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EXHIBIT 10.11
CITY WEST BUSINESS CENTER
LEASE AGREEMENT
THIS LEASE AGREEMENT, made this 13th day of June, 1995, between Great West Life
Annuity & Insurance Company (hereinafter called "Landlord"), and Transition
Engineering, Inc., a Minnesota Corporation (hereinafter called "Tenant");
WITNESSETH, THAT
1. DEMISED PREMISES:
Landlord, subject to the terms and conditions hereof, hereby leases to Tenant
the premises (hereinafter referred to as the "Demised Premises") addressed as
0000 Xxxx Xxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxx and designated on the floor
plan attached hereto as Exhibit A, comprising approximately 20,900 square feet
of area in the building situated at Eden Prairie, Minnesota (hereinafter
referred to as the "Building"), to be used by Tenant for general office, light
assembly, warehouse and engineering design use and related and incidental uses
and for no other purpose. The Building, the land underlying and contiguous
thereto, as described on Exhibit B attached hereto, and all improvements
thereon are hereinafter referred to as the "Project".
2. TERM:
Tenant takes the Demised Premises from Landlord, upon the terms and conditions
herein contained, to have and to hold the same for the term ("Lease Term") of
seven (7) years and one-half (1/2) month commencing on the 15th day of July,
1995, and ending on the 31st day of July, 2002, unless sooner terminated as
herein provided.
Tenant shall have the option to terminate this Lease ("Termination Option"),
with not less than 120 days prior written notice to Landlord, effective on the
last day of either the 36th or the 60th month of the Lease Term (July 31, 1998
and July 31, 2000, respectively). Tenant shall pay a fee ("Termination Fee")
equal to the unamortized cost of the Leasehold Improvements (excluding the
cost of space planning, architectural and mechanical drawings), unamortized
Brokerage Fees and three (3) months Base Rent and Operating Costs. Such
amortization shall be on a straight line basis, at 9_ % interest, over the
initial Lease Term of eighty four and one-half (84 1/2) months. Termination
Fee and all rent remaining to the effective date of cancellation shall be due
sixty (60) days prior to the effective date of cancellation.
Provided Tenant is not then in default of any provision of this Lease, Tenant
shall have the option to extend the Lease ("Extension Option") for one (1),
three (3) year term, upon 120 days prior written notice to Landlord on the same
terms and conditions, except as provided in Section 3. If this option is not
timely exercised, then it shall immediately there upon terminate.
3. BASE RENT:
Tenant shall pay to Landlord during the Lease Term a monthly base rent ("Base
Rent") of the following:
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July 15, 1995 through July 31, 1995: $0.00 per square foot, which
includes Operating Costs and
Utilities
August 1, 1995 through July 31, 1997: $6.25 per square foot; $10,885.41
per month
August 1, 1997 through July 31, 1999: $6.50 per square foot; $11,320.83
per month
August 1, 1999 through July 31, 2002: $6.75 per square foot; $11,756.25
per month
payable on the first day of each month in advance at the office of Landlord at
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such
other place as may from time to time be designated by Landlord.
Base Rent during the Extension Option shall be at the then current Market Rent
rate, but not less than the Base Rent in effect during the last year of the
Lease Term.
The definition of current Market Rent shall take into account transactions in
comparable buildings in the Southwest Minneapolis Suburban corridor, having a
term equal to the extension option, including provision for all tenant or
landlord concessions, costs and allowances, such as (but without limitation)
tenant improvement allowance, free rent and leasing commissions.
In the event Landlord and Tenant are unable to agree to current Market Rent
within thirty (30) days of Tenant's exercise of its option, then the current
Market Rent shall be determined by arbitration. Landlord and Tenant, within
fifteen (15) days thereafter, shall jointly appoint as arbitrator, a commercial
real estate appraiser with a minimum of ten (10) years experience in the
applicable market. If Landlord and Tenant cannot agree on an acceptable
arbitrator, Landlord and Tenant shall choose, within an additional fifteen (15)
days thereafter, its own arbitrator who meets the qualifications described
above. The arbitrators shall then jointly select, within an additional fifteen
(15) days, an arbitrator to serve as the arbitrator hereunder. Within thirty
(30) days after appointment, the arbitrator shall determine the current Market
Rent. The cost of the arbitrator(s) shall be borne equally by Landlord and
Tenant.
4. OPERATING COSTS:
Tenant shall, for the entire Lease Term, except as provided in Section 3, pay
to Landlord as additional rent, without any set-off or deduction therefrom,
except as otherwise provided herein, 23.01 percent (23.01%) of all costs which
Landlord may incur during the term of this Lease in owning, maintaining, and
operating the Project. Said costs are referred to herein as "Operating Costs"
and are hereby defined to include, but shall not be limited to, all real estate
taxes and annual installments of special assessments payable with respect to
the Project, maintenance, repair, replacement and care of all heating,
lighting, plumbing and air conditioning fixtures, equipment and systems serving
the common areas, parking and landscape areas, signs, snow removal,
non-structural repair and maintenance of the exterior of the building,
insurance premiums, management fees (not to exceed four percent (4%) of gross
collections), wages and fringe benefits of personnel employed for such work,
and costs of equipment purchased and used for such purposes, exclusive of
depreciation, costs of tenant improvements and payments of principal and
interest on any mortgages covering the Project. Operating Costs shall also
include the yearly amortization of capital costs incurred by Landlord for
improvements or structural repairs to the Project required to comply with any
change in the laws, rules or regulations of any governmental authority having
jurisdiction, or for the purposes of reducing Operating Costs the extent of any
savings, which costs shall be amortized over the useful life of such
improvements or repairs, as reasonably estimated by Landlord.
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The amortization of capital costs to reduce Operating Costs shall not exceed
the resulting reduction in Operating Costs.
Not withstanding anything in Section 4 to the contrary, the following shall not
be deemed Operating Costs under this Lease:
(A) Real estate brokerage commissions;
(B) Legal fees incurred in leasing or in disputes with tenants;
(C) Cost of construction allowances and similar lease inducement allowances
provided to other tenants;
(D) Interest or principal payments on any mortgage or deed of trust or any
ground lease payments;
(E) Any cost or expenditure for which Landlord is reimbursed from third
parties, such as insurance proceeds or warranty claims;
(F) Cost of any services furnished to other tenants but which Landlord does
not furnish to Tenant;
(G) Cost of repairs or maintenance caused or necessitated by the negligence
of Landlord, its agents, contractors or employees;
(H) Bad debt losses, rent losses and reserves for capital, rent losses and
bad debts;
(I) Subject to Tenant's obligations under Section 16, all costs of complying
with laws, regulations, ordinances or governmental requirements in
effect as of the date of this Lease relating to Hazardous Materials.
As soon as reasonably practicable prior to the commencement of each calendar
year during the Lease Term, Landlord shall furnish to Tenant an estimate of
Tenant's share of Operating Costs for the ensuing calendar year and Tenant
shall pay, as additional rent hereunder together with each installment of
monthly base rent, one-twelfth (1/12th) of its estimated annual share of such
Operating Costs. Landlord's estimate for 1995 is $3.40 per square foot. As
soon as reasonably practicable after the end of each calendar year during the
Lease Term, Landlord shall furnish to Tenant a reasonably detailed, itemized
statement of the actual Operating Costs for the previous calendar year,
including Tenant's share of such amount, and within thirty (30) days thereafter
Tenant shall pay to Landlord, or Landlord to Tenant, as the case may be, the
difference between such actual and estimated Operating Costs paid by Tenant.
Tenant's share of such Operating Costs for the years in which this Lease
commences and terminates shall be prorated based upon the dates of commencement
and termination of the Lease Term.
Landlord shall maintain all books and records relating to Operating Costs for a
particular year for a period of at least 120 days thereafter, and shall make
such books and records available to Tenant for inspection and copying at a
reasonably convenient location, upon 48 hours' advance notice. Tenant shall
have the right, at Tenant's sole expense, at any time within 120 days after
Tenant's receipt of Landlord's statement of actual Operating Costs for any
calendar year, to have Landlord's books and records relating to such Operating
Costs audited by a certified public accountant reasonably acceptable to Tenant
and Landlord. The results of any such audit shall be conclusive. If the audit
determines that actual Operating Costs for any calendar year are different than
the amount shown on Landlord's statement, Landlord shall refund or Tenant shall
pay the difference within 30 days after receiving the audit report. Tenant
shall have the further right to have Landlord's books and records for the prior
three years audited by a certified public accountant and reasonably acceptable
to Tenant and Landlord, but only as to those items which have been shown to be
incorrect. Landlord shall pay prior to delinquency all Operating Costs and all
payments due under any mortgage, deed of trust, ground lease or other
encumbrance against the Building or the Project. Landlord shall cause all
assessments for local improvements to be paid in installments over the maximum
allowable period of time.
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5. ADDITIONAL TAXES:
Tenant shall pay as additional rent to Landlord, together with each installment
of monthly base rent, the amount of any gross receipts tax, sales tax or
similar tax (but excluding therefrom any income tax) payable, or which will be
payable, by Landlord, by reason of the receipt of the monthly base rent and
adjustments thereto.
6. SECURITY DEPOSIT: INTENTIONALLY DELETED
7. UTILITIES:
Landlord shall provide mains and conduits to supply water, gas, electricity and
sanitary sewage to the Demised Premises. Tenant shall pay, when due, all
charges for sewer usage or rental, garbage disposal, refuse removal, water,
electricity, gas, telephone and/or other utility services or energy source
furnished to the Demised Premises during the term of this Lease, or any renewal
or extension thereof, except as provided in Section 3.. If Landlord elects to
furnish any of the foregoing, the rate charged by Landlord for such utility
services or other services furnished or caused to be furnished by Landlord
shall not exceed the rate Tenant would be required to pay to a utility company
or service company furnishing any of the foregoing utilities or services. The
charges thereof shall be deemed additional rent.
8. CARE AND REPAIR OF DEMISED PREMISES:
Tenant shall, at all times throughout the term of this Lease, including
renewals and extensions, and at its sole expense, keep and maintain the Demised
Premises in a clean, safe, sanitary condition and in compliance with all
applicable laws, codes, ordinances, rules and regulations. Tenant's
obligations hereunder shall include but not be limited to the maintenance,
repair and replacement, if necessary, of all lighting, HVAC and plumbing
fixtures and equipment, fixtures, motors and machinery (but only if located in
the Demised Premises or exclusively serving the Demised Premises), all interior
walls, partitions, doors and windows, including the regular painting thereof,
all exterior entrances, windows, doors and docks and the replacement of all
broken glass. When used in this provision, the term "repairs" shall include
replacements or renewals when necessary, and all such repairs made by the
Tenant shall be equal in quality and class to the original work. The Tenant
shall keep and maintain all interior portions of the Demised Premises in a
clean and orderly condition.
Tenant shall not be obligated for maintenance, repair and replacement to the
extent coverable by insurance Landlord is obligated to maintain.
Landlord shall cause all HVAC and plumbing fixtures and equipment, fixtures,
motors and machinery to be in good operating condition as of the commencement
of this Lease. Subject to Tenant's obligations under Section 9.L. of this
Lease, Landlord warrants the good operation of all HVAC and plumbing fixtures
and of equipment, fixtures, motors and machinery for a period of one year from
the commencement of this Lease.
If Tenant fails, refuses or neglects to maintain or repair the Demised Premises
as required in this Lease after reasonable notice shall have been given Tenant,
Landlord may make such repairs without liability to Tenant for any loss or
damage that may accrue to Tenant's merchandise, fixtures or other property or
to Tenant's business by reason thereof, and upon completion thereof, Tenant
shall pay to Landlord all costs plus 15% for overhead incurred by Landlord in
making such repairs upon presentation
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to Tenant of xxxx therefor. Landlord shall keep the foundation, exterior walls
(except plate glass or glass or other breakable materials used in structural
portions) and roof in good repair, and if necessary or required by proper
governmental authority, made modifications or replacements thereof, except that
Landlord shall not be required to make any such repairs, modifications or
replacements which are not coverable by insurance and which become necessary or
desirable by reason of the negligence of Tenant, its agents, servants or
employees.
The Landlord shall maintain, repair and manage in good condition all common
areas of the Project, including grounds and parking areas consistent with
prevailing standards for similar projects in the Minneapolis - St. Xxxx
metropolitan area. The cost of said maintenance shall be prorated in
accordance with Section 4 of this Lease. All such maintenance which is
provided by Landlord shall be provided as reasonably necessary for the
comfortable use and occupancy of the Demised Premises, upon the condition that
the Landlord shall not be liable for damages for failure to do so due to causes
beyond its control.
9. COVENANTS OF TENANT:
Tenant agrees that it shall:
A. Observe such reasonable and uniform rules and regulations as from time
to time may be put in effect by Landlord for the general safety, comfort
and convenience of Landlord, occupants and tenants of the Building.
B. Give Landlord access to the Demised Premises at all reasonable times,
upon reasonable prior notice, without change or diminution of rent, to
enable Landlord to examine the same and to make such repairs, additions
and alterations as Landlord may deem advisable, and during the ninety
(90) days prior to the expiration of the term, to exhibit the Demised
Premises to prospective tenants and to place upon the door or in the
windows of the Demised Premises any usual or ordinary "For Lease" signs.
Landlord shall not exercise its rights under this Section in any manner
which unreasonably interferes with or disturbs Tenant's use or enjoyment
of the Demised Premises.
C. Replace all glass broken by Tenant with glass of the same quality as
that broken, save only glass broken by fire or other casualty coverable
by standard all risk insurance, and commit no waste on the Demised
Premises.
D. Pay for all electric lamps, starters and ballasts used in the Demised
Premises.
E. Upon the termination of this Lease in any manner whatsoever, remove
Tenant's goods and effects and those of any other person claiming under
Tenant, and quit and deliver up the Demised Premises to Landlord
peaceably and quietly in as good order and condition as the same are now
in or hereafter may be put in by Landlord or Tenant, reasonable use and
wear thereof, casualty, condemnation and repairs which are Landlord's
obligation excepted. Goods and effects not removed by Tenant at the
termination of this Lease, however terminated, shall be considered
abandoned and Landlord may dispose of the same as it deems expedient.
F. Except for an assignment or subletting to an affiliate or a wholly owned
subsidiary of Tenant, the Tenant may not assign this Lease, or sublet
all or any part of said Demised Premises, without the Landlord's prior
written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. The Landlord reserves the right, should the
Tenant request such assignment or subletting of the entire Demised
Premises, to release the Tenant from the terms and conditions of this
Lease and the Landlord shall have thirty (30) days to make such
determination. Should the Landlord exercise this right, the Lease shall
terminate. Until such termination, the Tenant will, however, remain
liable for the performance of all the terms and conditions hereof.
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G. Not place signs on or about the exterior of the Demised Premises without
first obtaining Landlord's written consent thereto.
H. Not overload, damage or deface the Demised Premises or do any act which
may make void or voidable any insurance on the Demised Premises or the
Building, or which may render an increased or extra premium payable for
insurance.
I. Not place any additional locks on any of Tenant's doors without the
written consent of the Landlord.
J. Not make any alterations or additions to the Demised Premises costing in
excess of $10,000.00 when aggregated over any period of twelve
consecutive months or which affect the safety or utility of the Demised
Premises without obtaining the prior written approval of the Landlord
thereto, and all alterations, additions or improvements (including
carpeting or other floor covering which has been glued or otherwise
affixed to the floor) which may be made by either of the parties hereto
upon the Demised Premises, except movable office furniture and
equipment, shall be the property of Landlord, and shall remain upon and
be surrendered with the Demised Premises, as a part thereof, at the
termination of this Lease.
K. Keep the Demised Premises and the Project free from any mechanics',
materialmen's, contractors' or other liens arising from, or any claims
for damages growing out of, any work performed, materials furnished or
obligations incurred by or on behalf of Tenant. Provided, however, that
Tenant shall have the right to contest any such lien, in which event
such lien shall not be considered a default under this Lease until the
existence of the lien has been finally adjudicated and all appeal
periods have expired. Tenant shall indemnify and hold harmless Lessor
from and against any such lien, or claim or action thereon, reimburse
Lessor promptly upon demand therefor by Lessor for costs of suit and
reasonable attorneys' fees incurred by Lessor in connection with any
such lien, claim or action, and, upon written request of Lessor, provide
Lessor with a bond in an amount and under circumstances necessary to
obtain a release of the Demised Premises or the Project from such lien.
L. Cause to be performed by a competent service company, preventative
maintenance of all HVAC units and warehouse unit heaters serving the
Demised Premises, as recommended by the equipment manufacturer.
Tenant's obligations under this paragraph numbered 9 to do or not to do a
specified act shall extend to and include Tenant's obligations to see to it
that Tenant's employees, agents and invitees shall do or shall not do such
acts, as the case may be.
10. PARKING AND DRIVES:
The Tenant, its employees, and invitees shall have the non-exclusive right,
without charge except as provided in Section 4, to use the common driveways and
parking lots along with the other tenants and customers of the building. The
use of such driveways and parking facilities are subject to such reasonable
rules and regulations as the Landlord may impose. The Tenant further agrees
not to use, or permit the use by its employees, the parking areas for the
overnight storage of automobiles or other vehicles without the written
permission of Landlord.
Landlord shall provide, on an as-is, non-exclusive basis (subject to Landlord's
repair and maintenance obligation) and without charge of any kind (other than
Operating Costs as provided in Section 4), a minimum of 3.8 parking stalls per
1,000 square feet of leasable area in the Building. Landlord shall designate
with appropriate signage five parking spaces for visitor parking. Landlord
shall not take any action to reduce the number of parking stalls located on the
land and serving the Building as of the date of this Lease.
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11. CASUALTY LOSS:
In case of damage to the Demised Premises or the Building by fire or other
casualty, Tenant shall give immediate notice to Landlord, who shall thereupon
cause the damage to be repaired with reasonable speed, at the expense of the
Landlord, subject to delays which may arise by reason of adjustment of loss
under insurance policies and for delays beyond the reasonable control of
Landlord, and to the extent that the Demised Premises are rendered
untenantable, the rent shall proportionately xxxxx. In the event the damage
shall be so extensive that the cost of repair would exceed thirty percent (30%)
of the value of the Building, and Landlord shall decide not to repair or
rebuild, this Lease shall, at the option of Landlord, be terminated as of the
date of such damage by written notice from the Landlord to the Tenant given
within 60 days of such damage, and the rent shall be adjusted to the date of
such damage and Tenant shall thereupon promptly vacate the Demised Premises.
If Landlord fails to complete the repair and restoration of the Building and
Demised Premises within 180 days after the date of any such damage or
destruction, then Tenant may terminate this Lease by giving written notice
thereof to Landlord at any time after such 180 day period and prior to
completion of such repairs and restoration.
12. CONDEMNATION:
If the entire Demised Premises is taken by eminent domain or transferred under
threat of such taking, this Lease shall automatically terminate as of the date
of taking. If a portion of the Demised Premises are taken by eminent domain,
either party shall have the right to terminate this Lease as of the date of
taking by giving written notice thereof to the other within ninety (90) days
after such date of taking. If neither party elects to terminate this Lease,
Landlord shall, at its expense, restore the Demised Premises, exclusive of any
improvements or other changes made therein by Tenant, to as near the condition
which existed immediately prior to the date of taking as reasonably possible,
and to the extent that the Demised Premises are rendered untenantable, the rent
shall proportionately xxxxx. All damages awarded for a taking under the power
of eminent domain shall belong to and be the exclusive property of Landlord,
whether such damages be awarded as compensation for diminution in value of the
leasehold estate hereby created or to the fee of the Demised Premises;
provided, however, that Landlord shall not be entitled to any separate award
made to Tenant for relocation expenses and the value and cost of removal of its
personal property and fixtures.
13. DELAY IN POSSESSION:
If the Demised Premises shall, on the scheduled date of commencement of the
Lease Term, not be ready for occupancy by the Tenant due to the possession or
occupancy thereof by any person not lawfully entitled thereto, or because
construction has not yet been completed, or by reason of any building
operations, repair or remodeling to be done by Landlord, Landlord shall use due
diligence to complete such construction, building operations, repair or
remodeling and to deliver possession of the Demised Premises to Tenant. except
as hereinafter provided, the Landlord, using such due diligence, shall not in
any way be liable for failure to obtain possession of the Demised Premises for
Tenant or to timely complete such construction, building operations, repair or
remodeling, but the rental and other charges payable by Tenant hereunder shall
be abated until the Demised Premises shall, on Landlord's part, be ready for
occupancy by Tenant, and the commencement and expiration dates and all other
dates herein shall be extended by the period of delay, this Lease remaining in
all other respects in full force and effect.
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If construction of the Leasehold Improvements to be completed by Landlord shall
not have commenced by June 14, 1995, Tenant may terminate this Lease by
telephone message to Landlord or Landlord's agent, delivered no later than 5:00
PM, June 14, 1995.
14. MUTUAL RELEASE/WAIVER OF SUBROGATION:
Landlord and Tenant each hereby release the other from any and all liability or
responsibility for any direct or consequential loss, injury or damage to the
Demised Premises, or its contents, caused by fire or any other casualty, during
the term of this Lease, even if such fire or casualty may have been caused by
the negligence (but not the willful act) of the other party or one for whom
such party may be responsible. Inasmuch as the above mutual waivers will
preclude the assignment of any aforesaid claim by way of subrogation (or
otherwise) to an insurance company (or any other person), each party hereto
agrees if required by said policies to give to each insurance company which has
issued to it all risk and other property insurance, written notice of the terms
of said mutual waivers, and to have said insurance policies properly endorsed,
if necessary, to prevent the invalidation of said insurance coverage by reason
of said waivers.
Tenant shall not carry any stock of goods or do anything in or about said
Demised Premises which will increase standard insurance rates on said Demised
Premises or the Building in which the same are located. If Landlord shall
consent to such use, Tenant agrees to pay as additional rental any increase in
premiums for all risk insurance resulting from the business carried on in the
Demised Premises by Tenant. Tenant shall, at its own expense, comply with the
requirements of insurance underwriters and insurance rating bureaus and
governmental authorities having jurisdiction.
The Tenant shall maintain in full force and effect during the term hereof, a
policy of commercial general liability insurance under which Landlord is named
additional insured. The minimum limits of liability of such insurance shall be
$2,000,000.00 combined single limit as to bodily injury and property damage.
Tenant agrees to deliver a duplicate copy of said policy, or a certificate of
insurance evidencing such coverage, to Landlord. Such policy shall contain a
provision requiring thirty (30) days written notice to Landlord before
cancellation of the policy can be effected.
Landlord shall maintain, at all times during the Lease Term and any extension
thereof, (i) an "all risk" or equivalent form property insurance policy,
insuring the Building and the Leasehold Improvements for their full replacement
cost, without deduction for depreciation, and with a deductible amount not to
exceed $25,000; (ii) boiler and machinery insurance in an amount equal to the
full replacement cost of the Building and Leasehold Improvements, with a
deductible amount not to exceed $25,000.00.
Upon the request of the Tenant, Landlord shall provide evidence of insurance.
15. INDEMNIFICATION AND HOLD HARMLESS:
Tenant does hereby agree to defend, indemnify and hold Landlord harmless from
and against any and all liability for any injury to or death of any person or
persons or any damage to property in any way arising out of or in connection
with the condition, use or occupancy of the Premises, or in any way arising out
of any activities in or about the Premises, of Tenant, its assignees or
subtenants or of the respective agents, employees, licensees, contractors or
invitees of Tenant or its assignees or subtenants, and from all costs, expenses
and liabilities (including, but not limited to, court costs and reasonable
attorney's fees) incurred by Landlord in connection therewith.
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Tenant covenants and agrees that Landlord shall not be liable to Tenant for any
injury to or death of any person or persons or for damage to any property of
Tenant, or any person claiming through Tenant, arising out of any accident or
occurrence in or about the Premises, including, but not limited to, injury,
death or damage caused by the Premises being out of repair or caused by any
defect in or failure of equipment, pipes or wiring, or caused by broken glass,
or caused by the backing up of drains, or caused by gas, water, steam,
electricity, or oil leaking, escaping or flowing into the Premises, or caused
by fire or smoke.
Tenant agrees to report in writing to Landlord any defective condition in or
about the Premises known to Tenant, and further agrees to attempt to contact
Landlord by telephone immediately in such instance.
16. HAZARDOUS SUBSTANCES:
Tenant covenants and agrees that Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of any biologically
or chemically active or other hazardous substances or materials in violation of
applicable laws. Tenant shall not allow the storage or use of such substances
or materials in any manner not sanctioned by law or by the standards prevailing
in the industry for the storage and use of such substances or materials, nor
allow to be brought into the Project any such materials or substances except to
use in the ordinary course of Tenant's business, and then only after written
notice is given to Landlord of the identity of such substances or materials.
Without limitation, hazardous substances and materials shall include those
described in the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et. seq., and
applicable state or local laws and the regulations adopted under these acts.
If any lender or governmental agency shall ever require testing to ascertain
whether or not there has been any release of hazardous materials, and such
testing determines that Tenant has caused the release, then the reasonable
costs thereof shall be reimbursed by Tenant to Landlord upon demand as
additional charges if such requirement applies to the Demised Premises. In
addition, Tenant shall execute affidavits, representations and the like from
time to time at Landlord's request concerning Tenant's best knowledge and
belief regarding Tenant's use of hazardous substances or materials on the
Demised Premises. In all events, Tenant shall indemnify Landlord as referenced
in Section 15, from all actual investigation and remediation costs reasonably
incurred by Landlord as a result of any release of hazardous materials caused
by Tenant on the Demised Premises or elsewhere if caused by Tenant or persons
acting under Tenant in violation of this Lease or applicable law. The within
covenants shall survive the expiration or earlier termination of the Lease
term.
Tenant has received a copy of the Phase I Environmental Survey Site Assessment
prepared by W.W. Engineering and Science dated April 15, 1994.
To the best of Landlord's knowledge, there are no other environmental issues
relating to the Property.
17. DEFAULT:
Tenant hereby agrees that in case Tenant shall default in making its payments
hereunder or any of them or in performing any of the other agreements, terms
and conditions of this Lease, then, in any such event, Landlord, in addition to
all other rights and remedies available to Landlord by law or by other
provisions hereof, may after ten days written notice (with respect to monetary
defaults) and 30 days written notice (with respect to all other defaults), with
due process, re-enter immediately into the Demised Premises and remove all
persons and property therefrom, and, at Landlord's option, annul and
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cancel this Lease as to all future rights of Tenant and Tenant hereby expressly
waives the service of any notice in writing of intention to re-enter as
aforesaid. If a nonmonetary default occurs which cannot reasonably be cured
within 30 days after notice from Landlord, then Landlord shall not exercise any
of its remedies as a result of such default for a period of 90 days after such
non-monetary default as long as Tenant has commenced and is diligently pursuing
reasonable efforts to cure such default. Tenant further agrees that in case of
any such termination Tenant will indemnify the Landlord against all loss of
rents and other damage which Landlord incurs by reason of such termination,
including, but not being limited to, costs of restoring and repairing the
Demised Premises and putting the same in rentable condition, costs of renting
the Demised Premises to another tenant, loss of diminution of rents and other
damage which Landlord may incur by reason of such termination, and all
reasonable attorney's fees and expenses incurred in enforcing any of the terms
of the Lease. Neither acceptance of rent by Landlord, with or without
knowledge of breach, nor failure of Landlord to take action on account of any
breach hereof or to enforce its rights hereunder shall be deemed a waiver of
any breach, and absent written notice or consent, said breach shall be a
continuing one.
18. NOTICES:
All bills, statements, notices of communications which Landlord may desire or
be required to give to Tenant shall be deemed sufficiently given or rendered if
in writing and sent by registered or certified mail addressed to Tenant at the
Demised Premises and the time of rendition thereof of the giving of such notice
or communication shall be deemed to be the time when the same is delivered to
Tenant or deposited in the mail as herein provided. Any notice by Tenant to
Landlord must be served by registered or certified mail addressed to Landlord
at the address where the last previous rental hereunder was payable, or in case
of subsequent change upon notice given, to the latest address furnished and the
time of rendition thereof of the giving of such notice or communication shall
be deemed to be the time when the same is delivered to Tenant or deposited in
the mail as herein provided.
19. HOLDING OVER:
Should Tenant continue to occupy the Demised Premises after expiration of the
Lease Term or any renewal or renewals thereof, or after a forfeiture incurred,
such tenancy shall be from month to month and in no event from year to year or
for any longer term. Landlord shall charge Tenant a holdover rent equal to
150% of Base Rent and Operating Costs last in effect hereunder.
20. SUBORDINATION:
Subject to the non-disturbance rights set forth below, the rights of Tenant
shall be and are subject and subordinate at all times to the lien of any first
mortgage now or hereafter in force against the project, and Tenant shall
execute such further instruments subordinating this Lease to the lien of any
such first mortgage as shall be requested by Landlord, provided, however, the
holder of such first mortgage shall agree not to disturb Tenant's rights under
this Lease so long as Tenant is not in default hereunder.
Landlord shall obtain and deliver to Tenant, within 30 days after the date of
this Lease, a written agreement, in form and substance reasonably acceptable to
Tenant, from each mortgagee, ground lessor, beneficiary of a deed of trust, or
other party holding a lien on any part of the Project (collectively, the
"Holder"), in which the Holder agrees to recognize Tenant's rights under this
Lease and not to disturb Tenant's possession of the Demised Premises in the
event of any foreclosure or termination of Landlord's interest in the Demised
Premises or the Project.
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21. ESTOPPEL CERTIFICATE:
Tenant shall at any time and from time to time, upon not less than ten (10)
days prior written notice from Landlord, execute, acknowledge and deliver to
Landlord and any other parties designated by Landlord, a statement in writing
certifying (a) that this Lease is in full force and effect and is unmodified
(or, if modified, stating the nature of such modification), (b) the date to
which the rental and other charges payable hereunder have been paid in advance,
if any, and (c) that there are, to Tenant's knowledge, no uncured defaults on
the part of Landlord hereunder (or specifying such defaults if any are
claimed). Any such statement may be furnished to and relied upon by any
prospective purchaser, Tenant or encumbrancer of all or any portion of the
Project.
22. SERVICE CHARGE:
Tenant agrees to pay a service charge equal to one percent (1%) per month or
any portion thereof of any payment of monthly base rent or additional charge
payable by Tenant hereunder which is not paid within ten (10) days from the
date due, or of $50.00 per month or portion thereof, whichever is greater.
23. BINDING EFFECT:
The word "Tenant", wherever used in this Lease, shall be construed to mean
tenants in all cases where there is more than one tenant, and the necessary
grammatical changes required to make the provisions hereof apply to
corporations, partnerships or individuals, men or women, shall in all cases be
assumed as though in each case fully expressed. Each provision hereof shall
extend to and shall, as the case may require, bind and inure to the benefit of
Landlord and Tenant and their respective heirs, legal representatives,
successors and assigns, provided that this Lease shall not inure to the benefit
of any heir, legal representative, transferee or successor of Tenant except
upon the express written consent or election of Landlord. The Landlord may
assign its right, title, and interest in this Lease, and such assignment shall
thence terminate all the assigning Landlord's obligations thereafter arising,
provided the assignee assumes such obligation in writing.
24. LEASEHOLD IMPROVEMENT COSTS:
Landlord shall provide all space planning, construction, mechanical and
engineering drawings at its sole cost and expense.
Landlord will complete, at its expense, on or before July 15, 1995, all of the
improvements ("Leasehold Improvements") to the Demised Premises in accordance
with the plans and specifications identified in Exhibit _____ attached hereto
(the "Plans").
Changes to the Plans as requested by Tenant from time to time shall be
performed by Landlord, provided that any such changes shall be subject to
Landlord's prior approval, which approval shall not be withheld except where
the changes (i) violate any applicable laws or require an amendment or variance
to the applicable zoning ordinance or a special permit, (ii) in Landlord's
reasonable judgment, materially and adversely effect the exterior appearance of
the Buildings or the exterior appearance of other areas of the Demised
Premises, or (iii) would result in a violation of the provisions of this Lease,
(iv) or would result in a delay in the Commencement of the Term. Landlord
shall, before proceeding with any change, submit to Tenant in writing within
five (5) business days after Tenant notifies Landlord of the change or request
therefor, an estimate of the additional cost, if any, of the change and
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the additional period of time, if any, the change will add to the scheduled
date for completion of the Leasehold Improvements. If Tenant fails to approve
such statement within five (5) business days following receipt thereof, the
same shall be deemed disapproved and Landlord shall not proceed with the
change. If Tenant approves said statement within said period, Landlord shall
cause the approved change to be made. Landlord shall promptly proceed with the
change as soon as reasonably practical after Tenant's written (i) approval of
the foregoing statement by Landlord and (ii) agreement to pay the net
additional costs of such change as estimated by Landlord, determined on the
basis of actual out-of-pocket costs for labor and materials, plus contractor's
and subcontractor's fees not to exceed a total of six percent (6%) of labor and
materials costs, after deducting any savings resulting from such change or any
prior changes approved by Tenant. Any such amount shall be paid in cash within
30 days after the later of (i) Tenant's receipt of Landlord's itemized invoice
showing a breakdown of such additional cost and including such backup
documentation as may be reasonably requested by Tenant, or (ii) completion of
the Leasehold Improvements.
Upon substantial completion of the Leasehold Improvements, Landlord, Tenant and
Landlord's architect shall execute a written instrument (the "Punch List")
identifying those minor details of construction, decoration and mechanical
adjustments remaining to be completed by Landlord which do not materially
interfere with Tenant's use and occupation of the Demised Premises ("Punch List
Items"). Full execution and delivery of the Punch List shall constitute
Tenant's acceptance of the Demised Premises; provided, however, that such
acceptance shall be subject to the completion of such Punch List Items within a
period of sixty (60) days after the commencement date. In addition to the
foregoing Punch List Items, Tenant shall have the right to include as a part of
said Punch List Items any other uncompleted items (the "Additional Punch List
Items") which Tenant discovers while occupying the Demised Premises during the
aforesaid sixty (60) day period, which Additional Punch List Items shall be
completed or corrected by Landlord as soon as reasonably possible. Tenant's
acceptance of the Demised Premises shall not relieve Landlord of liability for
any defect or deficiency therein.
If within one year after the Commencement of this Lease any of the work is
found to be defective due to faulty workmanship or materials, and if within
such period Tenant notifies Landlord thereof in writing, then Landlord shall
correct the same at its expense within a reasonable time after receipt of such
notice. Tenant shall notify Landlord promptly after discovery of the
condition.
25. BROKERAGE FEES:
Landlord shall pay a brokerage fee ("Brokerage Fees") of $3.00 per square foot
to The Shelard Group. The Shelard Group and Northco Real Estate shall divide
this fee under the terms of a separate agreement. The Landlord and Tenant each
warrant that there are no other claims for Broker's Commissions or finder fees
in connection with this Lease by any party with whom it has dealt. Tenant and
Landlord hereby indemnifies and mutually holds each other harmless from and
against all loss, cost, damage or expense including, but not limited to,
attorney's fees and court costs incurred as a result of a claim made by a real
estate broker or agent through the Tenant or Landlord, respectively.
26. SIGNAGE:
Upon the City of Eden Prairie's approval, Tenant shall have the option to
install signage on the Building. Said signage shall be in accordance with all
applicable sign criteria for the Building, and subject to Landlord's consent,
which shall not be unreasonably withheld.
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27. AMERICANS WITH DISABILITIES ACT:
The parties agree that the liabilities and obligations of Landlord and Tenant
under that certain federal statute commonly known as the Americans With
Disabilities Act (42 U.S.C. 12101 et seq.) as well as the regulations and
accessibility guidelines promulgated thereunder as each of the foregoing is
supplemented or amended from time to time (collectively, the "ADA") shall be
apportioned as follows:
A. Landlord represents and warrants to Tenant that all common areas of the
Building and the Project, including, but not limited to, exterior and
interior horizontal and vertical routes of ingress and egress,
off-street parking, and all rules and regulations applicable to the
Demised Premises, the Building or the Project, now comply, or shall be
promptly made to comply by Landlord, at Landlord's sole cost and
expense, with the ADA. Landlord shall also cause its manager of the
Building and the Project (the "Manager") to comply with the ADA in its
operation of the Building and the Project. Notwithstanding any
provision of this Lease to the contrary, Landlord shall not be permitted
to pass through to Tenant, as an Operating Cost or otherwise, any cost
incurred by Landlord or the Manager in causing the Building or the
Project to comply with the ADA, as presently published, as aforesaid.
B. From and after the commencement date of the Lease, and subject to
performance by Landlord of its obligations under subparagraph A
immediately above, Tenant covenants and agrees to conduct its operations
within the Demised Premises in compliance with the ADA. In the event
that Tenant elects to undertake any alterations to, for or within the
Demised Premises, including initial build-out work if such work,
pursuant to other terms of this Lease, is the responsibility of Tenant
to perform, then Tenant agrees to cause such alterations to be performed
in compliance with the ADA. In the event that Tenant shall be required
to make any alterations within the Demised Premises in order to make the
Demised Premises comply with the ADA and such required alterations are
not required because of Landlord's failure to perform its obligations
under subparagraph A immediately above, then, to the extent any other
term of this Lease requires the Tenant to obtain the Landlord's consent
to make such alterations, Landlord hereby agrees to provide such consent
to Tenant.
28. QUIET ENJOYMENT:
Landlord hereby covenants that if Tenant pays the rent and other charges and
performs the covenants and agreements contained herein, Tenant shall peaceably
and quietly hold and enjoy the Demised Premises during the Lease Term and
extensions thereof.
29. LANDLORD'S WARRANTIES:
Landlord warrants to Tenant that (i) the Demised Premises are zoned to permit
the use thereof for the purposes contemplated by this Lease without requiring a
variance or special or conditional use permit, and such use will not violate
any applicable Private Restrictions, and (ii) Landlord has good and marketable
fee simple absolute title to the Project, free from any liens and encumbrances
which would interfere with Tenant's use and enjoyment of the Demised Premises
and common areas for the purposes provided in this Lease.
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30. NO RECORDATION OF LEASE:
Without the prior written consent of Landlord, neither this Lease nor any
memorandum thereof shall be recorded or placed on public record.
IN WITNESS WHEREOF, the respective parties hereto have caused this Lease to be
executed the day and year first above written.
LANDLORD:
GREAT WEST LIFE ANNUITY & INSURANCE COMPANY
/s/
TENANT:
TRANSITION ENGINEERING, INC.
/s/
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