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Exhibit 10.38
LEASE
This Lease Agreement made as of the 6th day of April, 1998 by and
between Xxxx Xxxxxxxxxx LLC (herein "Landlord") and Xxxxxxx, Inc. ("Tenant").
Witnesseth:
Landlord hereby leases to Tenant and Tenant hereby takes from Landlord
certain premises known as Deerfield Industrial Park Property comprising
approximately 16.613 acres as described on Exhibit 1, attached hereto and
incorporated herein by reference (the "Premises") containing a building of
approximately 100,000 rentable square feet suitable for a combination of light
manufacturing, warehouse and office use (the "Building") situated as outlined on
a diagram of the Premises shown in the Site Plan attached hereto as Exhibit 2
and incorporated herein by reference, and built in accordance with plans and
specifications attached hereto on Exhibit 3 and incorporated herein by
reference. The building and other improvements to be constructed by Landlord are
herein often referred to as the "Landlord Improvements."
To have and to hold the same for a term (the "Primary Term") of
approximately one hundred twenty-one (121) months beginning on the later of the
19th day of October, 1998 or upon the substantial completion of the Landlord
Improvements (the "Rent Commencement Date") and expiring on the last day of
November, 2008, upon the following terms, conditions and covenants.
If the Building and all other Landlord improvements (collectively, the
"Landlord Improvements") on the Premises are not completed on or before October
19, 1998, then Landlord shall work diligently to have the Landlord Improvements
completed as soon as possible thereafter. If the Landlord Improvements have not
been completed on or before November 19, 1998, then Landlord shall, upon written
demand from Tenant, pay to Tenant as liquidated damages with respect to Tenant's
obtaining alternative interim facilities of and not as a penalty the amount of
Two Thousand Five Hundred Dollars ($2,500) per day for each day from and
including November 20, 1998 that the Landlord Improvements are not completed.
Without in any manner constituting an election of remedies, and in addition to
Tenant's other rights and remedies (including, without limitation, the right to
pursue an action for damages), all
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of which shall be cumulative, Tenant shall in addition have the right if it, in
its sole discretion chooses, to take over from Landlord and complete
construction of the Premises if (i) Landlord's Improvements are not completed on
or before December 19, 1998, (ii) Landlord at any time abandons or directs his
subcontractors to abandon the Landlord's Improvements, (iii) Tenant at any time
after August 15, 1998 can establish that it is more probable than not that
Landlord, considering Landlord's performance to date, cannot complete Landlord's
Improvements on or before December 19, 1998, or (iv) Landlord files a petition
for relief under the United States Bankruptcy Code. Landlord hereby collaterally
assigns to Tenant all permits, approvals, drawings, plans, specifications and
every other right, privilege or item relating to the Premises and necessary or
appropriate to continue such construction and Landlord agrees to cooperate in
connection therewith and to execute such documents as Tenant may reasonably
request to more fully perfect such assignment so that Tenant may successfully
complete construction of the Premises. Tenant's interest under such assignment
is and shall be subordinate to the interest of Landlord's construction lender.
If Tenant takes over such construction, it shall be entitled to credit against
its rental obligations hereunder for the amounts reasonably expended in
completing construction of the Building and other Landlord Improvements together
with interest thereon at the rate of twelve percent (12%) per annum. Unless
otherwise agreed by Landlord and Tenant, such credit shall be applied against
rental obligations first coming due under this Lease, and Tenant's obligation to
pay cash rent to Landlord shall commence when the credit is consumed. Throughout
the period of construction, Tenant shall have access to the Premises for
inspecting Landlord's progress. If on any date weather conditions preclude
scheduled construction activities to be conducted on-site or if on any day prior
to completion of the foundation and floor of the Building weather-caused site
conditions preclude scheduled construction activities absent soil replacement,
then for each day such conditions exist each of the dates in this paragraph
shall be extended by one day. Landlord will notify Tenant upon its determination
that a weather-related condition precludes scheduled construction activities as
described above, and will inform Tenant of the anticipated duration of such
delay and any remedial action required or indicated by the condition. Should
substantial completion of the Building be deferred beyond November 19, 1998 as a
result of claimed weather-related conditions, and Landlord and Tenant do not
agree as to the extent of the delay occasioned by weather-related causes, the
matter shall be referred to a third party acceptable to Landlord and Tenant, who
shall determine the extent of the delay, with costs of determination by such
third party borne equally by Landlord and Tenant.
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In addition, to the extent that Tenant has not by April 1, 1998 approved
the final plans and specifications for the Building footprint and exterior
configuration and site elevation and layout, each of the dates in the preceding
paragraph shall be extended one day for each day such approval is withheld and
on-site work is thereby delayed.
On June 1, 1998 Landlord will report to Tenant with respect to
Landlord's progress toward completion of the Building and other improvements to
the Premises. Landlord's report shall include (i) an accounting of any delays
occasioned by weather conditions, weather-caused site conditions or any other
cause for which completion of Landlord Improvements may be deferred without
penalty to Landlord, (ii) the estimated date of substantial completion of
Landlord Improvements and (iii) if such estimate is for a date later than
November 20, 1998, remedial measures (and costs thereof) which might be
implemented to expedite substantial completion.
1. RENT PRIMARY TERM: The rent payable during the Primary Term (the
"rent") shall be at the rate of FORTY-THREE THOUSAND SEVEN HUNDRED SEVENTY-EIGHT
DOLLARS AND THIRTY-THREE CENTS ($43,778.33) per month, subject to adjustment in
accordance with Section 2 below. The monthly base rent is based on costs of
constructing the Landlord Improvements in accordance with Exhibit 3. The monthly
base rent shall be increased by the product of 0.10 and the cost in dollars of
(i) remedial action taken by Landlord in response to soil conditions on the
premises, (ii) costs of landscaping the berm area adjacent to the Leased
Premises, and (iii) any additions or changes to Exhibit 3 requested by Tenant
prior to May 1, 1998. The base rent shall be decreased by an amount equal the
product of 0.10 and (i) saving realized as a result of changes to Exhibit 3
requested by Tenant and (ii) amounts paid to Landlord from proceeds of TEA
grants and/or TIF funds. Any changes or additions to Exhibit 3 requested by
Tenant subsequent to May 1, 1998, will not be capitalized into the monthly base
rent but will be invoiced to Tenant upon completion by Landlord with payment due
within 30 days of invoice. Tenant's obligation to pay rent shall commence on the
Rent Commencement Date. Rent shall be payable on or before the first day of the
month for each month thereafter during this Lease and any extended term hereof.
In the event the Rent Commencement Date under this Lease falls on a date other
than the first day of a calendar month, rent for the initial partial month shall
be prorated and shall be paid on the Rent Commencement Date. All rent payable
hereunder shall be paid to Landlord in lawful currency of the United States at
such place as Landlord may from time to time designate in writing.
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2. RENT INCREASES: The rent shall be increased on the following basis.
At the beginning of the fourth year the rent shall be increased nine percent
(9%) over the initial rent. At the beginning of the seventh year the rent shall
be increased an additional nine percent (9%) over the sixth year rent. At the
beginning of the ninth year the rent shall be increased 6 % over the eighth year
rent.
3. OPTION TO EXTEND: Tenant shall have the option to extend this Lease
for two (2) additional five (5) year term(s) (the "Option Terms") upon the same
conditions applicable to the Primary Term. However, during each Option Term the
rent for the first three (3) years shall be four percent (4%) over the rent
payable in the year immediately preceding such Option Term, and the rent for the
fourth and fifth years shall be three percent (3%) over the rent payable in the
third year of such Option Term. Whenever the terms "Lease term" or "term of this
Lease" are used in this Lease, they shall refer to the Primary Term and any
Option Term for which Tenant has exercised its option to extend.
Tenant may exercise any option to extend this Lease by giving notice in
writing to Landlord not less than one hundred eighty (180) days before the
expiration of the Primary Term or any prior Option Term, as the case may be.
Landlord covenants and agrees to give Tenant written notice of the date by which
such option must be exercised at least twenty (20) but not more than thirty (30)
days prior to when such option needs to be exercised. Tenant shall not be
entitled to exercise any option to extend this Lease if Landlord's notice was
given as required but Tenant's notice is not given as required herein or if the
Tenant is in default of this Lease pursuant to Section 21 hereof beyond any
applicable notice and grace period, or if Tenant has been ten (10) or more days
late in payment of its rent and has not cured such late payments within ten (10)
days after written notice on more than three (3) occasions during any year of
this Lease.
4. SECURITY DEPOSIT: On execution of this Lease, Tenant shall deposit
with Landlord one (1) month's rent either in the form of cash or a standby
letter of credit as a security deposit for the performance by Tenant of the
provisions of this Lease. If Tenant is in default, Landlord can use the security
deposit, or any portion of it, to cure the default or to compensate Landlord for
damage sustained by Landlord resulting from the Tenant's default. Tenant shall
immediately on demand pay to Landlord or deposit with Landlord a substitute
letter of credit in a sum equal to the portion of the security deposit expended
or applied by the Landlord as provided in this paragraph so as to maintain the
security deposit in the sum initially deposited with Landlord. If Tenant is not
in default at the expiration or termination of the Lease
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term, Landlord shall return the security deposit to Tenant. Landlord may require
that the security deposit be in cash if it agrees that the security deposit will
be held in an interest-bearing account designated by Tenant, with interest paid
at least annually to Tenant and held by Landlord's mortgagee at all times, who
shall accept such security deposit and agree to hold it pursuant to the terms
hereof.
5. USE OF PREMISES: The Premises shall be used and occupied for the
purpose of manufacturing, warehousing and general office purposes and for
purposes incidental to such use and occupancy and for no other purposes
whatsoever without Landlord's prior consent. Tenant shall at its own expense
obtain any and all governmental approvals, licenses and permits necessary for
Tenant's use. Tenant shall not commit waste or suffer or permit waste to be
committed in, on or about the Premises.
6. COMPLIANCE WITH LAW: Tenant shall comply with all governmental laws,
ordinances and regulations (including Environmental Laws as hereinafter defined)
applicable to the Premises or its use of the Premises and shall promptly comply
with all governmental orders and directives applicable to the Premises, its use
of the Premises or connected with the Premises all at Tenant's sole expense.
Provided, however, that Landlord warrants and represents that (i) the Building
and Tenant's intended use of the Premises (referenced in Section 5 above) comply
with all building and use restrictions affecting the Premises, including
applicable zoning and land use laws, (ii) that Landlord has neither granted nor
consented to easements or other encumbrances that would adversely affect or
impair Tenant's proposed use of the Premises and (iii) that Landlord's
Improvements will have been constructed in compliance with all applicable laws,
rules, regulations and orders including, without limitation, the Americans With
Disabilities Act and any Wisconsin counterparts protecting the rights of the
disabled as modified or amended prior to construction. Landlord's obligation to
comply with the Americans With Disabilities Act and its Wisconsin counterpart
shall be based upon the information as to Tenant's proposed use which Tenant has
provided to Landlord prior to the execution of this Lease.
7. PROPERTY TAXES: Tenant shall pay, in addition to all other sums
required to be paid by it under the provisions of this Lease, and
notwithstanding any protest planned or pending, all Real Property Taxes which
may be taxed, charged, assessed, levied or imposed at any time or from time to
time on the Premises attributable to the Lease term. In addition to the rent
payable hereunder, Tenant shall on the first day of each month commencing with
the first day of the month following the Rent Commencement Date pay to Landlord
one-twelfth (1/12th)
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of the estimated (by the Village of Deerfield) Real Property Taxes for the then
current tax year. When real estate taxes are paid by Landlord, any excess paid
by Tenant shall be credited towards its liability for future real estate taxes
or, if the Lease term has ended, refunded to Tenant within ten (10) days of
determination that an excess amount has been paid. Any shortage shall be billed
to Tenant by Landlord and shall be paid by Tenant within ten (10) days of such
billing.
As between the parties hereto, Tenant alone shall have the duty of
attending to the making and filing of any statement or report which may be
provided or required by law as a basis of or in connection with the
determination, equalization, reduction, payment or abatement of each obligation
which is to be borne or paid by Tenant in accordance with this Section. Landlord
shall not be or become responsible therefor, nor for the contents of any such
statement or report. Unless required by law for a successful action to be
brought or claim to be made, Landlord shall not be obligated to make, join in or
be a party to any protest or objection to any law, order, proceeding or
determination, but shall cooperate and join with Tenant to the extent required
by law, provided the Tenant agrees to reimburse Landlord's actual out-of-pocket
expenses incurred in connection therewith.
Landlord agrees to provide Tenant, within ten (10) days of Landlord's
receipt, with true and complete copies of all Real Property Tax bills, tax
notices or assessments which Landlord receives relating to the Premises.
As used in this Section 7, "Real Property Tax" includes any real estate
taxes, special assessments (but only installments falling due during the Lease
term and which shall be paid over the longest period allowed) and similar levies
and charges against this Lease, the Premises (and all improvements thereon) or
the occupancy, use or possession thereof, or any estate, right, title or
interest of Landlord, Tenant or either of them in or to the Premises. "Real
Property Tax" does not, however, include Landlord's federal or state income,
franchise, inheritance or estate taxes.
Landlord warrants and represents that there are no special assessments
or similar levies or charges currently outstanding affecting the Premises nor
does Landlord have notice or knowledge of any improvements either currently
underway or planned which could result in the imposition of any special
assessment or similar levies or charges. If any sales tax shall be imposed on
the rentals, Tenant and not Landlord shall pay the same.
Tenant shall be responsible for paying any and all personal property
taxes which may be levied against Tenant's property.
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8. INSURANCE: Tenant shall obtain and maintain in full force and effect
at its expense during the term of this Lease, a comprehensive general liability
policy (or policies) satisfactory to Landlord, covering the Premises and naming
Landlord, Tenant and Landlord's mortgagee(s) as insureds. Such policy (or
policies) shall insure against injury to property, persons or loss of life
arising out of the use or occupancy of the Premises with a combined single
occurrence limit not less than One Million Dollars. Said insurance shall be
written on an "occurrence" and not on a "claims made" basis. All such liability
policies will require at least thirty (30) days notice to Landlord of
cancellation. If at any time during the term of this Lease, Tenant owns or rents
more than one location, its liability policy (or policies) shall contain an
endorsement to the effect that the aggregate limit in such policy (or policies)
shall apply separately to each location owned or rented by Tenant. If Landlord
reasonably anticipates that such coverage is inadequate, Tenant shall upon
written request of Landlord increase such insurance to amounts reasonably
requested by Landlord. Tenant shall furnish Landlord a copy (or copies) of such
policy (or policies), or certificate(s) thereof, indicating such coverage is in
effect. If Tenant shall fail to maintain such insurance in full force and
effect, or shall fail to present the required certificate or copy of policy (or
policies), Landlord may at its option, obtain the necessary insurance, pay the
premium and the premium shall be repaid to Landlord as additional rent for the
month following the date on which the premium was paid by Landlord.
Tenant shall during the term of this Lease procure and maintain, at
Tenant's expense, a "special form" policy (or policies) of insurance providing
special perils, all-risks, fire and extended coverage on the buildings and
improvements now or hereafter located on the Premises in an amount equal to the
full replacement value thereof above foundation, and against loss by boiler
explosion in an amount deemed adequate by Landlord. Tenant shall also procure
and maintain coverage for loss of rental under a business interruption policy
(or policies) including extra expense covering loss of rent in the amount of the
full rental agreed to be paid by Tenant hereunder for a period of one (1) year.
Landlord's mortgagee shall be covered as insured mortgagee. Tenant covenants and
agrees to provide Landlord, upon request, with a copy of the insurance policy
and to also provide Landlord on an annual basis with evidence of such coverage
continuing in place. All insurance coverages provided hereunder shall be
approved by Landlord. Landlord shall at least annually provide Tenant with
certificates of all insurance it maintains in connection with the Premises or
the Building.
Tenant shall be solely responsible for obtaining insurance as it may
deem advisable for all of its contents and merchandise located in the Premises
together with coverage for any
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fixtures, equipment or work done by Tenant including leasehold improvements. It
is understood that any insurance carried by Landlord does not cover the risk of
loss or damage to Tenant's property, equipment or fixtures nor property of
others which may be stored in the Premises by Tenant. Tenant waives any claim
against Landlord for such loss and shall save Landlord harmless from any claim
for loss or damage to contents, merchandise, fixtures or work done by Tenant
regardless of the cause of such damage or loss, unless it results from a
negligent act or omission or willful misconduct of Landlord.
9. USE AND EXTERIOR MAINTENANCE BY TENANT: Landlord covenants and agrees
to initially landscape the unimproved portion of the Premises and shall provide
parking areas and sidewalks as shown in the plans and specifications. Tenant
shall maintain the Premises in good order, condition and repair except as noted
in Sections 10 and 11 below, and shall bear all costs associated therewith
including, but not limited to costs resulting from lawn mowing, snow removal,
landscaping, painting, lighting, cleaning, rubbish removal, security and similar
items. Landlord shall make available to Tenant all warranties received by
Landlord from parties furnishing services or materials in connection with the
construction of the Landlord Improvements.
10. MAINTENANCE BY LANDLORD: Landlord at its expense shall maintain the
parking lot on the Premises during the Primary Term and the foundation, exterior
walls (including, without limitation, the window assembly excluding glass
breakage) and roof of the Building in good order and repair throughout the term
of this Lease.
11. MAINTENANCE BY TENANT: From and after one (1) year after the Rent
Commencement Date, Tenant shall at its expense maintain the interior of the
Building in good order and repair including, but not limited to repairs to the
interior plumbing, window glass, plate glass, doors and any heating, ventilating
and air conditioning equipment serving the Building. During the first year of
the Lease term, all of the foregoing shall be performed promptly by Landlord and
at Landlord's sole cost and expense. After such one-year period, Landlord agrees
to allow Tenant to use any manufacturer's warranties which may have been issued
in connection with the Premises and Landlord agrees to assist Tenant in using
such warranties.
12. ALTERATIONS, ADDITIONS AND IMPROVEMENTS: Tenant shall not make any
alterations, additions or improvements to the Premises without prior written
consent of the Landlord unless the cost therefor would not exceed Ten Thousand
Dollars ($10,000) per occurrence. Upon the expiration of the Lease term, all
such alterations, additions and improvements shall become the property of the
Landlord. However, Tenant shall have the right
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to remove such alterations, additions, or improvements upon the termination of
the Lease, provided that Tenant shall repair any damage caused by such removal
and shall restore the appearance of the Premises by redecorating. Landlord may
elect upon notice to Tenant to require the removal of all such alterations,
additions or improvements upon the expiration or termination of the Lease, in
which case Tenant shall promptly remove the said alterations, additions and
improvements and repair the damage caused by such removal.
13. SIGNS: Tenant shall have the right to erect such signs on the
Building and Premises as are consistent with governmental rules and regulations
applicable to the Premises. Any signs erected by Tenant shall be removed upon
the termination of the Lease. Tenant shall repair any and all damage caused by
such removal and shall restore the appearance of the Premises by redecorating.
14. INCREASED PREMIUMS/SUSPENSION OF INSURANCE: Tenant shall not permit
the Premises to be used in a manner which would cause the suspension or
cancellation of fire or extended coverage insurance on the Premises or the
liability insurance policy carried by Tenant for the benefit of Landlord and
Tenant. Tenant shall promptly notify Landlord of any changes in its use of the
Premises beyond the use stated in Section 5 and any corresponding change in
insurance coverage or premiums, and shall promptly pay any increased insurance
premium and immediately provide proof thereof to Landlord.
15. WAIVER OF SUBROGATION: To the extent permitted by their respective
policies of insurance, each party waives any claim which may arise against the
other party during the term of this Lease for loss or damage to any of its
property located within or upon or constituting a part of the Premises which
loss or damage is (i) covered by valid and collectable fire and extended
coverage insurance policies to the extent that such loss or damage is
recoverable under said insurance policies or (ii) is required hereunder to be
covered by such policy (or policies). These mutual waivers are intended to
preclude any subrogation claim by the insurer for either party against the other
party. Each party agrees to have its insurance policies properly endorsed if
necessary to prevent the invalidation of said insurance coverage by reason of
said waivers.
16. LANDLORD'S RIGHT OF ENTRY: Upon reasonable notice to Tenant (or
without notice if an emergency exists) and in a manner that minimizes disruption
to Tenant and its business, Landlord and its agents shall have the right to
enter the Premises during ordinary business hours for the purpose of inspecting
the Premises, making repairs, or showing the Premises to prospective purchasers,
lenders or for other reasonable purposes. An emergency
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exists if material damage would be caused to the Premises if immediate action
was not taken. Within one hundred eighty (180) days prior to the expiration of
the Lease term, Landlord and its agents shall have the right to erect usual
signs advertising the property for lease and shall have the right to enter the
Premises upon reasonable notice during ordinary business hours for the purpose
of showing the Premises to prospective tenants.
17. UTILITY AND WASTE REMOVAL SERVICES: Tenant shall directly pay costs
of all utilities which are separately metered to the Premises and shall further
pay for refuse disposal contracted for by Tenant in its own right. Landlord
warrants and represents that all such utilities shall be separately metered.
18. ASSIGNMENT AND SUBLEASING: This Lease may not be assigned nor may
all or any part of the Premises be sublet by Tenant without Landlord's prior
written consent which consent shall not be unreasonably withheld; except,
however, that no consent shall be needed for an assignment or subletting to any
parent, subsidiary or affiliate of (including, by way of example, an entity with
a common parent), or related entity to, Tenant. In no event shall any assignment
or sublease relieve Tenant from its obligations to Landlord for the full
performance of all of the terms, conditions and covenants of this Lease.
19. DAMAGE BY CASUALTY: If the Premises or the Building are damaged or
partially destroyed by fire or other casualty to the extent of one-half (1/2) or
less of the then cost of replacement above the foundation, the same shall as
soon as practicable be promptly repaired by Landlord except that the obligation
of Landlord to rebuild shall not include any obligation to rebuild those
portions of the Premises installed or added by Tenant. If the Premises or the
Building is destroyed or damaged to the extent of greater than one-half (1/2) of
the then replacement cost, either Landlord, with the approval of its mortgagee,
or Tenant may elect to terminate this Lease by giving notice in writing to the
other party terminating this Lease given within sixty (60) days of such damage
or destruction, in which event, this Lease shall be terminated as of the date of
such notice. If neither party provides such notice, Landlord shall promptly
commence and diligently pursue to completion any repair or restoration needed as
a result of such fire or other casualty.
If Landlord shall proceed to repair or rebuild the Premises, it shall
initiate and pursue the necessary work with reasonable dispatch in the manner
consistent with sound construction methods. Tenant agrees to promptly cooperate
with Landlord so as to not delay the progress of such repair and restoration.
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If the damage or partial destruction to the Building or Premises shall,
in the opinion of Tenant, render the Premises wholly untenantable, then rent
shall xxxxx until the Premises shall have been restored and are rendered
tenantable. If such damage or partial destruction renders the Premises
untenantable only in part, the rent shall xxxxx proportionately as to the
portion of the Premises rendered untenantable.
Notwithstanding the foregoing, if damage exceeding one-half (1/2) of the
replacement cost above foundation has been incurred, Landlord may at its option
terminate this Lease in the event insurance proceeds are not available to cover
all or substantially all of the estimated cost of repair. Landlord shall
exercise this option by written notice to Tenant within thirty (30) days after
the fire or casualty causing such loss, damage or destruction, which notice
shall be effective as of the date of such fire or casualty.
20. CONDEMNATION: If the whole or any part of the Premises is taken by
the exercise of the power of eminent domain so as to render the Premises
unsuitable for business in the reasonable opinion of Tenant or Landlord, then
the term of this Lease shall terminate as of the date possession is taken by the
condemnor. In the event of a partial taking or condemnation which is not
extensive enough to render the Premises unsuitable for business in the
reasonable opinion of Tenant or Landlord, then Landlord shall promptly restore
the Premises to a condition comparable to its condition at the time of such
condemnation less the portion lost in the taking and this Lease shall continue
in full force and effect and the rent shall be reduced in the proportion that
the part of the Premises which is taken bears to the original area of the
Premises. Notwithstanding the foregoing, in no event shall Landlord be required
to expend more than the amount of any condemnation award it receives to restore
the Premises after a taking or condemnation. Each party agrees to notify the
other of a threatened condemnation promptly upon becoming aware of it.
In the event of any condemnation or taking whether whole or partial, the
Tenant shall not, except as provided in the next sentence, be entitled to any
part of the award paid for such condemnation and Landlord is to receive the full
amount of such award. Provided, however, the Tenant shall have the right to
claim and recover from the condemning authority, but not from Landlord, such
compensation as may be separately awarded or recoverable by Tenant in Tenant's
own right on account of any and all damage to Tenant's business by reason of the
condemnation (including, without limitation, any award for business relocation)
and for or on account of any loss or cost to which Tenant might be put in
removing or replacing Tenant's merchandise, furniture, fixtures, leasehold
improvements or equipment.
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Landlord shall not be liable to Tenant for any damages Tenant may suffer
as a result of any condemnation or taking, including without limitation the
value of the unexpired lease term with respect to all or such part of the
Premises affected by the taking or condemnation.
21. DEFAULT:
A. The following are events of default by Tenant under this Lease:
i. Tenant shall fail to pay any rent when due and shall fail to
pay the delinquent rent within ten (10) days after written notice of
such failure shall have been given by Landlord;
ii. Tenant shall fail to conform or comply with any of the
terms, covenants or conditions of this Lease other than for payment of
rent and shall not cure such failure within thirty (30) days after
written notice thereof to Tenant provided, however, that the Tenant
shall not be in default after such thirty (30) day period if it has used
and is continuing to use reasonable diligence to cure such failure of
compliance;
iii. Tenant shall become insolvent, shall make a transfer in
fraud of creditors or shall make an assignment for benefit of creditors
or shall have a receiver or trustee appointed for all or substantially
all of its assets;
iv. Tenant shall be adjudged bankrupt or insolvent in
involuntary proceedings instituted against Tenant under any bankruptcy
act;
v. Tenant shall vacate or abandon all or substantially all of
the Premises.
Upon the occurrence of any such event of default, Landlord shall
have the option to pursue one or more of its remedies pursuant to law or
pursuant to this Lease without further notice or demand including, but
not limited to the following:
(1) Landlord may without terminating this Lease expel Tenant
from the Premises, enter upon and take possession of the Premises
and expel Tenant or any other person who may be occupying such
Premises therefrom, all without prejudice to any other remedies
which Landlord may have for possession or for the recovery of
past due rent and rent accruing under the Lease. Landlord shall
not be liable for damages or otherwise by reason of such
re-entry. Notwithstanding such re-entry or expulsion of Tenant,
the liability of Tenant for rent shall not be extinguished for
the balance of the remaining Primary Term or applicable Option
Term, as the case may be, if Tenant has exercised its option to
extend. Landlord shall be entitled to recover the same subject to
Landlord's obligations to mitigate damages as provided by law.
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(2) To recover reasonable attorney's fees incurred by
Landlord in connection with Tenant's default.
(3) To relet the Premises applying such rents from reletting
first to the costs and expenses incurred by Landlord in reletting
including brokerage fees, attorney's fees and costs of
alterations and repairs and, second, to other obligations due
Landlord from Tenant prior to application of any portion of the
rent to offset the future rent which will become due from Tenant
to Landlord under this Lease.
(4) To terminate the Lease and to recover from Tenant all
damages Landlord may incur by reason of the termination of the
Lease including the cost of recovering the Premises, reasonable
attorney's fees and the worth at the time of such termination of
the excess, if any, of the rent and charges equivalent to rent
reserved in this Lease for the remainder of the Primary Term, or
the applicable Option Term if Tenant has exercised its option to
extend, over the then reasonable rental value of the Premises for
the remainder of the stated term, all of which amounts shall be
immediately due and payable from Tenant to Landlord.
(5) In lieu of Landlord's other remedies, Landlord may elect
to remedy any default of Tenant which remains uncured beyond any
applicable notice and grace period, in which case the cost of
remedying such default including reasonable attorney's fees shall
be deemed to be additional rent hereunder and shall be due from
Tenant to Landlord with interest thereon at the rate of twelve
percent (12%) per annum from the date of payment by the Landlord
thereof.
B. Landlord covenants and agrees to promptly comply with all of its
obligations under this Lease. If Landlord fails to do so, Tenant may pursue all
of its legal rights and remedies and shall be entitled to recover all costs and
expenses, including attorneys' fees, it incurs in enforcing Landlord's
obligations hereunder. In addition, if Landlord fails to timely perform any of
its obligations hereunder, Tenant shall notify Landlord of the default and if
Landlord does not cure the default within thirty (30) days of the notice (or
five (5) days if such default disrupts Tenant's business), Tenant may cure the
default. The foregoing rights of Tenant are in addition to those set forth above
regarding Tenant's right to take over construction from Landlord.
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22. WAIVER OF DEFAULT: No waiver by the parties hereto of any default or
breach of any term, condition, or covenant of this Lease shall be deemed to be a
waiver of any subsequent or breach of the same or any other term, condition or
covenant contained herein.
23. FORCE MAJEURE: Landlord shall not be required to perform any term,
condition, or covenant in this Lease so long as such performance is delayed or
prevented by force majeure, which shall mean Acts of God, strikes, lockouts,
material or labor shortages, restrictions by any governmental authority, civil
riot, floods, and other cause not reasonably within Landlord's control and which
by the exercise of due diligence Landlord is unable, wholly or in part, to
prevent or overcome.
24. EXHIBITS: All exhibits, attachments, annexed instruments and addenda
referred to herein shall be considered a part hereof for all purposes with the
same force and effect as if copied at full length herein.
25. ENVIRONMENTAL LAWS: Except as provided in the immediately succeeding
sentence, Landlord makes no representation with respect to the Premises' past,
present or future compliance with Environmental Laws, which for purposes of this
Agreement shall mean all federal, state and local laws including statutes,
regulations, ordinances, codes, rules and other governmental restrictions and
requirements relating to the discharge of air pollutants, water pollutants or
process waste water or otherwise relating to the environment or hazardous
substances including, but not limited to, the Federal Solid Waste Disposal Act,
the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976, the Federal Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, regulations of the
Environmental Protection Agency, regulations of the Nuclear Regulatory Agency,
and regulations of any state department of natural resources or state
environmental protection agency now or at any time hereafter in effect. Landlord
represents that no substance has been or will be introduced to the Premises by
Landlord which is in a form, quantity or manner which if known to be present,
on, under, in or about the property would require clean up, removal or some
other remedial action under any applicable Environmental Laws. Tenant agrees
that, during its tenancy, it will neither cause nor allow any substance to be
present, used, stored, deposited, treated, recycled or disposed of, on, under,
in or about the Premises, in a form, quantity or manner which if known to be
present on, under, in or about the property would require clean up, removal or
some other remedial action under applicable Environmental Laws. All such
hazardous substances shall be handled in accordance with applicable laws and/or
Environmental Laws.
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26. USE OF LANGUAGE: Words of any gender used in the Lease shall be held
and construed to include any other gender, and words in the singular shall be
held to include the plural, unless the context otherwise requires.
27. CAPTIONS: The captions or headings of paragraphs in this Lease are
inserted for convenience only, and shall not be considered in construing the
provisions hereof if any question of intent shall arise.
28. SUCCESSORS: The terms, conditions and covenants contained in this
Lease shall apply and inure to the benefit of, and be binding upon, the parties
hereto and their respective successors in interest and legal representatives
except as otherwise herein expressly provided. All rights, powers, privileges,
immunities and duties of Landlord under this Lease including but not limited to
any notices required or permitted to be delivered by Landlord to Tenant
hereunder may, at Landlord's option, be exercised or performed by Landlord's
agent or attorney.
29. LANDLORD TRANSFER OF INTEREST: In the event of a complete transfer
of Landlord's title or interest in the Premises in an arm's length transaction
which occurs after completion of the Landlord's Improvements, Landlord (or the
grantor of a subsequent transfer) shall be relieved of all liability related to
Landlord's obligations after transfer provided that Landlord's transferee has
agreed in writing to be bound to the terms of this Lease and provided further
that Landlord (or its successor, as the case may be) shall have furnished Tenant
with documentation of such transfer within ten (10) days of the transfer which
shall identify the new landlord and state that the new landlord has agreed in
writing to be bound to the terms of this Lease and provided further that
Landlord (or its successor, as the case may be) shall have transferred the
entire security deposit to the new landlord, who shall then be liable therefor.
30. COMPLETE AGREEMENT: This Lease contains the entire agreement of the
parties and shall not be modified except by an instrument in writing which is
signed by both parties.
31. AUTHORIZATIONS AND REPRESENTATIONS: Each party hereby severally
represents that it has been duly authorized to execute and deliver and perform
this Agreement through its members, officers or agents signing on its behalf and
affixing any appropriate seal hereto.
32. BINDING EFFECT: This Agreement shall be binding upon, and inure to
the benefit of, the parties and their successors, legal representatives and
assigns.
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33. CONSENT: Whenever the consent or approval of the Landlord is
required under this Lease, such consent shall not be unreasonably withheld or
delayed.
34. 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.
35. CUMULATIVE REMEDIES: No remedy or election hereunder shall be
deemed exclusive but shall, whenever possible, be cumulative with all other
remedies at law or in equity.
36. COVENANTS AND CONDITIONS: Each provision of this Lease
performable by either party shall be deemed both a covenant and a condition.
37. NOTICES: Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered (a) upon personal delivery
or (b) three (3) business days after deposit in the United States mail, postage
prepaid, registered or certified mail, return receipt requested, or (c) the next
business day after deposit with a nationally-recognized overnight courier
service, addressed to the parties hereto at the respective addresses set
opposite their names below, or at such other address as they have theretofore
specified by written notice delivered in accordance herewith.
38. TENANT'S PURCHASE RIGHTS:
A. If not then in default hereunder and if this Lease remains
in full force and effect, the Tenant or its assigns shall have
the option to purchase ("Option") the Premises pursuant to the
terms and provisions hereof for a purchase price equal to ten
(10) times the amount of rent (as provided in Sections 1, 2 and
3, above) paid during the lease year in which the Option is
exercised.
B. This Option may be exercised by Tenant at any time
commencing on day one (1) of the first Option Term and continuing
through the expiration of the term of this Lease, provided Tenant
is not then in default and this Lease remains in full force and
effect, upon not less than ninety (90) days prior written notice.
If not exercised as provided herein, this Option shall
automatically expire upon expiration of the Lease term. This
Option shall be exercised as to the Premises by the delivery or
mailing of written notice of such exercise ("Option Notice") by
Tenant to Landlord at the address contained in Section 37 hereof,
which will provide for a closing no later than ninety (90) days
after the date of the Option Notice. Notwithstanding the
foregoing language requiring that the closing be held upon not
less than ninety (90) days prior written notice, Tenant, at its
election and upon written notice to Landlord, may require the
closing of the
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purchase to take place at any time not less than thirty (30) days
after the Option is exercised.
C. Within ten (10) business days after an Option Notice is
served as provided herein, Landlord shall obtain and provide to
Tenant evidence of title to the Premises in the form of a title
insurance binder ("Commitment") issued by a title insurance
company licensed to issue policies in the State of Wisconsin,
agreeing to issue to Tenant, upon the recording of the Warranty
Deed to the Premises, its standard title insurance policy in the
amount of the purchase price, insuring the interest of Tenant to
the Premises conveyed, free and clear of all liens and
encumbrances except any created by or under the Tenant, municipal
and zoning ordinances, easements, covenants and restrictions of
record, and net general real estate taxes and assessments. The
cost of such title insurance shall be paid by Landlord. If Tenant
objects to any title matters, it shall so notify Landlord in
writing within ten (10) business days after receipt of the
Commitment, and Landlord shall attempt to have such title defect
removed. If Landlord is unable to do so, Landlord shall so notify
Tenant, and Tenant shall, within ten (10) business days after
such notice, have the right to terminate the exercise of the
Option. If Tenant fails to do so, it shall accept title with such
defect(s) which will then be included as an exception to warranty
in the deed.
D. At closing, Landlord shall execute a Warranty Deed conveying
the Premises to Tenant subject only to the title exceptions
listed above and such other customary documents as may be
requested by either party or their counsel. Net general real
estate taxes for the year of closing, water and sewer use charges
and other customarily prorated or adjusted items will not be
prorated and adjusted but shall be the responsibility of the
Tenant. Landlord shall pay the transfer fees. Notwithstanding the
foregoing, any prepaid real estate taxes or special assessments
being held by Landlord shall be returned to Tenant at closing
along with the security deposit.
39. WAIVER AND INDEMNITY: Except for Landlord's negligence or willful
misconduct, Landlord shall not be liable for injury or damage to the person or
property of Tenant, Tenant's employees, contractors, invitees, customers or any
other person in or about the Premises from any cause whatsoever, and Landlord
shall not, in the absence of Landlord's negligence or willful misconduct, be
liable for injury to Tenant's business or for any loss of
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income or profit therefrom. Tenant agrees to protect, indemnify and save
harmless Landlord from and against any injury to or death of persons or loss of
or damage to property, including without limitation, the person and property of
Tenant, its agents, employees and invitees, (i) occurring on the Leased Premises
or on the adjoining sidewalks, streets, alleys or ways, or (ii) in any manner
directly or indirectly arising out of or in connection with the use and
occupancy, or disuse, of the Leased Premises, any part thereof, or any
improvement now or hereafter located thereon, by Tenant or any person holding
under Tenant, unless the same results from Landlord's negligence or willful
misconduct. Subject to the foregoing limitations on Landlord's liability, each
party agrees to protect, indemnify and save the other harmless from and against
any and all penalties, charges, claims, losses, damages, expenses, liabilities,
demands and causes of action, and any reasonable expenses (including attorneys'
fees) incidental to the defense thereof incurred by the indemnified party,
arising out of or resulting from any failure of the indemnifying party, in any
respect, to comply with and perform all of the requirements and provisions of
this Lease as imposed on it pursuant to the terms hereof. If the indemnified
party believes it is entitled to indemnification hereunder, it shall so notify
the indemnifying party with such notice identifying the claim as to which
indemnification is being requested. The indemnifying party shall, within ten
(10) business days after being sent such notice, either accept the defense of
that matter, providing the name of counsel being retained to provide such
defense, or decline to accept such defense. If the indemnifying party either (a)
declines to accept such defense; or (b) suggests counsel to defend unacceptable
to the indemnified party, the indemnified party may then retain its own attorney
and shall be entitled to recover its attorneys' fees if it should be determined
that either (i) the indemnifying party was obligated to defend and did not
accept such defense; or (ii) the indemnifying party accepted such defense but
proposed counsel to defend such matter that the indemnified party reasonably
objected to.
40. QUIET ENJOYMENT: Tenant shall, throughout the entire Lease term,
have exclusive use and quiet enjoyment of the Premises. Landlord agrees to
provide Tenant within reasonable time after execution of this Lease any
underlying Lender's agreement to not disturb Tenant's rights under this Lease
Agreement unless Tenant is in default under this Lease beyond any applicable
notice and grace period.
41. ENFORCEMENT COSTS: The defaulting party shall pay all reasonable
costs, attorneys' fees and expenses that may be incurred by the non-defaulting
party in enforcing the provisions of this Lease.
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42. SURRENDER AT TERMINATION: At the termination of this Lease for
any reason, Tenant shall quietly and peaceably surrender possession of the
Premises (and any improvements located thereon) to Landlord, maintained as
herein provided and free of any and all claims thereto by Tenant or any party
holding under Tenant.
43. HOLDING OVER BY TENANT: In the absence of an earlier default by
Tenant and termination of this Lease by Landlord, in which event Section 21
hereof shall govern, if Tenant holds over or remains in possession or occupancy
of the Premises after the expiration of the term of this Lease, such holding
over or continued possession or occupancy, if rent is paid by Tenant and
accepted by Landlord for or during any period of time it so holds over or
remains in possession or occupancy, shall create only a tenancy from month to
month at one and one-half (1-1/2) times the last monthly rental and upon the
same terms and conditions herein contained (other than the length of term),
which may at any time be terminated by either Landlord or Tenant giving to the
other twenty-eight (28) days' written notice.
44. PAYMENTS TO BE ADDITIONAL RENT: All payments to be made by Tenant
hereunder, whether or not designated as rent, shall be deemed additional rent
(but not for purposes of Tenant's Option to Purchase), so that in the event of
any failure by Tenant to make timely payment hereunder, Landlord shall be
entitled to all of the remedies available at law or equity, or under this Lease,
for the nonpayment of rent.
45. SUBORDINATION:
(a) At Landlord's option, this Lease shall be and is
subordinated to any existing mortgages covering the Premises, any extension or
renewal thereof, or to any new mortgages which may be placed thereon from time
to time; provided, however, anything to the contrary contained herein
notwithstanding, every such mortgage shall recognize the validity of this Lease
in the event of a foreclosure of Landlord's interest as long as Tenant shall not
be in default under any of the terms of this Lease beyond any applicable notice
and grace period. Tenant shall execute whatever instruments may be required to
effect such subordination so long as it does not obligate Tenant for provisions
other than those contained in this Lease and so long as it contains the
aforesaid non-disturbance provisions.
(b) In the event any mortgagee shall elect to have this Lease
prior to the lien of its mortgage then, upon notice to Tenant thereof, this
Lease shall thereupon be deemed prior to the lien of any such mortgage. The
provisions of this Article shall include Deeds of Trust and similar security
instruments.
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46. ESTOPPEL CERTIFICATES: Each party shall, without charge, at any
time and from time to time hereafter, within ten (10) days after receipt of
written request from the other, certify by written instrument duly executed and
acknowledged to any mortgagee or purchaser (or proposed mortgagee or proposed
purchaser) of the Premises, or any other person, firm, or corporation specified
in such request: (a) as to whether this Lease has been supplemented or amended,
and if so, the substance and manner of such supplement or amendment; (b) as to
the validity and force and effect of this Lease in accordance with its tenor as
then constituted; (c) as to the existence of any default thereunder, and if
there are any defaults, specifying same in detail; (d) as to the existence of
any offsets, counterclaims or defense thereto; (e) as to the commencement and
expiration dates of the term of this Lease; and (f) as to any other matters as
may reasonably be so requested. Any such certificate may be relied upon by the
party requesting it and any other person, firm or corporation to whom the same
may be exhibited or delivered, and the contents of such certificate shall be
binding on the party who completed such certificate.
47. INTEREST: All rent and other payments to be made by Tenant to
Landlord hereunder shall bear interest from and after the due date thereof at
the rate of twelve percent (12%) per year.
48. BROKER'S FEES: Each of Landlord and Tenant warrants and
represents to the other that, except as disclosed in this Section 48, it has had
no dealings with any person, firm, broker or finder in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that except as disclosed herein, no commission or
finder's fee is due any person or entity in connection with said transaction.
Landlord and Tenant hereby agree to indemnify, protect, defend and hold the
other harmless from and against any liability for compensation or charges which
may be claimed by any person or entity purporting to have acted on behalf of
Landlord or Tenant, as appropriate, in connection with said transaction with
Landlord acknowledging that Xxxxxxxxx Company has worked for it in connection
with this transaction and that Landlord will be responsible for payment of any
commissions or fees due Xxxxxxxxx Company.
49. TIME OF ESSENCE: Time is of the essence with respect to the
performance of all obligations to the performed or observed by the parties to
this Lease.
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IN WITNESS WHEREOF the parties have executed this Lease as of the date
and year first written above.
Landlord: Xxxx Xxxxxxxxxx LLC
0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
By: /s/ Xxxx Xxxxxxxxxx (SEAL)
---------------------------------------
Member
---------------------------------------
(Title)
Date: April 7, 1998
-------------------
Tenant: Xxxxxxx, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxx, XX 00000
By: /s/ X. XxXxxx (SEAL)
----------------------------------------
Vice President - Finance
----------------------------------------
(Title)
Date: April 7, 1998
---------------
The undersigned hereby joins in this Lease Agreement to guarantee Tenant's
obligations hereunder.
Guarantor: Spacelabs Medical, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxx, XX 00000
By: /s/ Xxxxxx X. XxXxxxxx (SEAL)
---------------------------------------
Vice President, General Counsel and Secretary
---------------------------------------------
(Title)
Date: April 6, 1998
---------------
Exhibits Attached:
------------------
Exhibit "1": Legal Description
Exhibit "2": Site Plan
Exhibit "3": Topographical Site Plan, Foundation Plan, Floor Plan & Elevations
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