FIRST AMENDMENT TO LEASE
This Amendment made this first day of February, 2001, by and between AMB
Property, L.P., a Delaware Limited Partnership ("Lessor"), and WTC Industries,
Inc., a Delaware corporation ("Lessee").
RECITALS AND PRELIMINARY STATEMENT OF FACTS
Lessee has entered into that certain Lease Agreement dated November 30, 2000,
with AMB Property, L.P., for approximately, 35,942 square feet of
office/warehouse space ("Premises") commonly known as Corporate Square B located
at 0000 Xxxxxx Xxxx, Xxxxx, Xxxxxxxxx, 00000.
COVENANTS
In consideration of the rights reserved in the Covenants and Agreements set
forth, it is agreed the Lease be hereby amended,
1. LEASE TERM: The Lease commencement date shall be February 1, 2001 and
the Lease expiration shall be June 30, 2006.
2. BASE RENT: Lessee shall pay to Lessor, as base rent for the premises,
without notice on any offset or deduction, except as may be otherwise
expressly provided in this Lease on the first day of each month of the
term hereof, monthly payments in advance in the amounts set forth
below:
a.) FEBRUARY 1, 2001 THROUGH MARCH 31, 2001: Zero dollars ($0.00) per
month provided however, Lessee shall be responsible for operating
expenses, taxes, utilities, and insurance for said months with
operating expenses estimated at the rate of $2.26 per rentable
square foot.
b.) APRIL 1, 2001 THROUGH AUGUST 31, 2003: Twelve Thousand Four
Hundred and Seventy-Eight and 71/100 dollars ($12,478.71) per
month.
c.) SEPTEMBER 1, 2003 THROUGH JUNE 30, 2006: Thirteen Thousand Three
Hundred Fifty-Nine and 56/100 Dollars ($13,359.56) per month.
3. ENTIRE AGREEMENT. This Lease Amendment, the Lease and Exhibits thereto
set forth all covenants, promises, agreements, conditions and
understandings between Lessor and Lessee concerning the Leased
Premises. No representations, warranties, undertakings or promises,
whether oral, implicated, written or otherwise, have been made by
either party hereto to the other unless expressly stated in this Lease
Amendment or unless mutually agreed to in writing between the parties
hereto after the date hereof, and neither party has relied upon any
verbal representations, agreements, or understandings not expressly
set forth herein. Except as herein otherwise provided, no subsequent
alteration, amendment, change or addition to this Lease shall be
binding upon Lessor or Lessee unless reduced to writing and signed by
them. All other terms and conditions as stated in the Lease remain in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to Lease on the
date first above written.
LESSEE: LESSOR:
WTC INDUSTRIES, INC., AMB PROPERTY, LP,
A DELAWARE CORPORATION A DELAWARE LIMITED PARTNERSHIP
By: AMB PROPERTY CORPORATION,
A MARYLAND CORPORATION
ITS GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------- ---------------------
Xxxxxx X. Xxxxxxx
Its: VP - Operations Its: Vice President
Lessee's Address: Lessor's Address:
0000 Xxxxxx Xxxx Asset Manager - Minneapolis
Xxxxx, XX 00000 AMB Property, LP
00 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
CORPORATE SQUARE
INDUSTRIAL LEASE - MULTI-TENANT
1. PARTIES. This Lease, dated, for reference purposes only, November 30, 2000,
is made by and between AMB Property, L.P., a Delaware limited partnership
(herein called "Lessor"), and WTC Industries, Inc., a Delaware corporation
(herein called "Lessee").
2. PREMISES, PARKING, AND COMMON AREAS.
2.1 PREMISES. Lessor hereby leases to Lessee and Lessee leases from
Lessor for the term, at the rental, and upon all of the conditions set forth
herein, real property situated in the City of Xxxxx, County of Dakota, State of
Minnesota, commonly known as 0000 Xxxxxx Xxxx, Xxxxx, Xxxxxxxxx as shown
cross-hatched on the floor plan attached hereto as Exhibit A, comprising
approximately 35,942 rentable square feet of area, herein referred to as the
"Premises", including rights to the Common Areas as hereinafter specified but
not including any rights to the roof of the Premises or to any building in the
Industrial Center. The Premises are a portion of a building, herein referred to
as the "Building." The Premises, the Building, the Common Areas, the land upon
which the same are located, along with all other buildings and improvements
thereon, are herein collectively referred to as the "Industrial Center", and are
legally described on the attached Exhibit A-1 entitled "Legal Description of
Industrial Center". Lessor shall construct the leasehold improvements as set
forth in the Leasehold Improvements Plans and Specifications and exhibits
thereto, set forth on the attached Exhibit B, on or before the commencement of
the Lease term. Any statement of square footage set forth in this Lease or that
may have been used in calculating Base Rent and/or Operating Expenses is an
approximation which Lessor and Lessee agree is reasonable and the Base Rent and
Lessee's Share based thereon is not subject to revision whether or not the
actual square footage is more or less.
2.2 VEHICLE PARKING. Lessee shall be entitled to employee and customer
vehicle parking, unreserved and unassigned, on those portions of the Common
Areas designated by Lessor for parking. Common area parking shall be used only
for parking by vehicles no larger than full-size passenger automobiles or
pick-up trucks, herein called "Permitted Size Vehicles." Vehicles other than
Permitted Size Vehicles, including semi cabs and trailers, are herein referred
to as "Oversized Vehicles."
(a) Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Lessor for such activities.
(b) Lessee shall not permit or allow overnight parking or storage of
Oversized Vehicles anywhere within the Industrial Center.
(c) If Lessee permits or allows any of the prohibited activities
described in paragraph 2.2 of this Lease, then Lessor shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
2.3 COMMON AREAS - DEFINITION. The term "Common Areas" is defined as
all areas and facilities outside the Premises and within the exterior boundary
line of the Industrial Center that are provided and designated by Lessor from
time to time for the general non-exclusive use of Lessor, Lessee, and other
lessees of the Industrial Center and their respective employees, suppliers,
shippers, customers, and invitees, including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, and landscaped areas.
2.4 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, customers, and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no circumstances
shall the right herein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the Common Areas.
Any such storage shall be permitted only by the prior written consent of Lessor
or Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage occurs then Lessor shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove the
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property and charge the cost to Lessee, which cost shall be immediately payable
upon demand by Lessor.
2.5 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and management
of the Common Areas and shall have the right, from time to time, to establish,
modify, amend, and enforce reasonable rules and regulations with respect
thereto. Lessee agrees to abide by and conform to all such rules and
regulations, and to cause its employees, suppliers, shippers, customers, and
invitees to so abide and conform. Lessor shall not be responsible to Lessee for
the non-compliance with said rules and regulations by other lessees of the
Industrial Center. See Exhibit C.
2.6 COMMON AREAS - CHANGES.
(a) Provided that the same shall not materially and adversely interfere
with Lessee's occupancy and use of the Premises. Lessor shall have the right, in
Lessor's sole discretion, from time to time: (i) To make changes to the Common
Areas, including, without limitation, changes in the location, size, shape, and
number of driveways, entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas, and
walkways; (ii) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available; (iii)
To designate other land outside the boundaries of the Industrial Center to be a
part of the Common Areas; (iv) To add additional buildings and improvements to
the Common Areas; (v) To use the Common Areas while engaged in making additional
improvements, repairs, or alterations to the Industrial Center, or any portion
thereof; (vi) To do and perform such other acts and make such other changes in,
to, or with respect to the Common Areas and the Industrial Center as Lessor may,
in the exercise of sound business judgment, deem to be appropriate.
3. TERM.
3.1 TERM. The term of this Lease shall be for sixty-five (65) months
commencing on January 1, 2001 and ending on May 31, 2006 unless sooner
terminated to any provision hereof
3.2 DELAY IN POSSESSION. Notwithstanding said commencement date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on said
date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Lessee
hereunder, but in such case, Lessee shall not be obligated to pay rent or
perform any other obligation of Lessee under the terms of this Lease, except as
may be otherwise provided in this Lease, until possession of the Premises is
tendered to Lessee; provided, however, that if Lessor has not delivered
possession of the Premises within thirty (30) days from said commencement date
and said delay in delivery is not due to Lessee's action, or the action of any
governmental agency, Lessee may, at its option, by notice in writing to Lessor
within ten (10) days thereafter, cancel this Lease, in which event the parties
shall be discharged from all obligations hereunder; provided further, however,
that if such written notice of Lessee is not received by Lessor within said ten
(10) day period, Lessee's right to cancel this Lease hereunder shall terminate
and be of no further force or effect. If the date of delivery of Possession of
the Premises to Lessee is later than the commencement date specified in
Paragraph 3.1 above, then the term of this Lease shall be extended by the number
of days between the commencement date and such delivery date, and Lessor and
Lessee shall enter into an amendment to this lease setting forth such new
expiration date.
3.3 EARLY POSSESSION. If Lessee occupies the Premises prior to said
commencement date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not advance the termination date, and Lessee shall
pay rent for such period at the initial monthly rates set forth below.
4. RENT.
4.1 BASE RENT. Lessee shall pay to Lessor, as Base Rent for the
Premises, without notice or any offset or deduction, except as may be otherwise
expressly provided in this Lease, on the first day of each month of the term
hereof, monthly payments in advance in the amounts set forth below:
(a) January 1, 2001 through February 28, 2001: zero dollars ($0.00) per
month, provided, however, Tenant shall be responsible for Operating Expenses,
taxes, utilities, and insurance for said months, with Operating Expenses
calculated at the rate of $2.26 per rentable square foot; and
(b) March 1, 2001 through July 31, 2003; twelve thousand four hundred
seventy-eight and 71/100 Dollars ($12,478.71) per month; and
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(c) August 1, 2003 through May 31, 2006: thirteen thousand three
hundred fifty-nine and 56/100 Dollars ($13,359.56) per month.
Rent for any period during the term hereof which is for less than one month
shall be a pro rata portion of the Base Rent. Rent shall be payable in lawful
money of the United States to Lessor at the address stated herein or to such
other persons or at such other places as Lessor may designate in writing.
4.2 OPERATING EXPENSES. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share, as hereinafter defined, of
all Operating Expenses, as hereinafter defined, during each calendar year of the
term of this Lease, in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease, as fifty
point four seven percent (50.47%). Lessee's share is subject to periodic review
and adjustment by Lessor to accurately reflect Lessee's pro-rata share of the
improvements then comprising the Industrial Center.
(b) "Operating Expenses" is defined, for the purposes of this Lease, as
all costs of management, operation, maintenance, and repair of the Building, and
to, the extent allocable to the Building, the Common Areas and the balance of
the Industrial Center, including, without limitation, the wages, salaries, and
payroll burden of employees, maintenance, landscaping, irrigation, parking, and
other services, power, water, and other utilities, materials and supplies,
maintenance and repairs (including repaving of the parking areas and replacement
of any roofs), insurance, the deductible portion of any insured loss, real
property and other taxes and assessments (including any increases resulting from
a sale or other change in ownership of the Building or the Industrial Center),
depreciation on personal property, the cost of any capital improvements designed
to reduce other items of Operating Expenses, plus interest at the rate of twelve
percent (12%) per annum or such higher cost of funds incurred by Lessor to
construct such improvements, amortized over a reasonable period determined by
Lessor, and a construction management fee of five percent (5%) of the foregoing
amounts. The share of Operating Expenses pertaining to the Common Areas and the
balance of the Industrial Center allocated to the Building shall be determined
in the reasonable business judgment of Lessor. "Operating Expenses" shall
exclude those items set forth on the attached Exhibit F.
(c) The inclusion of the improvements, facilities, and services set
forth in paragraph 4.2(b) in the definition of Operating Expenses shall not be
deemed to impose an obligation upon Lessor either to have said improvements or
facilities or to provide those services unless the Industrial Center already has
the same.
(d) Lessee's Share of Operating Expenses shall be payable by Lessee
within ten (10) days after a reasonably detailed statement of actual expenses is
presented to Lessee by Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee's Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each twelve-month period of the Lease term, on the same day as
the Base Rent is due hereunder. In the event that Lessee pays Lessor's estimate
of Lessee's Share of Operating Expenses as aforesaid, Lessor shall deliver to
Lessee as soon as practical after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Operating
Expenses incurred during the preceding year. If Lessee's payments under this
paragraph 4.2(d) during said preceding year exceed Lessee's Share as indicated
on said statement, Lessee shall be entitled to credit the amount of such
overpayment against Lessee's Share of Operating Expenses next falling due. If
Lessee's payments under this paragraph during said preceding year were less than
Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the
amount of the deficiency within ten (10) days after delivery by Lessor to Lessee
of said statement.
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
Eighteen Thousand Nine Hundred Eight and 92/100 Dollars ($18,908.92) as security
for Lessee' performance of its obligations hereunder. If Lessee fails to pay
rent or other charges due hereunder, or otherwise defaults with respect to any
provision of this Lease, Lessor may use, apply, or retain all or any portion of
said deposit for the payment of any rent or other charge in default or for the
payment of any other sum to which Lessor may become obligated by reason of
Lessee's default, or to compensate Lessor for any loss or damage that Lessor may
suffer thereby. If Lessor so uses or applies all or any portion of said deposit,
Lessee shall within ten (10) days after written demand therefor deposit cash
with Lessor in an amount sufficient to restore said deposit to the full amount
then required of Lessee. If the monthly rent increases, from time to time,
during the term of this Lease, Lessee shall, at Lessor's request, at the time of
such increase, deposit with Lessor additional money as a security deposit so
that the total amount of the security deposit held by Lessor shall at all times
bear the same proportion to the then current Base Rent as the initial security
deposit bears to the initial Base Rent set forth in paragraph 4. Lessor shall
not be required to keep said security deposit separate from its general
accounts. If Lessee performs its general accounts. If Lessee performs
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all of its obligations hereunder, said deposit, or so much thereof as has not
theretofore been applied by Lessor, shall be returned, without payment of
interest or other increment for its use, to Lessee (or, at Lessor's option, to
the last assignee, if any, of Lessee's interest hereunder) at the expiration of
the term hereof, and after Lessee has vacated the Premises. No trust
relationship is created herein between Lessor and Lessee with respect to said
security deposit.
6. USE.
6.1 USE. The Premises shall be used and occupied only for the operation
of a light manufacturing and general warehousing/distribution center provided
that no such use shall be permitted which would in any way (a) violate any
conditions, covenants, and restrictions applicable to the Premises, the
Building, or the Industrial Center, (b) involve in any fashion the manufacture,
storage, or release on or from the Premises of hazardous or toxic substances or
materials, (c) render economically infeasible or unobtainable any insurance
required hereunder, (d) increase the amount of real property tax or insurance
premiums payable by Lessor under this Lease, or (e) in Lessor's reasonable
judgment, decrease the marketability of the Premises, the Building, or the
Industrial Center with respect to sale or leasing or both.
6.2 COMPLIANCE WITH LAW. Lessee shall, at its sole cost and expense,
comply with (a) all governmental laws, rules, regulations, and orders, (b) all
rules, regulations, and orders of a national or local Board of Fire Underwriters
or other bodies performing a similar function, and (c) any covenants and
restrictions in effect during the term or any part of the term hereof and
applicable to Lessee's specific use of the Premises. Lessee shall take all steps
necessary to effect such compliance; Lessee's obligation therefor shall be
unqualified, regardless of the unforeseeable, extraordinary, or structural
character of the work required for compliance. It is the intention of the
parties that Lessee shall assume the entire responsibility for complying with
all such laws, requirements, rules, orders, ordinances, and regulations relating
to the Premises and Lessee's use of the Premises. Lessee shall not use or permit
the use of the Premises in any manner that will tend to create waste or a
nuisance or, if there should be more than one tenant in the Building, will tend
to disturb such other tenants.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the Premises to Lessee clean and free of
debris on the Lease commencement date (unless Lessee is already in possession).
(b) Except as otherwise provided in this Lease, Lessee hereby accepts
the Premises in their condition existing as of the Lease commencement date or
the date that Lessee takes possession of the Premises, whichever is earlier,
subject to all applicable zoning, municipal, county, and state laws, ordinances,
and regulations governing and regulating the use of the Premises, and any
covenants or restrictions of record, and accepts this Lease subject thereto and
to all matters disclosed thereby and by any exhibits attached hereto. Lessee
acknowledges that neither Lessor nor any agent of Lessor has made any
representation or warranty as to the present or future suitability of the
Premises for the conduct of Lessee's business.
7. MAINTENANCE, REPAIRS, ALTERATIONS, AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of paragraphs 4.2
(Operating Expenses), 6 (Use), 7.2 (Lessee's Obligations), and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act or
omission of Lessee, Lessee's employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage, Lessor, at Lessor's
expense, subject to reimbursement pursuant to paragraph 4.2, shall keep in good
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, and roof of the Premises, as well as the parking lots,
walkways, driveways, landscaping, fences, and utility installations of the
Common Areas and all parts thereof, as well as providing the services for which
there is an Operating Expense pursuant to paragraph 4.2. Lessor shall not,
however, be obligated to paint the exterior or interior surface of exterior
walls, nor shall Lessor be required to maintain, repair, or replace windows,
doors, or plate glass of the Premises or windows, doors or plate glass forming
part of the exterior of the Premises. Lessor shall have no obligation to make
repairs under this paragraph 7.1 until a reasonable time after receipt of
written notice from Lessee of the need for such repairs. Lessee expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Premises in good order, condition,
and repair. Lessor shall not be liable for damage or loss of any kind or nature
by reason of Lessor's failure to furnish any Common Area services when such
failure is caused by accident, breakage, repair, strike, lockout, or other labor
disturbance or dispute of any character, or by any other cause beyond the
reasonable control of Lessor.
page 4
7.2 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of paragraphs 6 (Use), 7.1 (Lessor's
Obligations), and 9 (Damage or Destruction), Lessee, at its expense, shall keep
in good order, condition, and repair and make replacements (provided replacement
cost for heating, ventilating and air conditioning ("HVAC") equipment and HVAC
systems shall be amortized over the useful life of such replacement and
pro-rated for the number of months remaining on Lessee's Lease Term, provided if
such replacement is required as a result of Lessee's negligence or failure to
abide by the covenants and conditions of this Lease, Lessee shall be responsible
for the entire cost of such replacement) when necessary to the Premises and
every part thereof (whether or not a damaged portion of the Premises or the
means of repairing the same is reasonably or readily accessible to Lessee),
including, without limiting the generality of the foregoing, all plumbing,
heating, ventilating and air conditioning systems (Lessee shall procure and
maintain, at Lessee's expense, a ventilating, and air conditioning system
maintenance contract), electrical and lighting facilities and equipment within
the Premises, fixtures, interior walls and interior surfaces of exterior walls,
ceilings, windows, doors, plate glass, and skylights located within the
Premises, including windows, doors, and plate glass forming a part of the
exterior of the Premises, and all loading dock areas serving the Premises
including repair or replacement of overhead doors, dock plates, dock seals and
bumpers, and dock levelers. Lessor reserves the right to procure and maintain
the ventilating and air conditioning system maintenance contract, and if Lessor
so elects, Lessee shall reimburse Lessor, upon demand, for the reasonable cost
thereof.
(b) If Lessee fails to perform its obligations under this paragraph
7.2, Exhibit C or under any other paragraph of this Lease, Lessor may enter upon
the Premises after forty-eight (48) hours' prior written notice to Lessee beyond
the applicable cure period (except in the case of emergency, in which no notice
shall be required), perform such obligations on Lessee's behalf, and put the
Premises in good order, condition, and repair, and the cost thereof together
with interest thereon at the maximum rate then allowable by law shall be due and
payable as additional rent to Lessor together with Lessee's next Base Rent
installment.
(c) On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear excepted, clean and free of debris. Any damage to or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices. Lessee shall
repair any damage to the Premises occasioned by the installation or removal of
Lessee's trade fixtures, alterations, furnishings, and equipment.
Notwithstanding anything to the contrary otherwise stated in this Lease, Lessee
shall leave the air lines, power panels, electrical distribution systems,
lighting fixtures, space heaters, air conditioning, plumbing, and fencing on the
Premises in good operating condition, ordinary wear and tear excepted.
7.3 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not, without Lessor's prior written consent, which
shall not be unreasonably withheld, make any alterations, improvements,
additions, or Utility Installation in, on, or about the Premises, or the
Industrial Center, except for nonstructural alterations to the Premises not
exceeding$5,000.00 in cumulative costs, during the term of this Lease. In any
event, whether or not in excess of $5,000.00 in cumulative cost, Lessee shall
make no change or alteration to the exterior of the Premises nor the exterior of
the Building nor the Industrial Center without Lessor's prior written consent.
As used in this paragraph 7.3 the term "Utility Installation" shall mean
carpeting, window coverings, air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning, plumbing, and
fencing. Lessor may require that Lessee remove any or all of said alterations,
improvements, additions, or Utility Installations at the expiration of the term
hereof, and restore the Premises and the Industrial Center to their prior
condition. Lessor may require Lessee to provide Lessor, at Lessee'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 Lessor against any
liability for mechanics and materialmen's liens, and to insure completion of the
work. Should Lessee make any alterations, improvements, additions, or Utility
Installations without the prior approval of Lessor, Lessor may, at any time
during the term of this Lease, require that Lessee remove any or all of the
same.
(b) Any alterations, improvements, additions, or Utility Installations
in or about the Premises or the Industrial Center, other (than those which
Lessor's consent does not require pursuant to subsection (a) above. that Lessee
desires to make and that require the consent of Lessor shall be presented to
Lessor in written form, with proposed detailed plans. If Lessor gives its
consent thereto, the consent shall be deemed conditioned upon Lessee's acquiring
a permit to do so from appropriate governmental agencies, the furnishing of a
copy thereof to Lessor prior to the commencement of the work, and the compliance
by Lessee with all conditions of said permit in a prompt and expeditious manner.
page 5
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanics or
materialmen's lien against the Premises, or the Industrial Center, or any
interest therein. Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in the Premises, and Lessor shall have the
right to post notices of non-responsibility in or on the Premises or the
Building as provided by law. If Lessee, in good faith, contests the validity of
any such lien, claim, or demand, then Lessee shall, at its sole expense, defend
itself and Lessor against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises or the Industrial Center, upon the condition that if
Lessor shall so require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to such contested lien claim or
demand, indemnifying Lessor against liability for the same and holding the
Premises and the Industrial Center free from the effect of such lien or claim.
In addition, Lessor may require Lessee to pay Lessor's attorney fees and costs
participating in such action if Lessor decides it is in Lessor's best interest
to do so.
(d) All alterations, improvements, additions, and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee)
that may be made on the Premises shall be the property of Lessor and shall
remain upon and be surrendered with the Premises at the expiration of the Lease
term, unless Lessor requires their removal pursuant to paragraph 7.3(a).
Notwithstanding the provisions of this paragraph 7.3(d), Lessee's machinery and
equipment, other than that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises, and other than Utility
Installations, shall remain the property of Lessee and may be removed by Lessee
subject to the provisions of paragraph 7.2.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Building and the Common Areas for
the benefit of Lessor or Lessee, or any other lessee of the Industrial Center,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not k interfere with
Lessee's use of the Premises.
7.5 ALTERATIONS REQUIRED BY LAW. Lessee shall pay to Lessor as
additional rent the cost of any structural or nonstructural alteration,
addition, or change to the Building and/or at Lessor's election, shall promptly
make, at Lessee's sole expense and in accordance with the provisions of
paragraph 7.1 above, any structural or nonstructural alteration, addition, or
change to the Premises required to comply with laws, regulations, ordinances, or
orders of any public agencies, whether now existing or hereafter promulgated,
where such alterations, additions, or changes are required by reason of:
Lessee's or Lessee's agents' acts; Lessee's use or change of use of the
Premises; alterations or improvements to the Premises made by or for Lessee;
Lessee's application for any permit or governmental approval; or pursuant to the
Americans with Disabilities Act, 42 U.S.C. xx.xx. 12101-12213, as amended
(including administrative, judicial, and legislative interpretations, rulings,
and clarifications relating thereto).
8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE - LESSEE. Lessee shall, at its expense, obtain
and keep in force during the term of this Lease a policy of Combined Single
Limit Bodily Injury and Property Damage insurance insuring Lessee and Lessor
against any liability, unless the liability is the result of the Lessor's gross
negligence or willful misconduct, arising out of the use, occupancy, or
maintenance of the Premises and the Industrial Center. Such insurance shall be
in an amount not less than $2,000,000.00 per occurrence. The policy shall insure
performance by Lessee of the indemnity provisions of this paragraph 8, subject
to the conditions and exclusions of the Lessee's policy. The limits of said
insurance shall not, however, limit the liability of Lessee hereunder. In
addition to such liability insurance policy, Lessee shall at all times maintain
in force on all of its fixtures, equipment and tenant improvements in the
Premises a policy or policies of insurance covering losses or damage in an
amount equal to the full replacement value of such property, as the same may
exist from time to time, providing protection against all perils included within
the classification of fire, extended coverage, vandalism, malicious mischief,
flood, special extended perils, "all risk", plate glass insurance, and such
other insurance as Lessor may reasonably request.
8.2 LIABILITY INSURANCE - LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Property Damage Insurance, insuring Lessor, but not Lessee, against any
liability arising out of the ownership, use, occupancy, or maintenance of the
Industrial Center, in an amount not less than $2,000,000.00 per occurrence.
8.3 PROPERTY INSURANCE. Lessor shall obtain and keep in force during
the term of this Lease a policy or policies of insurance covering loss or damage
to the Industrial Center improvements, but not Lessee's personal property
fixtures, equipment, or tenant improvements,
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in an amount not to exceed the full replacement value thereof, as the same may
exist from time to time, providing protection against all perils included within
the classification of fire, extended coverage, vandalism, malicious mischief,
flood (in the event the same is required by a lender having a lien on the
Premises), special extended perils ("all risk", as such term is used in the
insurance industry), plate glass insurance, and such other insurance as Lessor
deems advisable. In addition, Lessor shall obtain and keep in force, during the
term of this Lease, a policy of rental value insurance covering a period of not
less than one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period.
8.4 PAYMENT OF PREMIUM INCREASE.
(a) After the term of this Lease has commenced, Lessee shall not be
responsible for paying Lessee's share of any increase in the property insurance
premium for the Industrial Center specified by Lessor's insurance carrier as
being caused by the use, acts, or omissions of any other lessee of the
Industrial Center, or by the nature of such other lessee's occupancy that
creates an extraordinary or unusual risk.
(b) Lessee, however, shall pay the entirety of any increase in the
property insurance premium for the Industrial Center over what it was
immediately prior to the commencement of the term of this Lease if the increase
is specified by Lessor's insurance carrier as being caused by the nature of
Lessee's occupancy or any act or omission of Lessee.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be with
companies holding a "General Policyholders Rating" of at least A, or such other
rating as may be required by a lender having a lien on the Premises, as set
forth in the most current issue of "Best's Insurance Guide." Lessee shall not do
or permit to be done anything that invalidates the insurance policies carried by
Lessor. Lessee shall deliver to Lessor copies of liability insurance policies
required under paragraph 8.1 or certificates evidencing the existence and
amounts of such insurance, within seven (7) days after the commencement date of
this Lease. No such policy shall be cancelable or subject to reduction of
coverage or other modification except after thirty (30) days' prior written
notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with renewals or "binders" thereof.
8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other with respect to, and waive their entire right of recovery
against the other for, loss or damage arising out of or incident to the perils
insured against which perils occur in, on, or about the Premises, whether due to
the negligence required to be of Lessor or Lessee or their agents, employees,
contractors, and/or invitees. Lessee and Lessor shall, upon obtaining the
policies of insurance required, give notice to the insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this Lease.
8.7 INDEMNITY. (a) Lessee shall indemnify, defend, and hold harmless
Lessor from and against any and all claims arising from Lessee's use of the
Industrial Center, or from the conduct of Lessee's business or from any
activity, work, or thing done, permitted, or suffered by Lessee or occurring in
or about the Premises or elsewhere and shall further indemnify, defend, and hold
harmless Lessor from and against any and all claims arising from any breach or
default in the performance of any obligation on Lessee's part to be performed
under the terms of this Lease, or arising from any act or omission of Lessee, or
any of Lessee's agents, contractors, or employees, and from and against all
costs, attorney's fees, expenses, and liabilities incurred in the defense of any
such claim or any action or proceedings brought thereon; and in case any action
or proceedings be brought against Lessor by reason of any such claim, Lessee
upon notice from Lessor shall defend the same at Lessee's expense by counsel
reasonably satisfactory to Lessor, and Lessor shall cooperate with Lessee in
such defense. The indemnification obligations set forth in this paragraph 8.7
shall survive the termination or expiration of this Lease. (b) Lessor hereby
agrees to indemnify and hold Lessee, its contractors, employees, officers,
partners and shareholders harmless from and against any and all costs, damages,
claims, liabilities and expenses (including reasonable attorney fees) suffered
by or claimed against Lessee, resulting from the gross negligence or willful
misconduct of Lessor, its employees or contractors in the Premises.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of income
therefrom or for damage to the goods, wares, merchandise, or other property of
Lessee, Lessee's employees, invitees, customers, or any other person in or about
the Premises or the Industrial Center, nor shall Lessor be liable for injury to
the person of Lessee, Lessee's employees, agents, or contractors, whether such
damage or injury is caused by or results from fire, steam, electricity, gas,
water, or rain, or from the breakage, leakage, obstruction, or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Industrial
page 7
Center, 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
Lessee. Lessor shall not be liable for any damages arising from any act or
neglect of any other lessee, occupant, or user of the Industrial Center, nor
from the failure of Lessor to enforce the provisions of any other lease of the
Industrial Center. The foregoing exemption of Lessor from liability shall not
extend to any liability of Lessor arising out of the gross negligence or willful
misconduct of Lessor or Lessor's employees or agents.
8.9 INCREASED COVERAGE. Not more frequently than once every year,
Lessee shall increase the amounts of insurance as follows: (a) as recommended by
Lessor's insurance broker, provided that the amount of insurance recommended by
such broker shall not exceed the amount customarily required of tenants in
comparable projects located within the general area of the Industrial Center, or
(b) as required by Lessor's lender.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Partial Damage" shall mean if the Premises are damaged or
destroyed to the extent that the cost of repair is less than fifty percent of
the then replacement cost of the Premises.
(b) "Premises Total Destruction" shall mean if the Premises are damaged
or destroyed to the extent that the cost of repair is fifty percent or more of
the then replacement cost of the Premises.
(c) "Premises Building Partial Damage" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent of the then replacement cost of the
Building.
(d) "Premises Building Total Destruction" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent or more of the then replacement cost of the
Building.
(e) "Industrial Center Buildings" shall mean all of the buildings on
the Industrial Center site.
(f) "Industrial Center Buildings Total Destruction" shall mean if the
Industrial Center Buildings are damaged or destroyed to the extent that the cost
of repair is fifty percent or more of the then replacement cost of the
Industrial Center Buildings.
(g) "Insured Loss" shall mean damage or destruction that was caused by
an event required to be covered by the insurance described in paragraph 8. The
fact that an Insured Loss has a deductible amount shall not make the loss an
uninsured loss.
(h) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees.
9.2 PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the term of this Lease there is damage which is an Insured
Loss and which falls into the classification of either Premises Partial Damage
or Premises Building Partial Damage, then Lessor shall, at Lessor's expense,
repair such damage to the Premises, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage that is not an
Insured Loss and that falls within the classification of Premises Partial Damage
or Premises Building Partial Damage, unless caused by a negligent or willful act
of Lessee (in which event Lessee shall make the repairs at its expense), which
damage prevents Lessee from using the Premises, Lessor may at Lessor's option
either (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after the date of the
occurrence of such damage of Lessor's intention to cancel and terminate this
Lease as of the date of the occurrence of such damage. In the event Lessor
elects to give such notice of Lessor's intention to cancel and terminate this
Lease, Lessee shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's intention to repair
such damage at Lessee's expense, without reimbursement from Lessor, in which
event this Lease shall continue in full force and effect, and
page 8
Lessee shall proceed to make such repairs as soon as reasonably possible. If
Lessee does not give such notice within such ten (10) day period, this Lease
shall be canceled and terminated as of the date of the occurrence of such
damage.
9.3 PREMISES TOTAL DESTRUCTION; PREMISES BUILDING TOTAL DESTRUCTION;
INDUSTRIAL CENTER BUILDINGS TOTAL DESTRUCTION. Subject to the provisions of
paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is
damage, whether or not it is an Insured Loss, and such damage falls into the
classification of (a) Premises Total Destruction, or (b) Premises Building Total
Destruction, or (c) Industrial Center Buildings Total Destruction, then Lessor
may at its option either (y) repair such damage, but not Lessee's fixtures,
equipment, or tenant improvements, as soon as reasonably possible at Lessor's
expense, and this Lease shall continue in full force and effect, or (z) give
written notice to Lessee within thirty (30) days after the date of occurrence of
such damage, of Lessor's intention to cancel and terminate this Lease, in which
case this Lease shall be canceled and terminated as of the date of the
occurrence of such damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last six
months of the term of this Lease there is substantial damage, whether or not an
Insured Loss, and such damage falls within the classification of Premises
Partial Damage, each of Lessor and Lessee may at its option cancel and terminate
this Lease as of the date of occurrence of such damage by giving written notice
to Lessee of Lessor's election to do so within thirty (30) days after the date
of occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the occurrence of an
Insured Loss falling within the classification of Premises Partial Damage during
the last six months of the term of this Lease. If Lessee duly exercises such
option during said twenty (20) day period, Lessor shall, at its expense, repair
such damage, but not Lessee's fixtures, equipment, or tenant improvements, as
soon as reasonably possible, and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option during said twenty (20) day
period, then Lessor may at its option terminate and cancel this Lease as of the
expiration of said twenty (20) day period by giving written notice to Lessee of
Lessor's election to do so within ten (10) days after the expiration of said
twenty (20) day period, notwithstanding any term or provision in the grant of
option to the contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event Lessor repairs or restores the Premises pursuant to
the provisions of this paragraph 9, the rent payable hereunder for the period
during which such damage, repair, or restoration continues shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired.
Except for abatement of rent, if any, Lessee shall have no claim against Lessor
for any damage suffered by reason of any such damage, destruction, repair, or
restoration.
(b) If Lessor is obligated to repair or restore the Premises under the
provisions of this paragraph 9 and does not commence such repair or restoration
within ninety (90) days after such obligation accrues, Lessee may at its option
cancel and terminate this Lease by giving Lessor written notice of Lessee's
election to do so at any time prior to the commencement of such repair or
restoration. In such event this Lease shall terminate as of the date of such
notice.
9.6 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.7 WAIVER. Lessor and Lessee waive the provisions of any statute that
relate to termination of leases when leased property is destroyed, and agree
that any such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Industrial Center, subject to
reimbursement by Lessee of Lessee's Share of such tax in accordance with the
provisions of paragraph 4.2.
10.2 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary, or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy, or tax (other than inheritance, personal
income, or estate taxes) imposed on the Industrial Center or any portion thereof
by any authority having the direct or indirect power to tax, including any
page 9
city, county, state, or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Industrial Center or in
any portion thereof, as against Lessor's right to rent or other income
therefrom, and as against Lessor's business of leasing the Industrial Center.
The term "real property tax" shall also include any tax, fee, levy, assessment,
or charge (a) in substitution of, partially or totally, any tax, fee, levy,
assessment, or charge hereinabove included within the definition of "real
property tax," or (b) the nature of which was hereinbefore included within the
definition of "real property tax," or (c) which is imposed as a result of a
transfer, either partial or total, of Lessor's interest in the Industrial Center
or which is added to a tax or charge hereinbefore included within the definition
of "real property tax" by reason of such transfer, or (d) which is imposed by
reason of this transaction, any modifications or changes hereto, or any
transfers hereof. "Real Property Tax" shall exclude any interest or penalty for
the late payment, and any income, transfer, sales, use or rent taxes. Any
special assessments or charges for capital expenditures or infrastructure shall
be included in Real Property Tax only to the extent levied after the
Commencement Date and then only based upon that installment thereof (including
interest thereon) payable in a particular tax year assuming such special
assessment was spread over the longest term available to Lessor by the assessing
authority and at the interest rate available from the assessing authority.
10.3 JOINT ASSESSMENT. If the Industrial Center is not separately
assessed, Lessee's Share of the real property tax liability shall be an
equitable proportion of the real property taxes for all of the land and
improvements included within the tax parcel assessed, such proportion to be
determined by Lessor from the respective valuations assigned in the assessor's
work sheets or such other information as may be reasonably available. Lessor's
reasonable determination thereof, in good faith, shall be conclusive.
10.4 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment, and all other personal
property of Lessee contained in the Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures, furnishings, equipment, and all other personal
property to be assessed and billed separately from the real property of Lessor.
(b) If any of Lessee's said personal property is assessed with Lessor's
real property, Lessee shall pay to Lessor the taxes attributable to Lessee
within ten (10) days after receipt of a written statement setting forth the
taxes applicable to Lessee's property.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to the
Premises, Lessee shall pay, at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in this Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner, provided that any attempted assignment, transfer, mortgage,
encumbrance, or subletting without such consent shall be void, and shall
constitute a breach of this Lease without the need for notice to Lessee under
paragraph 13.1.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation that controls, is controlled by, or
is under common control with Lessee, all of which are referred to as a "Lessee
Affiliate," provided that before such assignment or subletting is effective,
said assignee or Subleasee shall assume, in full, the obligations of Lessee
under this Lease. Any such assignment or subletting shall not, in any way,
affect or limit the liability of Lessee under the terms of this Lease even if
after such assignment or subletting the terms of this Lease are materially
changed or altered without the consent of Lessee, the consent of whom shall not
be necessary.
12.3 TERMS AND CONDITIONS OF ASSIGNMENT. Regardless of Lessor's
consent, no assignment shall release Lessee of its obligations hereunder or
alter the primary liability of Lessee to pay the Base Rent and Lessee's Share of
Operating Expenses, and to perform all other obligations to be performed by
Lessee hereunder. Lessor may accept rent from any person other than Lessee,
pending approval or disapproval of such assignment. Neither a delay in the
approval or disapproval of such assignment nor the acceptance of rent shall
constitute a waiver or estoppel of Lessor's right to exercise its remedies for
the breach of any of the terms or
page 10
conditions of this paragraph 12 or this Lease. Consent to one assignment shall
not be deemed consent to any subsequent assignment. In the event of default by
any assignee of Lessee or any successor of Lessee, in the performance of any of
the terms hereof, Lessor may proceed directly against Lessee without the
necessity of exhausting remedies against said assignee or successor. Lessor may
consent to subsequent assignments of this Lease or amendments or modifications
to this Lease with assignees of Lessee, without notifying Lessee, or any
successor of Lessee, and without obtaining its or their consent thereto, and
such action shall not relieve Lessee of liability under this Lease.
12.4 TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless of
Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be included in
subleases:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
the same toward Lessee's obligations under this Lease; provided, however, that
until a default occurs in the performance of Lessee's obligations under this
Lease, Lessee may receive, collect, and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to become due under the sublease. Lessee agrees that such
sublessee shall have the right to rely upon any such statement and request from
Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right to claim against such sublessee or Lessor for any such rents
so paid by such sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any sublease,
Lessee shall use only such form of sublease as is satisfactory to Lessor, and
once approved by Lessor, such sublease shall not be changed or modified without
Lessor's, in Lessor's reasonable discretion, prior written consent. Any
sublessee shall, by reason of entering into a sublease under this Lease, be
deemed, for the benefit of Lessor, to have assumed and agreed to conform and
comply with each and every obligation herein to be performed by Lessee other
than such obligations as are contrary to or inconsistent with provisions
contained in a sublease to which Lessor has expressly consented in writing.
(c) If Lessee's obligations under this Lease have been guaranteed by
third parties, then a sublease, and Lessor's consent thereto, shall not be
effective unless said guarantors give their written consent to such sublease and
the terms thereof.
(d) The consent by Lessor to any subletting shall not release Lessee
from its obligations or alter the primary liability of Lessee to pay the rent
and perform and comply with all of the obligations of Lessee to be performed
under this Lease.
(e) The consent by Lessor to any subletting shall not constitute a
consent to any subsequent subletting by Lessee or to any assignment or
subletting by the sublessee. However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on this Lease or the
sublease and without obtaining their consent, and such action shall not relieve
such persons from liability.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors, or anyone else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) In the event Lessee defaults in the performance of its obligations
under this Lease, Lessor, at its option and without any obligation to do so, may
require any sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of Lessee under such sublease from the time of the exercise of
said option to the termination of such sublease; provided, however, Lessor shall
not be liable for any prepaid rents or security deposit paid by such sublessee
to Lessee for any other prior defaults of Lessee under such sublease.
(h) Each and every consent required of Lessee under a sublease shall
also require the consent of Lessor.
page 11
(i) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(j) Lessor's written consent to any subletting of the Premises by
Lessee shall not constitute an acknowledgment that no default then exists under
this Lease of the obligations to be performed by Lessee, nor shall such consent
be deemed a waiver of any then existing default, except as may be otherwise
stated by Lessor at the time.
(k) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within ten (10) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such default cured by the sublessee.
12.5 ATTORNEY'S FEES/ASSIGNMENT AND SUBLETTING. In the event Lessee
assigns or sublets the Premises or requests the consent of Lessor to any
assignment or subletting or if Lessee requests the consent of Lessor to any act
Lessee proposes to do, then Lessee shall pay Lessor's reasonable attorney's fees
incurred in connection therewith.
12.6 GENERAL CONDITIONS TO ASSIGNMENT AND SUBLETTING.
(a) If Lessee is a privately held corporation, or is an unincorporated
association or partnership, the transfer, assignment, or hypothecation of any
stock or interest in such corporation, association, or partnership in excess of
forty-nine percent (49%) in the aggregate shall be deemed an assignment or
transfer within the meaning and provisions of this paragraph 12. If Lessee is a
publicly held corporation, the public trading of stock in Lessee shall not be
deemed an assignment or transfer within the meaning of this paragraph.
(b) In connection with any request for Lessor's consent to a proposed
assignment of this Lease or a proposed sublease of all or part of the Premises,
Lessee shall give written notice to Lessor identifying the intended assignee or
subtenant by name and address, the terms of the intended assignment or sublease,
and the nature of the business of the proposed assignee or sublessee, together
with current financial statements for the proposed assignee or sublessee (which
financials, in the case of an assignee, shall have been audited) and,
thereafter, any other information that Lessor may reasonably request. For a
period of thirty (30) days after such notice is given, Lessor shall have the
right by written notice to Lessee (i) in the case of a proposed sublease, either
to (A) sublet from Lessee any portion of the Premises proposed to be sublet for
the term for which such portion is proposed to be sublet but at the same rent as
Lessee is required to pay to Lessor under this Lease for the same space,
computed on a pro rata square footage basis, or (B) if the proposed subletting
is for substantially all of the remaining term of this Lease, terminate this
Lease entirely or as it pertains to the portion of the Premises so proposed by
Lessee to be sublet, or (ii) in the case of a proposed assignment, to terminate
this Lease. If Lessor so terminates this Lease, such termination shall be as of
the date specified in Lessor's notice. If Lessor so terminates this Lease,
Lessor may, if it elects, enter into a new lease covering the Premises or a
portion thereof with the intended assignee or subtenant on such terms as Lessor
and such person may agree or enter into a new lease covering the Premises or a
portion thereof with any other person, in which event Lessee shall not be
entitled to any portion of the profit, if any, that Lessor may realize on
account of such termination and reletting. Lessor's exercise of its aforesaid
option shall not be construed to impose any liability upon Lessor with respect
to any real estate brokerage commission(s) or any other costs or expenses
incurred by Lessee in connection with its proposed subletting or assignment.
(c) If Lessee complies with the provisions of paragraphs 12.6(a) and
12.6(b) above, and Lessor does not exercise any of the options provided to
Lessor under paragraph 12.6(b), Lessor's consent to a proposed assignment or
sublet shall not be withheld unreasonably, and shall be granted or refused
within thirty (30) days after Lessor's receipt of all of the information that
Lessee is required to deliver to Lessor pursuant to paragraph 12.6(b). If Lessor
refuses such consent, Lessor shall state the basis for such refusal. Without
limiting the other instances in which it may be reasonable for Lessor to
withhold its consent to an assignment or subletting, Lessor and Lessee
acknowledge that it shall be reasonable for Lessor to withhold its consent in
the following instances:
1. The proposed assignee or sublessee is a governmental agency;
2. The use of the Premises by the proposed assignee or sublessee would
involve occupancy in violation of paragraph 6 of this Lease;
3. In Lessor's reasonable judgment, the financial worth of the proposed
assignee or sublessee does not meet the credit standards applied by Lessor or
its investment advisors for other tenants under leases with comparable terms;
page 12
4. In Lessor's reasonable judgment, the proposed assignee or sublessee
does not have a good reputation as a tenant of property;
5. Lessor has received from any prior lessor of the proposed assignee
or subtenant a negative report concerning such prior lessor's experience with
the proposed assignee or subtenant;
6. Lessor has experienced previous defaults by or is in litigation with
the proposed assignee or subtenant;
7. The use of the Premises by the proposed assignee or subtenant would
violate any applicable law, ordinance, regulation, or covenants, conditions, and
restrictions;
8. The proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this paragraph
12; or
9. Lessee is in default of any of its obligations under this Lease, or
Lessee has defaulted under this Lease on three or more occasions during the 12
months last preceding the date that Lessee has requested such consent.
(d) In the case of an assignment, any sum or other economic
consideration received by Lessee as a result of such assignment shall be paid to
Lessor after first deducting the cost of any real estate commissions incurred in
connection with such assignment. In the case of a subletting, one-half of any
sum or economic consideration received by Lessee as a result of such subletting
in excess of the monthly rental due hereunder (such monthly rental prorated if
necessary to reflect only rental allocable to the sublet portion of the
Premises) shall be paid to Lessor after first deducting (i) the cost of
leasehold improvements made to the sublet portion of the Premises at Lessee's
cost for the specific benefit of the sublessee, amortized over the term of the
sublease, and (ii) the cost of any real estate commissions incurred in
connection with such subletting, amortized over the term of the sublease. Upon
Lessor's request, Lessee shall assign to Lessor all amounts to be paid to Lessee
by any such subtenant or assignee and shall direct such subtenant or assignee to
pay the same directly to Lessor.
13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a default of this Lease by Lessee ("Default"):
(a) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure continues for a period of five (5) days after written notice thereof
from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to
Pay Rent or Quit or summons and complaint pursuant to applicable Unlawful
Detainer statutes, such Notice to Pay Rent or Quit or summons and complaint
shall also constitute the notice required by this subparagraph. In the event
Lessee fails to make any payment required hereunder for a period of three (3)
days after written notice that such is due as provided above on two (2) or more
occasions within any twelve (12) month period, Lessor shall not be required for
the duration of such twelve (12) month period to provide notice of such failure
to Lessee prior to declaring a Default under this Lease.
(b) Except as otherwise provided in this Lease, the failure by Lessee
to observe or perform any of the covenants, conditions, or provisions of this
Lease to be observed or performed by Lessee, other than as described in
paragraphs (a) and (b) above, where such failure continues for a period of
thirty (30) days after written notice thereof from Lessor to Lessee; provided,
however, that if the nature of Lessee's noncompliance is such that more than
thirty (30) days are reasonably required for its cure, then Lessee shall not be
deemed to be in Default if Lessee commences such cure within said thirty (30)
day period and thereafter diligently prosecutes such cure to completion. To the
extent permitted by law, such thirty (30) day notice shall constitute the sole
and exclusive notice required to be given to Lessee under applicable Unlawful
Detainer statutes.
(c) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as
defined in 11 U.S.C. 101 or any successor statute thereto (unless, in the case
of a petition filed against Lessee, the same is dismissed within sixty (60)
days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution, or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days.
page 13
In the event that any provision of this paragraph 13. 1 (d) is contrary to any
applicable law, such provision shall be of no force or effect.
(d) The discovery by Lessor that any financial statement given to
Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor
in interest of Lessee, or any guarantor of Lessee's obligations hereunder, was
materially false.
(e) The death of any guarantor of Lessee's obligations hereunder
without a replacement guarantee or other security satisfactory to Lessor, within
sixty (60) days of such death.
13.2 REMEDIES. In the event of a Default, Lessor may at any time
thereafter, with or without notice or demand and without limiting Lessor in the
exercise of any right or remedy that Lessor may have by reason of such Default:
(a) Terminate this Lease or Lessee's right to possession of the
Premises by notice to Lessee or any other lawful means, in which case this Lease
shall terminate and Lessee shall immediately surrender possession of the
Premises to Lessor. In such event Lessor shall be entitled to recover from
Lessee:
(i) The worth at the time of award of the unpaid rentals which had been
earned at the time of termination;
(ii) The worth at the time of award of the amount by which the unpaid
rentals that would have been earned after termination until the time of award
exceeds the amount of such rental loss that Lessee proves could have been
reasonably avoided;
(iii) The worth at the time of award (computed by discounting at the
discount rate of the Federal Reserve Bank of Minneapolis at the time of award
plus one (1) percent) of the amount by which the unpaid rentals for the balance
of the term hereof after the time of award exceeds the amount of such rental
loss that Lessee proves could be reasonably avoided; and
(iv) Any other amounts necessary to compensate Lessor for detriment
proximately caused by the Default or which in the ordinary course of events
would likely result, including without limitation the reasonable costs and
expenses incurred by Lessor for:
(A) Retaking possession of the Premises;
(B) Cleaning and making repairs and alterations (including installation
of leasehold improvements, whether or not the same shall be funded by a
reduction of rent, direct payment, or otherwise) necessary to return the
Premises to good condition and preparing the Premises for reletting;
(C) Removing, transporting, and storing any of Lessee's property left
at the Premises (although Lessor shall have no obligation to remove, transport,
or store any of the property);
(D) Reletting the Premises, including without limitation brokerage
commissions, advertising costs, and attorney's fees;
(E) Attorneys' fees, expert witness fees, and court costs;
(F) Any unamortized real estate brokerage commissions paid in
connection with this Lease; and
(G) Costs of carrying the Premises, such as repairs, maintenance, taxes
and insurance premiums, utilities, and security precautions, if any.
The "worth at the time of award" of the amounts referred to in paragraphs
13.2(a)(i) and (ii) is computed by allowing interest at an annual rate equal to
eleven percent (11%).
(b) Maintain Lessee's right to possession, in which case this Lease
shall continue in effect whether or not Lessee has vacated or abandoned the
Premises. In such event Lessor shall be entitled to enforce all of its rights
and remedies under this Lease, including the right to recover the rent as it
becomes due hereunder. In such event, Lessor may also elect to relet the
Premises for the account of Lessee for a period, which may extend beyond the
term hereof, and for such other terms as Lessor may reasonably deem appropriate.
Lessee shall reimburse Lessor upon demand for all costs incurred by Lessor in
connection with such reletting, including, without limitation, attorneys' fees,
and brokerage commissions. The proceeds of such reletting shall be applied first
to any sums then due and payable to Lessor from Lessee, including the
reimbursement described above. The balance, if any, shall be applied to the
payment of future rent as it becomes due hereunder. Acts
page 14
of maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon the initiative of Lessor to protect its interest
under this Lease shall not constitute a termination of Lessee's right to
possession.
(c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state of Minnesota. Unpaid installments of
rent and other unpaid monetary obligations of Lessee under the terms of this
Lease shall bear interest from the date due at the maximum rate then allowable
by law.
(d) If Lessee should fail to pay any sum of money, other than rental to
Lessor, required to be paid hereunder or should fail to perform any other act on
its part to be performed hereunder and such failure should continue for thirty
(30) days after notice thereof by Lessor, or such longer period as may be
allowed hereunder, Lessor may, but shall not be obligated to, without waiving or
releasing Lessee from any obligations of Lessee, make any such payment or
perform any such other act on Lessee's part to be made or performed as set forth
in this Lease. Any and all sums so paid by Lessor and all necessary incidental
costs shall be payable to Lessor on demand from the date of Lessor's expense or
incurring of such costs to the date repaid at a rate equal to the lesser of (i)
the rate of interest publicly announced from time to time by Xxxxx Fargo Bank
N.A. as its "prime rate" for unsecured commercial loans, plus four percent (4%),
or (ii) the maximum rate allowed by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but in
no event later than thirty (30) days after written notice by Lessee to Lessor
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 Lessee in
writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance, then Lessor shall not be in
default if Lessor commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of Base Rent, Lessee's Share of Operating Expenses or other
sums due hereunder will cause Lessor 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 that may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Industrial Center or any part thereof Accordingly, if any
installment of Base Rent, Operating Expenses, or any other sum due from Lessee
is not received by Lessor or Lessor's designee within ten (10) days after such
amount is due, then, without any requirement for notice to Lessee, Lessee shall
pay to Lessor a late charge equal to six percent (6%) of such overdue amount.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs that Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default with respect to such overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of any of the aforesaid monetary
obligations of Lessee, then Base Rent shall automatically become due and payable
quarterly in advance, rather than monthly, notwithstanding paragraph 4.1 or any
other provision of this Lease to the contrary.
14. CONDEMNATION. If the Premises or any portion thereof or the Industrial
Center is taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date when the condemning
authority takes title or possession, whichever first occurs. If more than ten
percent of the floor area of the Premises, or more than twenty-five percent of
that portion of the Common Areas designated as parking for the Industrial
Center, is taken by condemnation, Lessee may, at its option, to be exercised in
writing only within thirty (30) days after Lessor has given Lessee written
notice of such taking (or in the absence of such notice, within ten (10) days
after the condemning authority has taken possession) terminate this Lease as of
the date when the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall remain
in full force and effect as to the portion of the Premises remaining, except
that the rent shall be reduced in the proportion that the floor area of the
Premises taken bears to the total floor area of the Premises. No reduction of
rent shall occur if the only area taken does not have the Premises located
thereon. Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat of the exercise of such
power shall be the property of Lessor, whether such award is made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled
to any award for loss of or damage to Lessee's trade fixtures and removable
personal property. In the event that this Lease is not terminated by reason of
such condemnation, Lessor shall, to the extent of severance damages received by
Lessor in connection with such condemnation, repair any damage to the Premises
caused by such condemnation except to the
page 15
extent that Lessee has been reimbursed therefor by the condemning authority.
Lessee shall pay any amount in excess of such severance damages required to
complete such repair.
15. BROKER'S FEE. Lessee warrants that it has not had any dealings with any real
estate brokers or leasing agents other than CB XXXXXXX XXXXX (the "Broker") in
connection with this Lease and that no person or entity other than the Broker is
entitled to receive any real estate brokerage or leasing commissions or finder's
fees by reason of the execution of this Lease. Lessee's indemnification of
Lessor in Paragraph 8.7 of this Lease shall apply to breach of the warranty
contained in this provision.
16. ESTOPPEL CERTIFICATE.
(a) Lessee shall at any time and from time to time within ten (10) days
following request from Lessor execute, acknowledge, and deliver to Lessor 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); (ii)
acknowledging that there are not, to Lessee's knowledge, any uncured defaults on
the part of Lessor hereunder, or specifying such defaults if any are claimed;
(iii) certifying the date when Lessee entered into occupancy of the Premises and
that Lessee is open and conducting business at the Premises; (iv) certifying the
date to which rentals and other charges are paid in advance, if any; (v)
certifying the current amount of base rent due under the Lease; (vi) evidencing
the status of this Lease as may be required either by a lender making a loan
affecting, or a purchaser of, the Premises or any part of the Industrial Center
from Lessor; (vii) warranting that if any beneficiary of any security instrument
encumbering the Premises forecloses on the security instrument, such beneficiary
shall not be liable for the security deposit; (viii) certifying that all
improvements to be constructed on the Premises by Lessor are substantially
completed, except for any punch list items that do not prevent Lessee from using
the Premises for its intended use; and (ix) certifying as to such other matters
relating to this Lease and/or the Premises as may be requested by a lender
making a loan to Lessor or a purchaser of the Premises or any part thereof from
Lessor. Any such statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Industrial Center or any interest
therein. Lessee shall, within ten (10) days following request of Lessor, deliver
such other documents, including Lessee's financial statements, as are reasonably
requested in connection with the sale of, or a loan to be secured by, any
portion of the Industrial Center or any interest therein.
(b) If Lessor desires to finance, refinance, or sell the Property, or
any part thereof, Lessee hereby agrees to deliver to any lender or purchaser
designated by Lessor such financial statements of Lessee as may be reasonably
required by such lender or purchaser. Such statements shall include the past
three (3) years' financial statements of Lessee. All such financial statements
shall be received by Lessor and such lender or purchaser in confidence and shall
be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Industrial Center, and except as expressly
provided in paragraph 15, in the event of any transfer of such title or
interest, Lessor herein named (and in case of any subsequent transfers, then the
grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successor and assigns, only during their
respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any
amount due to Lessor and not paid when due shall bear interest at the maximum
rate then allowable by law from the date due. Payment of such interest shall not
excuse or cure any default by Lessee under this Lease; provided, however, that
interest shall not be payable on late charges incurred by Lessee nor on any
amounts upon which late charges are paid by Lessee.
20. TIME OF ESSENCE. Time is of the essence of the obligations to be performed
under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expenses and insurance and tax expenses payable, shall be deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous
page 16
agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification. Except as otherwise stated in this Lease, Lessee
hereby acknowledges that neither the real estate broker listed in paragraph 15
hereof nor any cooperating broker on this transaction nor the Lessor or any
employee or agent of any of said persons has made any oral or written warranties
or representations to Lessee relative to the condition or use by Lessee of the
Premises or the Property, and Lessee acknowledges that Lessee assumes all
responsibility regarding the Occupational Safety and Health Act, the legal use
and adaptability of the Premises, and the compliance thereof with all applicable
laws and regulations in effect during the term of this Lease except as otherwise
specifically stated in this Lease.
23. NOTICES. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified mail, and if given
personally or by mail, shall be deemed sufficiently given if addressed to Lessee
or to Lessor at the address noted below the signature of the respective parties,
as the case may be. Either party may by notice to the other specify a different
address for notice purposes except that upon Lessee's taking possession of the
Premises, the Premises shall constitute Lessee's address for notice purposes. A
copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.
24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. HOLDING OVER. In the event of holding over by Lessee after the expiration or
termination of this lease, the holdover shall be as a tenant at will, and all of
the terms and provisions of this Lease shall be applicable during that period,
except that Lessee shall pay Lessor as rental for the period of such holdover an
amount equal to one and one-half (1 1/2) times the rent of the last month of the
Term, including the Base Rent, Operating Expenses, real property taxes and
additional rental, which would have been payable by Lessee had the holdover
period been a part of the original Term of this Lease. Lessee agrees to vacate
and deliver the Premises to Lessor upon its receipt of notice from Lessor to
vacate. The rental payable during the holdover period shall be payable to Lessor
upon demand. No holding over by Lessee, whether with or without the consent of
Lessor, shall operate to extend this Lease, except as otherwise expressly
provided herein. Lessee shall be liable for damages as a result of any holdover
from the original lease Term or renewal term, as applicable. All options, if
any, granted under the terms of this Lease shall be deemed terminated and be of
no further effect during the holdover period.
26. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
27. COVENANTS AND CONDITIONS. Each provision of this Lease performable by Lessee
shall be deemed both a covenant and a condition.
28. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of paragraph
17, this Lease shall bind the parties, their personal representatives,
successors, and assigns. This Lease shall be governed by the laws of the State
where the Industrial Center is located, and any litigation concerning this Lease
between the parties hereto shall be initiated in the county in which the
Industrial Center is located.
29. SUBORDINATION.
(a) This Lease, and any Option granted hereby, at Lessor's option,
shall be subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation or security now or hereafter placed upon the Industrial Center and
to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements, and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default and so long as
Lessee pays the rent and observes and performs all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms; Lessor
shall obtain a non-disturbance agreement from the holders of all existing and
future ground lessees, mortgagees or deed of trust holders. If any mortgagee,
trustee, or ground lessor elects to have this Lease, and any Options granted
hereby, prior to the lien of its mortgage, deed of trust, or ground lease, and
gives written notice thereof to Lessee, this Lease and such Options shall be
deemed prior to such mortgage, deed of trust, or ground
page 17
lease, whether this Lease or such Options are dated prior or subsequent to the
date of such mortgage, deed or trust, or ground lease or the date of recording
thereof.
(b) Lessee agrees to execute any documents required to effectuate an
attornment or, a subordination or to make this Lease or any Option granted
herein prior to the lien of any mortgage, deed of trust, or ground lease, as the
case may be. Lessee's failure to execute such documents within ten (10) days
after written demand shall constitute a material default by Lessee hereunder
without further notice to Lessee or, at Lessor's option, Lessor may execute such
documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby
make, constitute, and irrevocably appoint Lessor as Lessee's attorney-in-fact
and in Lessee's name, place and stead, to execute such documents in accordance
with this paragraph 29(b).
30. ATTORNEY'S FEES. If there is any legal action or proceedings between the
parties to enforce or interpret any provisions of this Lease or to protect or
establish any right or remedy of any of them hereunder, the unsuccessful party
to such action or proceedings shall pay to the prevailing party all costs and
expenses (including, but not limited to, reasonable attorney's fees and
disbursements) incurred by such prevailing party in such action or proceedings.
If any party secures a judgment in any such action or proceedings, then any
costs and expenses (including, but not limited to, reasonable attorney's fees
and disbursements) incurred by the prevailing party in enforcing such judgment,
or any costs and expenses (including, but not limited to, reasonable attorneys'
fees and disbursements) incurred by the party prevailing in any appeal from such
judgment in connection with such appeal shall be recoverable separately from and
in addition to any other amount included in such judgment. The preceding
sentence is intended to be severable from the other provisions of this Lease and
shall survive and not be merged into any such judgment. In addition to the
foregoing, if Lessee fails to pay any amount owing to Lessor hereunder or fails
to perform any other obligation hereunder and Lessor serves Lessee with notice
of such breach (including, without limitation, a demand letter or a three-day
notice to pay rent or quit), then Lessee shall pay to Lessor on demand all costs
incurred by Lessor in connection with preparing and serving such notice,
including, but not limited to, attorneys' fees, process serving fees, and other
disbursements.
31. LESSOR'S ACCESS. Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times following Lessor's reasonable efforts to
provide prior notice for the purpose of inspecting the same, showing the same to
prospective purchasers, lenders, or lessees (during the last six months of the
Term), and making such alterations, repairs, improvements, or additions to the
Premises or to the Building as Lessor may deem necessary or desirable. Lessor
may at any time place on or about the Premises or the Building any ordinary "For
Sale" signs, and Lessor may at any time during the last 120 days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All
activities of Lessor pursuant to this paragraph shall be without abatement of
rent, nor shall Lessor have any liability to Lessee for the same.
32. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent thereto.
Notwithstanding anything to the contrary in this Lease, Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
grant such consent.
33. SIGNS. Lessee shall not place any sign upon the Premises or the Industrial
Center without Lessor's prior written consent. Under no circumstances shall
Lessee place a sign on any roof of the Industrial Center.
34. MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
35. CONSENTS. Except for paragraphs 32 and 33 hereof, wherever in this Lease the
consent of one party is required to an act of the other party, such consent
shall not be unreasonably withheld or delayed.
36. GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
37. QUIET POSSESSION. Upon Lessee's paying the rent for the Premises and
observing and performing all of the covenants, conditions, and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor.
page 18
38. OPTIONS.
38.1 DEFINITION. As used in this paragraph the word "Option" has the
following meaning: (a) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal or right of first negotiation to lease other space within the Industrial
Center or other property of Lessor or the right of first offer to lease other
space within the Industrial Center or other property of Lessor; and (c) the
right or option to purchase the Premises or the Industrial Center, or the right
of first refusal to purchase the Premises or the Industrial Center, or the right
of first offer to purchase the Premises or the Industrial Center, or the right
or option to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
38.2 OPTIONS PERSONAL. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while occupying the Premises, who does so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee, provided, however, that an Option may be
exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of
this Lease. The Options, if any, herein granted to Lessee are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, whether by reservation or otherwise.
38.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
options to extend or renew this Lease, a later option cannot be exercised unless
the prior option to extend or renew this Lease has been so exercised.
38.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary, (i) during the time
commencing from the date when Lessor gives to Lessee a notice of Default
pursuant to paragraph 13.1(b) or 13.1(c) and continuing until the noncompliance
alleged in said notice of Default is cured, or (ii) during the period of time
commencing on the date after a monetary obligation to Lessor is due from Lessee
and unpaid (without any necessity for notice thereof to Lessee) and continuing
until the obligation is paid, or (iii) at any time after an event of Default
described in paragraph 13.1(a), 13.1(d), or 13.1(e) without any necessity of
Lessor to give notice of such Default to Lessee, or (iv) in the event that
Lessor has given to Lessee three or more notices of Default under paragraph
13.1(b), or paragraph 13.1(c), whether or not the Defaults are cured, during the
12-month period of time immediately prior to the time that Lessee attempts to
exercise the subject Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 38.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a Default specified in paragraph 13.1(c) within thirty (30)
days after the date that Lessor gives notice to Lessee of such Default and/or
Lessee fails thereafter to diligently prosecute said cure to completion, or
(iii) Lessee commits a Default described in paragraph 13.1(a), 13.1(d) or
13.1(e) (without any necessity of Lessor to give notice of such Default to
Lessee), or (iv) Lessor gives to Lessee three or more notices of Default under
paragraph 13.1(b), or paragraph 13.1(c), whether or not the Defaults are cured.
39. SECURITY MEASURES. Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Industrial Center. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at its sole option, from
providing security protection for the Industrial Center or any part thereof, in
which event the cost thereof shall be included within the definition of
Operating Expenses, as set forth in paragraph 4.2.
40. EASEMENTS. Lessor reserves to itself the right, from time to time, to grant
such easements, rights, and dedications as Lessor deems necessary or desirable,
and to cause the recordation of parcel maps and restrictions, so long as such
easements, rights, dedications, maps, and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor, and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.
page 19
41. PERFORMANCE UNDER PROTEST. If at any time a dispute arises as to any amount
or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
42. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of such entity. If Lessee is a corporation, trust, or
partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
43. CONFLICT. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
44. OFFER. Preparation of this Lease by Lessor or Lessor's agent and submission
hereof to Lessee shall not be deemed an offer to lease. This Lease shall become
binding upon Lessor and Lessee only when fully executed by Lessor and Lessee.
45. HAZARDOUS MATERIALS. Lessor and Lessee agree as follows with respect to the
existence or use of Hazardous Materials (as defined below) at, on, in, under,
above, or about the Industrial Center:
45.1 Any handling, transportation, release, generation, storage,
treatment, disposal, or use of Hazardous Materials by Lessee or its employees,
agents, contractors, or invitees after the date hereof at, on, in, under, above,
or about the Industrial Center shall strictly comply with all applicable
Hazardous Material Laws (as defined below). Lessee shall indemnify, defend upon
demand with counsel reasonably acceptable to Lessor, and hold harmless Lessor
from and against any liabilities, losses, claims, damages, lost profits,
consequential damages, interest, penalties, fines, monetary sanctions,
attorneys' fees, experts' fees, court costs, remediation costs, investigation
costs, and other expenses that result from or arise in any manner whatsoever out
of the use, storage, treatment, transportation, release, or disposal of
Hazardous Materials at, on, in, under, above, or about (i) the Industrial Center
or (ii) the Premises by Lessee or its employees, agents, contractors, invitees
or by third parties.
45.2 If the presence of Hazardous Materials at, on, in, under, above,
or about (i) the Industrial Center caused or permitted by Lessee or its
employees, agents, contractors, or invitees after the date hereof or (ii) the
Premises after the date hereof results in contamination or deterioration of
water or soil, resulting in a level of contamination greater than the levels
established as acceptable by any governmental agency having jurisdiction over
such contamination, then Lessee shall promptly take any and all action necessary
to investigate and remediate such contamination if required by law or as a
condition to the issuance or continuing effectiveness of any governmental
approval which relates to the use of the Industrial Center or any part thereof.
Lessee shall further be solely responsible for, and shall defend, indemnify, and
hold harmless Lessor and its agents from and against, all claims, costs, and
liabilities, including attorneys' fees and costs, arising out of or in
connection with any investigation and remediation required hereunder to return
the Industrial Center or any part thereof to its condition existing prior to the
appearance of such Hazardous Materials.
45.3 Lessor and Lessee shall each give written notice to the other as
soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials that relates to the
Industrial Center, and (ii) any contamination of the Industrial Center by
Hazardous Materials that constitutes a violation of any Hazardous Materials Law.
Lessee may use small quantities of household chemicals such as adhesives,
lubricants, and cleaning fluids in order to conduct its business at the Premises
and such other Hazardous Materials as are necessary for the operation of
Lessee's business of which Lessor receives notice prior to such Hazardous
Materials' being brought onto the Premises and which Lessor consents in writing
may be brought onto the Premises, provided that all such uses shall be conducted
at all times in compliance with all Hazardous Materials Laws. At any time during
the Lease term, Lessee shall, within five (5) days after written request
therefor received from Lessor, disclose in writing all Hazardous Materials that
are being used by Lessee at, on, in, under, above, or about the Industrial
Center, the nature of such use, and the manner of storage and disposal.
45.4 Lessor may cause testing xxxxx to be installed on the Industrial
Center, and may cause the soil and groundwater to be tested under and about the
Industrial Center, and may inspect the Premises, to detect the presence of
Hazardous Materials by the use of such tests as are
page 20
then customarily used for such purposes. If Lessee so requests, Lessor shall
supply Lessee with copies of such test results. The cost of such tests and of
the installation, maintenance, repair, and replacement of such xxxxx shall be
paid by Lessee if such tests disclose the existence of facts that may give rise
to liability of Lessee pursuant to its indemnity given in paragraph 45.1 and/or
45.2 above.
45.5 As used herein, the term "Hazardous Material" means any hazardous
or toxic substance, material, or waste that is or becomes regulated by any local
governmental authority, the State of Minnesota, or the United States Government.
The term "Hazardous Material" includes, without limitation, petroleum products,
asbestos, PCBs, and any material or substance that is (i) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6903), or (ii) defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C.
9601). As used herein, the term "Hazardous Material Law" shall mean any statute,
law, ordinance, or regulation of any governmental body or agency (including the
U.S. Environmental Protection Agency, the Minnesota Pollution Control Agency,
and the Minnesota Department of Health) which regulates the use, storage,
release, handling, transportation, generation, treatment, or disposal of any
Hazardous Material.
45.6 Lessor has initialed and provided to Lessee a copy of the Phase I
environmental assessment report regarding the Building and the underlying land,
completed in accordance with ASTM standards ("Environmental Report"). Except as
disclosed in the Environmental Report, Lessor has no knowledge of any Hazardous
Materials or violations of environmental laws in the Building or on the land.
Lessor shall mitigate the effect of any Hazardous Substances which Lessor has or
may place in the Building or on the land, and shall indemnify Lessee from all
liability resulting therefrom, including attorneys fees, environmental
investigation costs and court costs.
46. EXCULPATION. If Lessor is a corporation, trust, partnership, joint venture,
unincorporated association, or other form of business entity: (i) the
obligations of Lessor shall not constitute personal obligations of the officers,
directors, trustees, partners, joint ventures, members, owners, stockholders, or
other principals or representatives of such business entity; and (ii) Lessee
shall not have recourse to the assets of such officers, directors, trustees,
partners, joint ventures, members, owners, stockholders, principals, or
representatives except to the extent of their interest in the Industrial Center.
Lessee shall have recourse only to the interest of Lessor in the Industrial
Center for the satisfaction of the obligations of Lessor and shall not have
recourse to any other assets of Lessor for the satisfaction of such obligations.
47. ADDENDUM. Attached hereto is an addendum containing paragraphs ___N/A___
through _____ which constitute a part of this Lease.
48. RIGHT OF FIRST OFFER FOR ADDITIONAL SPACE. Subject to Paragraph 38 herein,
Tenant shall have a right of first offer with respect to the space located
adjacent to the Premises in the Building ("Expansion Area"). Tenant shall have
the following rights with respect to the Expansion Area:
(i) Upon the terms and provisions set forth in this Lease, the Tenant
shall have a one time only right of "first offer" to lease the Expansion Area.
If the Tenant fails to exercise such right of first offer as provided herein
with regard to any part of the Expansion Area, the Landlord thereafter may lease
such space to any part or parties and upon any terms the Landlord deems
necessary or desirable.
(ii) For the purposes of this Section, "first offer" shall mean a right
by the Tenant to lease such space under this Lease following the expiration of
the Landlord's lease with the current third party tenant of the Expansion Area;
for purposes of this Section, space becomes "available space" in the building
when the lease of such space has expired or otherwise terminated, and the prior
occupant of such space has physically vacated and surrendered possession of the
space to the Landlord.
(iii) The Tenant may not exercise any right of first offer with respect
to less than all of the Expansion Area. The Tenant shall exercise such right of
first offer by delivering written notice of exercise to the Landlord not later
than thirty (30) days following the date of delivery by the Landlord to the
Tenant of notice ("Notice of Availability") that the Expansion Area is becoming
available on the expected date specified in the notice. Notice of Availability
will include the rate of Base Rent that Landlord expects to charge for the
Expansion Area. The Notice of Availability will not be delivered to Tenant more
than one hundred eighty (180) days prior to the date upon which the Landlord
expects the Expansion Area to become available space.
page 21
(iv) The Tenant's tenancy of the Expansion Area covered by any
exercised right of first offer shall commence and be deemed to have commenced on
the earlier of (a) the date that the Expansion Area actually becomes available
space, or (b) upon Tenant's taking occupancy. Tenant shall accept delivery of
the Expansion Area in its "AS IS" condition subject to the terms of Section 9
above. Upon exercise of this right by Tenant, the Expansion Area shall become a
part of the Premises under this Lease, provided Base Rest for the Expansion Area
shall be at the then market rate for comparable space, in comparable condition,
in a comparable location for a term coterminous with the Lease. At the time that
the Expansion Area is added to the Premises there shall be an appropriate
adjustment to Lessee's Share as defined in Section 4.2(a).
49. GUARANTY. As a condition percent to execution of this Lease, Landlord will
require execution of the Guaranty by Xxxxxx X. Xxxx, Xx. substantially in the
form attached hereto as Exhibit X.
XXXXXX AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
LESSEE: LESSOR:
WTC INDUSTRIES, INC., AMB PROPERTY, L.P.,
A DELAWARE CORPORATION A DELAWARE LIMITED PARTNERSHIP
BY: AMB PROPERTY CORPORATION,
A MARYLAND CORPORATION, ITS GENERAL
PARTNER
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------- ---------------------
Xxxxxx X. Xxxxxxx
Its: VP Operations Its: Vice President
Lessee's Address: Lessor's Address:
000 Xxxxx Xxx X Asset Manager - Xxxxxxxxxxx
Xxxx Xx Xxxx XX 00000 AMB Property, LP
00 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
page 22
EXHIBIT A
PREMISES
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.,
a Delaware limited partnership
("Lessor")
Corporate Square B
Tenant Floor Plan
page 23
EXHIBIT A-1
LEGAL DESCRIPTION OF INDUSTRIAL CENTER
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.,
a Delaware limited partnership
("Lessor")
0000 Xxxxxx Xxxx, Xxxxx, Xxxxxxxxx
Xxx 0, Xxxxx 0 Xxxxxxxxx Xxxxxxxxx Xxxxxx
page 24
EXHIBIT B
LEASEHOLD IMPROVEMENTS PLANS AND SPECIFICATIONS
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.,
a Delaware limited partnership
("Lessor")
This Exhibit B is attached to, made a part of, and subject to the Lease referred
to above.
1. Lessor agrees to cause the construction of, and, subject to
paragraph 2 below, to pay the cost of, the leasehold improvements described in
Paragraph 3 below (the "Leasehold Improvements"). The cost of the Leasehold
Improvements shall consist of all direct and indirect "hard" and "soft" costs of
designing, developing, constructing, and completing the Leasehold Improvements,
including, without limitation, the following:
(a) The cost of preparing the space plan, construction drawings
and specifications, and mechanical, electrical, and structural
drawings and specifications, including the cost of any changes
thereto required by either party hereto or by the Fire
Department, Building or Planning Department, Building
Inspector, or any other agency or authority having
jurisdiction over the Industrial Center or the Leasehold
Improvements;
(b) All permit and license fees and taxes and other governmental
charges relating to the Leasehold Improvements;
(c) All construction management and supervision fees;
(d) All costs of labor and materials employed or used in the
construction of the Leasehold Improvements, including, without
limitation, all amounts paid to contractors, architects,
engineers, subcontractors, and materialmen and sign
contractor;
(e) All rental costs for necessary temporary facilities,
machinery, equipment, and tools;
(f) The cost of premiums for insurance and bonds, to the extent
attributable to the undertaking of the work described in this
Exhibit; and
(g) All clean-up costs and other costs associated with the removal
of debris.
2. Notwithstanding anything to the contrary provided herein, Lessor
shall not be obligated to pay more than One Hundred Eighty-eight Thousand Nine
Hundred Eighty and 00/100 Dollars ($188,980.00) (the "Allowance") toward the
cost of the Leasehold Improvements. In the event that the cost of the Leasehold
Improvements exceeds the Allowance, then Lessee shall pay upon demand from
Lessor (together with supporting invoices), either to Lessor or, if Lessor so
indicates, directly to the persons named as payees on such invoices, the cost of
the Leasehold Improvements in excess of the Allowance. If Lessor directs Lessee
to pay such amounts directly to the persons named as payees on such invoices,
Lessee shall provide Lessor with evidence of such payment within ten (10) days
of Lessor's original demand. In the event that Lessee fails to pay any amount
required to be paid to Lessor pursuant to this paragraph 2 within ten (10) days
of Lessor's original demand, then such amount shall bear interest at the lesser
of two percent (2%) per month or the highest rate legally allowed. Lessee's
allowance includes Lessor's reimbursement of $10,000.00 for office computer
wiring expenses. Lessee will submit evidence of paid invoices for the wiring
expense and upon receipt Lessor will reimburse Lessee $10,000.00.
3. The Leasehold Improvements shall consist of those improvements as
shown on the plans and specifications attached hereto.
4. If delivery of possession of the Premises to Lessee is delayed as a
result of delays in completion of the improvements to the Premises for any of
the following reasons:
(a) Lessee's request for substitution or additional improvements
or changes in materials, finishes, or installations; or
(b) Lessee's changes in the final drawings and specifications; or
page 25
(c) Lessee's failure to timely approve any plans in accordance
with paragraph 4 hereof; or
(d) Lessee's failure to timely make any payments required to be
made by Lessee pursuant to paragraph 2 hereof;
then the commencement of the term of this Lease and Lessee's obligation to pay
Base Rent and all other monetary sums under this Lease shall be accelerated by
the number of days of such delay. In no event shall the expiration date of the
Lease be extended on account of any delay.
If Lessor is obstructed or delayed in the commencement or completion of
the work by flood or inclement weather, fire, earthquake, act of God, war,
strike, picketing, boycott or lockout, governmental or legal intervention,
governmental permit or zoning approvals, or any other cause beyond the control
of Lessor, then the date for delivering possession and/or for completion of the
work, as the case may be, shall be extended for that period of time necessary to
make up for the construction time loss because of any or all of the causes
aforesaid, and Lessor shall have no liability of any kind whatsoever to Lessee
as a result of such delay.
page 26
EXHIBIT C
RULES & REGULATIONS
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.,
a Delaware limited partnership
("Lessor")
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises without the prior written consent of Lessor.
Lessor shall have the right to remove any such unapproved item without
notice and at Lessee's expense.
2. Lessee shall not regularly park motor vehicles or trailers in
designated parking areas after the conclusion of normal daily business
activity.
3. Lessee shall not use any method of heating or air conditioning other
than that supplied by Lessor without the consent of Lessor.
4. All window coverings installed by Lessee and visible from the outside
of the building require the prior written approval of Lessor.
5. Lessee shall not use, keep or permit to be used to kept any foul or
noxious gas or substance or any flammable or combustible materials on
or around the Premises.
6. Lessee shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Lessor.
7. Lessee agrees not to make any duplicate keys without the prior consent
of Lessor.
8. Lessee shall park motor vehicles in those general parking areas as
designated by Lessor except for loading and unloading. During those
periods of loading and unloading, Lessee shall not unreasonably
interfere with traffic flow within the Industrial Center and loading
and unloading areas of other Lessees.
9. Lessee shall not disturb, solicit or canvas any occupant of the
Building or Industrial Center and shall cooperate to prevent same.
10. No person shall go on the roof without Lessor's permission.
11. Business machines and mechanical equipment belonging to Lessee which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Lessor or
other Lessees, shall be placed and maintained by Lessee, at Lessee's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
12. All goods, including material used to store goods, delivered to the
Premises of Lessee shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
13. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Industrial Center or on streets adjacent
thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
15. Lessee is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures or in the warehouse. If
trash or refuse is stored in the driveway or common area for more than
one day, Lessor shall have the debris removed at Lessee's expense.
page 27
16. Lessee shall not store or permit the storage or placement of goods,
merchandise, trash or debris in or around the common areas surrounding
the Premises. No displays or sales or merchandise shall be allowed in
the parking lots or other common areas. Lessee shall not store or permit
the storage or placement of wooden pallets in or around the Premises, or
in or around the common areas surrounding the Premises. Lessee shall be
solely responsible for periodical removal of wooden pallets from the
Premises to maintain compliance with this regulation.
page 28
EXHIBIT D
HAZARDOUS MATERIALS DISCLOSURE
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.,
a Delaware limited partnership
("Lessor")
(PLEASE PRINT)
1. Type of business operation (administrative, printing, research, etc.)
light manufacturing and assembly
2. Do you use any equipment powered by combustible fuels?
YES _X_ NO ___
If so, what type(s) of equipment? fork truck
3. Do you use any liquid chemical products, other than small quantities of
copier or printer toner, in your operations?
YES ___ NO _X_
If so, what quantity is typically stored on site?
---------------------
4. Do you use any powdered chemical products, other than small quantities
of copier or printer toner, in your operations?
YES ___ NO _X_
If so, what quantity is typically stored on site?
---------------------
5. Do you store paint or related products in containers of 5 gallons or
larger? YES ___ NO _X_
6. Do you use the services of a hazardous waste recycling company?
YES ___ NO _X_
7. Do you use the services of a hazardous disposal company?
YES ___ NO _X_
8. Do you use the services of a medical waste disposal company?
YES ___ NO _X_
page 29
EXHIBIT E
INSURANCE QUESTIONNAIRE
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.,
a Delaware limited partnership
("Lessor")
1. Do you use, store, or contemplate using at any time fluids or other
materials having a closed cup flash point 80 degrees or less including,
but not limited to, gasoline, benzene, carbon disulfide, naphtha,
kerosene, LPG, or other materials? YES ___ NO _X_
If yes, please answer the following:
A. Will you use Underwriter's Laboratory approved self-closing
cans? YES ___ NO ___
B. What is the gallon capacity you anticipate storing or
using?
-------------------------------------------------------
C. Will the above be "shelf stock" stored in original sealed
containers? YES ___ NO ___
D. Do you plan to use or store outside of the building?
YES ___ NO ___
2. Do you have or plan to have a gasoline engine or other gasoline powered
equipment to be used in the building (other than forklifts)?
YES ___ NO _X_
3. Do you contemplate the use of any spray painting equipment?
YES ___NO _X_
If yes, please answer the following:
A. Will an Underwriter's Laboratory approved booth be installed?
YES ___ NO ___
B. If yes, submit the specifications for the booth or furnish the
name of the booth company and person to contact including
telephone and address.
--------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
4. Do you contemplate or plan to operate a restaurant or similar cooking
facility? YES ___ NO _X_
If yes, will you install an Underwriter's Laboratory approved hood and
dust fire extinguisher system? YES ___ NO ___
5. Do you contemplate any of the following operations? If yes, please
check the appropriate occupancy.
Storage of dynamite, dynamite caps or gunpowder
Woodworking (any kind)
Paper box manufacturing
Excelsior works
Paper shredding plants
Upholstery works
Cotton storage
Broom manufacturing
Calcium carbide (Stocks)
Celluloid goods
Fireworks
Furniture repairing
Furniture factories
Moving picture film (stock)
Paint manufacturing
Printer's ink manufacturing
Rubber tire recap or retread
page 30
6. If building has a sprinkler system, please answer the following:
A. Do you contemplate storing stock over 15 " without racks, or
over 12' with racks? YES ___ NO _X_
B. How many feet in height will you store goods? 12' w/racks
C. Will you store closer than within 3 feet of the sprinkler
heads? YES ___ NO _X_
D. Will you use racks or shelves for storage? YES _X_ NO ___
E. If answer to "D" is "yes," please answer the following:
1. Are racks slatted, solid, or open? open
2. What is the width of racks? 48"
3. Will racks be single or multi-row? multi-row
4. What is aisle width between racks? 6-8'
F. Describe goods to be stored: raw materials and finished
goods for filter manufacturing.
G. What materials are products made of?
carbon block, plastic, adhesives
H. Will your inventory consist of any of the following?
Please check the appropriate item.
Linoleum products
Lacquers in cans or in cartons
All high-hazard plastics
Upholstered furniture
Wooden furniture
Eighty-six proof or higher liquors
Pharmaceuticals in bottles
Rugs or carpets
Rolled pulp and paper (horizontal storage or
racked)
Light tissue crepe grade
Baled waste paper
Alcohols in cans or bottles or in cartons
Baled cork
[X] Wood patterns, pallets, and flats
Rolled pulp and paper (vertical storage)
Unbanded or light tissue crepe paper
Rolled asphalt paper (vertical)
Rubber tires
Foam or sponge rubber
Crude or synthetic rubber
Foamed plastic products (with or without cartons)
[X] Goods encapsulated by plastic
If any of the above is checked, do you plan to install approve
in-rack or in-bin sprinklers? YES ___ NO _X_
Do you plan to install other fire protection devices?
YES ___ NO _X_
If yes, describe
-----------------------------------------------
7. What is your contemplated usage if not previously covered? N/A
page 31
COMPANY NAME: WTC -Pentapure
LOCATION OR PREMISES TO BE LEASED: 0000 Xxxxxx Xx, Xxxxx
DATE: 11/28/00
SIGNED BY: /s/ Xxxxxx X. Xxxxxxx
TITLE: VP - OPERATIONS
page 32
EXHIBIT F
"OPERATING EXPENSES" EXCLUSIONS
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.
a Delaware limited partnership
("Lessor")
Operating Costs shall exclude the following:
1. Depreciation or amortization of the Project, the Building or its
contents or components;
2. Expenses for the preparation of space or other work which Landlord
performs for any tenant or prospective tenant of the Building;
3. Expenses for repairs or other work which is caused by fire, windstorm,
casualty or any other insurable occurrence, including costs subject to
Landlord's insurance deductible and any cost for any commercial general
liability insurance coverage with minimum limits in excess of
$10,000,000;
4. Expenses incurred in leasing or obtaining new tenants or retaining
existing tenants, including leasing commissions, legal expenses,
advertising or promotion;
5. Legal expenses incurred in enforcing the terms of any lease, except the
Lease to which this Exhibit is attached;
6. Interest, amortization or other costs, including legal fees, associated
with any mortgage, loan or refinancing of all or any part of the
Project or sale of all or any part of the Project;
7. Accounting and legal fees relating to the ownership, construction,
leasing or sale of the Project;
8. Any ground rent, air space rent or other rent incurred for the Land;
9. Any costs incurred to test, survey, clean up, contain, xxxxx, remove or
otherwise remedy Regulated Substances from the Project which were
present at the Project prior to the Commencement Date or brought onto
the Project after the Commencement Date, including any damages or
future claims asserted against Landlord in connection with the same;
10. Any personal property taxes of the Landlord for equipment or items not
used directly in the operation or maintenance of the Building;
11. Rentals and other related expenses, if any, incurred in leasing items
to the extent that the cost of the purchase of that item would not be
included as a permitted capital expenditure hereunder;
12. All expenses directly resulting from the gross negligence or willful
misconduct of the Landlord, its agents, servants or other employees;
13. All bad debt loss, rent loss or reserve for bad debt or rent loss;
14. Any additional costs incurred to operate or maintain the Building or
costs directly incurred by the Landlord due to the nature of the
business conducted by any tenant(s) within the Building which do not
occupy the Building for a purpose similar to that of Tenant, for
example, any retail, child care or food service tenants.
page 33
EXHIBIT G
PERSONAL GUARANTY
Industrial Multi-Tenant Lease
dated November 30, 2000, between
WTC Industries, Inc.,
a Delaware corporation
("Lessee"),
and
AMB PROPERTY, L.P.
a Delaware limited partnership
("Lessor")
LEASE GUARANTY
THIS GUARANTY is made as of November 30, 2000, by Xxxxxx X. Xxxx, Xx.
(hereinafter called "Guarantor"), to and for the benefit of AMB PROPERTY, L.P.,
a Delaware limited partnership (hereinafter called "Lessor").
RECITALS
WTC Industries, Inc., a Delaware corporation ("Lessee"), has executed
and entered into a Lease with Lessor dated November 30, 2000 relating to real
property located in the City of Xxxxx, County of Dakota, State of Minnesota,
(the "Lease").
Lessor, as a condition to the Lease, has required the execution of this
Guaranty by Guarantor, an owner, officer and director of Lessee who shall
benefit by Lessee's occupancy and use of the real property subject to the Lease.
NOW, THEREFORE, Guarantor, in consideration of the premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, agrees as follows:
1. Guarantor hereby absolutely and unconditionally, guarantees to
Lessor (i) the full and prompt performance of all terms, covenants and
conditions of the Lease, (ii) the full and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all sums due and
to become due under the Lease, (and all interest thereon) and any extensions or
renewals thereof and substitutions therefor and the undersigned agrees to pay
all costs, expenses and reasonable attorneys' fees paid or incurred by Lessor in
endeavoring to enforce this Guaranty.
2. No act or thing need occur to establish the liability of Guarantor
and, with the exception of full performance of the Lease as provided in
Paragraph 1 above, no act or thing (including, but not limited to, a discharge
in bankruptcy of the indebtedness evidenced by the Lease, and/or the running of
the statute of limitation relating to the indebtedness evidenced by the Lease)
which but for this provision could act as a release of the liability of the
undersigned hereunder, shall in any way exonerate Guarantor, or affect, impair,
reduce or release this Guaranty and the liability of Guarantor hereunder; and
this shall be a continuing, absolute and unconditional guaranty and shall be in
force and be binding upon Guarantor until the Lease is fully performed.
3. The liability of Guarantor hereunder shall not be affected or
impaired in any way by any of the following acts or things (which Lessor is
hereby expressly authorized to do, omit or suffer from time to time without
notice to or consent of anyone): (i) any acceptance of collateral security,
guarantors, accommodation parties or sureties for any or all indebtedness
evidenced by the Lease; (ii) any extension or renewal of the Lease (whether or
not for longer than the original period) or any modification of the interest
rate, maturity or other terms of the Lease; (iii) any waiver or indulgence
granted to Lessee, any delay or lack of diligence in the enforcement of the
Lease, or any failure to institute proceedings, file a claim, give any required
notices or otherwise protect any indebtedness evidenced by the Lease; (iv) any
full or partial release of, compromise or settlement with, or agreement not to
xxx, Lessee or any other guarantor or other person liable on the Lease; (v) any
release, surrender, cancellation or other discharge of the Lease or the
acceptance of any instrument in renewal or substitution therefor; (vi) any
failure to obtain collateral security (including rights of setoff) for the
Lease, or to see to the proper or sufficient creation and perfection thereof, or
page 34
to establish the priority thereof, or to preserve, protect, insure, care for,
exercise or enforce any collateral security; (vii) any modification, alteration,
substitution, exchange, surrender, cancellation, termination, release or other
change, impairment, limitation, loss or discharge of any collateral security;
(viii) any assignment, sale, pledge, endorsement, or other transfer of the
Lease; or (ix) any manner, order or method of application of any payments or
credits on the Lease. Guarantor waives any and all defenses and discharges
available to a surety, guarantor, or accommodation co-obligor, dependent on his
character as such.
4. Guarantor waives any and all defenses, claims, setoffs and
discharges of Lessee, or any other obligor, pertaining to the Lease, except the
defense of discharge by performance in full. Without limiting the generality of
the foregoing, Guarantor will not assert against Lessor any defense of waiver,
release, discharge in bankruptcy, statute of limitations, res judicata,
illegality or unenforceability which may be available to Lessee in respect of
the Lease, or any setoff available against Lessor to Lessee whether or not on
account of a related transaction. The liability of Guarantor shall not be
affected or impaired by any voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of credits, reorganization, arrangement, composition or readjustment of,
or other similar event or proceeding affecting, Lessee or any of its assets.
Guarantor will not assert against Lessor any claim, defense, or setoff available
to Guarantor against Lessee.
5. Guarantor also hereby waives (i) presentment, demand for payment,
notice of dishonor or nonpayment and protest; (ii) notice of the acceptance
hereof by Lessor and of the creation and existence of all indebtedness evidenced
by the Lease; and (iii) notice of any amendment to or modification of any of the
terms and provisions of the Lease. Lessor shall not be required to first resort
for payment of the Lease to Lessee or other persons or corporations, their
properties or estates, or to any collateral, property, liens or other rights or
remedies whatsoever.
6. Whenever, at any time or from time to time, Guarantor shall make any
payment to Lessor hereunder, Guarantor shall notify Lessor in writing that such
payment is made under this Guaranty for such purpose. If any payment applied by
Lessor to the Lease is hereafter set aside, recovered, rescinded or required to
be returned for any reason (including, without limitation, the bankruptcy,
insolvency or reorganization of Lessee or any other obligor), the indebtedness
to which such payment was applied shall for the purposes of this Guaranty be
deemed to have continued in existence, notwithstanding such application, and
this Guaranty shall be enforceable as to such indebtedness as fully as if such
application had never been made.
7. No payment by Guarantor pursuant to any provision hereof shall
entitle Guarantor, by subrogation to the rights of Lessor or otherwise, to any
payment by Lessee or out of the property of Lessee until all of the indebtedness
evidenced by the Lease (including interest) and all costs, expenses and
attorneys' fees paid or incurred by Lessor in endeavoring to enforce the Lease
and enforce this Guaranty have been fully paid. The undersigned will not
exercise or enforce any right of contribution, reimbursement, recourse or
subrogation available to the undersigned as to any indebtedness evidenced by the
Lease, or against any person liable therefor, or as to any collateral security
therefor, unless and until all such indebtedness shall have been fully paid and
discharged.
8. On December 31, 2003, the undersigned Guarantor's obligations
hereunder shall be reduced to the limits as set forth on the declining schedule
attached hereto as Exhibit 1, which schedule depicts the unamortized cost
incurred by Landlord for Tenant improvements and leasing commissions, provided,
as of December 31, 2003, the following are true and correct: (i) the preceding
36 months' rent has been paid in full and no event of default under the Lease
had been declared by Lessor; (ii) the Lessee is not in default of its primary
financing; and (iii) the Lessee has shown a net profit in each of eight (8)
previous consecutive quarterly financial statements (i.e., January 2002 through
December 2003).
9. This Guaranty shall be binding upon the heirs, legal
representatives, successors and assigns of Guarantor and shall inure to the
benefit of the successors and assigns of Lessor.
page 35
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of
the day and year first above written.
/s/ Xxxxxx X. Xxxx, Xx.
Xxxxxx X. Xxxx, Xx.
page 36
EXHIBIT 1
PERSONAL GUARANTY AMORTIZATION SCHEDULE - TENANT IMPROVEMENTS & LEASE
COMMISSIONS
Lease Commissions $ 63,929.00 Interest Rate: 12.0%
Tenant Improvements 188,980.00
-----------
$252,909.00
Unamortized
Month Date Ending Balance
--------------------------------------------------------------------------------
37 1/l/2004 129,126.29
38 2/l/2004 125,107.31
39 3/l/2004 121,048.14
40 4/l/2004 116,948.37
41 5/l/2004 112,807.61
42 6/l/2004 108,625.44
43 7/l/2004 104,401.45
44 8/l/2004 100,135.22
45 9/l/2004 95,826.32
46 10/l/2004 91,474.34
47 11/l/2004 87,078.84
48 12/l/2004 82,639.38
49 1/l/2005 78,155.53
50 2/l/2005 73,626.84
51 3/l/2005 69,052.86
52 4/l/2005 64,433.14
53 5/l/2005 59,767.23
54 6/l/2005 55,054.66
55 7/l/2005 50,294.96
56 8/l/2005 45,487.66
57 9/l/2005 40,632.29
58 10/l/2005 35,728.37
59 11/1/2005 30,775.41
60 12/l/2005 25,772.91
61 1/l/2006 20,720.40
62 2/l/2006 15,617.35
63 3/l/2006 10,463.28
64 4/l/2006 5,257.67
65 5/l/2006 0.00
