EXHIBIT 10.4
LEASE AGREEMENT WITH CITY CENTRE, LLC
LEASE FOR INDUSTRIAL/MANUFACTURING SPACE
THIS INDENTURE OF LEASE made and entered into this 1st day of January,
2005 by and between CITY CENTRE, L.L.C., a Wisconsin limited liability company,
party of the first part, and hereinafter referred to as "City Centre" or
"Landlord," and TOWER TECH SYSTEMS, INC., a Wisconsin corporation, party of the
second part, and hereinafter referred to as "Tenant."
WITNESSETH:
Landlord, for and in consideration of the covenants and agreements
hereinafter set forth to be kept and performed by the Tenant, demises and leases
unto the Tenant, and the Tenant does hereby hire and rent from the Landlord, the
premises hereinafter described, for the period, at the rental, and upon the
terms and conditions hereinafter specifically set forth.
1. DESCRIPTION OF PREMISES. The demised premises is situated at 000 X.
00xx Xxxxxx, in the City of Manitowoc, Wisconsin, said manufacturing facility
known as Xxxxxxxxx #000, #000, #000, #000, #000, #000, #000, and #218 having an
area of approximately 138,186 square feet, together with right of ingress and
egress to and from said buildings, the right in common with other tenants of
said building to the use of the common areas of the building. Tenant shall also
have the right to use and occupy an area adjacent to the #000 X. 00xx Xxxxxx
complex for employee parking (not greater than sixty (60) cars.) Said premises
are sometimes referred to herein as "demised premises".
2. TERM OF LEASE. The original term of this lease shall commence on
January 1, 2005, and end at midnight on December 31, 2009. The tenant is granted
five (5) options to renew this lease. Each option is for five (5) years
beginning at the end of the lease period just ended. The tenant must give a six
(6) month written notice prior to the end of any lease period stating that the
tenant wishes to exercise the next option period. The rent during any option
period shall be the base rent ($33,319.83) per month times the increase in the
rate of inflation based on the Consumers Price Index (CPI) for each year past.
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3. RENTAL. The Tenant shall pay to the Landlord at 000 Xxxxxxxx Xxxxx,
Xxxxx 0 Xxxxxxxxx, Xxxxxxxxx, 00000, or at such other place as the Landlord
shall from time to time designate in writing, rental computed as follows:
(a) DURING THE FIRST LEASE YEAR.
Building: Square Footage $ per sq ft. Effective Date
# 231 - 36,000 $ 3.00 Jan. 1, 2005
# 232 - 25,200 " " "
# 233 - 13,500 " " "
# 234 - 6,880 " " "
# 217 - 19,720 " " "
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Sub-Total 101,300
# 202 25,110 $ 3.00 Aug. 1, 2005
# 207/218 11,776 $ 1.75 Aug. 1, 2005
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Total 138,186
The Accrued Rent per month from January 1, 2005 through July 31, 2005 amounts to
$25,325.00 per month or a total of $177,275. Effective August 1, 2005 the rent
will be $33,319.83 or annually $399,837.99. This annual rent is a base year rent
which includes 100% of the base year Real Estate taxes and building insurance
(2004). This annual rent is based on the production of 100 Towers each year.
City Centre LLC will receive an additional $ 3,800.00 per tower for towers #101
through #150 produced each fiscal year of the Lease. During any option for
renewal period, the $3,800.00 per tower for the additional towers will be
increased by the Consumer Price Index (CPI) for each year of the previous five
(5) year period--just as same as the base rent is adjusted.
(b) ADDITIONAL RENT. Any other obligations of the Tenant contained
herein shall be considered additional rent and shall be paid as the same becomes
due.
(c) PENALTY FOR LATE RENT. Should Tenant pay rent later than the
seventh (7th) day of any month during the term of this lease, the Tenant agrees
to pay a late fee of One Hundred Dollars ($100.00) per day.
4. USE OF PREMISES. The demised premises shall be used by the Tenant
for the manufacturing of heavy industrial weldments.
5. OBLIGATIONS OF LANDLORD.
(a) MAINTENANCE AND REPAIR. Landlord, at its expense, shall maintain
the roof of the building and outside walls in good condition of repair and
maintenance, and shall keep and maintain the
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exterior of said building and the common areas in good, sightly, and reasonably
attractive condition as they are currently in. Provided, however, that the
Landlord shall not be obligated and the Tenant shall be obligated to make any
repairs made necessary by the fault or negligence of the Tenant, its employees,
clients, or invitees, unless such repairs are covered by the Landlord's or
Tenant's insurance contracts, in which case the Tenant shall only be responsible
for the costs of repair in excess of the proceeds of the Landlord's or Tenant's
insurance contract.
(b) GUARANTEE OF TENANT'S PEACEFUL POSSESSION. If and while the
Tenant shall and does perform all and singular the covenants herein agreed to be
performed by the Tenant, the Landlord shall and does hereby warrant and defend
the Tenant in the enjoyment and peaceful possession of said premises during the
term of this lease or any renewal thereof.
(c) INSURANCE COVERAGE. During the term of this lease or any
renewal thereof, the Landlord shall procure and maintain, at its expense, fire
insurance with extended coverage endorsement, and with such co-insurance clause
as the Landlord may determine covering the demised premises, and in an amount in
Landlord's sole discretion covers Landlord's investment in said building.
Provided, however, that the Landlord shall not be obligated to insure the
fixtures furnished and other equipment installed in the premises by the Tenant
and/or owned by the Tenant. The Landlord shall carry adequate public liability
insurance covering its ownership of said premises, and shall carry adequate
public liability insurance covering said building, parking lot, sidewalks, and
other common areas.
(d) REAL PROPERTY TAXES. Year 2004 Real Estate Taxes (ending
12/31/04) shall be considered the "Base Year Taxes". Landlord will pay that
portion of Tenant's real estate tax liability each year. Each subsequent year,
Tenant shall pay twenty three and .12 (23.12%) per cent of any increase over the
base year real estate taxes and special improvement taxes assessed or levied.
Said payment is
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due within thirty (30) days of receipt of said xxxx against the entire property
known as the City Centre Peninsula and Wollmer Street property.
(e) REMOVAL OF SNOW. Tenant, at its expense, shall keep the
sidewalks, doorways, loading and parking area, and any material storage areas
reasonably free of ice and snow.
6. OBLIGATIONS OF TENANT.
(a) PAYMENT OF RENTALS. The Tenant shall pay at the time and in the
manner heretofore specified the rents herein reserved and such rental shall be
payable at 000 Xxxxxxxx Xxxxx, Xxxxx 0, Xxxxxxxxx, Xxxxxxxxx, 00000, or at such
other place as the Landlord shall from time to time designate in writing.
(b) HEATING, COOLING & ELECTRICAL. The Tenant shall provide, install
and maintain the necessary facilities and equipment to provide heating and
cooling for the demised premises as Tenant deems necessary. The Tenant shall pay
for all energy costs for heating and cooling the demised premises. Tenant shall
also provide and maintain the necessary electrical facilities and services as
required by Tenant's business at Tenant's expense.
(c) UTILITIES. The Tenant shall pay for all electric power, sewer,
and water consumed upon the demised premises for any purpose whatsoever.
Separate electric meters shall be installed by the Tenant so as to accurately
meter electric current consumed on the demised premises. Tenant shall be
obligated to install, maintain and replace all required lighting fixtures and
bulbs.
(d) INTERIOR DECORATING. Tenant, at its expense, shall keep the
demised premises clean and neat and in a reasonably attractive condition. All
decorations of the demised premises other than the original decorations shall be
at the Tenant's expense. Tenant may also renovate the exterior of the premises
with the permission of the Landlord.
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(e) MAINTENANCE OF INTERIOR. Tenant, at its expense, shall maintain
the interior of the premises, including all walls, floors, ceilings, hallways
and bathrooms. Tenant shall keep said demised premises neat, clean and orderly,
providing the staff necessary to keep the premises in the condition required in
this lease.
(f) PERSONAL PROPERTY TAXES. Tenant shall, at its expense, pay all
personal property taxes when said taxes are due.
(g) ADDITIONAL OUTSIDE AREAS. All other outside areas utilized by
enant shall be maintained by Tenant throughout the term of this lease.
(g.1) CRANES. Tenant shall have the obligation to repair and
maintain the five (5) overhead cranes in the premises at Tenant's cost. Tenant
will keep both cranes in good operating condition throughout the term of this
lease and the same will be in good operating condition on the last day of this
lease.
(h) SIGNS. Tenant shall have the right to erect a sign on the
exterior portion of the building, and also a small sign in the lobby or common
area of the building, provided, however, that any such sign and its location
shall first be approved by Landlord prior to installation.
(i) SURRENDER POSSESSION ON TERMINATION OF LEASE. Tenant, upon
termination of this lease, in any manner, will surrender to Landlord possession
of the demised premises in good condition and repair, ordinary wear and tear
excepted, and loss through fire and other insurable risk excepted, and will
deliver up the keys to the Landlord. Should Tenant holdover with or without
Landlord's consent, this lease shall continue under the same terms and
conditions contained herein, but shall become a month-to-month tenancy.
(j) USE OF PREMISES. Tenant shall not allow said premises to be
used for any purpose that will increase the rate of insurance thereon, nor for
any purpose other than that of preparation of and distribution of steel
products, nor shall Tenant permit said premises to be used for any unlawful or
immoral purposes or for any purpose that will injure the reputation of the
premises, and Tenant will not use or keep
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in or about the premises any article or item which would in any way affect the
validity of the standard fire insurance policy of the State of Wisconsin.
(k) ALTERATIONS. Tenant shall not permit any alterations of or upon
any part of the demised premises except with the written consent of Landlord,
which consent shall not unreasonably be withheld. All alterations and additions
to the demised premises made by Tenant shall remain for the benefit of Landlord,
unless otherwise provided in said consent.
(l) PERMIT NO MECHANIC'S LIENS. Tenant shall promptly pay for any
work done in or about the premises contracted by him, and will not permit or
suffer any mechanic's liens to attach to the premises as a result thereof, and
shall promptly cause any claim for any such lien to be released, or to secure
the Landlord to its satisfaction in the event the Tenant desires to contest any
such claim.
(m) LANDLORD'S ACCESS. The Tenant shall allow the Landlord or his
agents or employees access to the demised premises at all reasonable times, and
in the event of an emergency for the purpose of examining the premises or to
make any needful repairs or alterations of the demised premises. During the last
six (6) months of the term of this lease or any renewal term, the Landlord may
show the demised premises to prospective tenants, provided such showing does not
unreasonably interfere with the Tenant's use of the demised premises. Landlord
shall, as an accommodation to other Tenants, have unlimited access to all
systems for maintenance, alterations and improvements thereto.
(n) TERMINATION ON BANKRUPTCY. If the Tenant shall be adjudged
bankrupt, or if a judgment is rendered against the Tenant in such an amount as
to render Tenant insolvent and incapable of meeting the obligations hereunder,
and such judgment or order is not appealed from, or if the Tenant shall make an
assignment for the benefit of creditors, or a receiver shall be appointed for
him by a court of competent jurisdiction and said order appointing receiver is
not appealed from by the Tenant, this lease shall immediately terminate, and the
Landlord shall have the right to recover the premises. Provided, however, if in
any of such events Tenant is not in default under the terms of this lease, the
Landlord may not terminate this lease and may not recover the premises.
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(o) TENANT'S INSURANCE. The Tenant agrees to carry and pay the
premiums for public liability insurance, insuring itself and the Landlord
against injury to property, person, or loss of life arising out of the use and
occupancy of the demised premises, with limits of at least $500,000 property
damage, $2,000,000 for one person, and $6,000,000 for any number of persons
injured or killed in any one accident, and shall furnish to the Landlord as may
be requested from time to time, a certificate of said insurance. Such policies
of insurance must be written with insurance carriers approved by Landlord (said
approval not to be unreasonably withheld) and shall not be canceled,
discontinued, or altered without ten (10) days' written notice to the Landlord.
Such policies of insurance shall consent to the waiver of subrogation
hereinabove set forth.
(p) HAZARDOUS SUBSTANCES - REPORTABLE USES.
(1) HAZARDOUS SUBSTANCES. Defined: "Hazardous Substances"
means any material or substance; (i) defined as a "hazardous substance" pursuant
to the Comprehensive Environmental response. Compensation and Liability Act (42
U.S.C. Section 9601 et seq.) and amendments thereto and regulations promulgated
thereunder, to the extent such amendments and regulations are in effect on the
Execution Date, (ii) containing gasoline, oil, diesel fuel or other petroleum
products, (iii) defined as a "hazardous waste" pursuant to the Federal Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) and amendments
thereto and regulations promulgated thereunder, to the extent such amendments
and regulations are in effect on the Execution Date, (iv) containing
polychlorinated byphenyles (PCB's); (v) containing asbestos; (vi) radioactive;
(vii) biologically dangerous, or (viii) the presence of which requires
investigation, reporting or remediation under any federal, state or local
statute, regulation, ordinance or policy or which is defined as a "hazardous
waste" or "hazardous substance") under any federal, state or local statute,
regulation or ordinance in effect on the Execution Date, and any toxic,
explosive, corrosive or otherwise hazardous substance, material or waste, which
is regulated by any federal, state or local governmental authority.
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(2) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous
Substance" as used in this lease shall mean in addition to those items stated
above in Paragraph 6(p)(1), any product, substance, chemical, material or waste
whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release, or effect, either by
itself or in combination with other materials expected to be on the premises is
either (i) potentially injurous to the public health, safety or welfare, the
environmental or the premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express written consent of Lessor (consent not to be unreasonably withheld) and
compliance in a timely manner (at Lessee's sole cost and expense) with all
applicable law.
(3) INDEMNIFICATION. Lessee shall indemnify, protect, defend
and hold Lessor, its agents, employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all loss of rents and/or
damages, liabilities, judgments, costs, claims, liens, expenses, penalties,
permits and attorney's and consultant's fees arising out of or involving any
Hazardous Substance or storage container brought onto the Premises by or for
Lessee or under Lessee's control. Lessee's obligation shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created by Lessee, and the cost of investigation (including
consultant's and attorney's fees and testing), removal, remediation, restoration
and/or abatement thereof, or of any contamination therein involved, and shall
survive the expiration of earlier termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous
Substances or storage tanks, unless specifically so agreed by Lessor in writing
at the time of such agreement.
7. GENERAL PROVISIONS.
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(a) If the building of which the demised premises are a part shall
be totally destroyed or damaged by fire, the elements, or other cause, either
party hereto shall have the option to terminate this lease by giving to the
other party written notice of termination within thirty (30) days after such
destruction. If neither party elects to terminate this lease, the Landlord shall
rebuild, reconstruct, or repair the premises as closely as reasonably possible
to their original condition. Said rebuilding, reconstruction, or repairing shall
commence immediately after proper adjustment is made by the Landlord's insurers,
and in any event, within ninety (90) days after the destruction, and shall be
completed as expeditiously as possible.
(b) If the building of which the demised premises are a part is
partially destroyed by fire, elements, or other cause partially destroyed for
purposes of this lease being defined as twenty-five percent (25%) of the
building's appraised value or less, the Landlord shall repair and rebuild the
premises as reasonably close to their original condition as possible. Such
repairing and rebuilding shall commence immediately after proper adjustment is
made upon the Landlord's insurance contracts, or in any event, within thirty
(30) days after the destruction, and shall be completed as expeditiously as
possible.
(c) If during the term of this lease or any renewal term the
demised premises shall be so damaged by fire, the elements, or other cause not
attributable to the Tenant, so as to make the demised premises completely
untenantable by the Tenant, then and in that event the rent shall completely
xxxxx until the premises have been so restored, so that the Tenant may again
occupy the same for the carrying on of his profession. If a part of the demised
premises are rendered untenantable, the rent shall be prorated on a per diem
basis and apportioned in accordance with the part of the premises which is
usable by the Tenant until the damaged part is again ready for Tenant's
occupancy.
d) In all cases, allowance shall be made for reasonable delay caused
by adjustment of insurance loss, strikes, labor difficulties or any cause beyond
Landlord's reasonable control.
8. LANDLORD'S REMEDIES. All rights and remedies of the Landlord herein
enumerated shall be cumulative and none shall exclude any other right or remedy
allowed by law, to-wit:
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(a) If the Tenant defaults in any payment of rent, and such
default continues for fifteen (15) days after Landlord's notice thereof to
Tenant, or if Tenant defaults in the prompt and full performance of any other
provision of this lease, the Landlord, at his option, may terminate this lease
and Tenant's right to possession of the demised premises. Landlord shall not be
required to provide more than two (2) written notices of default during each
"lease year" of this lease. After the cure of the second notice of default
hereunder, Tenant shall be deemed to know when Tenant is in default and no
additional notice is required. Lease year shall be defined as each period of
time falling between May 1st and April 30th during the term of this lease.
(b) Upon any termination of this lease, whether by lapse of time or
otherwise, or upon any termination of Tenant's right to possession without
termination of the lease, Tenant shall surrender possession and vacate the
premises immediately and deliver possession thereof to Landlord, and the Tenant
hereby grants to the Landlord free and full license to enter into and upon the
demised premises in any such event, with or without process of law, and to
repossess the premises, and to expel or remove Tenant or any others who may be
occupying or within the premises, and to remove any and all property therefrom,
using such force as may be necessary without being deemed guilty of trespassing,
eviction, or forcible entry or detainer, and without releasing Landlord's rights
to rent or any other right given to the Landlord by this lease or by operation
of law.
(c) If the Tenant abandons the premises or otherwise entitles
Landlord so to elect to terminate, and Landlord elects to terminate Tenant's
right to possession only, without terminating the lease, Landlord may at
Landlord's option, enter into the premises, remove Tenant's property and other
evidences of tenancy, and take and hold possession thereof without such entry
and possession terminating the lease or releasing Tenant, in whole or in part,
from Tenant's obligation to pay the rent hereunder for the full term. Upon and
after entry into possession without termination of this lease, Landlord shall
use its best effort to relet the premises or any part thereof for the account of
Tenant to any person, firm, or corporation other than Tenant for such rent, for
such time and upon such terms as
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Landlord in Landlord's sole discretion shall determine. Landlord shall not be
required to accept any tenant offered by Tenant or to observe any instructions
given by Tenant about such reletting. In any such case, Landlord may make
repairs in or to the premises and redecorate the same to the extent deemed by
Landlord necessary or desirable, and Tenant shall, upon demand, pay the cost
thereof, together with Landlord's expenses of the reletting. If the
consideration collected by Landlord upon any such reletting for Tenant's account
is not sufficient to pay monthly the full amount of the rent reserved in this
lease, together with the costs of repairs, redecorating, and Landlord's
expenses, Tenant shall pay to Landlord the amount of each monthly deficiency
upon demand; and if the consideration so collected from any such reletting is
more than sufficient to pay the full amount of the rent reserved herein,
together with the costs and expenses of Landlord, Landlord, at the end of the
stated term of the lease, shall account for the surplus to Tenant.
9. ASSIGNMENT OR SUBLETTING. The Tenant may not assign this lease, or
sublet all or any portion of the demised premises without the written consent of
the Landlord.
10. LANDLORD'S INSURER NOT SUBROGATED AGAINST TENANT. Nothing in this
lease shall be construed so as to authorize or permit the Landlord's insurer or
insurers to be subrogated to any of the Landlord's rights against the Tenant and
arising under this lease.
11. SAVE HARMLESS CLAUSE - TENANT.
The Tenant agrees that it will at all times protect, indemnify,
save, and keep harmless the Landlord against and from any and all claims arising
out of or from any accidents or other occurrences on or about the demised
premises causing injury to any person or persons or property, whomsoever or
whatsoever and due directly or indirectly to negligent use of the demised
premises or any part thereof by said Tenant, its employees, agents, or invitees.
12. EARLY TERMINATION BY LANDLORD. Landlord may, with a one hundred
twenty (120) day notice, terminate this lease with Tenant providing the Landlord
pays Tenant three (3) months rent as a termination of lease penalty. Should
there be fewer than three (3) months remaining of Tenant's
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lease upon Tenant's receipt of said sixty (60) day notice, Landlord shall be
responsible to pay Tenant only for the one or two months remaining on the lease
term.
13. LANDLORD'S RIGHT TO MORTGAGE. The Tenant's rights under this lease
are and shall always be subordinate to the lien of any mortgage or mortgages now
or hereafter placed upon the land and building of which the demised premises are
a part, and to all advances hereafter made from time to time upon the security
thereof, provided, however, that as long as the tenant is not in default under
the terms of this lease, it may continue in possession of the demised premises
under the terms of this lease. Tenant shall cooperate with the Landlord in
furnishing any information Landlord's mortgagee shall reasonably request.
14. PARTIES BOUND. Each provision hereof shall extend to and shall, as
the case might require, bind and inure to the benefit of the Landlord and Tenant
and their respective heirs, legal representatives, successors, and assigns,
provided that this lease shall not inure to the benefit of any assignee,
transferee, or successor of the Tenant except upon the written consent of the
Landlord.
15. LANDLORD'S LIABILITY FOR DAMAGES. The Landlord shall not be liable
for any damage to any property at any time stored or kept in said premises or
building from water, rain, snow or flooding which may leak, issue, or flow from
or into any part of said building, which is Landlord's responsibility to repair,
unless previous written notice shall have been given by Tenant to Landlord of
the necessity of the repairs, and Landlord has unreasonably delayed making
repairs.
16. NOTICES. Any notice required or permitted under this lease shall be
deemed sufficiently given or served if sent by registered mail to Tenant and to
Landlord at the address then fixed for the payment of rent, and either party may
by like notice at any time and from time to time, designate a different address
to which notices shall be sent. Notices given in accordance with these
provisions shall be deemed received when mailed.
17. MISCELLANEOUS. No waiver of any default by Tenant hereunder shall
be implied from any omission by Landlord to take any action on account of such
default if such default persists or is
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repeated and no express waiver shall affect any default other than the default
specified in the express waiver, and then only for the time and to the extent
therein stated. One or more waivers of any covenant, term, or condition of this
lease by Landlord shall not be construed as a waiver of a subsequent breach of
the same covenant, term, or condition. The invalidity or unenforceability of any
provision hereof shall not affect or impair any other provisions. The laws of
the State of Wisconsin shall govern the validity, performance, and enforcement
of this lease. The headings of the several paragraphs contained herein are for
convenience only and do not define, limit, or construe the contents of such
articles. The necessary grammatical changes required to make the provisions
apply to individuals, singular or plural, males or females, corporations or
partnerships, shall be in each case assumed as though in each case expressed.
18. DEFAULT OF EITHER PARTY. If either party hereto should be in
default under any provisions of this lease (except in the payment of rent as
aforesaid) the other party, prior to exercising any option arising upon such
default, and the defaulting party shall have thirty (30) days in which to remedy
such default, unless a shorter time be provided elsewhere in this lease, in
which case the shorter time shall apply; provided, however, that if any such
default cannot be remedied by the defaulting party with reasonable diligence
within said thirty (30) days, the defaulting party may have such additional time
as may, under the circumstances, be reasonably necessary to remedy such default;
provided, further, that this option shall not apply to the payment of any rent
reserved hereunto the Landlord.
19. SEVERABILITY. If any portion of this agreement shall be found to be
illegal, invalid, or have the enforcement of its terms otherwise restricted by a
court of competent jurisdiction, the remainder of this agreement shall
nevertheless remain in full force and effect.
20. AUTHORITY. All persons executing this document warrant and
represent that they have the appropriate corporate or organizational authority
required to bind the parties to this lease.
LANDLORD: TENANT:
CITY CENTRE, L.L.C. TOWER TECH SYSTEMS, INC.
By: /s/ XXXXXXXXXXX X. XXXXX By: /s/ XXXXXXX X. XXX
--------------------------------- ------------------------------------
Xxxxxxxxxxx X. Xxxxx Xxxxxxx X. Xxx
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