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CR 2000-081 Lease Agreement 35-37 Ninth Avenue North . . . CITY OJ: .. ~ Council Report 2000-81 May 9, 2000 kOPK1NS LEASE AGREEMENT - 35-37 NINTH AVENUE NORTH Proposed Action Staff recommends approval of the following motion: approve execution of parking lot lease agreement with U.S. Bank (35-37 Ninth Avenue North). Overview The City Council has previously taken action authorizing execution of the purchase agreement for this property. The purchase is contingent upon execution ofa lease agreement with US. Banle The specifics ofthe lease agreement are as follows: . The City would purchase the subject property and construct a parking lot. US. Bank would have exclusive use of the lot during weekday business hours (including Saturdays, 7 a.m. to noon), The City would have responsibility for enforcement consistent with the parking enforcement procedures for other publicly-owned parking lots within the downtown. In the evening the parking lot would be available for public use. . US. Bank would agree to pay all acquisition and development costs incurred by the City in purchasing and developing the subject lot through an assessment process over a ten-year period. . The lease would run for a nine-year period with an option to renew for an additional five years. · The City would be responsible for snow removal and maintenance. . Besides payment of all acquisition and development costs, US. Bank would agree to pay an annual rent of$I,OOO, which would increase at a rate of3 percent each year during the term of the lease. With approval of the lease, staffwill undertake the following: . Complete parking lot design. Construction of the lot is anticipated to be completed in the fall. . Undertake due diligence activities to purchase of the property, i.e., title work, environmental assessment, etc, SUDDortin2: Documents a Lease agreement · Site map ') /" . ,</// r-' " \ ('/9 y' / ., ,/ < JIm Kerngan. / Planning & Economic mvelopment Director . . . PARKING LOT LEASE This Parking Lot Lease ("Lease") is made and entered into by and between the Landlord and Tenant identified in Paragraph 1 of this Lease, effective , :2000. 1. Parties. The parties to this Lease are the City of Hopkins, a municipal corporation under the laws of the State of Minnesota, hereinafter called "Landlord" and US Bank. National Association, hereinafter called "Tenant." 2. Demise and Premises. Subject to the tem1S and conditions stated in this Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord, during the term and for the hours of use specified in Paragraph 3 ofthi5 Lease, all of the parking lot, driveway, access and other Parking Improvements (collectively "Parking Improvements") to be constructed by Landlord on certain land ("Real Property") located in the southeast quadrant of the intersection of Ninth A venue North and First Street North, in the City of Hopkins, outlined and designated on Exhibit A attached hereto and incorporated herein by reference. The Real Property and the Parking Improvements are hereinafter collectively referred to as the "Premises." 3. Term and Hours of Use. Subject to the provisions of Paragraph 21 of this Lease, the term of this Lease shall commence on the 1 st day of December, 2000, and shall tem1inatc on the 31 st day of December, 2009, unless earlier terminated as hereinafter provided. Tenant shall be entitled to the exclusive use ofthe Premises during the entire term of this Lease, but only between the hours of7 a.m. and 6 p.m., Monday through Friday. and Saturday from 7 a.m. to 12 p.m (noon). Landlord shall be free to allow the use of the Premises for public parking purposes during the term of this Lease at all times other than those reserved to Tenant by the immediately preceding sentence. c:hopciv\parkleaso: . 4. Rent and Taxes. Tenant agrees to pay Landlord, at the address stated in Paragraph 13 of this Lease, annual rent in the amounts stated below, payable in advance on the commencement date of this Lease and on the amliversary date of the commencement date of this Lease each and evcry year during the term of this Lease without demand therefor or deduction or set off. Such annual rent shall initially be $1,000, and shall be increased at the compounded rate of3% per annum each year during the term of this Lease so that the amll.ml rent payable hereunder is: Payment Date Rent Amount December 1, 2000 $ 1,000.00 December 1, 2001 $1,030.00 December 1,2002 $1,061.00 December 1,2003 $1,093.00 . December 1, 2004 $1,126.00 December 1, 2005 $1,160.00 December 1.2006 $1,195.00 December 1, 2007 $1,231.00 December 1,2008 $1,268.00 December 1, 2009 $1,306.00 Tenant shall also pay to Landlord as additional rent hereunder 100% of the annual real estate taxes and installments of special assessments payable with respect to the Premises. Tenant shall not however, be obligated to pay any real estate taxes attributable to the value of any building or structure now or hereafter located on the Premises other than the Parking Improvements. Landlord shall submit a "vritten request for payment ofrcal estate tax installments to Tenant forty-five (45) . c:hopcivlparklease - 2 - . days before the due date for each installment, and Tenant's payments for real estate taxes and installments of special assessments shall be due to Landlord fifteen (15) days before the date on which such installments arc due to Hennepin County, namely, on May 1 and October 1 of each year during the term ofthis Lease. I[the ternl of this Lease includes only a partial calendar year, the real estate taxes and installments of special assessments payable by Tenant shall be prorated on a daily basis so that Tenant pays only the real estate taxes and installments of special assessments for those days during which the term of this Lease is in effect. No provision of this Lease shall be interpreted to require Tenant to pay any income, excess profit or other tax assessed against Landlord. with the exception of real estate taxes and special assessments assessed against the Premises. 5. Use of Premises. Tenant shall use the Premises only for parking purposes for the parking of vehicles owned by Tenant and the parking of vehicles of customers and employees of Tenant. . Tenant shall comply with all applicable state and local laws, ordinances and regulations in its use of the Premises. Without limiting the foregoing, T emnt agrees that its use of the Premises shall comply with the requirements of Mirmesota Statutes Section 459.14, Subd. 4, the provisions of which are incorporated in this Lease, and that Tenant shall not allow the sale or offer for sale of any merchandise or supplies, including gasoline or oil, or the cleaning, repair or fumishing of services other than parking upon the Premises. 6. Maintenance of Premises. Landlord shall perform, at Landlord's expense, all snow plowing, snow removaL maintenance, repair, resurfacing, striping and sweeping of the Parking Improvements during the ternl of this Lease. The snow removal, maintenance and repair work to be performed by Landlord shall be perfonned in accordance with Landlord's cllstomary practices for snow removaL maintenance and repair of its municipally owned parking lots, and Landlord shall . e .hupe i v\parkleasc '1 - .J - . have no obligation to perform snow removal, maintenance or repair of the Parking Improvements in a different manner or according to a schedule different from that practiced by Landlord for other municipally owned parking lots in the City of Hopkins. If damage is caused to the Premises or the Parking Improvements by Tenant or Tenant's employees, customers or agents, Landlord may repair such damage, and Tenant shall reimburse Landlord for all reasonable costs and expenses incurred in completing such repairs. Landlord shall have no obligation or duty to improve, administer or operate the Premises and the Parking Improvements other than those 0 bligations expressly described in this Paragraphs 19 and 21 of this Lease. Without limiting the generality of the foregoing, Landlord shall have no obligation to provide lighting or security for the Premises or the Parking Improvements. Tenant shall permit Landlord, and Landlord's agents and employees, to enter the Premises at all times for the purposes of perfomling maintenance and repair work, and there shall . be no abatement ofthe rent due hereunder by reason of such entry by Landlord and Landlord's agents and employees. 7. Alterations. No alteration or modification or improvemcnt (including signs) shall be made by Tenant in or to the Premises without the prior consent of Landlord in writing, which consent shall not be unreasonably withheld. 8. Destruction of Premises. If the Premises or the Parking Improvements thereon shall be damaged or destroyed by any cause so as to rendcr the Parking Improvements thereon unfit for their intended use, without the fault or neglect of Ten ant or any person for whose conduct Tenant may be liable, Landlord shall undertake to repair such damage or destruction at Landlord's own expense. This Lease shall remain in full force and etfect following such damage or destruction, and the rent payable under Paragraph 4 of this Lease, prorated to the extent the Parking Improvements located . c: h{)]1c]v\parklea~c - 4- ~ tit on the Premises are rendered untenantable, shall be equitably abated Lmtil such repairs are completed. If the destruction or damage was caused by the negligence or intentional conduct of Tenant. or Tenant's agents or employees, the rent shall not abate and the Tenant shall remain liable for the same. 9. Subleasing and Assignment. Tenant shall not assign its rights under this Lease or sublet the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Tenant shall be allowed to sublet or assign this Lease, without Landlord's consent, to any entity that controls, is controlled by or is under common control with Tenant or to any entity resulting from a merger or acquisition with or by Landlord. As a condition to any permitted subletting or assignment of Tenant's interest in this Lease, Tenant shall provide Landlord with a written sublease or assigrunent of Tenant's interest in this Lease whereby . the subtenant or assignee agrees to be bound by and perform all of the terms, covenants and conditions of this Lease. Further any permitted subletting or assigmncnt shall not relieve Tenant of Tenant's obligations under this Lease, all of which shall survive any subletting or assignment. 10. Non-liability of Landlord: Indemnity of Landlord by Tenant. This Lease is made on the express co nd i tion that, except [or inj ury or damage caused by Land lord's negligence or willful misconduct. the Landlord shall be free from all liabilities, claims, obligations and damages for or by reason of any injury or injuries to any person, persons or property of any kind of nature whatsoever resulting from the use of the Premises by Tenant, or Tenant's agents, employees, customers or invitees, from any cause or causes vvhatsoever during the term of this Lease, whether occasioned by any occupancy or use of the Premises or any activity carried on by the Tenant, or Tenant's agents, employees, customers or invitees. The Tenant further covenants and agrees to indemnify, save, hold . e: hope iv\parklease - 5 - e harmless and det~nd the Landlord from all liabilities, claims. obligations. damages. charges. expenses and costs (including Landlord's reasonable attorney's fees) arising out of or resulting from the use of the Premises by Tenant. or Tenant's agents, employees, customers or invitees, including. but not limited to, the liabilities. claims, obligations and damages referred to the foregoing provisions of this paragraph. 11. Insurance. Tenant shall, during the term of this Lease, maintain comprehensive general public liability insurance insuring against personal injury and property damage occurring as a result of or in connection with Tenant's use of the Premises in a single limit amount of not less than $1 million for personal injury or death and not less than $500,000 for property damage. Such insurance shall name Landlord as an additional insured. and Tenant shall provide Landlord with certificates evidencing Tenant is maintaining such insurance. Such insurance shall also require the insurer to . give Landlord at least 30 days' prior written notice the cancellation or termination of the insurance policy. 12. Default and Termination. a) Anyone of the following events shall constitute an Event of Default: i) Tenant shall fail to pay any installment of annual rent or payment for real estate taxes or special assessments as provided in Paragraph 4 of this Lease within five (5) days after Tenant receives notice from Landlord that such installment or payment is due; ii) Tenant shall violate or fail to perfoml any of the other terms, covenants or conditions of this Lease and such default shall continue for thirty (30) days after notice from Landlord. unless such default cannot be cured in the . c:hopciv\park]e:L~c - 6 - . . . exercise of reasonable diligence within said thirty (30) days period, in which event Tenant shall be allowed such additional time as is needed to cure such default with all due diligence; b) IfanEvent of Dcfault shall have occurred and be continuing, Landlord may at its sole option by written notice to Tenant terminate this Lease. Neither the passage of time after the occurrence ofthe Event of Default nor exercise by Landlord or any other remedy with regard to such Event of Default shall limit Landlord's right under this Paragraph 12. b). c) If an Event of De fault shall have occurred and be continuing, whether or not Landlord elects to tenninatc this Leasc, Landlord may enter upon and repossess the Premiscs (said repossession being hereinafter referrcd to as "Repossession") by force, summary proccedings, ejectment or otherwisc, and may remove Tenant and all other persons and property therefrom. d) Neither the termination of this Lease pursuantto Paragraph 12. b) Non-Repossession of the Premises pursuant to Paragraph 12. c) or otherwise shall relieve Tenant of its liabilities and obligations under this Lease, all of which shall survive any such termination or Repossession. e) If an Event of Default shall have occurred and Landlord retains an attorney to prosccute the enforcement of all or any of the terms, covenants, agreements or conditions of this Lease, the collection of any rent due or to become due, or the recovery of possession of the Premises. Tenant agrees to reimburse Landlord, for Landlord's reasonable attorney's fees. together with the actual cost of maintaining any action commenced in law or equity by said attorneys for the services ofthe attorneys, whether suit is actually flled or not Such reimburscment shall be payable within thirty (30) days of demand therefore. f) Upon termination of this Lease, Tenant shall vacate the Premises, and remove all c:hopclv\parkkase - 7 - . personal property belonging to Tenant or Tenant's employees and agents therefrom. 13. Notices. All notices provided by this Lease shall be in writing and shall be given to the other party as follows: To the Tenant: US Bank Corporate Properties Attention: Chad Carr 2800 East Lake Street Minneapolis, I'v1N 55406 To the Landlord: City of Hopkins Attention: 1010 First Street South Hopkins, MN 55343 All notices shall be personally delivered to the individual identified above or sent by certified United States mail. return receipt requested. Personally delivered notices shall be effective as ofthe date of delivery. Mailed notice shall be effective two (2) days after the date of mailing. Either party . may change such party's address for notice purposes by written notice to the other as provided in this Paragraph 13. 14. Applicable Law. This Lease and the rights and obligations of the parties hereunder shall be interpreted in accordance with the laws of the State of Mirmesota. 15. Amendment. Modification or Waiver. No amendment, modification or waiver of any condition, provision or term of this Lease shall be valid or of any effect unless made in writing, signed by the party or parties to be bound or a duly authorized representative, and specifying with particularity the extent and nature of such amendment, modification or waiver. Any waiver by any party of any defaul t of another party shall not affect or impair any right arising from any subsequent default. Nothing herein shall limit the remedies and rights of the parties hereto under and pursuant to this Lease. . c hopcivlparklcasc - 8 - 16. Entire Agreement. This Lease contains the entire understanding of the parties hereto with respect to the transactions described herein and supersedes all prior agreements and understandings between the parties with respect to sllch subject matter. No representations, warranties, undertakings or promises, whether oraL implied, written or otherwise, have been made by either party to the other unless expressly statcd in this Lease or unless mutually agreed to in VvTiting between the parties after the date hereof, and neither party has relied on any verbal representations, agrccments or understandings not expressly set forth herein. 17. Captions. Headings or Titles. All captions, headings or titles in the paragraphs or sections of this Lease are inserted for convenience of reference only and shall not constitute a part of this Lease as a limitation of the scope ofthe particular paragraphs or sections to which they apply. 18. Option to Renew. Provided Tenant is not in default under this Lease, either at the time . notice is given or at the expiration of the initial tcrm of this Lease, Tenant shall have the right and . . option, exercisable by giving Landlord written notice ("Notice of Extension") thereof at least 180 days but no more than 360 days prior to the expiration of the initial term of this Lease, to extend the tenn of this Lease for an additional period of five (5) years. Upon delivery of the Notice of Extension, the tcrm of this Lease shall automatically be extended, and this Lease shall remain in effect in all of its tenus and conditions, except that the rent payable under Paragraph 4 of this Lease shall be increased to an amount equal to thc then fair market rental value of the Premises as determined by an appraisal by a qualified appraiser reasonably acceptable to both parties. In the event Tenant fails to give Notice of Extension in the time and manner herein provided, this Lease shall automatically terminate at the end of the initial tenn thereof, and Tenant shall have no further right or option to extend the Lease. c: hopclv\p~rklcase - 9 - . 19. Parking Enforcement. During the ternl of this Lease. Landlord shall erect signs on the Premises giving notice that the Parking Improvements are reserved for the exclusive use ofTenanfs employees and customers during the hours designated in Paragraph 3 of this Lease. Landlord shall issue parking permits to Tenant permitting parking on the Premises during the hours reserved to Tenant, which permits may be used solely by Tenant's employees, invitees and customers and must be affixed to vehicles parked on the Premises during the hours reserved to Tenant in accordance with the City's parking permit system regulations. Landlord shall enforce the parking restrictions for the Parking Improvements consistent with the parking enforcement procedures followed by Landlord for other publicly-owned parking lots in the City of Hopkins. However, Landlord does not warrant that it will prevent use of the Parking Improvements during restricted hours by parties who have not been issued permits. and Landlord does not undertake to prevent such use. Landlord shall have no . liability to Tenant, nor shall there be any reduction in the payments due Landlord under this Lease, if parties who have not been issued permits park in the Parking Improvements despite Landlord's enforcement activities. 20. Contin!!ency for Landlord's Benefit. Landlord's option to reduce Parking Improvements. a) Lmldlord has entered into a Purchase Agreement ("Purchase Agreemcnt"), dated April 26, 2000, with Hopkins Health Clinic, Inc. CHHC"), whereby Landlord has agreed to acquire the Real Property from HHC. Landlord's obligations under this Lease are subject to and contingent upon Landlord completing the acquisition of fee title to the Real Property from HI-Ie in accordance with the terms and conditions of the Purcbase Agreement. Ifthis contingency has not been satisfied by July 26,2000. this Lease may be terminated, by written notice [rom Landlord to Tenant delivered . c: hOpCl vlparklease - 10- no later than July 31,2000. Upon such tennination, this Lease shall be canceled and be of no further effect, and neither party shall have any further rights or obligations regarding this Lease or the Premises. This contingency is for the sole and exclusive benetit of Landlord. b) Attached to this Lease as Exhibit B is a copy of Section 19 of the Purchase Agreement which provides that HUe is to be granted an option to repurchase (the "Repurchase Option") a portion of the Real Prope11y ("Option Parcel"), upon and subject to the tenns and conditions stated in Exhibit B. In the event the Repurchase Option is exercised. Tenant agrees that the Parking Improvements shall be reduced and certain parking stalls will be removed as a result of the reacquisition of the Option Parcel by HHC or its assigns. Tenant agrees that this Lease shall remain in effect regardless of the reacquisition of the Option Parcel by HHC or its assigns and that there shall be no reduction in the rent payable under this Lease regardless of the reduction in size of . the Parking Improvements or loss of parking spaces. . . 21. Completion of Parking Improvements. Landlord agrees that it shall substantially complete the Parking Improvements prior to the commencement date of this Lease, subject to delays resulting from strikes, shortages of material, acts of God and other events heyond Landlord's reasonable control. I f the Parking Improvements have not been substantially completed on the commencement date stated in Paragraph 3 of this Lease, such commencement date shall be postponed until the Parking Improvements have been substantially completed. Postponement of the commencement date shall not change the termination date of this Lease as stated in Paragraph 3. 22. Special Assessments. The following costs and expenses are hereinafter collectively referred to as the "Premises Acquisition and Parking Improvement Costs"; a) All costs incLIrred by Landlord, of whatever kind or nature, in acquiring the Real c :hop c i vlparkleasc - 11 - . Property, including, but not limited to, the purchase price therefor as stated in the Purchase Agreement, attorney's fees, engineer's, surveyor's and consultant's fees incurred in performing investigation and testing under the Purchase Agreement, the cost of obtaining an AL T A survey as provided in the Purchase Agreement the premium for the owner's title insurance policy to be obtained by Landlord, fees of the title insurance company issuing such owner's title insurance policy, and all other reasonable costs and expenses incurred by Landlord in the acquisition of the Real Property. b) All of the costs actually incurred by Landlord, of whatever kind or naturc, in constructing the Parking Improvements and otherwise improving the Real Property for parking purposes, including, but not limited to, all construction costs for parking, driveway, access and landscaping improvements, and tees of surveyor's. engineer's and other third-party consultants. . Tenant agrees that all ofthc Premises Acquisition and Parking Improvement Costs shall be assessed as a special assessment pursuant to Minn. Stat. Section 459.14 and Minn. Stat. Chapter 429 against the following described real property ("Tenants Property") on which Tenant's banking facility and offices are located, namely: Lots 7, 8, 9 and the south 45 feet of Lot 6, Block 68, West Mirmeapolis Second Division, according to the recorded plat thereot: Hellllepin County, Minnesota. Property Identification No. 24-117-22-31-0127 Tenant acknowledges and agrees that Tenants Property has or shall receive a benefit from Landlord's acquisition of the Real Property and construction of the Parking Improvements equal to or greater than the amount of the Premises Acquisition and Parking Improvement Costs, and Tenant hereby waives all rights to notice of such assessment, objection to the assessment or the amount to be . c :hopc I v\parkl ~[l~~ - 12 - . . . assessed and any rights to appeal such special assessment, provided such special assessment is payable in installments over a period of ten (10) years at an interest rate not to exceed 8%. Tenant represents and warrants that it is the successor in interest to First National Bank of Hopkins, is the fee owner of Tenants Property amI is entitled to consent and agree to imposition of such special assessments against Tenants Propelty. c) In the event HHC or its assigns exercises the Repurchase Option, all amounts received by Landlord for the repurchase ofthe Option Parcel described in Exhibit B hereto shall be credited as a prepayment of the special assessments described in the inunediately preceding subparagraph b). IN WITNESS WHEREOF, the undersigned Landlord and Tenant have executed this Lease Agreement effective as of the day of ,2000. LANDLORD: CITY OF HOPKINS TENANT: US BANK, NATIONAL ASSOClATION By Its By Its By Its By Its c: hopciv\parklcasc - 13 - .4 x ./' () 't\ ~ C> . ~ . ~~ kt ~ (J . ~ - I . . ) C;t . / I .' , I .I / I , . I \;.J. VJ \,.J ~."""'l . l . ',910 / /.. / / , ./ , / / / Q . . -1,: / ;'... ,;" / .. ~.:..z...-~_.-. - .0/,..' ............. ~ - ~--- - -. -. .....,.... ~.,.-- . ;~ . . .. .' , .~" '\...J' ; !\' C:l,L ,) ..' .' " I t C"Hwcr .....":",;'. EXHIBIT A I I I . . . 19. Seller's Option to Repurchase. Buyer agrees that Buyer shalL at the time of Closing, grant Seller an Option to repurchase ("Repurchase Option ") a portion ofthe Real Property" upon and subject to the following terms and conditions: (a) The Repurchase Option shall apply to a rectangular parcel (the "Option Parcel") located in the southwest corner of the Real Property. The north/south dimension of the Option Parcel shall be twenty (.:20) feet. The westerly line of the Option Parcel shall be the westerly line of the Real Property. The easterly line of the Option Parcel will be located at the most northeasterly corner of the existing building located on the land immediately to the south of the Real Property, as such corner is extended northerl y. (b) The Purchase Price for the Option Parcel shall be determined as follows: i) The sum of the Purchase Price for the Real Property plus all acquisition costs incurred by Buyer in acquiring the Real Property, including, but not limited to, attorney"s fees, engineers', surveyors' and consultants' tees incurred in performing Buyer"s investigation and testing under Paragraph 3(d) of this Agreement, costs of obtaining the ALT A Survey described in Paragraph 6(b) of this Agreement, the premium for the Owner's Title Insurance Policy obtained by Buyer, fees of the Title Company and all other costs and expenses incurred by Buyer in the acquisition of the Real Property, shall be divided by the total number of parking spaces located in the parking lot on the Real Property on the date Seller exercises the Repurchase Option; ii) Thc dollar amount per parking space so determined shall be multiplied by the aggregate percentage increase in the Consumer Price Index (the "Index") published by the Bureau of Labor Statistics of the Department of Labor (1984 = 100) for the Minneapolis-St. Paul area from the Date of Closing to the date on which Seller exercises the Repurchase Option; and iii) The adjusted amount per parking space so obtained shall be mul tiplicd by the number of full or partial parking spaces that will be lost or become unusable as a result of Seller's reacquisition of the Option Parcel, and the resulting amount shall be the Purchase Price for the Option Parcel, provided that such Purchase Price shall be further adjusted as stated in Paragraph (c), below. (c) The Purchase Price for the Option Parcel calculated under Paragraph (b) above, shall be subject to increase, as follows: EXHIBIT B-1 c :hupc i v\park1ease . . . .' i) All of the costs actually incurred by the Buyer, of whatever kind or nature, during the one year period commencing on the Date Of Closing, in improving the Real Property for parking purposes and including, but not limited to, surveyor's and engineer's fees, shaH be determined; ii) The costs determined pursuant to clause i) shall be divided by the number of parking spaces in the parking lot constructed on the Real Property by Buyer; iii) The cost per parking space determined under clause ii) shall be multiplied by the number of full or partial parking spaces that will be lost or become unusable as a result of the reacquisition of the Option Parcel by Seller; iv) The result so obtained shall be reduced by 40%; and v) The result so obtained shall be reduced by twenty (20) percent at the end of each year during the time period the Repurchase Option is exercisable, with the first such reduction occurring on the fifth anniversary date of the Closing Date and each subsequent reduction occurring on the same date of each successive year. (d) Seller shall be solely responsible for all costs associated with subdividing the Option Parcel from the Real Property, including, but not limited to surveyor's and engineer's fees. Seller shall also be solely responsible for removal of any parking lot improvements from the Option Parcel and reconstruction or repair of damage to adjacent parking lot improvements located on the Real Property resulting from such removal. Seller shall be solely responsible for obtaining governmental approvals for subdivision of the Option Parcel, and Seller's reacquisition of the Option Parcel shall be contingent upon obtaining such governmental approvals. (e) The Repurchase Option shall be appurtenant to the title to the land located immediately to the south of the Real Property, and shall be exercisable only by the party that is the owner of such adjacent land at the time the Option Parcel is acquired. (t) The Repurchase Option shall be exercisable only between the fourth armiversary date of the Closing date and the same date in the year 2009, and shall terminate thereafter. (g) At Closing, Buyer and Seller shall enter into an Option Agreement including the above terms and conditions ami such other tenns and conditions as shall be reasonably required by Buyer and Seller. (h) The Repurchase Option shall be contingent upon Seller obtaining a building permit and/or conditional use permit for the construction of an addition to the existing building located on the land immediately to the south of the Real Property, and Buyer shall not he obligated to convey the Option Parcel to Seller unless Buyer receives assurances reasonably satisfactory to Buyer that Seller shall construct such addition to the building located on the adjacent land. 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