Exhibit 10.12
LEASE AGREEMENT
THIS LEASE is executed this 18th day of August 1998, by and between DUKE REALTY
MINNESOTA, LLC, Minnesota limited liability company (`Landlord'), and AUGUST
TECHNOLOGY CORPORATION, a Minnesota corporation (`Tenant').
WITNESSETH:
ARTICLE I - LEASE OF PREMISES
SECTION 1.01. BASIC LEASE PROVISIONS AND DEFINITIONS.
A. Leased Premises Address: 0000-00 Xxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx,
Xxxxxxxxx 00000 (the "Building"); located in Pakwa Business Center I
(the "Park,);
B.. Rentable Area: approximately 14,148 square feet;
Landlord shall use commercially reasonable standards, consistently
applied, in determining the Rentable Area and the rentable area of the
Building. The Rentable Area shall include the area within the Leased
Premises plus a pro rata portion of the area covered by the common
areas within the Building. Landlord's determination of Rentable Area
made in good faith as set forth above shall conclusively be deemed
correct for all purposes hereunder, including without limitation the
calculation of Tenant's Proportionate Share and Tenant's Minimum Annual
Rent. Landlord hereby agrees that the Rentable Area of the Building
shall not be increased or decreased by more than ten percent (10%).
C. Tenant's Proportionate Share: 37.04%;
D. Minimum Annual Rent:
08/15/98- 08/31/98 $ 4,007.07 (17 days)
09/01/98 - 08/31/00 $ 87,684.60 per year
09/01/00 - 09/30/00 $ 7,307.05 (1 month)
10/01/00 - 09/30/03 $ 90,006.84 per year;
E. Monthly Rental Installments:
08/15/98 - 08/31/98 $ 4,007.07 (17 days)
09/01/98 - 09/30/00 $ 7,307.05 per month
10/01/00 - 09/30/03 $ 7,500.57 per month;
F. Term: Five (5) years, one (1) month and seventeen (17) days;
G. Target Commencement Date: September 1, 1998;
H. Security Deposit: None;
I. Guarantor: None;
J. Broker: Duke Realty Services Limited Partnership representing Landlord;
Duke Realty Services Limited Partnership will not share the broker's
compensation with other brokers who may represent Tenant.
K. Permitted Use; Office, assembly, warehousing and distribution,
including office, design, marketing, assembly, warehousing, storage and
distribution of automated inspection equipment for the semiconductor
industry.
L. Addresses for notices:
Landlord: Duke Realty Minnesota, LLC
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, M 55343-7750
Tenant: August Technology Corporation
0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Address for rental and other payments:
Duke Realty Minnesota, LLC
NW 7210
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000
SECTION 1.02. LEASED PREMISES. Landlord hereby leases to Tenant and
Tenant leases from Landlord, subject to all of the terms and conditions set
forth herein, that portion of the Building described in the Basic Lease
Provisions and outlined on EXHIBIT A attached hereto (the "Leased Premises").
Landlord also grants to Tenant, together with the rights granted from time to
time by Landlord to other tenants and occupants of Landlord's premises in common
with Tenant, the nonexclusive right to use the common parking area adjoining the
Building.
ARTICLE 2 - TERM AND POSSESSION
SECTION 2.01. TERM. The term of this Lease ("Lease Term") shall be the
period of time specified in the Basic Lease Provisions and shall commence on (i)
the Target Commencement Date described in the Basic Lease Provisions; or (ii)
such later date as the tenant finish improvements to be constructed by Landlord
in the Leased Premises pursuant to Section 2.02 hereof are Substantially
Completed (as hereinafter defined), provided, however, that such date shall not
be extended as a result of any Tenant Caused Delays (as hereinafter defined).
Substantial Completion shall mean the date on which the tenant finish
improvements to be constructed by Landlord have been completed in accordance
with Exhibit B subject only to minor punchlist items of work which do not
substantially interfere with Tenant's use of the Leased Premises `Tenant Caused
Delay, shall mean any delay caused by or resulting from the following or any
combination thereof: (i) any change orders requested by Tenant; (ii) failure of
Tenant to timely or properly arrange its furnishings or be present for any
scheduled walk-
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throughs of the Leased Premises; or (iii) failure of Tenant to
cooperate with Landlord and respond promptly to any reasonable request of
Landlord. Upon delivery of possession of the Leased Premises to Tenant, Tenant
shall execute a letter of understanding acknowledging (i) the Commencement Date
of this Lease, and (ii) that Tenant has accepted the Leased Premises for
occupancy and that the condition of the Leased Premises (including any tenant
finish improvements constructed thereon) and the Building was at the time
satisfactory and in conformity with the provisions of this Lease in all
respects, except for (i) any patent defects as to which Tenant shall give
written notice to Landlord within thirty (30) days after such delivery, and (ii)
any latent defects as to which Tenant shall give written notice to Landlord
within twelve (12) months after such delivery. Landlord shall promptly
thereafter correct all such defects. Such letter of understanding shall become a
part of this Lease. If Tenant takes possession of and occupies the Leased
Premises, and does not execute the letter described above within ten (10)
business days after delivery of the Leased Premises, Tenant shall be deemed to
have accepted the Leased Premises as described above, even though Tenant may not
have executed the letter of understanding.
SECTION 2.02. CONSTRUCTION OF TENANT IMPROVEMENTS. Tenant has
personally inspected the Leased Premises and accepts the same "as is" without
representation or warranty by Landlord of any kind and with the understanding
that Landlord shall have no responsibility with respect thereto except to
construct in a good and workmanlike manner the improvements in the Leased
Premises in accordance with Tenant's plans and specifications which shall be
mutually agreed upon by both Landlord and Tenant and attached hereto as Exhibit
B in an amount not to exceed Twenty-seven Thousand Three Hundred Forty-six
Dollars ($27,346.00) (-Landlord's Allowance') and except as provided in Section
2.01. Tenant hereby acknowledges and agrees that all costs in excess of
Landlord's Allowance will be (i) paid by Tenant to Landlord within thirty (30)
days of Tenant's receipt of Landlord's invoice therefor; or (ii) amortized at an
interest rate of eleven percent (11%) per annum and paid by Tenant as Additional
Rent over the Lease Term. Notwithstanding anything contained herein to the
contrary, Landlord agrees that, at Landlord's sole cost and expense (and without
deduction from Landlord's Allowance), Landlord shall repair the existing defect
in floor elevation rise within the Leased Premises.
In addition, Landlord and Tenant hereby agree that Landlord will not be
responsible for removing the existing scissor xxxx lift in the Leased Premises
(the `Lift') and Tenant shall have the right, at Tenant's sole cost and expense,
to remove the Lift, provided that Tenant promptly repairs any damage caused by
such removal and restores the Leased Premises to its prior condition. In the
event Tenant elects not to remove the Lift, Tenant shall have no liability or
responsibility to ensure that the Lift is operational at the end of the Lease
Term.
Landlord hereby agrees that the tenant finish improvements to be
constructed pursuant to Exhibit B shall be submitted to four (4) contractors for
bids, including one (1) contractor selected by Tenant. Landlord and Tenant shall
thereafter work together in good faith and in a reasonable manner to select the
contractor to perform such work, based on price, quality, delivery and other
reasonable factors. Landlord shall keep Tenant involved in the selection
process, but Landlord shall have the ultimate right to select the contractor
based on its reasonable evaluation of the factors set forth above. There shall
be d presumption that the lowest bid will be selected, unless outweighed by
other factors. Landlord agrees to warrant all work performed on the tenant
finish
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improvements within the Leased Premises pursuant to EXHIBIT B for a period of
one (1) year from the Commencement Date.
SECTION 2.03. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, or upon the exercise by Landlord of its right to
re-enter the Leased Premises without terminating this Lease, Tenant shall
immediately surrender the Leased Premises to Landlord, in broomclean condition
and in good order, condition and repair, except for ordinary wear and tear and
damage which Tenant is not obligated to repair. Tenant shall also remove its
personal property, trade fixtures and any of Tenant's alterations (excluding the
initial tenant finish improvements as set forth in EXHIBIT B) designated by
Landlord at the time Landlord gives its consent to said alteration; promptly
repair any damage caused by such removal; and restore the Leased Premises to the
condition existing prior to the installation of the items so removed. Landlord's
work pursuant to Section 2.02 herein, shall not be considered a Tenant
alteration and, therefore, shall not be removed by Tenant. If Tenant fails to do
so, Landlord may restore the Leased Premises to such condition at Tenant's
expense, and Landlord may cause all of said property to be removed at Tenant's
expense, and Tenant hereby agrees to pay all the costs and expenses thereby
reasonably incurred. All property of Tenant which is not removed within ten (10)
days following Landlord's written demand therefor shall be conclusively deemed
to have been abandoned by Tenant, and Landlord shall be entitled to dispose of
such property without thereby incurring any liability to Tenant. The provisions
of this section shall survive the expiration or other termination of this Lease.
Notwithstanding anything contained herein to the contrary, in the event Tenant
installs or causes Landlord to install HEPA filters paid for by Tenant (the
"Filters') in the Leased Premises, Tenant shall have the right to remove the
Filters upon expiration or earlier termination of the Lease Term, provided
Tenant is not in default hereunder, and further provided that Tenant replaces
all ceiling tiles and professionally-and appropriately terminates all wiring
associated with the Filters.
SECTION 2.04. HOLDING OVER. It Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant shall
become a tenant from month to month at 150% of the Monthly Rental Installment in
effect at the end of the Lease Term (plus Additional Rent as provided in Article
3 hereof), and otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Acceptance by Landlord of rent after such
expiration or earlier termination shall not result in a renewal of this Lease,
and Tenant shall vacate and surrender the Leased Premises to Landlord upon
Tenant being given thirty (30) days prior written notice from Landlord to
vacate.
ARTICLE 3 - RENT
SECTION 3.01. BASE RENT. Tenant shall pay to Landlord as Minimum Annual
Rent for the Leased Premises the sum specified in the Basic Lease Provisions,
payable in equal consecutive Monthly Rental Installments, in advance, without
deduction or offset except as otherwise specifically provided herein, beginning
on the Commencement Date and on or before the first day of each and every
calendar month thereafter during the Lease Term. The Monthly Rental Installment
for partial calendar months shall be prorated based on the number of days during
the month this Lease was in effect in relation to the total number of days in
such month.
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SECTION 3.02. ADDITIONAL RENT. In addition to the Minimum Annual Rent
specified in this Lease, Tenant agrees to pay to Landlord for each calendar year
during the Lease Term, as "Additional Rent," Tenant's Proportionate Share (as
described in the Basic Lease Provisions) of all costs, charges and expenses
incurred by Landlord during the Lease Term for Real Estate Taxes and Operating
Expenses for the Building and appurtenant common areas (collectively "Common
Area Charges").
"Operating Expenses" shall mean all of Landlord's expenses for
operation, repair, replacement and maintenance as necessary to keep the Building
and appurtenant common areas in good order, condition and repair (including all
additional direct costs and expenses of operation and maintenance of the
Building which Landlord reasonably determines it would have paid or incurred
during such year if the Building had been ninety-five percent (95%) occupied),
including, but not limited to, service and other charges incurred in the
operation and maintenance of the electrical systems, heating, ventilation and
air conditioning systems and sprinkler and plumbing systems; reasonable and
customary management fees; utilities; stormwater discharge fees; license,
permit, inspection and other fees; environmental and pollution testing and
consultation fees related thereto; fees and assessments imposed by any covenants
or owners' association provided that costs are equitably shared with other
property owners subject to such covenants or owners, association; tools and
supplies; security services; insurance premiums; and maintenance and repair of
the driveways and parking areas (including snow removal), exterior lighting
facilities, landscaped areas, walkways, curbs, drainage strips, sewer lines,
exterior walls, foundation, structural frame, roof and gutters. Capital
expenditures shall be amortized, together with interest at the rate of twelve
percent (12%) per annum on the unamortized balance, over the useful life thereof
as reasonably determined by Landlord and in accordance with generally accepted
accounting principles.
"Operating Expenses' shall not include (i) the cost of repairs,
maintenance or replacements of the foundation, exterior and load-bearing walls
of the Building, (ii) costs of utilities separately billed to and paid by other
tenants in the Building, (iii) principal or interest payments on loans secured
by mortgages on the Building or any part thereof, (iv) the cost of any special
service provided to a tenant of the Building which is not provided generally to
all tenants of the Building, (v) costs and expenses incurred in connection with
leasing space in the Building, including, but not limited to, leasing
commissions, advertising and promotional expenses, legal fees for preparation of
leases, court costs and legal fees incurred to enforce the obligations of other
tenants under leases of the Building, (vi) costs recovered by Landlord pursuant
to its insurance policies, (vii) costs due to Landlord's default under this
Lease and (viii) costs due to the gross negligence of Landlord, its employees,
agents, contractors and assigns.
"Real Estate Taxes" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license fee,
commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed upon the Building and
common areas (or against Landlord's business of leasing the Building to the
extent in lieu of other real estate taxes) by any authority having the direct or
indirect power to tax, together with reasonable costs and expenses of contesting
the validity or amount of Real ` Estate Taxes. If the property is not separately
assessed, then Tenant's liability shall be an equitable proportion of the real
estate taxes for all of the land and improvements included within the tax parcel
assessed.
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Tenant shall pay, prior to delinquency, all taxes assessed against and
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Leased Premises or elsewhere. Tenant shall
cause such trade fixtures, furniture, equipment and all other personal property
to be assessed and billed separately from the Leased Premises.
SECTION 3.03. PAYMENT OF ADDITIONAL RENT. Landlord shall be entitled to
estimate the total amount of Additional Rent to be paid by Tenant during each
calendar year of the Lease Term, whereupon commencing on the Commencement Date,
Tenant shall pay to Landlord each month, at the same time the Monthly Rental
Installment is due, an amount equal to one-twelfth (1/12) of the estimated
Additional Rent for such year. Within a reasonable time after the end of each
calendar year, Landlord shall submit to Tenant a statement of the actual amount
of such Additional Rent and within thirty (30) days after receipt of such
statement, Tenant shall pay any deficiency between the actual amount owed and
the estimates paid during such calendar year, or in the event of overpayment,
Landlord shall credit the amount of such overpayment toward the next
installments of Minimum Rent. To the extent that the Lease Term includes any
partial calendar years, the Additional Rent included in this section shall be
prorated based upon the number of days in such calendar year included within the
Lease Term divided by 360.
SECTION 3.04. LATE CHARGES. Tenant acknowledges that Landlord shall
incur certain additional unanticipated costs and expenses, including
administrative costs and attorneys' fees, if Tenant fails to timely pay any
payment required hereunder. Therefore, as compensation for such additional
expenses, and in addition to the other remedies available to Landlord hereunder,
if any payment of Minimum Rent or any other sum or charge required to be paid by
Tenant to Landlord hereunder shall become overdue for a period of ten (10) days,
a late charge of five percent (5%) of the payment so due shall be paid by Tenant
as additional rent. In addition, if Tenant fails to pay within fifteen (15) days
after the same is due and payable any sum or charge required to be paid by
Tenant to Landlord, such unpaid amount shall bear interest from the due date
thereof to the date of payment at the rate of fifteen percent (15%) per annum.
ARTICLE 4 - SECURITY DEPOSIT
Tenant, upon execution of this Lease, shall deposit with Landlord the
Security Deposit as specified in the Basic Lease Provisions as security for the
full and faithful performance by Tenant of all of the terms, conditions and
covenants contained in this Lease on the part of Tenant to be performed,
including but not limited to the payment of the rent. In the event of a default
by Tenant of any term, condition or covenant herein contained beyond any
applicable grace or cure period, Landlord may apply all or any part of such
security deposit to curing all or any part of such default; and Tenant agrees to
promptly, upon demand, deposit such additional sum with Landlord as may be
required to maintain the full amount of the security deposit. All sums held by
Landlord pursuant to this section shall be without interest. At the end of the
Lease Term, provided that there is then no uncured default, Landlord shall
return the security deposit to Tenant.
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ARTICLE 5 - USE
SECTION 5.01. USE OF LEASED PREMISES. The Leased Premises are to be
used by Tenant solely as provided in the Basic Lease Provisions, and for no
other purposes without the prior written consent of Landlord.
SECTION 5.02. COVENANTS OF TENANT Regarding Use. In connection with its
use of the Leased Premises, Tenant agrees to do the following:
(a) Tenant shall (i) use and maintain the Leased Premises and conduct
its business thereon in a safe and lawful manner, (ii) comply with all laws,
rules, regulations, orders, ordinances, directions and requirements of any
governmental authority or agency, now in force or which may hereafter be in
force, including without limitation those which shall impose upon Landlord or
Tenant any duty with respect to or triggered by a change in the use or
occupation of, or any improvement or alteration to, the Leased Premises,
provided, however, that Landlord shall be responsible for performing any
alterations or improvements to the Leased Premises that pertain solely to the
use of the Leased Premises for general office and warehouse use and not to the
particular business or activities of Tenant, the costs of which shall be treated
as Operating Expenses in accordance with Section 3.02 hereof, and (iii) comply
with and obey all reasonable directions of the Landlord, including any Rules and
Regulations that may be adopted by Landlord from time to time, provided Tenant
is given prior written notice of the same.
(b) Tenant shall not (i) use the Leased Premises for any unlawful
purpose or act, (ii) commit or permit any waste or damage to the Leased
Premises, (iii) store any inventory, equipment or any other materials outside
the Leased Premises, or (iv) do or permit anything to be done in or about the
Leased Premises or appurtenant common areas which constitutes a nuisance or
which will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy them. Landlord shall not be
responsible to Tenant for the nonperformance by any other tenant or occupant of
the Building of its lease or of any Rules and Regulations but shall use
commercially reasonable efforts to enforce such leases and Rules and Regulations
against other tenants or occupants of the Building.
(c) Tenant shall not overload the floors of the Leased Premises as to
cause damage to the floor. Landlord represents that the floor load capacity is
750 pounds per square inch. Tenant represents that its forklift with maximum
load is equal to 300 pounds per square inch. All damage to the floor structure
or foundation of the Building due to improper positioning or storage of items or
materials shall be repaired by Landlord at the sole expense of Tenant, who shall
reimburse Landlord immediately therefor upon demand.
(d) Tenant shall not use the Leased Premises, or allow the Leased
Premises to be used, for any purpose or in any manner which would invalidate any
policy of insurance now or hereafter carried on the Building or increase the
rate of premiums payable on any such insurance policy. Should Tenant fail to
comply with this covenant, Landlord may, at its option, require Tenant to stop
engaging in such activity or to reimburse Landlord as Additional Rent for any
increase in premiums charged during the term of this Lease on the insurance
carried by Landlord on the Leased Premises and attributable to the use being
made of the Leased Premises by Tenant.
(e) Tenant may, at its own expense, erect a sign concerning its
business which shall be in keeping with the decor and other signs on the
Building, provided that such sign is first
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approved by Landlord in writing. Landlord's approval, if given, may be
conditioned upon such criteria as Landlord deems appropriate to maintain the
area in a neat and attractive manner. Tenant agrees to maintain any sign in good
state of repair, and upon expiration of the Lease Term, Tenant shall promptly
remove the sign and repair any resulting damage to the Leased Premises or
Building.
SECTION 5.03. LANDLORD'S RIGHTS REGARDING USE. In addition to the
rights specified elsewhere in this Lease, Landlord shall have the following
rights regarding the use of the Leased Premises or the appurtenant common areas
by Tenant, its employees, agents, customers and invitees, each of which may be
exercised without notice or liability to Tenant:
(a) Landlord may install such signs, advertisements, notices or tenant
identification information as it shall reasonably deem necessary or proper.
(b) Landlord shall have the right at any time to change or otherwise
alter the appurtenant common areas provided any change shall not diminish the
parking available for use by tenants or other occupants of the Building.
Landlord may control the appurtenant common areas in such manner as it deems
necessary or proper.
(c) Landlord or Landlord's agent shall be permitted to inspect or
examine the Leased Premises at any reasonable time, upon reasonable advance
notice, and accompanied by a representative of Tenant provided Tenant makes such
representative reasonably available, except in the event of an emergency in
which case no notice or Tenant representative shall be required, and Landlord
shall have the right to make any repairs to the Leased Premises which are
necessary for its preservation; provided, however, that any repairs made by
Landlord shall be at Tenant's expense, except as provided in Section 7.01
hereof. If Tenant is not present to open and permit such entry into the Leased
Premises at any time when such entry is necessary or permitted hereunder,
Landlord and its employees and agents may enter the Leased Premises by means of
a master or pass key or otherwise, provided Landlord has used commercially
reasonable efforts to notify Tenant as required hereunder. Landlord shall incur
no liability to Tenant for such entry, nor shall such entry constitute an
eviction of Tenant or a termination of this Lease, or entitle Tenant to any
abatement of rent therefor.
ARTICLE 6 - UTILITIES AND SERVICES
Tenant shall obtain in its own name and shall pay directly to the
appropriate supplier the cost of all utilities and services serving the Leased
Premises, including but not limited to: natural gas, electrical power,
telephone, janitorial service, refuse disposal and other utilities and services.
However, if any services or utilities are jointly metered with other property,
Landlord shall make a reasonable determination of Tenant's proportionate share
of the cost of such utilities and services and Tenant shall pay such share to
Landlord within fifteen (15) days after receipt of Landlord's written statement.
Landlord shall not be liable in damages or otherwise for any failure or
interruption of any utility service or other service furnished to the Leased
Premises; and no such failure or interruption shall entitle Tenant to terminate
this Lease or withhold sums due hereunder.
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Notwithstanding anything in this Lease to the contrary, Landlord shall
use commercially reasonable efforts to promptly restore utility service and in
the event restoration of service is within Landlord's control and Landlord
negligently fails to restore such service within a reasonable time, thereby
causing the Leased Premises to be rendered untenantable (meaning that Tenant is
unable to use such space in the normal course of its business) by Tenant for the
use permitted under this Lease for more than three (3) consecutive business days
after notice from Tenant to Landlord that such service has been interrupted and
a reasonable opportunity for Landlord to restore such service, Minimum Annual
Rent and Annual Rental Adjustment shall xxxxx on a per them basis for each day
after such three (3) day period during which the Leased Premises remain
untenantable.
ARTICLE 7 - MAINTENANCE AND REPAIRS
SECTION 7.01. LANDLORD'S RESPONSIBILITY. During the term of this Lease,
Landlord shall maintain in good condition and repair the electrical systems,
heating and air conditioning systems, sprinkler and plumbing systems, roof,
exterior walls, foundation and structural frame of the Building and the parking
and landscaped areas, the costs of which shall be included in Operating Expenses
except as otherwise provided in Section 3.02; provided, however, that to the
extent any of the foregoing items require repair because of the negligence,
misuse, or default of Tenant, its employees, agents, customers or invitees,
Landlord shall make such repairs at Tenant's expense.
SECTION 7.02. ALTERATIONS. Tenant shall not permit structural or
non-structural alterations or additions in or to the Leased Premises unless and
until the plans have been approved by Landlord in writing. As a condition of and
at the time of such approval, Landlord may require Tenant to remove the
alterations and restore the Leased Premises upon termination of this Lease;
otherwise, all such alterations or improvements, except movable office furniture
and equipment and trade fixtures, shall become a part of the realty and the
property of Landlord, and shall not be removed by Tenant. If Landlord consents
to Tenant's performance of alterations or additions to the Leased Premises,
Tenant shall ensure that all alterations and improvements which are made or
necessitated thereby shall be made in accordance with all applicable laws,
regulations and building codes, in a good and workmanlike manner and in quality
equal to or better than the original construction of the Building. Landlord's
approval of the plans, specifications and working drawings for Tenant's
alterations shall create no responsibility or liability on the part of Landlord
for their completeness, design sufficiency, or compliance with all laws, rules
and regulations of governmental agencies or authorities. Tenant shall indemnify
and save harmless Landlord from all costs, loss or expense in connection with
any construction or installation except to the extent caused by Landlord's
negligence or intentional acts. No person shall be entitled to any lien directly
or indirectly derived through or under Tenant or through or by virtue of any act
or omission of Tenant upon the Leased Premises for any improvements or fixtures
made thereon or installed therein or for or on account of any labor or material
furnished to the Leased Premises or for or on account of any matter or thing
whatsoever; and nothing in this Lease contained shall be construed to constitute
a consent by Landlord to the creation of any lien. If any lien is filed against
the Leased Premises for work claimed to have been done for, or material claimed
to have been furnished to, Tenant, Tenant shall cause such lien to be discharged
of record by bonding over or otherwise posting reasonable security to protect
Landlord against loss within thirty (30) days after filing. Tenant shall
indemnify and save harmless Landlord from
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all costs, losses, expenses, and attorneys' fees in connection with any
such lien. Notwithstanding anything contained herein to the contrary, Tenant
shall have the right, without Landlord's consent, and in compliance with all
other provisions of this section, to make any non-structural alterations to the
Leased Premises which do not materially impact the Building's mechanical or
electrical systems, do not require a building permit, and the aggregate cost of
which does not exceed Seven Thousand Dollars ($7,000.00) in any given year,
provided that Tenant gives Landlord fifteen (15) business days prior written
notice of any such alteration, along with copies of all plans and specifications
relating thereto, and provides Landlord with lien waivers for all work, labor
and services to be performed and materials to be furnished in connection with
such work.
ARTICLE 8 - CASUALTY
SECTION 8.01. CASUALTY . In the event of total or partial destruction
of the Building or the Leased Premises by fire or other casualty, Landlord
agrees to promptly restore and repair the Leased Premises; provided, however,
that Landlord's obligation hereunder shall be limited to the reconstruction of
such of the tenant finish improvements as were originally required to be made by
Landlord, if any. Any insurance proceeds not used by Landlord in restoring or
repairing the Leased Premises shall be the sole property of Landlord. Rent shall
proportionately xxxxx during the time that the Leased Premises or part thereof
are unusable because of any such damage thereto. Notwithstanding the foregoing,
if the Leased Premises are (i) so destroyed that they cannot be repaired or
rebuilt within one hundred eighty (180) days from the date on which the
insurance claim is adjusted; or (ii) destroyed by a casualty which is not
covered by the insurance required hereunder or, if covered, such insurance
proceeds are not released by any mortgagee entitled thereto or are insufficient
(excluding any deductible) to rebuild the Building and the Leased Premises;
then, in case of a clause (i) casualty, either Landlord or Tenant may, or, in
the case of a clause (ii) casualty, then Landlord may, upon thirty (30) days
written notice to the other party, terminate and cancel this Lease; and all
further obligations hereunder shall thereupon cease and terminate. Landlord
hereby agrees to notify Tenant (i) within sixty (60) days of the date of the
casualty whether or not Landlord believes the Leased Premises can be repaired or
rebuilt within such one hundred eighty (180) day time period, and (ii) as soon
as reasonably possible in the event Landlord elects to terminate the Lease
pursuant to clause (ii) above.
SECTION 8.02. FIRE AND EXTENDED COVERAGE INSURANCE. During the term of
this Lease, Landlord shall maintain fire and extended coverage insurance on the
Building, including the tenant finish improvements made by Landlord pursuant to
this Lease, but shall not protect Tenant's property on the Leased Premises; and,
notwithstanding the provisions of Section 9.01, Landlord shall not be liable for
any damage to Tenant's property, regardless of cause, including the negligence
of Landlord and its employees, agents, and invitees. Tenant hereby expressly
waives any right of recovery against Landlord (or any other tenant of the
Building) for damage to any property of Tenant located in or about the Leased
Premises, however caused, including the negligence of Landlord and its
employees, agents, and invitees; and, notwithstanding the provisions of Section
9.01 below, Landlord hereby expressly waives any rights of recovery
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against Tenant for damage to the Leased Premises or the Building which is
insured against under Landlord's fire and extended coverage insurance. All
insurance policies maintained by Landlord or Tenant as provided in this Lease
shall contain an agreement by the insurer waiving the insurer's right of
subrogation against the other party to this Lease and agreeing not to acquire
any rights of recovery which the insured has expressly waived prior to loss.
ARTICLE 9 - LIABILITY INSURANCE
SECTION 9.01. TENANT'S RESPONSIBILITY. Landlord shall not be liable to
Tenant or to any other person for (i) damage to property or injury or death to
persons due to the condition of the Leased Premises, the Building or the
appurtenant common areas, or (ii) the occurrence of any accident in or about the
Leased Premises or the appurtenant common areas, or (iii) any act or neglect of
Tenant or any other tenant or occupant of the Building or of any other person,
unless such damage, injury or death is directly and primarily the result of
Landlord's negligence or the negligence of its employees or agents; and Tenant
hereby releases Landlord from any and all liability for the same. Tenant shall
be liable for, and shall indemnify and defend Landlord and hold it harmless
from, any and all liability for (i) any act or neglect of Tenant and any person
coming on the Leased Premises by the license of Tenant, express or implied, (ii)
any damage to the Leased Premises caused by Tenant, its employees or agents,
subject to the waiver of rights set forth in Section 8.02, and (iii) any loss of
or damage or injury to any person (including death resulting therefrom) or
property occurring in, on or about the Leased Premises, regardless of cause,
except for any loss or damage from fire or casualty insured as provided in
Section 8.02 and except for that caused directly and primarily by Landlord's
negligence. Notwithstanding the foregoing, Tenant shall bear the risk of any
loss or damage to its property as provided in Section 8.02.
SECTION 9.02. TENANT'S INSURANCE. Tenant, in order to insure against
the liabilities specified in this Lease, shall at all times during the term of
this Lease carry, at its own expense, one or more policies of general public
liability and property damage insurance, issued by one or more insurance
companies acceptable to Landlord, with the following minimum coverages:
A. Worker's Compensation: minimum statutory amount.
B. Commercial General Liability Insurance, including blanket, contractual
liability, broad form property damage, personal injury, completed
operations, products liability, and fire damage: Not less than
$1,000,000 Combined Single Limit for both bodily injury and property
damage.
C. Fire and Extended Coverage, Vandalism and malicious Mischief, and
Sprinkler Leakage insurance, if applicable, for ninety-five percent
(95%) of the cost of replacement of Tenant's property.
The insurance policy or policies shall name Landlord and Landlord's managing
agent and mortgagee (upon written request) as additional insureds on the
Worker's Compensation and Commercial General Liability Insurance policies
required above, and shall provide that they may not be cancelled on less than
thirty (30) days prior written notice to Landlord. Tenant shall furnish Landlord
with Certificates of insurance evidencing all required coverage. Should Tenant
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fail to carry such insurance and furnish Landlord with such Certificates of
Insurance after a request to do so, Landlord shall have the right to obtain such
insurance and collect the cost thereof from Tenant as additional rent.
ARTICLE 10 - EMINENT DOMAIN
If all or any substantial part of the Building or appurtenant common
areas shall be acquired by the exercise of eminent domain, Landlord may
terminate this Lease by giving written notice to Tenant within fifteen (15) days
after possession thereof is so taken. If all or any part of the Leased Premises
shall be acquired or if Tenant's access to the loading docks shall be obstructed
or more than fifteen percent (15%) of the parking spaces in existence on the
date of this Lease shall be acquired by the exercise of eminent domain in such a
manner that the Leased Premises shall become unusable by Tenant for the purpose
for which it is then being used, Tenant may terminate this Lease by giving
written notice to Landlord within fifteen (15) days after possession of the
Leased Premises or part thereof is so taken. Tenant shall have no claim against
Landlord on account of any such acquisition for the value of any unexpired lease
term remaining after possession of the Leased Premises is taken. All damages
awarded shall belong to and be the sole property of Landlord; provided, however,
that Tenant shall be entitled to any award expressly made to Tenant by any
governmental authority for the cost of or the removal of Tenant's stock,
equipment and fixtures and other moving expenses.
ARTICLE 11 - ASSIGNMENT AND SUBLEASE
Tenant shall not assign this Lease or sublet the Leased Premises in
whole or in part without Landlord's prior written consent, which consent shall
not be unreasonably withheld, conditioned or, delayed. In the event of any
assignment or subletting, Tenant shall remain primarily liable to perform all of
the covenants and conditions contained in this Lease, including but not limited
to payment of Minimum Rent and Additional Rent as provided herein. The
acceptance of rent from any other person shall not be deemed to be a waiver of
any of the provisions of this Lease or to be a consent to the assignment of this
Lease or the subletting of the Leased Premises.
Without in any way limiting Landlord's right to refuse to consent to
any assignment or subletting of this Lease, Landlord reserves the right to
refuse to give such consent if in Landlord's reasonable discretion and opinion
(i) the use of the Leased Premises is or will likely be materially adversely
affected; (ii) the business reputation of the proposed assignee or subtenant is
unacceptable in light of Landlord's or its affiliate's leasing standards for
similar properties owned by Landlord or its affiliate in the general vicinity of
the Leased Premises (or, in the event Landlord or its affiliate no longer owns
or manages any such similar properties, the reasonable standards utilized by
other similarly situated landlords for similar properties in the vicinity); or
(iii) the financial worth of the proposed assignee or subtenant is insufficient
to meet the obligations hereunder or is less than that of Tenant as of the date
of execution of this Lease. Landlord further expressly reserves the right to
refuse to give its consent to any subletting if the proposed rent is to be less
than the then current rent for similar premises in the Park under a similar
lease term, and in comparable condition. Landlord agrees to notify Tenant in
writing of the reasons for any refusal of consent hereunder. Tenant agrees to
reimburse Landlord for reasonable accounting and attorneys, fees incurred in
conjunction with the processing and
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documentation of any such requested transfer, assignment, subletting or any
other hypothecation of this Lease or Tenant's interest in and to the Leased
Premises, which fees shall not exceed Five Hundred Dollars ($500.00) for any
proposed assignment or subletting.
ARTICLE 12 - TRANSFERS BY LANDLORD
SECTION 12.01. SALE AND CONVEYANCE OF THE BUILDING. Landlord shall have
the right to sell and convey the Building at any time during the term of this
Lease, subject only to the rights of Tenant hereunder; and such sale and
conveyance shall operate to release Landlord from liability hereunder arising
after the date of such conveyance.
SECTION 12.02. SUBORDINATION AND ESTOPPEL CERTIFICATE. Landlord shall
have the right to subordinate this Lease to any mortgage presently existing or
hereafter placed upon the Building by so declaring in such mortgage; and the
recording of any such mortgage shall make it prior and superior to this Lease
regardless of the date of execution or recording of either document. Within ten
(10) business days following receipt of a written request from Landlord, Tenant
shall execute and deliver to Landlord, without cost:
(a) any instrument which Landlord may deem necessary or desirable to
confirm the subordination of this Lease; provided that such agreement shall
contain a covenant of nondisturbance as described in subparagraph (c) below. If
Tenant fails or refuses to do so, Landlord may execute such instrument in the
name and as the act of Tenant.
(b) an estoppel certificate in such form as Landlord may reasonably
request certifying (i) that this Lease is in full force and effect and
unmodified (or, if modified, stating the nature of such modification), (ii) the
date to which rent has been paid, (iii) that there are not, to Tenant's
knowledge, any uncured defaults (or specifying such defaults if any are
claimed), and (iv) any other matters or state of facts reasonably required
respecting the Lease or Tenant's occupancy of the Leased Premises. Such estoppel
may be relied upon by Landlord and by any purchaser or mortgagee of all or any
part of the Building. Tenant's failure to deliver such statement within such
period shall be conclusive upon Tenant that this Lease is in full force and
effect and unmodified and that there are no uncured defaults in Landlord's
performance hereunder except for any defaults of which Landlord has actual
knowledge.
(c) Notwithstanding the foregoing, if the mortgagee or anyone claiming
through the mortgagee shall take title to the Leased Premises through
foreclosure or deed in lieu of foreclosure, Tenant shall be allowed to continue
in possession of the Leased Premises as provided for in this Lease so long as
Tenant shall not be in default. Tenant shall, in the event any proceedings are
brought to foreclose any such mortgage, attorn to the purchaser upon any such
foreclosure and recognize such purchaser as the landlord under this Lease.
Landlord hereby represents to Tenant that, as of the date of execution of this
Lease, there are no mortgages or deeds of trust encumbering the Building.
SECTION 12.03. LENDER'S RIGHTS. Landlord shall have the right, at any
time and from time to time, to notify Tenant in writing that Landlord has placed
a mortgage on the Building, specifying the identity of the Lender ("Lender").
Following receipt of such notice, Tenant agrees to give such Lender a copy of
any notice of default served by Tenant on Landlord. Tenant
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further agrees that if Landlord fails to cure any default as provided in Section
13.03 herein, Lender shall have an additional five (5) days within which to cure
such default; provided, however, that if the term, condition, covenant or
obligation to be performed by Landlord is of such nature that the same cannot
reasonably be performed within such thirty-day period, such default shall be
deemed to have been cured if Lender commences such performance within said
five-day period and thereafter diligently completes the same.
ARTICLE 13 - DEFAULT AND REMEDY
SECTION 13.01. DEFAULT. The occurrence of any of the following shall be
deemed an "Event of Default":
(a) Tenant shall fail to pay any Monthly Rental Installment or
Additional Rent within ten (10) days after the same shall be due and payable, or
Tenant shall fail to pay any other amounts due Landlord from Tenant within ten
(10) days after the same, shall be due and payable.
(b) Tenant shall fail to perform or observe any term, condition,
covenant or obligation as required under this Lease for a period of thirty (30)
days after notice thereof from Landlord; provided, however, that if the nature
of Tenant's default is such that more than thirty (30) days are reasonably
required to cure, then such default shall be deemed to have been cured if Tenant
commences such performance within said thirty day period and thereafter
diligently completes the required action within a reasonable time.
(c) Tenant shall abandon the Leased Premises for any period, or fail to
occupy the Leased Premises or any substantial portion thereof for a period of
ninety (90) days.
(d) All or substantially all of Tenant's assets in the Leased Premises
or Tenant's interest in this Lease are attached or levied under execution (and
Tenant does not discharge the same within sixty (60) days thereafter); a
petition in bankruptcy, insolvency, or for reorganization or arrangement is
filed by or against Tenant (and Tenant fails to secure a stay or discharge
thereof within sixty (60) days thereafter); Tenant shall be insolvent and unable
to pay its debts as they become due; Tenant makes a general assignment for the
benefit of creditors; Tenant takes the benefit of any insolvency action or law;
the appointment of a receiver or trustee in bankruptcy for Tenant or its assets
if such receivership has not been vacated or set aside within thirty (30) days
thereafter; dissolution or other termination of Tenant's corporate charter if
Tenant is a corporation.
SECTION 13.02. REMEDIES. Upon the occurrence of any Event of Default,
Landlord shall have the following rights and remedies, in addition to those
allowed by law, any one or more of which may be exercised without further notice
to or demand upon Tenant:
(a) Landlord may apply the security deposit or re-enter the Leased
Premises and cure any default of Tenant, and Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord thereby incurs; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action, except to the extent caused by
Landlord's gross negligence.
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(b) Landlord may terminate this Lease or, without terminating this
Lease, terminate Tenant's right to possession of the Leased Premises as of the
date of such default, and thereafter (i) neither Tenant nor any person claiming
under or through Tenant shall be entitled to possession of the Leased Premises,
and Tenant shall immediately surrender the Leased Premises to Landlord; and (ii)
Landlord may re-enter the Leased Premises and dispossess Tenant and any other
occupants of the Leased Premises by any lawful means and may remove their
effects, without prejudice to any other remedy which Landlord may have. Upon the
termination of this Lease, Landlord shall be entitled to recover from Tenant the
present value of the amount of rent and other charges equivalent to rent
reserved in this Lease for the remainder of the Lease Term, less the present
value of the net amount of such rent and other charges for the remainder of the
Lease Term which Landlord determines could reasonably be recovered by Landlord
from reletting the Leased Premises under then-current and reasonably anticipated
market conditions, whereupon Tenant shall be obligated to pay the same to
Landlord, together with all loss or damage which Landlord may sustain by reason
of Tenant's default ("Default Damages"), which shall include without limitation
reasonable expenses of preparing the Leased Premises for re-letting, demolition,
repairs, tenant finish improvements, and brokers, and attorneys' fees, it being
expressly understood and agreed that the liabilities and remedies specified in
this subsection (b) shall survive the termination of this Lease. In the event of
any reletting which extends beyond the original term of this Lease, Tenant shall
pay only a prorated portion of the expenses of reletting attributable to the
original term of the Lease.
(c) Landlord may, without terminating this Lease, reenter the Leased
Premises and re-let all or any part thereof for a term different from that which
would otherwise have constituted the balance of the Lease Term and for rent and
on terms and conditions different from those contained herein, whereupon Tenant
shall be immediately obligated to pay to Landlord as liquidated damages the
present value of the difference between the rent provided for herein and that
provided for in any lease covering a subsequent re-letting of the Leased
Premises, for the period which would otherwise have constituted the balance of
the Lease Term, together with all of Landlord's Default Damages.
(d) Landlord may xxx for injunctive relief or to recover damages for
any loss resulting from the breach.
(e) In addition to the defaults and remedies described above, the
parties hereto agree that if Tenant defaults in the performance of any term or
condition of this Lease (excluding any default in the payment of rent) three (3)
or more times during any twelve (12) month period and Landlord has previously
given notice to Tenant of such defaults, regardless of whether such defaults are
ultimately cured, then such conduct shall, at Landlord's option, represent a
separate Event of Default.
SECTION 13.03. LANDLORD'S DEFAULT AND TENANT'S REMEDIES. Landlord shall
be in default if it shall fail to perform or observe any term, condition,
covenant or obligation as required under this Lease for a period of thirty (30)
days after written notice thereof from Tenant to Landlord and to Lender, if any;
provided, however, that if the term, condition, covenant or obligation to be
performed by Landlord is of such nature that the same cannot reasonably be
performed within such thirty-day period, such default shall be deemed to have
been cured if Landlord commences such performance within said thirty-day period
and thereafter diligently undertakes to complete
15
the same. Upon the occurrence of any such default, Tenant may xxx for injunctive
relief or to recover damages for any loss resulting from the breach, but Tenant
shall not be entitled to terminate this Lease or withhold, offset or xxxxx any
rent due hereunder until final judgment has been rendered, except as otherwise
provided herein.
SECTION 13.04. LIMITATION OF LANDLORD'S LIABILITY. If Landlord shall
fail to perform or observe any term, condition, covenant or obligation required
to be performed or observed by it under this Lease and if Tenant shall, as a
consequence thereof, recover a money judgment against Landlord (whether
compensatory or punitive in nature), Tenant agrees that it shall look solely to
Landlord's right, title and interest in and to the Building and the rents
therefrom for the collection of such judgment; and Tenant further agrees that no
other assets of Landlord shall be subject to levy, execution or other process
for the satisfaction of Tenant's judgment and that Landlord shall not be
personally liable for any deficiency.
The references to "Landlord" in this Lease shall be limited to mean and
include only the owner or owners, at the time, of the fee simple interest in the
Building. In the event of a sale or transfer of such interest (except a mortgage
or other transfer as security for a debt), the "Landlord" named herein, or, in
the case of a subsequent transfer, the transferor, shall, after the date of such
transfer, be automatically released from all liability for the performance or
observance of any term, condition, covenant or obligation required to be
performed or observed by Landlord hereunder after such date; and the transferee
shall be deemed to have assumed all of such terms, conditions, covenants and
obligations.
SECTION 13.05. NONWAIVER OF DEFAULTS. Neither party's failure or delay
in exercising any of its rights or remedies or other provisions of this Lease
shall be construed to be a waiver thereof or affect its right thereafter to
exercise or enforce each and every such right or remedy or other provision. No
waiver of any default shall be deemed to be a waiver of any other default.
Landlord's receipt of less than the full rent due shall not be construed to be
other than a payment on account of rent then due, nor shall any statement on
Tenant's check or any letter accompanying Tenant's check be deemed an accord and
satisfaction, and Landlord may accept such payment without prejudice to
Landlord's right to recover the balance of the rent due or to pursue any other
remedies provided in this Lease. No act or omission by Landlord or its employees
or agents during the term of this Lease shall be deemed an acceptance of a
surrender of the Leased Premises, and no agreement to accept such a surrender
shall be valid unless in writing and signed by Landlord.
SECTION 13.06. ATTORNEYS' Fees. If either party defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and the non-defaulting party obtains a
judgment against the defaulting party, then the defaulting party agrees to
reimburse the non-defaulting party for the attorneys' fees incurred thereby.
ARTICLE 14 - LANDLORD'S RIGHT TO RELOCATE TENANT. Intentionally
Omitted.
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ARTICLE 15 NOTICE AND PLACE OF PAYMENT
SECTION 15.01. NOTICES. Any notice required or permitted to be given
under this Lease or by law shall be deemed to have been given if it is written
and delivered in person or by overnight courier or mailed by certified mail,
postage prepaid, to (i) the party who is to receive such notice at the address
specified in the Basic Lease Provisions and (ii) in the case of a default notice
from Tenant to Landlord, any Lender designated by Landlord. When so mailed, the
notice shall be deemed to have been given as of the date it was mailed. Either
party may change its address by giving written notice thereof to the other
party.
SECTION 15.02. PLACE OF PAYMENT. All payments required to be made by
Tenant to Landlord shall be delivered or mailed to Landlord's management agent
at the address specified in the Basic Lease Provisions or any other address
Landlord may specify from time to time by written notice to Tenant.
ARTICLE 16 - TENANT'S RESPONSIBILITY REGARDING
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES.
SECTION 16.01. DEFINITIONS.
a. "Environmental Laws' - All federal, state and municipal laws,
ordinances, rules and regulations applicable to the environmental and ecological
condition of the Leased Premises, including, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; the Federal Resource Conservation and Recovery Act; the Federal Toxic
Substance Control Act; the Clean Air Act; the Clean Water Act; the rules and
regulations of the Federal Environmental Protection Agency, or any other
federal, state or municipal agency or governmental board or entity having
jurisdiction over the Leased Premises.
b. "Hazardous Substances" - Includes:
(i) Those substances included within the definitions of
`hazardous substances,' `hazardous materials,, toxic substances, "solid
waste' or "infectious waste' in any of the Environmental Laws; and
(ii) Such other substances, materials and wastes which are or
become regulated under applicable local, state or federal law, or which
are classified as hazardous, toxic or infectious under present or
future Environmental Laws or other federal, state, or local laws or
regulations.
SECTION 16.02. COMPLIANCE. Tenant, at its sole cost and expense, shall
promptly comply with the Environmental Laws which shall impose any duty upon
Tenant with respect to the use, occupancy, maintenance or alteration of the
Leased Premises. Tenant shall promptly comply with any final, binding and
enforceable notice from any source issued pursuant to the Environmental Laws or
with any notice from any insurance company pertaining to Tenant's use,
occupancy, maintenance or alteration of the Leased Premises, whether such notice
shall be served upon Landlord or Tenant.
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SECTION 16.03. RESTRICTIONS ON TENANT. Tenant shall not cause or permit
its agents or employees to cause:
a. Any violation of the Environmental Laws related to environmental
conditions on, under, or about the Leased Premises, or arising from Tenant's use
or occupancy of the Leased Premises, including, but not limited to, soil and
ground water conditions.
b. The use, generation, release, manufacture, refining, production,
processing, storage or disposal of any Hazardous Substances on, under, or about
the Leased Premises, or the transportation to or from the Leased Premises of any
Hazardous Substances, except as necessary and appropriate for Tenant's use as
defined in Section 1.01.K hereof in which case the use, storage or disposal of
such Hazardous Substances shall be performed in compliance with the
Environmental Laws and the highest standards prevailing in the industry.
SECTION 16.04. NOTICES, AFFIDAVITS, ETC.
a. Tenant shall immediately notify Landlord of (i) any known violation
by Tenant, its employees, agents, representatives, customers, invitees or
contractors of the Environmental Laws on, under or about the Leased Premises, or
(ii) the presence or suspected presence of any Hazardous Substances on, under or
about the Leased Premises in violation of the Environmental Laws and shall
immediately deliver to Landlord any notice received by Tenant relating to (i)
and (ii) above from any source. Landlord shall notify Tenant, to the extent it
affects Tenant, of (i) any known violation of Landlord, its employees, agents,
representatives, customers, invitees or contractors of the Environmental Laws
on, under or about the Building or (ii) the presence or suspected presence of
any Hazardous Substances on, under or about the Building.
b. Tenant shall execute affidavits, representations and the like
reasonably requested by Landlord from time to time, within ten (10) days of
Landlord's request therefor, concerning Tenant's best knowledge and belief
regarding the presence of any Hazardous Substances on, under or about the Leased
Premises.
SECTION 16.05. LANDLORD'S RIGHTS.
a. Landlord and its agent shall have the right, but not the duty, upon
advance notice (except in the case of emergency when no notice shall be
required) to inspect the Leased Premises and conduct tests thereon at any time
to determine whether or the extent to which there has been a violation of
Environmental Laws by Tenant or whether there are Hazardous Substances on, under
or about the Leased Premises. In exercising its rights herein, Landlord shall
use reasonable efforts to minimize interference with Tenant's business but such
entry shall not constitute an eviction of Tenant, in whole or in part, and
Landlord shall not be liable for any interference, loss, or damage to Tenant's
property or business caused thereby.
b. If Landlord, any lender or governmental agency shall ever require
testing to ascertain whether there has been a release of Hazardous Substances
on, under or about the Leased Premises or a violation of the Environmental Laws,
and such requirement arose in whole or in part because of an act or omission on
the part of Tenant, then Tenant's share of the reasonable costs thereof (which
shall be apportioned based upon Tenant's acts or omissions
18
relative to the acts or omissions of others) shall be reimbursed by Tenant to
Landlord upon demand as Additional Rent.
SECTION 16.06. TENANT'S INDEMNIFICATION. Tenant shall indemnify and
hold harmless Landlord and Landlord's managing agent from any and all claims,
loss, liability, costs, expenses or damage, including attorneys' fees and costs
of remediation, incurred by Landlord in connection with any breach by Tenant of
its obligations under this Article 16. The covenants and obligations of Tenant
under this Article 16 shall survive the expiration or earlier termination of
this Lease.
SECTION 16.07. LANDLORD'S REPRESENTATION AND INDEMNIFICATION. Landlord
represents and warrants that, to the best of Landlord's actual knowledge,
without independent investigation, as of the date of execution of this Lease,
there are no Hazardous Substances in, on or about the Leased Premises or
Building in violation of the Environmental Laws. Landlord agrees not to
knowingly allow other tenants of the Building to generate Hazardous Substances
in violation of Environmental Laws. Landlord shall indemnify and hold Tenant
harmless from and against any and all claims, loss, liability, costs, expenses
or damage, including attorneys' fees and costs of remediation, incurred by
Tenant to the extent caused directly by Landlord's use or disposal of any
Hazardous Substances in, on or about the Building or the Leased Premises in
violation of Environmental Laws. Amounts expended by Landlord under the
indemnification provision of this Section 16.07 shall not be included in
Operating Expenses.
ARTICLE 17 - MISCELLANEOUS
SECTION 17.01. BENEFIT OF LANDLORD AND TENANT. This Lease and all of
the terms and provisions hereof shall inure to the benefit of and be binding
upon Landlord and Tenant and their respective successors and assigns.
SECTION 17.02. GOVERNING Law. This Lease shall be governed in
accordance with the laws of the State of Minnesota.
SECTION 17.03. GUARANTY. Intentionally Omitted.
SECTION 17.04. FORCE MAJEURE. Landlord and Tenant (except for the
payment of rent) shall be excused for the period of any delay in the performance
of any obligation hereunder when such delay is occasioned by causes beyond its
control, including, but not limited to, war, invasion or hostility; work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; man-made or natural casualties; unusual weather conditions;
acts or omissions of governmental or political bodies; or civil disturbances or
riots.
SECTION 17.05. CONDITION OF PREMISES. Tenant acknowledges that neither
Landlord nor any agent of Landlord has made any representation or warranty with
respect to the Leased Premises or the Building or with respect to the
suitability or condition of any part thereof for the conduct of Tenant's
business except as provided in this Lease.
SECTION 17.06. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.
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SECTION 17.07. INDEMNIFICATION FOR LEASING COMMISSIONS. The parties
hereby represent and warrant that the only real estate brokers involved in the
negotiation and execution of this Lease are those named in the Basic Lease
Provisions and that no other broker or person is entitled to any leasing
commission or compensation as a result of the negotiation or execution of this
Lease. Each party shall indemnify and hold the other harmless from any and all
liability for the breach of this representation and warranty on its part and
shall pay any compensation to any other broker or person who may be deemed or
held to be entitled thereto.
SECTION 17.08. QUIET ENJOYMENT. If Tenant shall perform all of the
covenants and agreements herein provided to be performed by Tenant, Tenant
shall, at all times during the Lease Term, have the quiet enjoyment and peaceful
possession of the Leased Premises without hindrance, except as may be provided
in Section 12.02 hereunder.
SECTION 17.09. SEVERABILITY OF INVALID PROVISIONS. If any provision of
this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.
SECTION 17.10. FINANCIAL STATEMENTS. During the Lease Term and any
extensions thereof, Tenant shall provide to Landlord, within thirty (30) days of
Landlord's written request therefor, but not more frequently than once a year, a
copy of Tenant's most recent financial statements prepared as of the end of
Tenant's most recent fiscal year. Such financial statements shall be signed by
Tenant or an authorized officer or representative of Tenant who shall attest to
the truth and accuracy of the information set forth in such statements. All
financial statements provided by Tenant to Landlord hereunder shall be prepared
in conformity with generally accepted accounting principle consistently applied.
Landlord agrees to maintain all financial statements provided by Tenant
hereunder on a confidential basis, except that Landlord may provide copies to
Landlord's lenders, auditors and financial analysts on the condition that such
lenders, auditors and financial analysts maintain the confidentiality of such
financial statements.
SECTION 17.11.
(a) TENANT'S REPRESENTATIONS AND WARRANTIES. The undersigned represents
and warrants to Landlord that (i) Tenant is duly organized, validly existing and
in good standing in accordance with the laws of the state under which it was
organized; (ii) all action necessary to authorize the execution of this Lease
has been taken by Tenant; and (iii) the individual executing and delivering this
Lease on behalf of Tenant has been authorized to do so, and such execution and
delivery shall bind Tenant. Tenant, at Landlord's request, shall provide
Landlord with evidence of such authority.
(b) LANDLORD'S REPRESENTATIONS AND WARRANTIES. The undersigned
represents and warrants to Tenant that (i) Landlord is duly organized, validly
existing and in good standing in accordance with the laws of the state under
which it was organized; (ii) all action necessary to authorize the execution of
this Lease has been taken by Landlord; and (iii) the individual executing and
delivering this Lease on behalf of Landlord has been authorized to do so, and
such execution and delivery shall bind Landlord. Landlord, at Tenant's request,
shall provide Tenant with evidence of such authority.
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SECTION 17.12. REPRESENTATIONS AND INDEMNIFICATIONS. Any
representations and indemnifications of Landlord contained in the Lease shall
not be binding upon (prior to foreclosure and passage of the applicable
redemption period) any mortgagee having a mortgage presently existing or
hereafter placed on the Building.
SECTION 17.13. OPTION TO TERMINATE. Provided Tenant is not in default
hereunder, Tenant shall have the option to terminate this Lease effective
October 1, 2000 ("First Termination Option') and October 1, 2001 ("Second
Termination Option"). Such option shall be exercised by (i) Tenant's giving
written notice to Landlord of its intention to terminate on or before April 1,
2000 with respect to the First Termination Option or on or before April 1, 2001
with respect to the Second Termination Option, and (ii) Tenant's payment to
Landlord of an amount equal to the unamortized tenant finish improvement costs,
other allowances and leasing commissions (amortized at eleven percent (11%)
interest per annum) plus two (2) months' Minimum Annual Rent, to be paid on or
before September 1, 2000 with respect to the First Termination Option or to be
paid on or before September 1, 2001 with respect to the Second Termination
Option. Such payment is made in consideration for Landlord's grant of this
option to terminate, to compensate Landlord for rental and other concessions
given to Tenant, and for other good and valuable consideration. Such payment
shall not in any manner affect Tenant's obligations to pay Minimum Annual Rent
and Annual Rental Adjustment or to perform its obligations under the Lease up to
and including the date of termination. Failure to timely and properly exercise
this option shall forever waive and extinguish it. If such option is validly
exercised, then upon such termination, Tenant shall surrender the Leased
Premises to Landlord in accordance with the terms of this Lease and each party
shall be released from further liability hereunder; provided, however, that such
termination shall not affect any right or obligation arising prior to
termination or which survives termination of the Lease.
SECTION 17.14. OPTION TO RELOCATE AND TERMINATE. Provided Tenant is not
in default hereunder and provided Tenant enters into an agreement with Landlord
to expand its business operations in another building which is owned by
Landlord, Tenant shall have the option to terminate this Lease effective as of
the commencement of rent under the new lease. If such option is validly
exercised, then upon such termination, Tenant shall surrender the Leased
Premises to Landlord in accordance with the terms of this Lease and each party
shall be released from further liability hereunder; provided, however, that such
termination shall not affect any right or obligation arising prior to
termination or which survives termination of the Lease. Landlord hereby agrees
to use commercially reasonable efforts to accommodate Tenant's expansion needs
by locating space in another building owned by Landlord, if available.
SECTION 17.15. TERMINATION OF EXISTING LEASE. Landlord and Tenant
hereby agree that the Lease between RREEF MA-III Pakwa Park, Inc., as
predecessor in interest to Duke Realty Minnesota, LLC, and Tenant, dated June
21, 1995, shall be terminated as of the Commencement Date of this Lease and each
party shall be released from further liability thereunder; provided, however,
that such termination shall not affect any right or obligation arising prior to
termination or which survives termination of the lease.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
LANDLORD:
DUKE REALTY MINNESOTA, LLC, a Minnesota limited
liability company
By:
-------------------------------------------
Xxxxxx X. Xxxxxxx
Chief Manager
TENANT:
AUGUST TECHNOLOGY CORPORATION, a Minnesota
corporation
By:
-------------------------------------------
Printed:
--------------------------------------
Title:
----------------------------------------
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STATE OF _____________ )
) SS:
COUNTY OF __________ )
Before me, a Notary Public in and for said County and State, personally appeared
______________________, by me known and by me known to be the ______________ of
August Technology Corporation, a Minnesota corporation, who acknowledged the
execution of the above and foregoing Lease Agreement for and on behalf of said
corporation.
WITNESS my hand and Notarial Seal this _____ day of _______________,
1998.
1998.
--------------------------
Notary Public
--------------------------
(Printed Signature)
My Commission Expires:
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My County of Residence:
------------------------------
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