LEASE
THIS AGREEMENT made this 26th day of November, 1996, by and between
Redfield Industrial Development Corporation, which has an address of 000 Xxxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx, 00000, referred to herein as "Landlord",
and ACI Telecentrics, Incorporated, which has an address of 0000 Xxxx Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx, 00000, referred to herein as
"Tenant."
WITNESSETH:
A. Tenant is leasing and has an option to purchase certain real
property and the improvements located thereon in the city of Redfield, County of
Xxxxx, State of South Dakota, which property is legally described as follows, to
wit:
Xxx X, Xxxxx Xxxxx (0), Xxxxxxxx Xxxxxxxx Addition, Redfield, Xxxxx
County, South Dakota (the "Building").
B. Landlord has agreed to purchase and provide to Tenant on a rent free
basis the personal property set forth on the attached Schedule A, having a value
of not more than $300,000.00 (the "Equipment"), and Landlord has agreed to allow
Tenant the option to purchase the Equipment at its fair market value at the end
of the initial five year term of this lease.
C. Landlord desires to lease the Building to Tenant, and Tenant desires
to lease the same from Landlord, which lease is subject to the following terms
and conditions.
D. Tenant desires to have an option to purchase the Building, and
Landlord has agreed to grant Tenant an option to purchase the Building.
E. Tenant desires to have an option to purchase the Equipment, and
Landlord has agreed to grant Tenant an option to purchase the Equipment.
F. Tenant and Landlord agree that fair market value, as used herein,
shall be determined by an appraisal from a mutually agreed upon qualified
appraiser.
NOW THEREFORE, based upon the mutual terms and provisions, and the
consideration set forth in this agreement, the terms and provision in this Lease
and Option to Purchase are as follows:
TERMS OF AGREEMENT
1. Premises. Landlord hereby leases and lets to Tenant the Building,
and Tenant hereby accepts said lease, the Building upon the terms and provisions
set forth in this agreement.
2. Term. The term of this lease shall be for a period of five (5) years
commencing September 1, 1996, and terminating August 31, 2001. At the option of
Tenant, the lease can be renewed for an additional five (5) year period on the
same terms and conditions as set forth herein, except for lease payments as set
forth in Section 3 below, provided Tenant has notified Landlord, in writing, no
later than August 1, 2001, of Tenant's intention to renew said lease.
3. Lease Payment. The lease payment to be paid by Tenant to Landlord
shall be the sum of $2,500 per month, which rental shall be paid on or before
the first day of each day of the month during the term of this lease, with the
first rental payment due on or before September 1, 1996. Should Tenant exercise
its option to renew the lease for an additional five (5) year period of time,
commencing September 1, 2001, Landlord agrees that it will not increase the rent
by more than five (5) percent of the $2,500.00 during the second five year term
of the lease.
It is understood by and between the parties that $400.00 per month of
said rent is payment in lieu of taxes and $100.00 per month is for insurance
costs on the leased premises.
4. Improvements and Alterations. Tenant has the right, upon taking
possession of the Building, to improve or alter the Building in accordance with
plans and specifications to be approved in writing by Landlord, which approval
will not be unreasonably withheld. Landlord shall pay up to $200,000 for
improvements and alterations to the Building, including but not limited to
security systems, parking lot, electrical data and telephone cabling, signage,
plumbing, HVAC, interior and exterior wall treatment, roof office partitions -
affixed and non-affixed, and other items as necessary. All improvements or
alterations to the Building shall, on expiration or termination of this lease,
belong to Landlord without compensation to Tenant unless otherwise agreed to in
writing.
5. Maintenance. Tenant, at its sole cost and expense, shall maintain
the interior of the Building in good order and condition, reasonable wear and
tear and casualty damage excepted. Landlord, at its sole cost and expense, shall
maintain the exterior and all structural components of the Building in good
order and condition.
6. Utilities. Tenant shall pay for all utilities furnished to the
Building during the term of this lease, including but not limited to
electricity, gas, water, sewer, garbage. Tenant shall pay for all telephone
utilities and usage fees.
7. Liabilities of the Parties - Insurance. Tenant shall procure and
maintain, at its expense, during the term of this lease, public liability
insurance from a reliable insurance company, protecting against loss by reason
of liability imposed by law or contract upon the property, because of death,
sickness, or disease sustained by any person or persons, and damage to property
by reason of the use and maintenance of the property by Tenant.
Landlord covenants that fire and extended insurance coverage, including
plate glass insurance coverage and liability insurance coverage, will be
provided by Landlord on the Building, including additions or improvements, if
there are any made by Tenant. Tenant shall provide all fire and extended
insurance coverage on the Equipment that Tenant moves onto the property or is
provided by Landlord, in addition to the liability insurance coverage referenced
herein.
8. Landlord's Access. Landlord will have reasonable access to the
Building during normal business hours for purposes of inspecting the same and
making such repairs, replacements, and improvements as they shall elect, but
such access shall not unreasonably interfere with Tenant's business operation.
Landlord shall notify Tenant a minimum of 24 hours before access is necessary,
except in cases of emergency.
9. Destruction of Damage of Building. In the event the Building shall
be partially destroyed by fire or other casualty, the same shall be repaired and
restored as speedily as possible at the expense of Landlord. In case the damage
is so extensive as to render the Building untenantable, or the Equipment
unusable, the rent shall cease until such time as the Building and Equipment
shall be put in complete repair; provided, however, that Tenant shall have the
right to terminate this lease if the damage cannot be repaired within ninety
days.
10. Default. If Tenant defaults in the payment of rent or in the
performance of any other term or condition of this lease, and fails to correct
such default or commence corrective action within 30 days after receipt of
written notice from Landlord describing the default, Tenant will be considered
to have breached this lease. In that event, Landlord shall have the right to
re-enter the property upon notice to Tenant, perform necessary maintenance and
repairs, and relet the premises.
11. Option to Purchase Building. Landlord, in further consideration of
foregoing the lease, hereby grants to Tenant, prior to the expiration of the 5
year period of the lease, the sole, exclusive and irrevocable right to purchase
the Building for a sum not to exceed fair market value. Tenant must exercise the
option by mailing a written notice of exercise of said option to Landlord or by
delivering such written notice to Landlord personally on or before September 1,
2001. Landlord will then provide Tenant with an abstract of title within thirty
days thereafter, which abstract will show good and merchantable title in
Landlord as of October 1, 2001. Tenant shall then have a period of 10 days from
the receipt of the abstract to notify Landlord in writing, of any defects or
objections to the title, and Landlord will have until November 1, 2001, in which
to remedy those defects. The closing of the sale shall then be scheduled on or
before December 15, 2001. The real estate taxes and special assessments shall be
prorated as of the date of closing, and the special assessments which will be
prorated will be those which have been certified as due and payable. Tenant
acknowledges that none of the payments which it makes under this lease agreement
will be applied to or considered as a reduction towards the purchase price of
the Building. At the closing, Landlord will provide Tenant with a warranty deed
transferring good title to Tenant, and Tenant will tender to Landlord the
purchase price.
12. Option to Purchase Equipment. Landlord, in further consideration of
foregoing the lease, hereby grants to Tenant, prior to the expiration of the 5
year period of the lease but not before September 1, 1999, the sole, exclusive
and irrevocable right to purchase the Equipment for a sum not to exceed fair
market value. Tenant must exercise the option by mailing or delivering a written
notice of exercise of said option to Landlord on or before September 1, 2001.
Landlord shall deliver to Tenant a warranty Xxxx of Sale for the Equipment
within ten days after receipt of such written notice from Tenant.
13. Confidential Information. Tenant will retain sole and exclusive
ownership and use of any and all intangible rights and properties that may be
used by Tenant in connection with its operation from the Building. From and
after the terms of this lease, the nature of Tenant's business operations and
all information relating to customers, financial affairs, and the like shall be
considered and kept as the private and privileged records of Tenant, and any
such information, however obtained by Landlord, will not be used, given or
divulged to any person, firm, corporation, or other entity by Landlord except
upon direct written authorization by Tenant.
14. Assignment and Sublease. Tenant shall not assign this lease or
sublet the Building or permit any other party to occupy or use the Building
without prior written consent of Landlord, which consent will not be
unreasonably withheld.
15. Binding Effect. This lease and option to purchase and all of the
terms and conditions set forth herein shall endure to the benefit and bind the
heirs, successors, and assigns of the respective parties hereto, as well as the
parties themselves.
16. Timely Performance. Time is of the essence in the performance of
each and every term and provision of this agreement.
17. Notices. Notices to be given under the provision of this lease
shall be sent, certified mail, to the parties as follows:
Attn: Xxxx Xxxxxxx Redfield Industrial Development
ACI Corporation
0000 Xxxx Xxxx Xxxxxx 000 Xxxxx Xxxx Xxxxxx
Xxxxx 000 Xxxxxxxx, XX 00000
Xxxxxxxxxxx, XX 00000 Tel: (000) 000-0000
Tel: (000) 000-0000
IN WITNESS WHEREOF, the parties have executed this agreement the day
and year first above written.
ACI (Tenant) Redfield Industrial Development Corp.
(Landlord)
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxxxxx
--------------------------------- --------------------------------
Its: Vice President Its: President RIDC
-------------------------------- -------------------------------
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On this _____ day of ____________________, 1996, before me
_____________________________, the undersigned officer, personally appeared
______________________________, who acknowledged himself to be the
___________________________ of ACI, a corporation, and that he as such
___________________ being authorized to do so, executed the foregoing instrument
for the purposes therein contained, by signing the name of the corporation by
himself as __________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
____________________________________
NOTARY PUBLIC
(SEAL)
My Commission Expires
_________________________.
STATE OF SOUTH DAKOTA )
) SS.
COUNTY OF XXXXX )
On this _____ day of _______________________, 1996, before me
____________________________, the undersigned officer, personally appeared
_____________________________, who acknowledged himself to be the
_________________ of Redfield Industrial Development Corp., and that he as such
__________________ being authorized to do so, executed the foregoing instrument
for the purposes therein contained, by signing the name of the corporation by
himself as ___________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
____________________________________
NOTARY PUBLIC
(SEAL)
My Commission Expires
__________________________.
GUARANTY
FOR VALUE RECEIVED, and specifically for and in consideration of an
Equipment Lease (With Purchase Option) between VALLEY CITY-XXXXXX COUNTY
DEVELOPMENT CORPORATION, a North Dakota nonprofit corporation, whose post office
address is 000 0xx Xxxxxx X.X., Xxxxxx Xxxx, Xxxxx Xxxxxx 00000, (hereinafter
called "Lessor"), and VALLEY CITY COMMUNICATIONS, INCORPORATED, a North Dakota
corporation, whose post office address is 0000 Xxxx Xxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxx Xxxxxx 00000 (hereinafter called "Lessor"), providing for a waiver of
monthly rental and an option to purchase at the end of a five-year term for
$1.00, but also requiring the purchase of leased equipment by the Lessor from
the Lessee in the sum of $107,000.00 in the event Lessee's business operations
cease within three years of Lessee's occupancy of its business premises in
Valley City, North Dakota, the undersigned guarantors, XXXX X. XXXXXXX and XXXX
XXXXX, at the special instance and request of Lessor, do hereby unconditionally
guarantee the purchase of equipment subject to the above referenced lease in the
event the termination of Lessee's business operations triggers such purchase
obligation on the part of the Lessee.
In such event, the guarantors will be obligated to pay to the Lessor,
on demand, the repurchase price called for in the lease. However, each
guarantor's obligation will not exceed the sum of $53,500.00, being one-half of
the total purchase price of $107,000.00. The undersigned guarantor shall also
pay to Lessor all costs and expenses incurred by it in collecting any
indebtedness of the Lessee guaranteed hereunder or enforcing this guaranty
against guarantors.
This guaranty is absolute and continuing and any notice of indebtedness
due and owing under said repurchase clause of the lease by the Lessee to Lessor
is hereby waived. Prior action or suit against the Lessee shall not be a
prerequisite to the right of Lessor to proceed hereunder in case of Lessee's
default triggering such repurchase obligation guaranteed hereby.
This agreement shall inure to the benefit of Lessor, its successors and
assigns, and shall be binding upon the guarantors and guarantors' heirs and
assigns.
IN WITNESS WHEREOF, the guarantors have executed this guaranty this
15th day of June, 1995.
____________________________________
Xxxx X. Xxxxxxx
____________________________________
Xxxx Xxxxx
