or any other monetary sums
required to be paid hereunder (where such failure continues for three (3) days
after written notice thereof by Landlord to Tenant);
B. The abandonment or vacation of the premises by Tenant;
C. A failure by Tenant to observe and perform any other provision of
this lease to be observed or performed by Tenant, where such failure continues
for twenty (20) days after written notice thereof by Landlord to Tenant;
provided, however, that if the nature of such default is such that the same
cannot
reasonably be cured within such twenty (20) day period, Tenant shall not be
deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion;
D. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; the filing by or against Tenant of a
petition to have Tenant adjudged a bankrupt or of a petition for reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the premises or of Tenant's interest in this
lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the premises or of Tenant's interest in this lease,
where such seizure is not discharged within thirty (30) days.
16.2 REMEDIES. In the event of any such material default or breach by
Tenant, Landlord may at any time thereafter, with or without notice and demand
and without limiting Landlord in the exercise of any right or remedy at law or
in equity which Landlord may have by reason of such default or breach:
A. Maintain this lease in full force and effect and recover the rent
and other monetary charges as they become due, without terminating Tenant's
right to possession, irrespective of whether Tenant shall have abandoned the
premises. In the event Landlord elects to not terminate the lease, Landlord
shall have the right to attempt to relet the premises at such rent and upon such
conditions and for such a term, and to do all acts necessary to maintain or
preserve the premises as Landlord deems reasonable and necessary without being
deemed to have elected to terminate the lease including removal of all persons
and property from the premises; such property may be removed and stored in a
public warehouse or elsewhere at the cost of and for the account of Tenant. In
the event any such reletting occurs, this lease shall terminate automatically
upon the new tenant taking possession of the premises. Notwithstanding that
Landlord fails to elect to terminate the lease initially, Landlord at any time
during the term of this lease may elect to terminate this lease by virtue of
such previous default of Tenant.
B. Terminate Tenant's right to possession by any lawful means, in
which case this lease shall terminate and Tenant shall immediately surrender
possession of the premises to Landlord, in such event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default including, without limitation thereto, the following: (i) The worth at
the time of award of any unpaid rent which has been earned at the time of such
termination; plus (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that is proved could have been
reasonably avoided; plus (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that is proved could be reasonably
avoided; plus (iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this lease or which in the ordinary course of things would be likely to
result therefrom; plus (v) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable state law. Upon any such re-entry Landlord shall have the right to
make any reasonable repairs, alterations or modifications to the premises, which
Landlord in its sole discretion deems reasonable and necessary. As used in
Subparagraph (i) above, the "worth at the time of award" is computed by allowing
interest at the rate of ten percent (10%) per annum from the date of default.
As used in Subparagraphs (ii) and (iii) the "worth at the time of award" is
computed by discounting such amount at the discount rate of the U.S. Federal
Reserve Bank at the time of award plus one percent (1%). The term "rent", as
used in this Article XVI, shall be deemed to be and to mean the rent to be paid
pursuant to Article III and all other monetary sums required to be paid by
Tenant pursuant to the terms of this lease.
16.3 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the premises.
Accordingly, if any installment of rent or any other sum due from Tenant
shall not be received by Landlord or Landlord's designee within ten (10) days
after such amount shall be due, Tenant shall pay to Landlord a late charge
equal to ten percent (10%) of such overdue amount. The parties hereby agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant. Acceptance of such
late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
16.4 DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event later than thirty (30) days after written notice by Tenant to
Landlord and to the holder of any first mortgage or deed of trust covering the
premises whose name and address shall have theretofore been furnished to Tenant
in writing, specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for performance, then Landlord shall not be
in default if Landlord commences performance within such thirty (30) day period
and thereafter diligently prosecutes the same to completion.
XVII
MISCELLANEOUS
17.1 ESTOPPEL CERTIFICATE.
A. Tenant shall at any time upon not less than ten (10) days' prior
written notice from Landlord execute, acknowledge and deliver to Landlord a
statement in writing (i) certifying that this lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by a prospective purchaser or
encumbrancer of the premises.
B. Tenant's failure to deliver such statement within such time shall
be conclusive upon Tenant (i) that this lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) that there
are no uncured defaults in Landlord's performance, and (iii) that not more than
one month's rent has been paid in advance.
C. If Landlord desires to finance or refinance said premises, or any
part thereof, Tenant hereby agrees to deliver to any lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such lender. Such statements shall include the past three (3) years' financial
statements of Tenant. All such financial statements shall be received by
Landlord in confidence and shall be used only for the purposes herein set forth.
17.2 TRANSFER OF LANDLORD'S INTEREST. In the event of a sale or conveyance
by Landlord of Landlord's interest in the premises other than a transfer for
security purposes only, Landlord shall be relieved from and after the date
specified in such notice of transfer of all obligations and liabilities accruing
thereafter on the part of the Landlord, provided that any funds in the hands of
Landlord at the time of transfer in which Tenant has an interest, shall be
delivered to the successor of Landlord. This lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee provided all
Landlord's obligations hereunder are assumed in writing by the transferee.
17.3 CAPTIONS; ATTACHMENTS; DEFINED TERMS.
A. The captions of the paragraphs of this lease are for convenience
only and shall not be deemed to be relevant in resolving any question of
interpretation or construction of any section of this lease.
B. Exhibits attached hereto, and addendums and schedules initialed
by the parties, are deemed by attachment to constitute part of this lease and
are incorporated herein.
C. The words "Landlord" and "Tenant", as used herein, shall include
the plural as well as the singular. Words used in neuter gender include the
masculine and feminine and words in the masculine or feminine gender include the
neuter. If there be more than one Landlord or Tenant, the obligations hereunder
imposed upon Landlord or Tenant shall be joint and several. If the Tenants are
husband and wife, the obligations shall extend individually to their sole and
separate property as well as to their community property. The term "landlord"
shall mean only the owner or owners at the time in question of the fee title or
a tenant's interest in a ground lease of the premises. The obligations
contained in this lease to be performed by Landlord shall be binding on
Landlord's successors and assigns only during their respective periods of
ownership.
17.4 ENTIRE AGREEMENT. This instrument, along with any exhibits and
attachments hereto, constitutes the entire agreement between Landlord and Tenant
relative to the premises and this agreement and the exhibits and attachments may
be altered, amended, or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or
contemporaneous written or oral agreements between and among themselves and
their agents or representatives relative to the leasing of the premises are
merged in or revoked by this agreement.
17.5 SEVERABILITY. If any term or provision of this lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this lease shall not be affected thereby, and
each term and provision of this lease shall be valid and be enforceable to the
fullest extent permitted by law.
17.6 COSTS OF SUIT.
A. If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this lease,
including any suit by Landlord for the recovery of rent or possession of the
premises, the losing party shall pay the successful party a reasonable sum for
attorneys' fees which shall be deemed to have accrued on the commencement of
such action and shall be paid whether or not such action is prosecuted to
judgment.
B. Should Landlord, without fault on Landlord's part, be made a
party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the premises by
license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act or transaction of Tenant or of any such other person,
Tenant covenants to save and hold Landlord harmless from any judgment rendered
against Landlord or the premises or any part thereof, and all costs and
expenses, including reasonable attorneys' fees, incurred by Landlord in or in
connection with such litigation.
17.7 TIME; JOINT AND SEVERAL LIABILITY. Time is of the essence of this
lease and each and every provision hereof, except as to the conditions relating
to the delivery of possession of the premises to Tenant. All the terms,
covenants and conditions contained in this lease to be performed by either
party, if such party shall consist of more than one person or organization,
shall be deemed to be joint and several, and all rights and remedies of the
parties shall be cumulative and nonexclusive of any other remedy at law or in
equity.
17.8 BINDING EFFECT; CHOICE OF LAW. The parties hereto agree that all the
provisions hereof are to be construed as both covenants and conditions as though
the words importing such covenants and conditions were used in each separate
paragraph hereof; subject to any provisions hereof restricting assignment or
subletting by Tenant and subject to Paragraph 17.2, all of the provisions hereof
shall bind and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns. This lease shall be
governed by the laws of the State of Minnesota.
17.9 WAIVER. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed, and any waiver or the breach of any covenant, term or condition shall
not be deemed to be a waiver of any preceding or succeeding breach of the same
or any other covenant, term or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall not
constitute a waiver by Landlord of the breach or default of any covenant, term
or condition unless otherwise expressly agreed to by Landlord in writing.
17.10 SURRENDER OF PREMISES. The voluntary or other surrender of this
lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and
shall, at the option of the Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.
17.11 HOLDING OVER. If Tenant remains in possession of all or any part
of the premises after the expiration of the term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from month to
month only, and not a renewal hereof or an extension for any further term, and
in such case, rent and other monetary sums due hereunder shall be payable in the
amount and at the time specified in this lease and such month to month tenancy
shall be subject to every other term, covenant and agreement contained herein.
17.12 SIGNS AND AUCTIONS. Tenant shall not place any sign upon the
premises or conduct any auction thereon without Landlord's prior written
consent. Provided, however, that Tenant may place any sign, placard, statement
or notice required by bank supervisory and regulatory agencies without
Landlord's prior written consent.
17.13 REASONABLE CONSENT. Except as limited elsewhere in this lease,
wherever in this lease Landlord or Tenant is required to give its consent or
approval to any action on the part of the other, such consent or approval shall
not be unreasonably withheld. In the event of failure to give any such consent,
the other party shall be entitled to specific performance at law and shall have
such other remedies as are reserved to it under this lease, but in no event
shall Landlord or Tenant be responsible in monetary damages for failure to give
consent unless said failure is withheld maliciously or in bad faith.
17.14 INTEREST ON PAST DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest at
eight percent (8%) per annum from the due date.
17.15 RECORDING. Tenant shall not record this lease without Landlord's
prior written consent, and such recordation shall, at the option of Landlord
constitute a noncurable default of Tenant hereunder. Either party shall, upon
request of the other, execute, acknowledge and deliver to the other a "short
form" memorandum of this lease for recording purposes.
17.16 NOTICES. All notices or demand of any kind required or desired
to be given by Landlord or Tenant hereunder shall be in writing and shall be
deemed delivered forty-eight (48) hours after depositing the notice or demand in
the United States mail, certified or registered, postage prepaid, addressed to
the Landlord or Tenant respectively at the addresses set forth after their
signatures at the end of this lease.
17.17 TAKEOVER BY SUPERVISORY AUTHORITY. In the event that Tenant is
closed and is taken over by the banking authority of the State of Minnesota or
other bank supervisory authority, at the option of the receiver or other legal
representative of the bank, the maximum claim of Landlord for damages or
indemnity for injury resulting from the rejection or abandonment of the
unexpired lease shall in no event be an amount exceeding the rent reserved by
the lease, without acceleration, for the year next succeeding the date of the
surrender of the premises to the Landlord or the date of re-entry of the
Landlord, whichever first occurs, whether before or after the closing of the
bank, plus an amount equal to the unpaid rent accrued.
XVIII
OPTION TO EXTEND TERM OF LEASE
Subject to the conditions hereinafter specified, there is hereby granted to
and reserved in Tenant the option to extend the time of this lease upon the same
terms and conditions as are herein contained for two (2) successive five (5)
year periods; provided, however, that:
A. The option to extend the original term for a first additional
period of five (5) years shall be exercised no later than one hundred eighty
(180) days prior to the expiration of the original term, and if not exercised by
said Tenant, the option herein granted shall in all things expire;
B. If the original term is fully extended for a period of five (5)
years, then the option to extend the term of this lease for a second additional
period of five (5) years shall become operative and shall be exercised not later
than one hundred eighty (180) days prior to the expiration of the terms as
extended and if not exercised by such time, shall expire;
C. Should Tenant elect to exercise the option herein granted for a
first additional period of five (5) years or, after having exercised the option
for such first additional period of five (5) years, then elect to exercise the
option for a second additional period of five (5) years, Tenant shall in either
event at the time of the exercise of the applicable option notify Landlord in
writing of his intention and desire to extend the term of this lease for a first
additional or a second additional period, as the case may be;
D. The option to extend whether for a first additional period or a
second additional period (such periods to be successive in point of time) shall
not be exercised nor shall any such notice be effective for any purpose if at
the time of the giving of such notice and the attempted exercise of said option
Tenant shall be in default as to any of his obligations under this lease,
written notice of any such default having been theretofore given Tenant by
Landlord.
Upon the exercise by Tenant of the option herein granted and the giving of
the prescribed notice within the time herein specified, all in conformity with
the foregoing provisions of this Article, the terms of this lease shall be
extended for a period of five (5) years, or for two (2) successive periods of
five (5) years each, as the case may be, and all of the terms, provisions and
conditions of this lease shall govern and apply to such extended term.
XIX
OPTION TO PURCHASE
A. Tenant shall have and is hereby given an option to purchase the
premises, said option becoming exercisable January 1, 1979, and expiring one (1)
year prior to the expiration of the lease term or extended lease term should the
tenant have exercised its extension rights hereunder or either of them.
B. Exercise of said option shall be by written notice of such
exercise given to Landlord specifying a closing date not less than ninety (90)
nor more than one hundred eighty (180) days after the date of such notice.
C. The purchase price shall be an amount agreed upon between the
Landlord and Tenant, and absent such agreement shall be the price determined
by a majority of a Board of Appraisal consisting of three (3) MAI (or
equivalent) appraisers, one of whom shall be appointed by the Landlord, one
by the Tenant, and one by the two appraisers so selected. The price
determined by said appraisers shall be binding on the parties hereto, but in
no event shall it be less than Three Hundred Fifty Thousand Dollars
($350,000.00). Said appraisers shall give the Landlord and Tenant written
notice of their determination not less than twenty (20) days after the
appointment of the last of said appraisers. The expense of such appraisal
shall be borne equally by Landlord and Tenant.
If Landlord and Tenant cannot agree upon a purchase price and if the
purchase price shall be in excess of Three Hundred Fifty Thousand Dollars
($350,000.00), Tenant shall have the right to rescind its election to purchase
by giving written notice of such rescission to Landlord within ten (10) days of
receipt of the written notice from the appraisers. In the event Tenant shall
elect such rescission, the full appraisal expense shall be borne by Tenant. Any
exercise and rescission of such option shall not affect the Tenant's right to
later elect to exercise such option as long as such option shall not have
expired pursuant to the provisions of Paragraph A of this Article.
D. Not less than thirty (30) days prior to the closing date,
Landlord shall furnish to Tenant an abstract of title, or registered property
abstract certified to date, to include proper searches covering bankruptcies,
and state and federal judgments and liens. Tenant shall be allowed twenty (20)
days after receipt thereof for examination of said title and the making of any
objections thereto, said objections to be made in writing or deemed to be
waived. If any objections are so made, the Landlord shall be allowed one
hundred twenty (120) days to make such title marketable. Pending correction of
title, the closing hereunder shall be postponed. If said title is not
marketable and is not made so within one hundred twenty (120) days from the date
of written objections thereto as above provided, the exercise of the option
shall be deemed null and void, and Tenant shall have no obligation to complete
the purchase. Provided, however, that the option to purchase on the part of
Tenant shall not be extinguished, but could be exercised later by Tenant within
the time limitation hereinbefore provided. This provision shall not deprive
either party of the right of enforcing specific performance of the sale provided
it shall not be terminated as aforesaid, and provided action to enforce such
specific performance shall be commenced within six (6) months after such right
of action shall arise.
E. At the closing, a warranty deed to the premises shall be
delivered to Tenant and cash or bank funds equal to the purchase price shall be
delivered to Landlord.
F. Tenant shall have and is hereby given the right to assign its
right to purchase the premises, but only after the election to purchase has been
exercised and the time for rescission thereof as permitted in Paragraph C of
this Article has expired. Any such assignment shall be in writing and an
executed copy thereof delivered to Landlord.
IN WITNESS WHEREOF, the Landlord and Tenant have executed this lease the
day and year first above written.
SIGNAL HILLS COMPANY
By /s/
--------------------------------------
Its Partner
-----------------------------------
Address:
c/o Xxxxxx X. Xxxxxxxx
00 Xxxxxx Xxxxx
Xxxx Xx. Xxxx, Xxxxxxxxx 00000
Or such other address as Landlord may in
writing specify to Tenant
Landlord
(Signatures continued
on following page)
SIGNAL HILLS STATE BANK
By /s/
-------------------------------------
Its President
---------------------------------
Address:
000 Xxxxxx Xxxxx
Xxxx Xx. Xxxx, Xxxxxxxxx 00000
Tenant
EXHIBIT "A"
The North 313.0 feet of the East 200.0 feet of the West
three-quarters Northwest Quarter Southwest Quarter of
Section 17, Township 28 North, Range 22 West, Dakota County,
Minnesota, subject to an easement over the South 22 feet of
the North 105.0 feet thereof.
AGREEMENT TO AMEND LEASE
THIS AGREEMENT made this 9th day of October, 1980, between Signal Hills
Co., a Minnesota Partnership, of West St. Xxxx, Minnesota, hereinafter referred
to as "Landlord", and Signal Hills State Bank, a Minnesota Banking Corporation,
of West St. Xxxx, Minnesota, hereinafter referred to as "Tenant";
WHEREAS, Landlord and Tenant are parties to that certain Lease dated June
26, 1969, and amended effective January 1, 1976, pursuant to which Landlord
leases the premises described therein and commonly described as 000 Xxxxxx
Xxxxx, Xxxx Xx. Xxxx, Xxxxxxxxx, to the Tenant (hereinafter referred to as
"Lease"), and
WHEREAS, parties desire to amend certain terms of Lease concerning (a) the
appraisal methods to be used in valuation of the premises for purchase by
Tenant, and (b) additions to the building located on the premises by the Tenant,
and
WHEREAS, Tenant has requested, and Landlord has granted, permission to
Tenant to construct an addition to the premises, said permission being granted
by Landlord in a separate written instrument,
NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereto agree as follows:
1. In the event Tenant gives notice of intent to exercise its option to
purchase the premises according to the terms of Paragraph XIX of said Lease, and
the parties are not able to agree on a purchase price so as to give rise to that
portion of XIX (c) providing for the appointment of appraisers to determine a
purchase price: (a) the parties hereby agree that the appraisers so appointed
shall not for the purposes of arriving at their individual or collective
valuation thereof, include the rental rate of the Lease as a comparable rental
indicator in the valuation technique commonly referred to as the "Income
Approach". It being here agreed that said rental rate would have little
relationship to the actual market rate for comparable properties at the time
said valuation is being made, because of the length of the term of the Lease;
(b) the parties further agree that the appraisers so appointed will be
instructed to value the building for purposes of establishing said purchase
price, excluding the value of the addition made by and at the expense of the
Tenant, which addition was commenced on or about September 29, 1980, and
approved by Landlord on or about September 29, 1980. The parties acknowledge
that Tenant is constructing said addition at its sole cost and expense and agree
that it would be inequitable to require Tenant to essentially pay for said costs
and increased value thereof a second time in the event Tenant purchases said
premises at a later date. This paragraph shall not, however, be construed to
imply any obligation on the Landlord to pay Tenant for the increased value added
as a result of the addition, if the Lease is terminated during its term or if
Tenant does not choose to exercise its option to purchase and the Lease expires.
3. All other terms and conditions of said Lease, not hereinabove modified
or amended are hereby affirmed by the parties; and parties agree to attach
executed copies of this "Agreement to Amend Lease" to and as a part of the Lease
referred to hereinabove.
IN WITNESS WHEREOF, the Landlord and Tenant have caused these presents to
be executed this 9th day of October, 1980.
LANDLORD: SIGNAL HILLS CO.
By: /s/
-----------------------------------------
A Partner
By: /s/
-----------------------------------------
A Partner
TENANT: SIGNAL HILLS STATE BANK
By: /s/
-----------------------------------------
Its President
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE is entered into this 19th day of December,
1995, by and between SIGNAL HILLS COMPANY, a Minnesota corporation ("Landlord")
and SIGNAL BANK, INC., formerly known as Signal Hills State Bank, a Minnesota
banking corporation ("Tenant").
RECITALS:
A. Landlord and Tenant entered into a lease dated June 26, 1969, amended
and superseded by an agreement dated January 1, 1976, further amended by an
amendment dated October 9, 1980 (the "First Amendment") (together, the Lease and
its amendments are referred to herein as the "Lease"), for property located at
000 Xxxxxx Xxxxx, Xxxx Xx. Xxxx, Xxxxxxxxx, legally described as the North 313
feet of the East 200 feet of the Xxxx 0/0 XX 0/0 XX 0/0 xx Xxxxxxx 17, Township
28 North, Range 22 West, Dakota County, Minnesota, subject to an easement over
the South 22 feet of the North 105 feet thereto.
B. Landlord and Tenant now desire to amend the lease under the terms and
conditions set out below.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:
1. The term of the Lease is extended to December 31, 2000.
2. Section 3.1 of the Lease is replaced in its entirety as follows:
3.1 RENT. Tenant shall pay to Landlord as rent for the premises
in advance on the first day of each calendar month of the term of this
Lease without deduction, offset, prior notice or demand, in lawful
money of the United States as follows:
January 1, 1996 through December 31, 1996 $5,416.67
January 1, 1997 through December 31, 1997 $5,833.33
January 1, 1998 through December 31, 1998 $6,250.00
January 1, 1999 through December 31, 1999 $6,666.67
January 1, 2000 through December 31, 2000 $7,083.33
3. Article XVIII, OPTION TO EXTEND TERM OF LEASE, Article XIV, OPTION TO
PURCHASE, and the First Amendment are hereby deleted in their entirety.
4. Article 4, Taxation, shall be amended to add the following language:
Tenant shall have the right to contest property taxes and assessments
due and payable during the term of the Lease. Any settlement or
adjudication of an action regarding the property taxes which fixes the
value of the premises following the lease term requires the consent of
the Landlord. Landlord shall, at no cost to Landlord, fully cooperate
with Tenant in any action brought by Tenant to reduce property taxes,
including providing affidavits and testimony as necessary.
5. All other terms and conditions of the Lease not specifically modified
or amended herein are hereby affirmed by the parties and shall remain in full
force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Second Amendment
to Lease to be executed as of the day and year first above written.
LANDLORD: SIGNAL HILLS COMPANY
By /s/
----------------------------------
Xxxxxxx X. Xxxxxx, a Partner
TENANT: SIGNAL BANK, INC., f/k/a Signal
Hills State Bank
By /s/
----------------------------------
Its Executive Vice President
