Exhibit 10.37 LEASE AGREEMENT
This lease agreement is made and executed on March 5, 1998 by and
between Pierre Economic Development Corporation (PEDCO) , a non-profit
corporation organized and existing under the laws of the State of South Dakota,
with its principal office at 000 Xxxx Xxxxxx, Xxxx xx Xxxxxx, Xxxxxx of Xxxxxx,
State of South Dakota 57501, referred to as lessor, and ACI Telecentrics,
Incorporated, a Minnesota corporation of 0000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxx
xx Xxxxxxxxxxx, Xxxxxx of Hennepin, State of Minnesota 55416-4510, referred to
as lessee.
SECTION ONE
PREMISES
Lessor agrees to lease to lessee a portion of the premises described in
Exhibit A, which Exhibit is attached to and incorporated by reference into this
lease agreement.
SECTION TWO
TERM
The term of this lease agreement shall commence on or about March 5, 1998,
and expire April 30, 2002 unless sooner terminated in accordance with the terms
of this lease agreement.
SECTION THREE
RENT
A. Lessee shall pay to lessor as basic monthly rent, without deduction,
set off, prior notice, or demand, the sum as provided below (subject to
adjustments as provided later in this lease agreement) in advance on the first
day of each calendar month during the term of this lease agreement.
B. In addition to the basic monthly rent, lessee agrees to pay as
additional rent the amount of the rental adjustments and other charges as
required by this lease agreement.
C. All rent shall be paid to lessor, in lawful money of the United
States, at the address of lessor designated at the beginning of this lease
agreement, or to such other person or at such other place as lessor may from
time to time designate in writing.
D. The basic monthly rent for any partial month shall be prorated.
E . The basic monthly rent payable by lessee shall be Two-Thousand Five
Hundred Dollars ($2,500.00) per month as of the commencement date of this lease
agreement, and continuing through April 30, 1999. For the remainder of the
lease, the basic monthly rent payable shall be Three Thousand Dollars ($3,000.
00) per month.
SECTION FOUR
USE
A. Lessee shall use the demised premises for general office, sales,
storage, research and development, and incidental uses, and hereby agrees that
it has determined to its satisfaction that the demised premises can be used for
those purposes.
X . Xxxxxx represents and warrants that the above-specified uses are
permitted under current applicable zoning laws, rules, and regulations existing
as of the date of occupancy.
C. The demised premises may not be used for any other purpose without
lessor, s prior, express, and written consent, which consent shall not be
unreasonably withheld, conditioned, or delayed.
D . Lessee acknowledges that neither lessor nor lessor's agents has
made any representations or warranties as to the suitability of the demised
premises for the conduct of lessee's business, except as set forth herein.
E. Lessee shall comply with any direction of any governmental authority
having jurisdiction that shall, by reason of the specific nature of lessee's use
or occupancy of the demised premises, impose any duty upon lessee or lessor with
respect to the demised premises or with respect to the use or occupation of the
demised premises.
F . Lessee shall not use or occupy the demised premises in violation of
law, or the certificate of occupancy, or conditional certificate of occupancy,
if any, issued for the demised premises, and shall, upon written notice from
lessor, discontinue any use of the demised premises that is declared by any
governmental authority having jurisdiction to be a violation of law or of the
certificate of occupancy, or conditional certificate of occupancy, if any.
G. Lessee shall not do or permit to be done anything on the demised
premises that will invalidate or increase the cost of any fire, extended
coverage, or any other insurance policy covering the building in which the
demised premises are located. Within thirty (30) days of demand by lessor,
lessee shall reimburse lessor for any additional premium charged for such policy
by reason of lessee's failure to comply with the provisions of this paragraph.
H. Lessee shall not do or permit anything to be done in or about the
demised premises that will obstruct or interfere with the rights of other
tenants or occupants of the building in which the demised premises are located,
or injure or annoy them or interfere with their use or allow the demised
premises to be used for any immoral or unlawful purpose, nor shall lessee cause,
maintain, or permit any nuisance in, on, or about the demised premises or common
areas.
I . Lessee shall not commit or suffer to be committed any waste in or
upon the demised premises or common areas.
J. Lessee shall not place upon or install in windows or other openings
or on the exterior of the demised premises or in any common areas any signs,
symbols, drapes, or other materials without the prior, express, and written
consent of lessor, which consent shall not be unreasonably withheld, delayed or
conditioned.
SECTION FIVE
MAINTENANCE AND MANAGEMENT OF COMMON AREAS
A. Except for damage caused by any negligent or intentional act or
negligent omission of lessee, lessee' s agents, employees, or invitees, which is
not covered by lessor, s insurance, lessor shall maintain the common areas in
good condition at all times. Lessor shall be required to maintain all structural
elements of the building and all mechanical systems in good condition and
repair.
Lessor shall have the right to:
(1) Establish and enforce reasonable rules and regulations applicable
to all tenants concerning the maintenance, management, use, and operation of the
common areas;
(2) Make changes to the common areas including, but not limited to,
changes in the location of driveways, entrances, exits, vehicular parking
spaces, parking area, or the direction of the flow of traffic. Lessor shall not
be permitted to make such changes if such changes will result in fewer parking
spaces being available for lessee, or otherwise adversely affect lessee's use of
the leased premises.
Lessor shall have no obligation to make repairs under this section
until a reasonable time after receipt of written notice of the need for such
repairs.
B . Common areas, as referred to in this lease agreement, shall mean
all parts of the project, in which the building of which the demised premises
are a part, is located, the building in which the demised premises are located,
and related land uses and facilities outside the demised premises and available
to be used in common by all tenants in the project. Common areas include, but
are not limited to:
(1) The land upon which the project is located, pedestrian walkways and
patios, landscaped areas, sidewalks, loading areas, parking areas, and roads;
(2) The unexposed electrical, plumbing, and sewage systems laying
outside the demised premises;
(3) Window frames, gutters, and down spouts on the building in which
the demised premises are located;
(4) Exterior surfaces, roof, and exterior window surfaces; and
(5) Lobbies, corridors, restrooms, mechanical rooms, and telephone
booths in the building.
SECTION SIX
REPAIRS
A. Lessor warrants that the demised premises are in good and sanitary
order, condition, and repair and in compliance with all applicable laws, codes
and ordinances. Lessee shall keep, maintain, and preserve the demised premises
and appurtenances, including, but not limited to, signs, windows, doors,
skylights, and trade fixtures, in good condition and repair, reasonable wear and
tear and casualty damage excepted, and shall, when and if needed, at lessee's
sole cost and expense, make all repairs to the demised premises and every part
of the demised premises unless such damage is caused by the negligent acts or
omissions of lessor, its agents or employees.
B. Lessee shall, upon the expiration or sooner termination of the term
of this lease agreement, surrender the demised premises to lessor in the same
condition as when received, reasonable wear and tear, and casualty damage
excepted.
C . Except for the initial improvements provided by lessor, lessor
shall have no obligation to alter, remodel, improve, repair, decorate, or paint
the demised premises or any part of the demised premises, except as provided
herein.
D. The parties affirm that lessor has made no representations to
lessee respecting the condition of the demised premises or the building of which
the demised premises are a part, except as specifically set forth in this lease
agreement.
E . In spite of anything to the contrary contained in this section,
lessor shall at its sole cost and expense repair and maintain all building
system services and all the structural portions of the building in which the
demised premises are located, unless such maintenance and repairs are
necessitated in part or in whole by the negligent act or omission of lessee,
lessee's agents, employees, or invitees, in which case lessee shall pay to
lessor, as additional rent, the reasonable cost of such maintenance and repairs,
to the extent not covered by the insurance maintained or required to be
maintained hereunder.
F. For purposes of this lease agreement, structural portions of the
building of which the demised premises are a part shall mean:
(1) The foundation,
(2) The floor,
(3) The exterior and load-bearing walls, and
(4) The roof.
G. Unless damage is caused by lessor's negligent acts or omissions,
lessor shall not be liable for any failure to make such repairs or to per-Form
any maintenance unless such failure shall persist for an unreasonable length of
time after written notice of the need for repair or maintenance has been given
to lessor by lessee.
SECTION SEVEN
IMPROVEMENTS AND ALTERATIONS
A. So long as lessee's operations are not adversely affected lessor
shall have the right at any time to change the arrangement and/or location of
entrances or passageways, doors and doorways, and corridors, elevators, stairs,
toilets, or other public parts of the building in which the demised premises are
located. on giving lessee reasonable notice thereof, lessor shall have the right
to change the name, number, or designation by which the building in which the
demised premises are located or the project is commonly known, excepting
lessee's demised premises.
B. Lessee shall make no alterations, additions, or improvements in or
to the demised premises without lessor's prior, express, and written consent,
which will not be unreasonably withheld, conditioned, or delayed. If consent is
given, any alterations, additions, or improvements in or to the demised premises
shall be performed only by contractors or mechanics approved in advance of any
such work by lessor.
C . Lessee agrees that there shall be no construction of partitions or
other obstruction that might materially interfere with lessor's free access to
mechanical installations or service facilities of the building, or materially
interfere with the moving of lessor's equipment to or from the enclosures
containing such installations or facilities, or materially interfere with free
access by or rights of other tenants of the building to their leased premises.
D. Lessee covenants and agrees that all work done by lessee shall be
performed in full compliance with all laws, rules, order, ordinances,
regulations, and requirements of all governmental agencies, offices, and boards
having jurisdiction. Lessee further covenants and agrees that any mechanic's
lien filed against the demised premises or against the building in which the
demised premises are located for work claimed to have been done for, or
materials claimed to have been furnished to, lessee, will be discharged by
lessee, by bond or otherwise within ninety (90) days after the filing thereof,
at the sole cost and expense of lessee. All work performed shall be done in a
skillful manner and with materials (where not specifically described in the
specifications) of the quality and appearance customary in the trade, and of a
quality at least equal to and style consistent with the existing building, and
shall become the property of lessor.
SECTION EIGHT
PERSONAL PROPERTY
A. Furnishings, trade fixtures, and equipment installed by lessee shall
be the property of lessee and may be removed by lessee at any time during the
term of this lease agreement, provided that any equipment or furnishings subject
to the terms of other agreements, if any, is maintained, moved or disposed of
according to the terms of those agreements. On termination of this lease
agreement, lessee shall remove any such property that is not permanently affixed
to the premises. Lessee shall repair any damage to the demised premises
resulting from the installation or removal of such property.
B. Any repairs undertaken by lessee in accordance with the requirements
of this section shall be subject to all terms and conditions for improvements
and alterations as are set forth in Section Eight, above.
C. If lessee shall fail to remove all of its effects from the demised
premises upon termination of this lease agreement for any reason whatsoever,
lessor may, at its option, remove such effects without liability to lessee for
the loss of such items. In such event, lessee agrees to pay lessor upon demand
for any and all reasonable expenses incurred in removal, including court costs
and reasonable attorney fees and storage charges on such effects for any length
of time that may be in lessor's possession.
SECTION NINE
ADDITIONAL RENT
A. In addition to the basic monthly rent required by Section
Three,above,lessee shall pay as additional rent its pro rata share of all real
property taxes or other assessments and insurance premiums assessed against the
building in which the demised premises are located, common areas charges, and
property management fees incurred by lessor as set forth below.
B. Operating expenses shall not include any expenses relating to
mortgages, ground leases, or for capital repairs or improvements to the building
in which the demised premises are located, expenses incurred as a result of the
negligence of lessor, its agents or employees, or legal or other fees incurred
in connection with leasing all or any portion of the building in which the
demised premises are located or in enforcing the terms of any lease agreements
or any of the following costs or expenses: removal of hazardous substances,
costs of delivery of disproportionate services to other lessees, special
assessments related to initial construction.
C. In the event of non-payment of all or any portion of such charges,
costs, and expenses, lessor shall have the same rights and remedies as provided
in this lease agreement for the failure of lessee to pay rent.
D. For purposes of this lease agreement, lessee's pro rata share shall
be equal to the ratio of the total number of leasable square feet in the demised
premises to the total number of leasable square feet in the building in which
the demised premises are located.
E. Any costs or charges that cover a period not within the term of this
lease agreement shall be prorated.
F. Lessee shall have the right to audit operating expenses.
If the audit reveals that lessee has been overcharged, after the annual
application of Section Fifteen below, then in addition to refunding the
overpayment, lessor shall pay the costs of the audit, in the event that the
overpayment exceeds the cost of the audit.
SECTION TEN
COMMON AREA AND MAINTENANCE CHARGES
A. Lessee shall pay to lessor upon demand, as additional rent, its pro
rata share of any and all common area costs and charges as defined herein.
B. Common area costs shall mean all sums expended by lessor for the
maintenance and operation of the common areas and reasonable property management
fees incurred by lessor and all increases in any such costs and expenses,
subject to the exclusions described herein.
C. Costs for maintenance, management, and operation of the common areas
shall include, but not be limited to, the following: cleaning, sweeping,
cleaning exterior window surfaces, repainting, ice and snow removal, lighting,
water, and other utilities, and other costs necessary in lessor's judgment for
the maintenance and operation of the common areas, (and any other charges,
costs, and expenses that arise during the term of this lease agreement) relating
to the maintenance of the common areas, subject to the exclusions described
herein. Lessee shall pay its own janitorial expenses for the demised premises.
SECTION ELEVEN
REAL PROPERTY TAXES
Lessee shall during the term of this lease pay its pro rata share of
all real property taxes and general and special assessments levied and assessed
against the building, and shall not include transfer or recordation taxes.
Lessee specifically acknowledges that the property has in the past enjoyed a
beneficial tax status due to the nature of the lessor/co-tenant and that Lessor
will pay all real property taxes on the property, until such time as the
property may lose its current favorable tax status which will occur at the time
of signing of this lease. Thereafter Lessee shall be responsible for its pro
rata share of the real estate taxes from the date this lease commences
throughout the term of the lease. Such taxes shall commence by Lessee paying its
pro rata share of the 1998 real estate taxes which become a lien on the premises
on January 1, 1999 for the taxes for the approximate ten (10) months of the
lease in 1998 which shall be paid as part of the 1998 lease payment.
SECTION TWELVE
INSURANCE
Lessee shall pay its pro rata share of all fire and extended coverage
insurance that lessor is required to maintain on the building in which the
demised premises are located.
SECTION THIRTEEN
HEATING AND AIR CONDITIONING
Lessor may engage a maintenance firm to repair and maintain the
heating, ventilating, and air conditioning system servicing the building in
which the demised premises are located. Lessee shall pay to lessor, or at
lessor's election directly to the maintenance firm, Lessee's pro rata share of
the reasonable cost of such work.
SECTION FOURTEEN
UTILITIES
Lessee shall pay for heat, light, water, and other utility services
supplied to the demised premises which lessee consumes and which is separately
metered, if any. In addition, lessee shall pay its pro rata share of water,
sewer, and other utility charges for which separate xxxxxxxx are not available.
Separate charges may be made by lessor to lessee to reflect unusual or excessive
utility system demands, by lessee, where not separately metered.
SECTION FIFTEEN
PAYMENT OF ADDITIONAL RENT
A. Lessor shall provide lessee with written notice of the estimated
operating expenses and additional rent to be paid by lessee for each calendar
year during the term of this lease agreement prior to the start of each such
year, except that the notice for the calendar year for which the commencement
date of this lease agreement occurs shall be provided no later than thirty (30)
days after commencement date. Lessor may, at lessor's option, revise the
additional rent estimate once during any calendar year, on at least thirty (30)
days, written notice to lessee, and lessee's monthly payments under this lease
agreement shall be adjusted accordingly for the balance of such calendar year.
B. Within thirty (30) days after the end of every calendar year during
the term of this
lease agreement, lessor shall provide lessee with a written statement of the
actual operating expenses incurred by lessor and additional rent paid by lessee
for that year. If the actual additional rent should exceed the estimated
additional rent for such year, then lessee shall pay to lessor the additional
amount due to lessor within thirty (30)days. If the actual additional rent shall
be less than the estimated additional rent for such year, then lessor shall
credit against future additional rent due under this lease agreement the amount
of overpayment by lessee, or pay such amount in cash.
C. Lessee shall have the right to review lessor's statements at any
time within sixty (60) days after lessor has provided statements to lessee, and
shall be permitted to inspect lessor's books and records to determine whether
there have been any errors. If errors are discovered, appropriate credits of
payments will be made. Any overpayment of additional rent for the final year of
the term of this lease agreement shall be refunded to lessee at the expiration
of the term of this lease agreement.
SECTION SIXTEEN
LESSEE'S INSURANCE
A. Lessee shall, during the term of this lease agreement and any other
period of occupancy, at Lessee's sole cost and expense, maintain a reasonable
amount of insurance to cover the following:
(1) Standard form property insurance insuring against the perils of
fire, extended coverage, vandalism, malicious mischief, special extended
coverage ("all risk") , and sprinkler coverage. This insurance policy shall be
upon all property owned by lessee, for which lessee is legally liable, or that
was installed at lessee's expense and which is located on or in the demised
premises, including, but not limited to, furniture, fittings, fixtures (other
than lessee improvements installed by lessor) , and any other personal property
in the amount of the full replacement value of such property. This insurance
policy shall also be upon direct or indirect loss to lessee's earnings
attributable to the demised premises or to the building in which the demised
premises are located in an amount that will properly reimburse lessee. Lessor
and any named mortgagee shall be furnished with a copy of the certificate of
insurance. The insurance policy shall contain endorsements requiring thirty (30)
days' written notice to lessor and any named mortgagee prior to any cancellation
or reduction in the amount of coverage.
(2) Comprehensive general liability insurance insuring lessee against
any liability arising out of this lease agreement, or the use, occupancy, or
maintenance of the demised premises and all areas appurtenant to the demised
premises. Such insurance shall be in the amount of not less than One Million
Dollars ($1, 000, 000) combined single limit for injury to and/or death of one
or more persons in an occurrence, and for damage to tangible property (including
loss of use) in an occurrence. The insurance policy shall insure against hazards
arising from the demised premises and operations conducted in and on the demised
premises, claims or actions by or against or involving independent contractors,
and contractual liability under this lease agreement (including the duty to
indemnify lessor) , and shall name lessor and any mortgagee of lessor as
insured parties, as their respective interests may appear. Lessor and any named
mortgagee shall be furnished with a copy of the certificate of insurance. Such
insurance shall be primary and non-contributing with any insurance carried by
lessor. The liability insurance policy shall contain endorsements requiring
thirty (30) days, written notice to lessor and any named mortgagee prior to any
cancellation or reduction in the amount of coverage.
(3) Worker's compensation and employer's liability insurance as
required by the State of South Dakota.
B. All insurance policies shall be written in a form reasonably
satisfactory to lessor and to any named mortgagee. If lessor or the named
mortgagee obtains any insurance that is the responsibility of lessee under this
lease agreement, lessor or such mortgagee shall deliver to lessee a written
statement setting forth the cost of any such insurance and showing in reasonable
detail the manner in which it has been computed. Payment of such insurance on
lessee's behalf shall be charged to lessee as additional rent and lessee shall
be responsible to lessor or the procuring party for the full cost of such
insurance.
SECTION SEVENTEEN
WAIVER OF SUBROGATION
A. Lessee and lessor each releases and relieves the other and waives
its entire right of recovery against the other for loss or damage arising out of
or incident to the perils covered by fire and extended coverage, and liability
insurance endorsements approved of or use in the State of South Dakota that
occur in, on, or about the demised premises, whether caused by the negligence of
either party, their agents, employees or otherwise.
B. Each party shall obtain from its insurer or insurers provisions
permitting waiver of any claim against the other party for loss or damage within
the scope of the above-specified insurance.
SECTION EIGHTEEN
INDEMNIFICATION
A. Lessee shall indemnify, defend, and hold lessor harmless from any
and all claims and damages (including reasonable attorney fees and costs)
arising from lessee's use of the demised premises or the conduct of its business
or from any activity, work, or thing done, permitted, or suffered by lessee, in
or about the demised premises and/or the building in which the demised premises
are located, unless caused by lessor or lessor's agents or employees.
B. Lessee shall further indemnify, defend, and hold lessor harmless
from any and all claims and damages (including reasonable attorney fees and
costs) arising from any breach or default in the terms of this lease agreement,
or arising from any act, negligence, fault, or omission of lessee or lessee's
agents, employees, or invitees, and from and against any and all costs,
reasonable attorney fees, expenses, and liabilities incurred in or about such
claim or any
action or proceeding brought on such claim.
C. In case any action or proceeding shall be brought against lessor by
reason of any such claim, lessee upon notice from lessor, shall defend it at
lessee's expense by counsel approved in writing by lessor.
X. Xxxxxx shall indemnify, defend, and hold lessee harmless from any
and all claims and damages (including reasonable attorney fees and costs)
arising from lessor's use of the demised premises or the conduct of its business
or from any activity, work, or thing done, permitted, or suffered by lessor, in
or about the demised premises and/or the building in which the demised premises
are located, unless caused by lessee or lessee's agents or employees.
X. Xxxxxx shall further indemnify, defend, and hold lessee harmless
from any and all claims and damages (including reasonable attorney fees and
costs) arising from any breach or default in the terms of this lease agreement,
or arising from any act, negligence, fault, or omission of lessor or lessor's
agents, employees, or invitees, and from and against any and all costs,
reasonable attorney fees, expenses, and liabilities incurred in or about such
claim or any action or proceeding brought on such claim.
F. In case any action or proceeding shall be brought against lessee by
reason of any such claim, lessor upon notice from lessee, shall defend it at
lessor's expense by counsel approved in writing by lessee.
SECTION NINETEEN
DAMAGE TO LESSEE'S PROPERTY
A. Lessee shall give prompt notice to lessor in case of fire or
accident in or on the demised premises or the building in which the demised
premises are located.
SECTION TWENTY
LESSEE'S RIGHT TO USE COMMON AREAS
A. Lessor gives to lessee and lessee's employees, authorized
representatives, and business invitees a non-exclusive right to reasonable use
and enjoyment of the common areas, subject to lessor's rights set forth in
Section Seven of this lease agreement.
B. Lessee shall be entitled to parking spaces in the adjoining parking
lot in the same ratio which the demised premises are to the whole building.
SECTION TWENTY-ONE
ACCESS BY LESSOR
A. Lessee shall allow lessor access to the demised premises at
reasonable times on reasonable notice for the purpose of inspecting, altering,
and repairing the demised premises;
provided however, that lessee's use of the premises shall not be disrupted.
X. Xxxxxx may also show the demised premises to prospective tenants or
renters at reasonable times and on reasonable notice.
X. Xxxxxx shall at all times have and retain a key with which to unlock
all doors in and on the demised premises, excluding lessee's vaults and safes.
X. Xxxxxx shall have the right to use any and all reasonable means that
lessor may deem proper to open doors in an emergency to obtain entry to the
demised premises.
E. Any entry to the demised premises obtained by lessor for any of the
above-stated purposes and by any of such means, or otherwise, shall not be
construed or deemed to be a forcible or unlawful entry onto the demised
premises, or an eviction of lessee from the demised premises or any part of the
demised premises.
F. Lessee waives any claim for damages for any injury or inconvenience
to or interference with lessee's business, any loss of occupancy or quiet
enjoyment of the demise premises, and any other loss in, upon, or arising from
lessor's entry onto the demised premises in an emergency, except to the extent
caused by lessor's negligence.
SECTION TWENTY-TWO
DAMAGE OR DESTRUCTION
A. In the event the demised premises are damaged by fire or other
cause, lessor, at lessor's sole cost and expense, shall, as soon as reasonably
possible thereafter, commence repair, restoration, and reconstruction of the
demised premises and prosecute it diligently until completion. In the event the
damage to the demised premises or the building in which the demised premises are
located is of a nature that cannot be repaired, restored, or reconstructed
within ninety (90) days of the date of damage, or such longer period as may be
mutually agreed by the parties, and subject in any event to force majeure,
either party may cancel and terminate this lease agreement by giving the other
party notice in writing of its intention to cancel this lease agreement no later
than ten (10) days after the determination that the repair will require more
than 90 days to complete, whereupon the term of this lease agreement shall
terminate upon the 30th day after such notice is given. No rent shall be
required to be paid from the date of the damage.
B. In the event of repair, reconstruction, and restoration by lessor as
provided in this section, the rental payable under this lease agreement shall be
abated proportionately with the degree to which lessee's use of the demised
premises is impaired during the period of such repair, reconstruction, or
restoration, unless the damage or destruction was caused by the negligent act or
omission of lessee or lessee's agents, employees, or invitees, in which event
the provisions of this sentence shall not apply.
Lessee shall not be entitled to any compensation or damages for loss of
the use of the
whole or any part of the demised premises or any injury or interference with
lessee's business and/or any inconvenience or annoyance occasioned by such
damage, repair, reconstruction, or restoration to the demised premises, or the
building in which the demised premises are located, unless the damage or
destruction was caused by lessor's negligence.
C. Lessee shall not be released from any of its obligations under this
lease agreement except to the extent and under the conditions expressly stated
in this section. In spite of anything to the contrary contained in this section,
if lessor is delayed or prevented from repairing or restoring the demised
premises for six (6) months after the occurrence of the damage or destruction by
reason of an act of God, war, governmental restrictions, inability to procure
the necessary labor or material, or other cause beyond the control of lessor,
lessor shall be relieved of its obligation to make such repairs or restoration
and lessee shall be released from its obligations under this lease agreement at
the end of such six (6) month period, and this lease agreement shall be deemed
to be terminated.
D. If lessor is obligated to or elects to repair or restore as provided
in this lease agreement, lessor shall be obligated to make repair or restoration
only of those portions of the demised premises that were originally provided at
lessor, s expense, and the repair and restoration of items not provided at
lessor's expense shall be the obligation of lessee. If lessor receives proceeds
in excess of the current cost to replace those original lessee improvements,
then the excess proceeds will be applied to the replacement of additional
improvements provided by lessee in excess of lessor's original improvements.
E. In spite of anything to the contrary contained in this section,
lessor shall not have any obligation whatsoever to repair, reconstruct, or
restore the demised premises when the damage resulting from any casualty covered
under this section occurs during the last six (6) months of the current term of
this lease agreement or if any mortgagee fails to make insurance proceeds or any
portion of insurance proceeds available to lessor for such repair,
reconstruction, or restoration.
F. Upon any termination of this lease agreement under any of the
provisions of this section, the parties shall be released without further
obligation to the other as of the termination date, provided lessee shall remain
liable to lessor for items that have accrued as of the termination date and are
then unpaid.
SECTION TWENTY-THREE
CONDEMNATION
A. In case all of the demised premises, the building in which the
demised premises are located, or the common areas or such part thereof as shall
substantially interfere with lessee's use and occupancy thereof, shall be taken
for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation, or eminent domain, or sold
to prevent such taking, either party shall have the right to terminate this
lease agreement effective as of the date possession is required to be
surrendered to the taking authority.
B. Lessee shall not assert any claim against lessor or the taking
authority for any compensation because of such taking and lessor shall be
entitled to receive the entire amount of any award with deduction for any estate
or interest of lessee, except as provided herein.
C. In the event the amount of property and the type of estate taken
shall not substantially interfere with the conduct of lessee's business, and
lessor determines lessor is economically able to restore- the demised premises,
the building in which the demised premises are located, or the common areas to
an operating condition comparable to that which existed prior to the taking,
lessor shall be entitled to the entire amount of the award without deduction for
any estate or interest of lessee. In that event, lessor shall restore the
demised premises to substantially their same condition prior to the taking, and
a proportionate allowance shall be made to lessee for the rent corresponding to
the time during which and to the part of the demised premises of which lessee
shall be so deprived on account of the taking and restoration.
D. Nothing contained in this section shall be deemed to give lessor any
interest in an award made to lessee for the taking of personal property and
fixtures belonging to lessee or for relocation expenses or any other award made
separately to lessee.
SECTION TWENTY-FOUR
LESSEE'S DEFAULTS AND REMEDIES
A. The occurrence of any one or more of the following events shall
constitute a material default in breach of this lease agreement by lessee:
(1) Vacation or abandonment of the demised premises. Vacation and
abandonment includes, but is not limited to, any absence of lessee from the
demised premises for thirty (30) business days or longer.
(2) Failure by lessee to make any payment required under this lease
agreement as when due, where such failure shall continue for a period of ten
(10) days after written notice from lessor.
(3) Failure by lessee to observe or to perform any of the covenants,
conditions, or provisions of this lease agreement, other than the making of any
payment, where such failure shall continue for a period of ten (10) days after
notice of such failure from lessor or such additional period of time as is
reasonably necessary to cure such failure, provided lessee diligently prosecutes
such cure.
B. In the event of any default by lessee, in addition to any other
remedies available to lessor at law or in equity, lessor shall have the
immediate option to terminate this lease agreement and all rights of lessee
under this lease agreement. In the event that lessor shall so elect to terminate
this lease agreement, then lessor may recover from lessee:
(1) The worth at the time of the award of any unpaid rent that was due
and owing at the
time of termination;
(2) The worth at the time of the award of the amount of the unpaid rent
that would have been earned from the date of termination until the time of the
award, less the amount of such rental loss that lessee proves could reasonably
have been avoided; and
(3) The worth at the time of the award of the amount of the unpaid rent
due for the balance of the term of this lease agreement after the time of the
award, less the amount of such rental loss that lessee proves could reasonably
have been avoided.
C. In the event of any such default by lessee, lessor shall also have
the right, adhering to applicable legal processes, with or without terminating
this lease agreement, to reenter the demised premises and remove all persons and
property from the demised premises. Such property may be removed and stored in a
public warehouse or elsewhere at the cost of or on the account of lessee. No
reentry or taking of the demised premises by lessor pursuant to this section
shall be construed as an election to terminate this lease agreement unless
lessor gives lessee written notice of such intention or unless the termination
of this lease agreement is decreed by a court of competent jurisdiction.
D. In the event of any such default by lessee, lessor shall also have
the right, adhering to applicable legal processes, with or without terminating
this lease agreement, to reenter the demised premises and to relet them, and
lessee agrees to pay lessor the cost of recovering possession of the demised
premises, the reasonable expenses of reletting, and any other costs or damages
arising out of lessee's default. Lessee further covenants and agrees to make
good to lessor any deficiency arising from the reletting of the demised premises
at a lesser rental than agreed to in this lease agreement. Lessee shall pay to
lessor such deficiency each month as the amount of the deficiency is ascertained
by lessor and billed to lessee. Lessor is obligated to use good faith efforts to
mitigate its damages.
SECTION TWENTY-FIVE
REMEDIES CUMULATIVE
All rights, options and remedies of lessor and lessee contained in this
lease agreement shall be construed and held to be cumulative, and no one of them
shall be exclusive of the other. Either party shall have the right to pursue any
one or all of such remedies or any other remedy or relief that may be provided
by law, whether or not stated in this lease agreement.
SECTION TWENTY-SIX
NO WAIVER
No waiver of any default of lessee under this lease agreement shall be
implied from any acceptance by lessor of any rent or other payments due under
this lease agreement or any omission by lessor to take any action on account of
such default if such default persists or is repeated, and no express waiver
shall effect a default other than as specified in the waiver. The
consent or approval of either party to an act by the other party shall not be
deemed to waive or render unnecessary either party's consent or approval of any
subsequent similar act by the other party.
SECTION TWENTY-SEVEN
CURE BY LESSOR
A. Lessor or any mortgagee, at any time after lessee commits a default,
may cure the default at the cost of lessee.
B. If lessor or any mortgagee at any time, by reason of lessee's
default, pays any sum or does any act that requires the payment of any sum, the
sum paid by lessor or any mortgagee at the time the sum is paid shall be due
immediately from lessee to lessor or the mortgagee, and if paid at a date later
than thirty (30) days shall bear interest at the rate of eighteen percent
(18'-.) per annum from the date the sum is paid by lessor or the mortgagee until
lessor or the mortgagee is reimbursed by lessee. The sum, together with
interest, shall be deemed to be additional rent.
SECTION TWENTY-EIGHT
LESSOR'S DEFAULT
A. Lessee shall notify lessor promptly of any default not by its nature
necessarily known to lessor.
X. Xxxxxx shall not be in default under this lease agreement unless
lessor fails to perform its obligation within ten (10) days after notice by
lessee specifying where lessor has failed to perform, or immediately in the
event of an emergency. If the nature of lessor's obligation is such that more
than ten (10) days are required to perform, lessor shall not be in default if
lessor commences performance within ten (10) days of lessee's notice and
thereafter pursues performance with due diligence.
C. If there are any repairs that are the obligation of lessor, and
lessor exceeds the time period allowed in Paragraph B. of this section, then
lessee may, if it chooses, elect to perform the repair, then xxxx the reasonable
cost of such repair to lessor, including reasonable interest.
SECTION TWENTY-NINE
MORTGAGE PROTECTION
In the event of any default on the part of lessor, and within ten (10)
days of such event of default, lessee will give notice by registered or
certified mail to any mortgagee or contractor for deed whose address shall have
been furnished to lessee, and shall offer the mortgagee or contractor for deed
an opportunity to cure or commence to cure the default within ten (10) days
after notice from lessee.
SECTION THIRTY
ASSIGNMENT BY LESSEE AND SUCCESSION
A. Lessee shall not assign, let, or sublet this lease agreement or the
demised premises, or any part of the demised premises, or in any way transfer or
hypothecate any of its interest in this lease agreement or the demised premises
without first obtaining the written consent of lessor, which will not be
unreasonably withheld, conditioned, or delayed. Lessor's consent shall be
conditioned upon lessor's approval of the economic viability of the proposed
assignee or sublessee, lessor's determination that the proposed use of the
demised premises by the assignee or sublessee is consistent with the tenant mix
and uses in the building in which the demised premises are located, and such
other conditions as lessor deems appropriate.
B. If lessee is a corporation, any transfer of this lease agreement
from lessee by merger, consolidation, or liquidation or any change in the
ownership or power to vote the majority of the outstanding voting stock of
lessee shall constitute an assignment for the purposes of this section, subject
to the test of reasonableness.
C. Subject to the provisions above, this lease agreement shall be
binding upon and inure to the benefit of the parties, and successors and
assigns. However, lessee shall be released from all responsibility for any and
all obligations, liabilities, and responsibilities of lessee under this lease
agreement after any assignment, subletting, or hypothecation by lessee as
allowed hereunder.
D. Lessee agrees to reimburse lessor for lessor's reasonable attorney
fees and related costs incurred in connection with the processing, review, an/or
documentation of any requested transfer, assignment, subletting, or
hypothecation of this lease agreement or of lessee's interest in and to the
demised premises.
SECTION THIRTY-ONE
LATE CHARGES
Lessee acknowledges that late payment by lessee to lessor of rent or
other sums due under this lease agreement will cause lessor to incur costs not
contemplated by this lease agreement, the exact amount of which would be
extremely difficult and impractical to ascertain. Such costs include, but are
not limited to, processing and accounting charges, and late charges that may be
imposed on lessor by the terms of any mortgage or deed of trust covering the
demised premises. In the event lessee should fail to pay any installment of rent
or any other sum due under this lease agreement within seven (7) days after
receipt of written notice that such sum is due, lessee shall pay to lessor, as
additional rent, a late charge equal to six percent (6%) of each installment or
sum. Waiver of the six percent (6%) late charge with respect to any, installment
or sum shall not be deemed to constitute a waiver with respect to any subsequent
installment or sum so due. In the event any amount so due is delinquent for a
period in excess of ten (10) days after written notice, an additional late
charge at the rate of one and one half percent (1 1/2 per month on the amount so
overdue shall be paid to lessor for the period of delinquency in
excess of ten (10) days. A charge of Thirty Dollars ($30) will be paid by lessee
to lessor for each returned check.
SECTION THIRTY-TWO
SUBORDINATION
A. This lease agreement, at lessor's option, shall be subordinate to
any mortgage, deed of trust, contract for deed, or other hypothecation for
security now or hereafter placed upon the real property of which the demised
premises are a part, and to any and all advances made on the security thereof,
and to all renewals, modifications, consolidations, replacements, and extensions
thereof. In spite of such subordination, lessee's right to quiet possession of
the demised premises pursuant to the terms of this lease shall not be disturbed
if lessee is not in default and so long as lessee shall pay the rent and observe
and perform all of the provisions of this lease agreement, unless this lease
agreement is otherwise terminated pursuant to its terms. If any holder of such
mortgage, deed of trust, contract for deed, or other hypothecation for security
shall elect to have this lease agreement prior to its lien and shall give
written notice to that effect to lessee, this lease agreement shall be deemed
prior to such mortgage, deed of trust, contract for deed, or other hypothecation
for security, whether this lease agreement is dated prior or subsequent to such
mortgage, deed of trust, contract for deed, or other hypothecation for security,
or the date of recording such instrument. Lessor shall be obligated to obtain a
non-disturbance agreement from any present or future mortgagee in favor of
lessee.
B. Lessee also agrees to execute any reasonable documents required to
effectuate such subordination or to make this lease agreement prior to the lien
of any mortgage, deed of trust, contract for deed, or other hypothecation for
security, as the case may be.
C. Upon a foreclosure of any deed of trust, contract for deed or
mortgage or execution of any deed in lieu of foreclosure, or declaration of
lessor's default under any hypothecation for security and demand by lessor's
successor, lessee shall attorn to and recognize such successor as lessor under
this lease agreement.
SECTION THIRTY-THREE
NOTICES
All notices under this lease agreement shall be in writing and shall be
effective when mailed by certified mail, return receipt requested, or when
delivered personally to lessor and lessee at their addresses set forth above, or
to such other addresses as may be designated by notice.
SECTION THIRTY-FOUR
ENTIRE AGREEMENT
This lease agreement shall constitute the entire agreement between the
parties. Any prior understanding or representation of any kind preceding the
date of this lease agreement shall not
be binding upon either party except to the extent incorporated in this lease
agreement.
SECTION THIRTY-FIVE
MODIFICATION OF AGREEMENT
Any modification of this lease agreement or additional obligation
assumed by either party in connection with this agreement shall be binding only
if evidenced in a writing signed by each party or an authorized representative
of each party.
SECTION THIRTY-SIX
ATTORNEY FEES
In the event that any action is filed in relation to this lease
agreement, the unsuccessful party in the action shall pay to the successful
party, in addition to all the sums that either party may be called on to pay, a
reasonable sum for the successful party's attorney fees.
SECTION THIRTY-SEVEN
HOLD-OVER TENANCY
If (without execution of a new lease agreement or written extension)
lessee shall hold over after the expiration of the term of this lease agreement,
lessee shall be deemed to be occupying the demised premises as a tenant from
month-to-month, which tenancy may be terminated as provided by law. During such
tenancy, lessee agrees to be bound by all of the terms, covenants, and
conditions specified in this lease agreement, insofar as applicable.
SECTION THIRTY-EIGHT
RULES AND REGULATIONS
Lessee shall faithfully observe and comply with the "Rules and
Regulations" that apply to all tenants, and all reasonable and
non-discriminatory modifications to such rules and regulations from time to time
put into effect by lessor. These rules and regulations are imposed for the
cleanliness, good appearance, proper maintenance, and good order and reasonable
use of the demised premises and the building in which the demised premises are
located by all tenants and their clients, customers, employees, and business
invitees. Lessor shall not be responsible or liable to lessee for violation or
non-performance of any of the rules and regulations by any other tenant or
occupant of the building in which the demised premises are located so long as
lessor uses reasonable efforts to enforce such rules.
SECTION THIRTY-NINE
GOVERNING LAW
It is agreed that this lease agreement shall be governed by, construed,
and enforced in accordance with the laws of the State of South Dakota.
SECTION FORTY
DEFINITION OF LESSOR
A. The term "lessor, 11 as used in this lease agreement, so far as
covenants or obligations on the part of lessor are concerned, shall be limited
to mean and include only the owner or owners, at the time in question, of fee
title, or holders of a contract for deed granting fee title of the building in
which the demised premises are located.
B. In the event of any transfer, assignment, or other conveyance of
any such fee title, lessor named in this lease agreement (and in the case of any
subsequent transfers or conveyances, the then grantor) shall be automatically
freed and relieved from and after the date of such transfer, assignment, or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of lessor contained in this lease agreement thereafter
to be performed. Without further agreement, the transferee of such title shall
be deemed to have assumed and agreed to observe and perform any and all
obligations of lessor under this lease agreement, during its ownership of the
demised premises.
X. Xxxxxx may transfer its interest in the demised premises without
the consent of lessee. Such transfer shall not be deemed a violation on lessor's
part of any of the terms and conditions of this lease agreement. In spite of the
preceding, if the transferee is the mortgagee who acquires title to the demised
premises by foreclosure or deed in lieu of foreclosure, lessor shall remain
liable for the performance of all covenants, conditions, and obligations and for
any default of lessor under this lease agreement occurring or arising prior to
the date the mortgagee acquired title to the demised premises.
SECTION FORTY-ONE
PARAGRAPH HEADINGS
The titles to the paragraphs of this lease agreement are solely for the
convenience of the parties and shall not be used to explain, modify, simplify,
or aid in the interpretation of the provisions of this lease agreement.
SECTION FORTY-TWO
TIME OF THE ESSENCE
It is specifically declared and agreed that time is of the essence of
this lease agreement.
SECTION FORTY-THREE
EFFECT OF PARTIAL INVALIDITY
The invalidity of any part of this agreement will not and shall not be
deemed to affect the validity of any other part. In the event that any provision
of this agreement is held to be invalid,
the parties agree that the remaining provisions shall be deemed to be in full
force and effect as if they had been executed by both parties subsequent to the
expungement of the invalid provision.
SECTION FORTY-FOUR
RECORDING
Neither lessor nor lessee shall record this lease agreement nor a short
form memorandum of this lease agreement without the written consent of the
other.
SECTION FORTY-FIVE
RIDERS
Clauses, plats, and riders, if any, signed by lessor or lessee, and
affixed to this instrument, are a part of this lease agreement.
SECTION FORTY-SIX
NAME
Lessee shall not, without the written consent of lessor, use the name
of the building in which the demised premises are located of or any purpose
other than as the address of the business to be conducted by lessee in the
demised premises, and in no event shall lessee acquire any rights in or to such
name or names.
SECTION FORTY-SEVEN
CORPORATE AUTHORITY
If lessee executes this lease agreement as a corporation, each of the
persons executing this lease agreement on behalf of lessee covenants and
warrants that lessee is a duly-authorized and existing corporation; lessee has
and is qualified to do business in the State of South Dakota, the corporation
has full right and authority to enter into this lease agreement; and each person
signing on behalf of the corporation was authorized to do so.
SECTION FORTY-EIGHT
FIRST RIGHT OF OPPORTUNITY
A. During the term of this lease agreement, including all renewal
terms, lessee shall have the first right of opportunity to lease any remaining
square footage directly adjacent to the demised premises, as described in
Exhibit C, as additional premises, in the event that any such space is vacated.
B. At such time as lessor wishes to lease the additional premises and
has received a written lease proposal from a third party, lessor will give
lessee written notice of its intention to
lease the additional premises.
C. The terms and rental rates shall be those set forth in lessor's
written lease proposal with a third party described above, or upon such other
terms as may be agreed upon by both lessor and lessee with the exception that
the term shall be coterminous with the term of this lease. Lessor and lessee
agree to negotiate in good faith concerning such terms and rates.
D. In the event that lessor and lessee have not entered into a written
letter of agreement specifying the general terms of the lease agreement of the
additional premises by lessee within thirty (30) business days after lessor's
notice of its intention to lease the additional premises, then lessor shall have
the right to lease the additional premises to any third party.
SECTION FORTY-NINE
OPTION TO RENEW
Provided that lessee is not in default under this lease agreement
during the original term or any extension of this lease agreement, lessee shall
have the option to extend this lease agreement for one additional term of sixty
(60) months by providing lessor with one-hundred-eighty (180) days' prior
written notice. The extended term shall be on the same terms and conditions of
this lease agreement except for the provisions regarding basic monthly rent.
Basic monthly rent applicable to the extended term shall be at the then
established market rate for similar facilities in the area.
SECTION FIFTY
MARKET RENT; APPRAISAL
A. At any time not more than one hundred eighty (180) days prior to the
expiration of the first or any subsequent extended term of this lease agreement,
lessee may notify lessor by written notice of its desire to determine the fair
market rental value ("market rent") of the demised premises. "Market rent," as
used in this lease agreement, is intended to be a flat market rate per square
foot for space of similar quality and tenant improvements in the Pierre area
taking into account market rental concessions.
Lessor and lessee shall negotiate in good faith in an effort to
determine the market rent.
B. If the parties are unable to agree within thirty (30) days following
receipt by lessor of written notice, each party, at its own cost and by giving
notice to the other party, shall appoint a real estate appraiser with commercial
experience in the Pierre area to appraise and set the market rent. If either
party does not appoint an appraiser within ten (10) days after the other party
has given notice of the name of its appraiser, the single appraiser appointed
shall be the sole appraiser and shall set the market rent. If the two appraisers
are appointed by the parties as stated in this section, they shall meet promptly
and attempt to set the market rent. If they are unable to agree within thirty
(30) days after the second appraiser has been appointed, they shall attempt to
select a third appraiser meeting the qualifications stated in this section. If a
third appraiser
has not been so selected within ten (10) days, written notice to the other,
either party can apply to the Circuit Court of Xxxxxx County for the selection
of a third appraiser who meets the qualifications stated in this section. Each
of the parties shall bear one-half of the cost of appointing the third appraiser
and of paying the third appraiser's fee. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity for either party.
Within thirty (30) days after the selection of the third appraiser, a majority
of the appraisers may, by agreement, determine the market rent. If a majority of
the appraisers are unable to determine the market rent within the stipulated
period of time, the market rent set separately by the three appraisers shall be
added together, and the total divided by three. The resulting quotient shall be
the market rent. If either the low market rent or the high market rent is,
respectively, more than ten percent (l0%) lower or higher than the middle market
rent, then the middle market rent shall be the market rent. After the market
rent has been set, the appraisers shall immediately notify the parties.
C. In no case shall the market rent be set less than Three Thousand Dollars
($3000) per month.
SECTION FIFTY-ONE
COUNTERPARTS
This lease agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
In witness whereof, each party to this lease agreement has caused it to
be executed at on the date indicated below.
/s/3-5-98 /s/XXXX XXXXXX
DATE PEDCO
Xxxx Xxxxxx, its Executive Director
/s/3-4-98
DATE ACI Telecentrics, Incorporated, by
/s/XXXXXX X. XXXX,
its Vice President
